Ethical dilemma:
Government contracts: trimming the 'fat'
September 2007
You are tendering for a small, but important piece of work for the Royal Australian Navy. Although not promising to offer a large stream of income, success as a tenderer will be seen as a vote of confidence in the company. The real importance of this is that it will help to open the door for lucrative contracts overseas.
You discover that the Navy has a very tight budget. In the normal course of events, it would be difficult to win on price.
However, your finance director suggests that this problem might be overcome by tendering to the Navy at a price below cost, then allocating an extra charge to an existing Government contract - building new detention centres - that has some ‘fat’ within it.
Ethical questions:
- What are the issues?
- Who are the stakeholders?
- What should you do?
- What would you do?
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