Introduction
GEI manufactures protective body armor, munitions equipment, and armored vehicles. They are a long-term military contractor. As a result of injuries and deaths involving service personnel in combat, the U.S. military began to realize the problems with these products they were purchasing from GEI. Along with the legal investigations initiated by the U.S. department of Justice, families of injured or killed U.S. service members also began filing lawsuits and forming class action lawsuits against GEI. I conducted some research to understand the issues around this case and provide some possible solutions.

Ethics Issue statement
Through my research and analysis, I’ve identified the following issues:
1. GEI was knowingly manufacturing products using substandard materials
2. GEI’s Board of Directors took steps to circumvent requirements under POCA and UMAW
3. GEI is posing an environmental hazard

Fact Findings
Substandard Materials in Manufacturing
The use of substandard materials has caused the following problems – flak jackets don’t fully protect service members; night vision rifle scopes work erratically; and armored vehicles are vulnerable to IED explosions. Although the defects in these products have resulted in injuries and deaths, GEI has not made the changes necessary to fix the problems neither have they disclosed their knowledge of this to the military.

Circumvention of POCA and UMAW Requirements
Since they were facing criminal prosecution and class action lawsuits, GEI’s Board of Directors decided to fire 20 workers and offered early retirement packages to 25 others. They did this in order to avoid being charged in violation of PLANT OPERATIONS CLOSING ACT (POCA) which would require them to give employees 60 days notice of their plant closing and its departure from U.S. operations. They also filed for bankruptcy to get around the Union of Munitions and Armor Workers’ (UMAW) collective bargaining agreement and relieve them from its contractual obligations, including union contracts.

Foreign Factories Pose Environmental Hazard
GEI established factories in Brazil and Columbia where they paid officials to turn a blind eye to environmental hazards their factories brought, leaking radiation and chemicals into the local groundwater. Paying off the officials in these countries allows GEI to bypass environmental laws, labor laws, and other business restrictions.

Conclusion
The findings presented in this analysis indicate that GEI has operated in a grossly unethical manner on several fronts. Effective December 2007, Federal Acquisition Regulations (FAR) was amended to add “requirements for a contractor code of business ethics and conduct and the display of the Fraud Hotline Posters prepared by the federal Office of the Inspector General” (Anonymous, 9). According to the amended rules, the code of business ethics and conduct must be in writing and must be provided “to each employee engaged in the performance of the contract work” (Anonymous, 9). Contractors are required to have this I place within 30 days of an award of any government contract in excess of $5 million. GEI had annual revenues of $300 billion. With such requirements in place, it is incumbent upon GEI, as it moves forward under new management, to establish and enforce these requirements. The federal government has realized that voluntary disclosure has not been effective and that these mandatory requirements are needed. This should prevent the types of unethical behavior that happened at GEI from happening again.

A report prepared by the U.S. General Accounting Office (GAO) shows how important it is to get ahead of the curve on such issues. “When problems are uncovered after production starts, costly retrofits are often needed for any delivered units. Also, problems have sometimes not been fixed, and substandard systems have been deployed to field units” (Hinton, 4), such as was in the case of GEI.

Resolution/Recommendation
The new corporate heads, under the direction of their legal advisors, need to update existing policies, retrain and/or replace workers as necessary, and restructure operations as required by governing agencies.

Bibliography

Anonymous. (2008). New Mandatory Ethics Rules in Effect for Federal Contractors. Contractor's Business Management Report. Feb 2008, Vol. 2008 Issue 2, p9. Retrieved October 28, 2010 from ABI/INFORM (Document ID: 1424340131).

Hinton, Kenry. (1994). Weapons Acquisition: Low-Rate Initial Production Used to Buy Weapon Systems Prematurely. Retrieved October 28, 2010 from http://www.gao.gov/archive/1995/ns95018.pdf