This case shows me much unethical behavior by Lockheed. Lockheed should consider themselves lucky that the Judge’s legal decision did not include issues of ethics in a bold way. I think maybe quietly, unobtrusively, they may have by making Lockheed extend the contract amount, to the additional amount requested by SB Pumps.
Lockheed in knowing that SB Pumps bid was low agreed to accept their bid. They full well knew, as stated, that this contract would never be completed as SB Pumps expected it would. Lockheed, as per their own contract, was under the FAR regulations thus having the duty to inform SB Pumps of an error in their bid and potentially why. Lockheed also claims that a contract amount cannot be changed unless there is a clerical or mathematical error.
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SB Pump’s bid was low due to the fact that they were not aware of how long this job would actually take, thus reducing man hours on the bid, furthermore they did not realize that they would need to acquire additional machinery to complete this job as the contract stated. The lack of knowledge with regards to the lack of proper machines may have constituted and form of clerical or mathematical error but in a technical way, the lower man hours may be considered as a misreading of specifications in which this would fall under the provisions of a contract change due to mathematical errors, the same with the production specs needed to make the cans Lockheed was looking for.
Lockheed, acting unconciousably and unethically, tried to “use” the system and SB Pumps to get their way with a low contract bid acceptance. Lockheed deserved the ruling the Judge awarded to SB Pumps. With Lockheed blatantly “lying” about their actual role and the terms used in the contract, Lockheed furthermore should be made to face fraud and even perjury charges as their statements regarding what wasn’t in the contract was in direct violation of what was there plainly.
Lockheed’s actions were deceptive because of the knowledge they had knowing SB Pumps would not complete the contract and Lockheed not pointing any of this out puts them in the light of looking for a “personal” gain. Additionally, Lockheed could have been charged formally, under criminal law codes for fraud for deliberate deception.
Lockheed made the final mistake in not asking for verification, maybe thinking that they could get away with suing SB Pumps for breach of contract as it was not completed, thus them being able to force the pump company to take a loss, complete the contract and to produce the canisters as requested. With this Lockheed stood to make an almost 4 million dollar profit from the next lowest bid, instead they paid that much plus court costs, simply by not being honest.
The ethical codes and social responsibility that Lockheed tried to side step, in the end they paid for it. Now they should be made to pay further and additional fees to SB Pump even above the almost $4,000,000 based on the principality of the fraud, lack of ethics, social responsibility and in general, the “scam.” Basically, Lockheed saw a mistake that another company had made, kept their mouths shut, thus setting them up for a futures scam by way of a suit over breach of contract. Such unconciousable behavior ought to come with a much higher price tag.
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