According to an article on (hat tip to Jeff Dean, SPSM), the president of a supplier in the US Navy’s supply chain has been sentenced to 41 months in prison. The article says that the offense of the supplier, Bristol Alloys Inc., was supplying a Navy subcontractor with metal that had not been heat-treated to meet contractual requirements for use in the building of submarines.

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The consequences of this breach are extensive: the article says that it “could eventually cost the government more than $30 million to find and replace the metal parts used in the construction of submarines.” The executive and his company were ordered to pay $1.35 million in restitution, but the likelihood of the government even seeing that relatively paltry sum is debatable given that “neither one of the defendants has any assets of any significance” and the company “has done no business since the fall of 2009.”

It would normally be easy to point the finger at the government for failure to monitor its suppliers’ performance, but it isn’t so easy in this case. The submarines are built by a two-prime-contractor team of Electric Boat and Northrop Grumman Shipbuilding. Northrop Grumman bought various metal components from one of its suppliers which had, in turn, purchased metals and other parts from Bristol Alloys.

So, the offending supplier was three tiers removed from the government. But shouldn’t the government be looking further down the supply chain?

Apparently not. The article notes that the Navy “has not changed the way it accepts materials from a supplier based on this incident.”

Makes you wonder when something like this will happen again, doesn’t it?

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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