Question

In one of the case studies in the textbook, the General Service Administration (GSA), the federal government's bookkeeping agency, purchased more than $200 million worth of defective and useless furniture from a New Jersey furniture manufacturer. After reviewing the books of the furniture manufacturer, it was clear that the company was paying off GSA inspectors. What happened to the furniture manufacturing company?

Answer 1

The Government Accountability Office (GAO) would likely investigate the furniture manufacturer's misconduct. While the exact penalties are not specified, typically actions could include legal proceedings, financial reimbursement, or barring from further contracts. The GAO ensures federal spending is appropriately scrutinized.

Step-by-step explanation:

The student asks what happened to the furniture manufacturing company that sold defective and useless furniture to the General Services Administration (GSA) and was found to be paying off GSA inspectors. While the specific consequences for this furniture manufacturer are not detailed in the information provided typically in such situations, the Government Accountability Office (GAO) would conduct an investigation into the misconduct.

In comparison, government agencies do not face market competition and cannot go bankrupt by losing customers because they are funded by tax dollars. However, they are still subject to oversight, and inefficiency or poor performance can lead to reorganization or new management as directed by elected officials, but this pressure is relatively mild. The GAO plays a crucial role in ensuring that the federal government's spending is scrutinized, including the purchases made from contractors like the furniture manufacturer in question.