Whistle Blowers: With Labor, That Will Be...

Weapons manufacturers normally do not worry about competitive bidding when renegotiating Pentagon contracts. Their profits are generally fixed as a percentage of costs. Or supposed costs: an Air Force study of six major contractors, released to a congressional committee last week, disclosed that they routinely mark up labor expenses by-quite legally-computing in overhead charges more than ten times as high as those of civilian business. The cost may reach $50 billion a year. "When you see a beautiful military jet flying overhead," said the study's author, Air Force Analyst A. Ernest Fitzgerald, "you're seeing a collection of overpriced parts...

Want the full story?

Subscribe Now

Subscribe
Subscribe

Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!