In the United States a defense contractor (SAIC) recently agreed to pay the government $5.75 million to settle (but not admit guilt) accusations that the firm defrauded the government by taking military contracts and then finding a way to keep the money and not do any work. No one went to jail over this, mainly because the government knows that companies like SAIC would spend much more than the disputed contract was worth to fight the accusations in court. Since justice delayed (long enough) is justice denied the government tends to take what it can get and publicize the theft and the circumstances.

There is a lot of this misbehavior, mainly because the defense budget is so large and the number of people monitoring it is outmatched (in numbers, experience, enthusiasm and lack of moral scruples) by the contractors. It’s not for nothing that defense contractors, especially those working in numerous office parks just off the beltway road that circles Washington DC, are called “beltway bandits.” Most contractors are honest, hard-working people trying to provide what the Department of Defense needs. But a significant minority are out to grab as much as they can, any way they can and as often as they can without getting prosecuted. Getting caught from time to time and paying a settlement is seen as a cost of doing business.

Read the whole thing, because this is why DoD contracting seriously needs reform.