Should the US government track the working conditions at its apparel suppliers ?

An article in the New York Times titled “Buying Overseas Clothing, US Flouts its own advice” (December 22, 2013) describes the $1.5 billion in clothing purchased by the US government and working conditions at its suppliers. Contracts for clothing for the Marines was being made at a Bangladeshi plan that used child labor. Defense officials blocked plans to require their suppliers to follow recommendations by the labor department regarding factory conditions, claiming that costs would go up by over $500K. Should the US government be required to adhere to supplier audits that guarantee ethical sourcing ? Should the higher cost of such ethical sourcing be accepted as a necessary condition for sourcing ? Should manufacturing locations for all US government purchases be required to be made transparent ?

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76 Responses to Should the US government track the working conditions at its apparel suppliers ?

  1. Christine Rasquinha says:

    Although, the US government should adhere to the standards of ethical sourcing, the supply chain that the US currently works with will not make it easy to identify the path at which goods are coming from. Based on the New York Times article, the US is usually purchasing from contractors. These contractors are working with other individuals to procure the garments. Additionally, the supply chain could be much deeper in terms of who and how the materials are supplied to the garment developers. In looking at the chain, the US would have to oversee multiple pieces of the chain because their contractor may be focused solely on their bottom line. Even if the US says they are willing to pay for the ethical sourcing, it doesn’t mean that their contractor will pass these savings on through the entire supply chain. By forcing each part of the chain to become transparent, it may increase the pressure for each aspect of the supply chain to improve conditions in order to save face toward the public which is an important cultural element for some of these countries.

  2. Sarinah says:

    The challenge would always be in implementing laws and audits because of the many intermediate layers in the supply chain. Although getting the “best price” is an agenda, an online article from the Human Rights Watch stated that there is a growing trend for “supply chain transparency” which the workers, unions, and nongovernmental organizations themselves can address to the apparel companies as part of their “corporate accountability” to build credibility. But a challenge still remains since not all countries share the same rules and regulations outside the U.S.

  3. Eric Zheng says:

    The US government, among all of those defined as “business customers”, should bear the responsibility of making sure that their supplies are not coming from sweatshops, especially those use child labor. Due to the government nature, procurement personnel from the United States government possess high negotiation power to squeeze the profit margins of their suppliers, which may push the vendors to compensate elsewhere, maybe by using the cheapest labor possible, regardless of ethical concerns. In the meantime, this government nature gives the purchasing people necessary resources to dig into the seemingly low prices on the table and require the opposite side to provide a clear cost composition to justify such low figures. As far as I’m concerned, the US government has to take the lead in ethical purchasing in order to even be able to regulate huge players in other markets that are known for using sweatshops extensively.

  4. Xin Wen says:

    Even the costs would increase by over $500K, the US government should do the ethical sourcing. It is not only about the costs, but also about the child labor which has zero tolerance. The US government has a chance to find a standard manufacturer with low cost, because the quantity is large and the government and the manufacturer could be a long-term relationship. Of course, these kinds of purchases by the US government should be transparent. However, to achieve the ethical sourcing still has a long way to go. Maybe the government should make some regulations and form a department to deal with this issue.

  5. Adam Davis says:

    The U.S. government should adhere to such supplier audits and accept higher costs of ethical sourcing for two reasons: it ought to, and it can. The first point is that because the U.S. has been a world leader on human rights conventions to stamp out child labor and the deplorable conditions in factories associated with it, it would be hypocritical for the government to turn a blind eye to the abuses that occur in the countries that it procures from. Furthermore, the government does not face the same pressure to cut costs as private industry does. It is well known that the U.S. Department of Defense in particular already has a bloated budget in terms of weapons systems, and it’s difficult to see how some of this money could not be put to better use in ethical sourcing.

  6. Anzi Peng says:

    Beside the profit and cost, another important indicator that US government and enterprises should seriously take into consideration is the “sustainability” of organizations. As a leading super power, US government has the responsibility to standardize the supply chain environment in order to regulate all the unethical issues such as child labor. What I’m concerned about is even the costs go up by over $500K, the scenario of child labour won’t be diminished. Those profits will be directly go to those public servants or owners of the factories. Child labours are less likely to gain any advantage from these $500K. Therefore, this is not something about the cost. Government intervention is urgently required

  7. mfoust35 says:

    The fact that the US government does not adhere to some form of supplier audits, or at least does not strictly enforce them, is abhorrent. Basically, we are allowing the US government to be above the law if they do not abide by what other companies have to do with regard to supplier auditing. The higher cost of ethical sourcing is the only way to run business. Furthermore, all manufacturing locations for all US government purchases should be required to be transparent so that the public can hold the government up to ethical standards. All of this said, even if the government were to ethically source the needed materials, there would always be new suppliers who would cover up their unethical practices and would offer a lower cost to compete with the current suppliers. In essence, the only way to avoid unethical sourcing would be to completely stop it at the base level, in the sourcing areas themselves. But this idealistic view is impossible for all practical purposes. Despite this, the US government should do their due diligence to avoid and be publicly accountable for unethical sourcing.

  8. Murilo Siqueira says:

    Basing our analysis 100% on ethical values, it is unacceptable to buy products from suppliers that use child labor. Since the US Government enforces laws to prohibit this behavior, it shouldn’t be the one to go against its own principles. Thus, audits should be part of it. Whether it is up to the Government to run the audits, or the contractor, the information should be included in the sourcing contract.
    As the Government usually represents an entire nation, they should make all transactions public, and use their power and ability to pool demand to reduce costs so that they can gather better supply offers.
    Offers including child labor shouldn’t even be considered as part of the auction, so they do not provide a realistic benchmark for prices.

  9. Man Lu says:

    Ethical purchasing is always the important point in the supply chain. I think the US government should do the ethical sourcing. Everyone involved in purchasing and supply management in an organization should be aware of the organization’s ethical policy and be actively encouraged to embrace its principles. If the government doesn’t adhere to ethical purchasing, ethical problems cannot be solved. The government, as a buyer in the supply chain, is responsible for keeping the supply chain be ethical. It can push suppliers to manufacturer ethically.

  10. Koustuv Pal says:

    On one hand the US government represents the world’s most powerful economy and by not adhering to ethical standards it will set a wrong precedent to the world at large. But again the US government is not responsible for the factory standards where the apparel is produced and in this case the responsibility lies with the Bangladeshi government to ensure that the country’s labour standards are kept high. When it comes to ethics no cost is too high however the key difference again is between owning and buying. If the US government decides to own the supply chain,which is the reasonable thing to do, it can both be ethical and set the standards for the world to follow. As suggested earlier when it comes to ethics transparency is the key. So all manufacturing locations for US government purchases should be made transparent unless there is some pressing strategic need to conceal any particular location.

  11. Amer Nasrawi says:

    Absolutely yes! Double standards and hypocrisy should not exist in any government venue. This will not only hurt the cause, but it will give a leeway to other government agencies and private sector agencies to take the same route. However, the government does not fear the threat of boycott like private sector retailers like Walmart would. Such lack of constraints is taking pressure off of the government and making such dealings seem okay.
    One way to counter this is bringing wide publicity to the issue and creating public reaction that will create alternative type of pressure on the government.

  12. Milind Patel says:

    Basically, the question is should the U.S. government’s contractors continue to acquire clothing from suppliers using child labor and poor factory conditions, or spend an additional $500K (with current spending of $1.5 billion annually)? Clearly it should be pay the extra cost of $500K because child labor in very unsafe factories in Bangladesh, and anywhere in the world, should not be supported. Supplier audits should be implemented to guarantee ethical sourcing. The article mentions trade barriers and allowing manufacturers to move from country to country looking for cheaper labor, as well as free-trade zones contributing to driving labor wages lower and lower. This could be an area where legislators can work on improving, however it is very difficult and lengthy to improve laws involving international governments. Another area where the article mentions a push being made, is requiring agencies to let the public know about their contractors and put the addresses for factories out. Along with information on all players in the supply chain, this should be a good starting point for congressman to go after to get ethical sourcing.

  13. Huaijing Lin says:

    WTO regulates legal trading requirements regarding government procurement procedure across national borders. As one of founders of WTO, US Government has pledged to comply fair trading regulations of WTO, which against child labor, unfair salary, hazardous working environment etc. Besides, US domestic law also specifies working conditions and laboring as parts of trading agreement, in which enforcement agencies are also involved.

    Just as cost and specifications, ethical sourcing should be a part of contractual obligation. Any intent or unintentional breach of ethical terms shall lead to termination of contract regardless of cost. As a buyer in transactions, US Government is entitled ultimate discretion to make the call. Additional contractual endorsements might be underwritten when US Government is trading with parties located in non-WTO countries or at where government intervention is widely absent.

    Transparency could be problematic if several international trading intermediaries are in the loop. Establishing an effective tracking system in-house could be costly and time consuming for government. One possible easy solution is to procure from intermediate merchants or dealers which have proven ethical records, and therefore can delegate responsibility of due diligence to their hands.

  14. Kyle Fithian says:

    The US government should be required to adhere to supplier audits that guarantee ethical sourcing. They should follow the same recommendations laid out by the labor department. There is no reason the government should be exempt from these ethical standards.The higher cost is something that will be a byproduct of increased sourcing scrutiny. However, the benefits are that the government will have greater concern for their supply chain. This can lead to increased efficiencies and better quality. I do not believe all manufacturing locations for government purchases should be made transparent. Although the government should be transparent in its business, there can be national security risks related to disclosing manufacturing contracts. It may be the case that certain types of contracts, or non-defense related contracts can be made more transparent.

  15. Jutong Cui says:

    In any country, employing child labor is prohibited. Although the target of sourcing is to generate cost-savings, the restricted zones, such as ethnic issues can’t be violated. Regulations on rigid supplier audit and ethnic sourcing need to be carried out by the government.
    Sourcing is not only about cost reduction, it also has to be responsible for the product quality and brand reputation. Having suppliers using illegal child labor may be broadcasted by media and leave a bad impression on the customers. Hence, higher cost of supplier audit and information transparent is worthwhile preventing such bad news from happening.

  16. Xiaodan Liu says:

    No matter which country that US government are sourcing from, they should all adhere to supplier audits that guarantee ethical sourcing, especially the use of child labor should be prevented at any region. However, the sourcing process is normally out of US government’s control, the local supplier will try to lower their cost but still can generate the highest profit, by doing so, they will use child labor or violate ethnic rules. US government should take the responsibility to guarantee ethical sourcing, along with it the cost will be high and there will be more people involve for just monitoring the sourcing process. But it is hard that manufacturing locations for all US government purchases be required to be made transparent, there will always be something out of control, and some sourcing country will not allow US government to monitoring their working process. The best way to do is when picking the supplier, pick from those with good reputation or has past ethical records. It will rise the cost, but still will be a better option for US engorgement, which can make sure they follow the ethical rule without violation.

  17. Saravana says:

    Ethical sourcing is certainly essential to keep up the image of such big organizations as US military, marines etc. Implementation of end to end transparent system, audits and assistance at tiers 3, 4 suppliers would require huge funds. This fact should not be used to justify child labor at suppliers’ end.
    One such example of ethical sourcing is the conflict diamonds from Kimberley diamond mines at South Africa. Diamond mining in African countries such as Congo, Sierra Leone etc. employed slave labor who were exploited severely. Several nations such as Australia, China, India, USA came together and adhered to Kimberley certification process with a goal of eliminating trade of conflict diamonds in the world. Kimberley process kick started when people (customers) didn’t want to purchase a diamond that was produced as a result of slave labor. Hence, diamonds are required to be certified to ensure that they are ethically sourced. Several companies adopted block chain technology that provides information to customers about end to end sourcing details of the diamond they wish to buy.
    Similarly, US government should convene meetings with supplier countries and implement ethical sourcing in a much larger scale. US government can partnership with countries that have similar ambitions and thus can sustain its goodwill.

  18. Shashank Chinnolla says:

    Ethical practices in business or any procurement activity is kind of an unsaid guideline to be followed by any organization. If it were the US government then this should be upheld to the highest standards. The government is a body which is looked up to by all forms or individuals and organizations. If it does not follow these guideline then another Rana Plaza Collapse ( would be in the pipeline. Though such incidents do not effect the bottom line of the books, the example that such incidents set forward including the bad publicity would have unforeseen situations arise. At such point in time other profit organizations would follow the same route and probably lead to similar situation. Even though the manufacturing locations of the US government might not be possible to be made transparent the activities should be audited by an independent third party for unethical practices and it should be held accountable for its actions.The higher costs leading to the ethical practices can always be nullified by improving the overall efficiency of the supply chain by better manufacturing practices, optimization of logistics and building competition among the suppliers.

  19. Vinay Gundam says:

    The USA as a world leader and torch bearer of labor and human right issues has a responsibility to set a standard in addressing these ethical issues. If government agencies also operate like corporations then there is no value in championing the rights and values of employees in other countries. Increasing supply chain transparency will definitely increase costs as inspection is required at multiple levels. Instead of absconding responsibility of ethical sourcing in the name of budget, government agencies can put an more effort in and reducing costs by optimizing the supply chain with few middle men and more certified suppliers. Doubling the less than a dollar wage per hour for labor in the supplier country will have a significant impact on their lives than a dollar increase in the price of the clothing in US. I think the budget for government agencies should be decided not on the current cost trend but on how much it would cost to manufacture the same clothing in US to do justice to the moral stand it portrays.

  20. Senthil says:

    The manufacturer should have control over the entire supply chain and held responsible for any unethical activities practiced by suppliers. So, US Governments has to implement rules for auditing suppliers to ensure that they are not violating any labor conditions. Supplier’s method of manufacturing and their business practice should be transparent to prevent malpractices. If a supplier is caught for any unethical practices, it will directly affect the brand of the owner (manufacturer) of supply chain. In this case, suppliers manufacturing Marine clothes should be audited in regular periods to ensure that they are sticking with labor laws.
    The cost associated with adhering to the ethical sourcing has to be accepted as default supply chain cost. Company’s brand name is defined by how they are approaching the situation and doing the right thing. So, cost associated with ethical sourcing has to be accepted as part of operational cost. The efficiency of supply chain is determined by how transparent the information flow is between the entities in supply chain. Information about manufacturing locations for all US government purchases is not required to be transparent. However, suppliers of US government should be audited by US government to ensure that ethical sourcing is practiced by all the players in the supply chain.

  21. Manita Dagar says:

    When it comes to matters of basic human rights, there should no other option but to stand by these rights. Any nation, any company is not above it. So,US Government should adhere to supplier audits that guarantee ethical sourcing.
    Now a days, there is more awareness about the ethical sourcing of products and end customers want to know where the products originate from, even for products such as coffee, diamonds, food etc. Making manufacturing locations for US government purchases transparent might have its own organizational constraints, but it will add value to the brand name of the organization.
    So, an organization which is solely discounting the humanitarian value of ethical sourcing by reduction in costs, is not looking at the bigger picture. It should not even be a question. They can look for other avenues, from where they can still achieve the reduction in costs but source their products ethically. Neglecting and ignoring any practices which are carried by their suppliers and which violates any basic human rights is equal to participating in such practices. It also have an impending effect of other companies following the suite without facing consequences.

    So, when setting an example, why not set a good one!

  22. Yun (Winnie) Lo says:

    Yes, even though maintaining cost is important, it is necessary to make sure that the working condition is satisfactory. Moreover, the manufacturing process is involved with child labor, which is not good or the offspring of the country, As the world police, US holds the responsibility to prevent such unethical situation happens. Even so, I believe US government can work with Bangladeshi to eliminate such situation and solve this issue in the long run. In this way, US can purchase the clothing with reduced and make sure the working condition is acceptable. Or simply, US can purchase clothing from other countries that have a better working environment. In this way, Bangladeshi will be forced to change its working environment.

  23. Jiangxu Chen says:

    The US government should track the working conditions of its clothing suppliers. Because tracking suppliers’ production is an important means of examining supplier capabilities. This includes monitoring the supplier’s production capacity, the supplier’s production method, and whether it is legal. If there is an ethical issue at the supplier, the public opinion will point to the entire supply chain where the supplier is located, and the cost of the US government’s public relations work may be well over $500,000. Moreover, the long-term influence of public opinion and the wide range of influences also determine the need for the US government to maintain a positive image. Therefore, ethics should be included in the scope of procurement and supplier selection. On the other hand, $500,000 is not a big cost, and it is easier to save $500,000 by finding more cost-effective suppliers and optimizing supply chains. The process of US government procurement should be transparent, and information such as the location of its manufacture must be disclosed to taxpayers and subject to social supervision. These actions can not only establish a good image in society, but also stimulate their own development to achieve better results.

  24. Zibo Meng says:

    The theme of the 21st century is peace and development. For humanitarian purposes, the US military should not involve the use of child labor. In my opinion, it is not worth to exchange bad reputation for a cost savings of $500K. As the country with the most international influence, the United States should play an exemplary role and set an example for other countries. As for all US government purchases be required to be made transparent which I think is unnecessary. Because it would cost lots of money to achieve such a goal. The US government should supervise all aspects of its supply chain and can appropriately introduce relevant policies to prevent such ethical issues from reappearing.

  25. Xin Liu says:

    Absolutely the US government should do the ethical sourcing. All companies and government should choose suppliers that guarantee ethical sourcing even though the costs may be higher. If this rule was broken, the damage to environment, people’s health or other rights of people are irreversible. In many area, poor people are forced to work for a long hour without overtime pay because the factories they work for won’t obey ethical sourcing. Child labors are also common for unethical sourcing, since they cost less to employ. To achieve the goals all companies adopt ethical sourcing, there is a long way to go. Thus, government should take the lead and launch some regulation to deal with this issue.

    • Mark Messick says:

      Xin Liu,

      I agree with you that all companies should ethically source products. I think as a tax payer and citizen if you feel strongly about ethical sourcing in government how can you not discard this in your own purchasing?

      Do you think that 3rd party verification via subscription apps will become popular to verify the sourcing of products?

  26. Nobuhiko Kobayashi says:

    This issue happened not only the for US government but also many other large firms. For example, Disney has manufactured its character goods in Asian factories which use child labor and many media (especially in Eastern countries) have attacked the company for many years. However, the problem is still there. Why? The real problem is the balance of the cost of manufacturing and integrity. In capitalism, we cannot avoid using cheaper offshore labors. In the last 50 years, the supplier country of cheaper labors has been changed; Japan, China, Vietnam, Bangladeshi, and now expand in Africa continent. In terms of ethical aspect, it might be negative images to use the cheaper labors in that countries. However, the reality is that investing in cheaper labors has helped the company to grow and catch up with the developing countries. In addition, using child labor might be the ethical problem in the US but the children might live in the street without enough food if they cannot work. Which situation is better? In the countries which use child labor has a different perspective with developed countries so that US government cannot prohibit the suppliers to avoid using cheaper labors, including child labor. If US governments want to show their ethical integrity with developed country’s perspective, they can use only US manufacturer with higher cost.

  27. Logan Aven says:

    I think that it is important for all buying entities to know what is going into the product they are sourcing. The US government is not above this and should know exactly what it is buying and should hold its suppliers to a higher standard. If it costs more to make equipment for the troops because we aren’t helping support child labor around the globe I think the American people will understand. I don’t think that the US Government should be transparent with where it buys its goods because I don’t want other countries knowing where we purchase our guns and ammo and by releasing this we are letting other countries have intelligence they would not give to us. I think the US Government should operate the way the people want it to. So if the US people want Child labor then go with that but until this happens we should not allow this to happen.

  28. Kaiyue Jin says:

    From the perspective of human nature and morality, it is extremely important for the US government to follow its promise on ethnic codes and make sure that the suppliers won’t violate morality codes when producing for US government. Since US government is the final buyer of the product, they have the power to negotiate with the suppliers. In most developing countries, since the resource is quite limited and the law enforcement is not as effective as that in the states, it is hard for locals to eliminate all the immoral behaviors during the manufacturing. So if the US government really concern a lot on the morality issue, it can use their leverage to leave pressure on suppliers and push them to follow the morality codes.

  29. Yash Kothari says:

    This seems to be a situation of “the pot calling the kettle black.” How can a government expect its people to follow the rules when they are not supporting it themselves. US government should adhere to supplier audits that guarantee ethical sourcing and should lead by example. As they say, if we desire respect for the law, we must first make the law respectable. Further, manufacturing locations for all US government purchases should be required to be transparent as this only will enthuse the ethical practices among its various suppliers. Further US Marine is one of the biggest purchasers of multiple products and thus different procurement strategies viz. developing supplier consortia, taking advantage of economies of scale, etc. can help in reducing the impact of the higher cost.

  30. Gopi Manthena says:

    As far as I’m concerned, the US government has to take the lead in ethical purchasing in order to even be able to regulate other government departments or other retailers in other markets that are known for using unethical sourcing extensively. I think the US government should adhere to supplier audits and bear the price of ethical sourcing, especially the use of child labor should be prevented at any region. Also, all manufacturing locations for all US government purchases should be required to be made transparent so that the public can hold the government up to ethical standards. But the biggest challenge would be to implement these things as all countries have different rules and regulations and just by paying extra money for ethical sourcing will not guarantee that those extra money will transfer till the bottom of the supply chain that will reduce child labor etc. Hence, maybe the government should make strict regulations and form separate independent teams to deal with these issues.

  31. Derek Curtis says:

    The US government should absolutely make sure that ethical sourcing is in place. This is a simple issue of human rights, and as a world leader, the US should be setting an example by refusing to deal with any countries that promote child labor and unsafe working conditions, amongst other things. Therefore, even though solely engaging in ethical sourcing would be more costly, it is still the right thing to do. I also do not think that manufacturing locations for all US government purchases should be made transparent, as this is sensitive information that would put the US at risk if it were to fall into the wrong hands. However, I do believe that stricter regulations by the US government of these locations need to be put in place and that the manufacturing locations should take complete responsibility for any inhumane practices.

  32. Mounika Panthala says:

    A government should keep the interests of the people above its needs and profits. Us government should standardize the way of procurement and should select only those suppliers which follow safety standards for its Materials, Man, Motion (the three Ms). Audits should be conducted across all the present supplier workstations and the suppliers should be given a comprehensive rating taking into account the working conditions. The government can also come into agreements with the suppliers to improve the poor working conditions. There should be strict screening conditions for the suppliers such as ending the ties with suppliers who encourage child labor and make workers work in inhumane conditions. Although the US government is dealing with a deeper supply chain, there are always tools with current technology to improve the transparency across the chain. US government should develop a sourcing procedure which should serve as an example for other governments to follow.

  33. Kaushal Kishore says:

    It is indispensable to ensure that supplies US is purchasing are not produced in unethical way, however going for a glass box transparency policy might backfire , especially in the case of Armed forces and military. Rather than going for imported clothes, US should produce all essentials for Army inhouse. Owning entire supply chain will reduce its supply chain risk and add value to economy of country, by generating employment.
    An audit is crucial to avoid use of child labour and other malpractices whether products are made in US or in any other place.

  34. Sajal Raj says:

    After reading the article, it looks like the problem doesn’t lie where its being pointed out, but it lies at intermediary level. US government get in touch with the third party and then avail the services at cheapest cost but since being a buyer it’s necessary for the U.S government to complement its suppliers. Being one of the biggest economy of the world and flag bearer of such policy the U.S government should not only adhere to supplier’s audit that guarantees ethical sourcing but also of the intermediary sources, which assist them in getting the work done at cheapest cost. Above all, US has the highest spending for their defense department, but the question why it is compromising where its image have the probability of getting jeopardised. U.S government can get into an agreement with suppliers, which can adhere to their policies just the way Toyota does.

  35. Abhinav Kaushal says:

    Being the superpower comes the responsibilities. The United States must lead by example and adhere to supplier audits that guarantees ethical sourcing. Child labor must be strictly prohibited. Even though the cost to maintain transparency be high, but it’s worth to bear the costs rather than face the repercussions after being involved in the bad name. It’s the bigger brand that bears the consequences. Strict regulations such as hard punishments, terminations of contracts etc. must be in place to enforce the rules.

  36. Jimlee Borboruah says:

    Ethical sourcing is slowly gaining importance especially for clothes sourced from the eastern part of the world. This is extended to the fashion brands who market themselves by declaring their preference towards this concept. However, we need to analyse the impact of selective supplier sourcing on the costs which will be passed on to the consumers, in this case it would be the tax paying individuals of the nation. Main criteria for global sourcing is lower costs which indirectly states lower wages. Lower wages may imply unacceptable working conditions. Transparency in the supply chain, supplier audits and norm to source from ethical locations will work only when the benefit is shared by both buyer and supplier. Coordination needs to exist between these two parties through supplier development (efficiency improvement) and arrangement of basic facilities for workers like food and safety which would give a competitive advantage to the buyer through ‘ethical sourcing’ tag as well as help the supplier provide the service at the minimum cost. This would ensure a win-win situation for both the parties.

    • Seerat Anjay says:

      I think this is an important point. Supplier management has been a differentiator in a competitive market and organizations use it because the want to reduce cost and risk. I feel, The negligence of auditing has prevented the whole supply chain to come up with a better idea to reduce cost, otherwise companies prefer to go for supplier development, as Jimlee pointed out.

  37. Bhartula Peeyush Sharma says:

    For me, whether you are purchasing through contractors or directly, spending $1.5billion in clothing but not wanting to spend $500K more to help do the right thing is not justified. Child labor being a problem since decades in several countries such as Bangladesh, the US with its power and resources, needs to certainly push for safe and decent working conditions leading to ethical sourcing and make sure that the labor department is allowed to recommend the suppliers on regulating factory conditions. Labor standards need to be set for procuring products from overseas suppliers where the standards should allow workers’ right to protect themselves and be legally binding and enforceable. Information asymmetry needs to reduce by having bidders disclose the complete names, addresses and working conditions of all factories along with releasing audit reports to the US government. This “sharing” of information needs to take place from the US government all the way down to the workers at those factories so that they can protect themselves if necessary using standards I mentioned earlier. Plus, having responsible external agencies that have no relationships with factories or customers need to be used to do the audits. If the US government is able to do all these things and work along with the local governments to share information, pursue ethical sourcing and coordinate monitoring, through standardization of such practices in all factories, I believe the effects of issue in hand can be mitigated and ethical sourcing would be accepted. It’s a question of spending a little extra money and going an extra mile to make sure the suggestions mentioned above are adopted and sustained.

  38. Mark Messick says:

    I do believe that procurement regulations should be altered to ensure ethical sourcing and oversight. The only way for a change in the status quo is for a change in purchasing decisions. I do believe that current government purchasing policies generally require purchasing from the lowest cost supplier. The article makes it sound as though this product is more of a retail product found in a base store(exchange), which is given an exception to sourcing requirements within 10 U.S. Code § 2533a – (Requirement to buy certain articles from American sources; exceptions). However, I do think that regardless of the item, it is not acceptable to do nothing.

    This also reminds me of a recent article which can be viewed at:The Washington Times – Thursday, September 22, 2016 titled: Company accused of selling U.S. military ‘Made in the USA’ boots that are from China. It would seem that since the first article, changes are being made and individuals held accountable. But this is only because it falls under a regulation requiring USA sourcing I referred to earlier.

    So in closing, yes, ethical sourcing needs to be improved. Lawmakers can make it a requirement or consumers can push for it via their purchasing habits. Either way, change needs to happen.

    • Bhartula Peeyush sharma says:

      Mark, thanks for sharing the name of the other article related to this one that shows some update. After today’s class, I would like to bring back the point on using cameras that can be placed in the suppliers’ facilities at their full disclosure. Maybe that’s something that can be done using algorithms to monitor the activities going on which should be able to prevent unethical practices. So the cost would be lesser than having people physically go there and check.

      • Mark Messick says:


        I agree that cameras would make ensuring compliance much easier. I just don’t think retailers would really want this. I think now, most say they are ethically sourcing but I would speculate they would want to maintain a certain amount of plausible deniability. Meaning, our agreement says that you will follow these guidelines and maybe we check every year, but they can still tell customers “we can’t be there 100% of the time”.

        I guess I would ask you if you think retailers are willing to give up their scapegoat? Also as consumers are we willing to admit that lower prices is more important then going beyond hand-waving ethical sourcing?

  39. Mitesh Somani says:

    The government should think about this question, “What if the similar kind of production was being done in their own country, with the help of child labor?”

    Expecting ethical sourcing from a government’s military contract should never be a question. It is the basic requirement. So definitely it should be aware of how the suppliers are producing the goods and regular auditing, etc. should be done.
    Just to cut the costs, if they allow for unethical means of production, then what will be the difference between them and the companies they stop in doing so?
    I don’t think the extra amount which they have to bear is higher than maintaining the reputation of such a great government institution.

  40. Carlos Mario Pelaez says:

    It is ridiculous to think that big companies like Nike had issues in the past with child labor of their suppliers, but there was the US government and ONGs to put and end to this. Now, this is something totally different. How can the government justify that they are contracting suppliers that use child labor? Even if the costs could raise $500k, $1M or more there is no justification on why the legal entities that are the ones supposed to supervise this are engaging them.

    Ethical sourcing should be a priority for not just governments but for every company and child labor should be stoped. If companies are incurring more costs because they figured out their suppliers have this kind of situations, then they need to coordinate their supply chain and look for other companies that can supply them with what they need. In my point of view, this is totally unacceptable for a legal entity like the government.

  41. ashish chandra says:

    Global corporate players such as Apple and Nike with overseas suppliers, use the mechanisms of FLA (Fair Labor Association), supplier development programs and audits, to keep a check on workplace conditions at its suppliers. Their supplier’s adherence to these accountability structure, enables these OEMs to establish a strong emotional connect with its customers as a brand.
    US government should as well ensure the practice of a more transparent adherence to processes for its suppliers, as per the ethical contractual terms in line to the values, fairness, respect as perceived by the people.

  42. Chushi Yang says:

    In my opinion, ethical sourcing is the fundamental principle which should be obeyed during the entire sourcing process. If the sourcing violated that rule, no matter how low the cost is, the cooperation can’t be achieved. Therefore, the US government is required to adhere to supplier to guarantee ethical sourcing. The problem lies in the increasing of sourcing costs, which may go up by over $500K, and the squeezing on profit. While, considering $1.5 billion purchasing cost, $500K is nearly negligible and buyer owns much higher bargaining capability compared with the supplier, which mains the buyer can lower that increasing cost through negotiation. Moreover, if the US government neglects the ethical sourcing problem, then when more severe problems appear, much greater costs will be demanded on buyers. In sum, it’s quite essential to guarantee the ethical purchasing.

  43. yingrui wang says:

    Yes, I think the US government should be required to adhere to supplier audits that guarantee ethical sourcing. Firstly, If we completely trust suppliers and let them do what they think is the best. There might be some suppliers let down this trust and hire child labour to reduce costs. Supervising the supplier not only raises people’s confidence about government, but also reduces the occurrence of using child labour. Additionally, higher cost of ethical sourcing can be accpeted as a neccessary condition for sourcing. The addtional cost can be added to the price of finished goods, and I think most of customers will understand this situation and fully support it. US government don’t need to make manufacturing locations transparent, because some informations is important and need to be protected.

  44. Chenxi Wang says:

    US government taking responsibilities of supervising their supplier is necessary. It’s better to reduce voilations like using child labor from two sides. One is from supplier itself, another one is from buyer . Supplier should have the awareness of social responsibility and take responsibility for their buyers and customers. As long as supplier fully aware of this ethical issue, the problem can be eradicated completely. There is no way that only US governement put efforts in it and solve the problem. Also, all citizens should show attitudes that resist suppliers that using child labor. There is no need for US government making manufacturing locations transparent. One is that I think this method is not very helpful for solving problems,it’s hard to let third parties know supplier’s operatoins detaiily and dig deeper leading to the original souce and also might arise some other problems related to information leakage.

  45. Ying Yang says:

    I believe it is necessary to adhere to supplier audits that guarantee ethical sourcing, even if US government is not the only who are supposed to be responsible for this. As the cost will be increased after requiring the suppliers to follow the recommendations, there are more than on part can stand out to share the cost. If we use the technology to reduce the cost of doing so, there will less risk and compliant. What’s more, it is ok for manufacturing locations for all US government purchases to be transparent, but it is more reasonable to study on the necessity and priority among each manufactures.

  46. Charles Nwaokobia says:

    $500,000 is 0.0003% of the $1.5 billion spend on clothing purchases by the US government. I don’t believe this is enough to warrant stopping suppliers from following recommendations for ethical sourcing. I don’t believe that any amount of cost savings should warrant using child labor, this is also a clear case of double standards. The US government should explore ways of contributing to shared value in countries like Bangladesh, where they source goods from, this would drive labor and production costs down and eliminate or reduce the need for child labor.

    For the US government purchases that are security sensitive, it may be counter-productive to reveal their manufacturing locations to the public, but there should be some form of internal audit to ensure that such items are sourced from locations where ethical standards of production are adhered to.

    • Mark Messick says:


      I believe one issue is that the article does not tell you that the shirt it is referring to is most likely sold at an Exchange, or base store. These Exchanges are deemed Category C non-appropriated fund (NAF) activities, meaning they are designed to not only be self-sufficient, but generate a profit. They are government agencies but exempt from sourcing requirements that other agencies follow. I agree that they should be held to a higher standard, but the challenging thing is how to do this and still be competitive against the Walmart outside the base gates? The shirts the article seems to be referencing are nothing special or specific. In fact most uniforms and accessories are made by the prison system. What are your thoughts?

      • Charles Nwaokobia says:

        I understand the need to drive down costs or/and be competitive, I just don’t believe it should involve using child labor. I am sure the US Government would clamp down on Walmart if they found out that their suppliers use child labor.

  47. NAICONG NING says:

    In my opinion, the US government should require their suppliers. Although by doing that the cost would go up by over $500K, it’s necessary to maintain the ethic which is important to business eco-system and the world principle. As the most advanced country in the world, US should build a good image which can be a good model for other country. In this aspect, it is better for US accept ethical sourcing even the cost is higher.
    What’s more, US government does not need to transparent the sourcing location.On the one hand, developing country has a lower cost which could be better for the business. On the other hand, sourcing and monitoring in these country could also regulate the market which is better for the future of these country.

  48. Nikeeta Brijwasi says:

    Saving $500k cost in $1.5 billion industry at the cost of human rights violation doesn’t make sense. And if the US government is not held responsible for this ignorance, other clothing MNCs will follow. Supplier audits should be practiced and re-inforced irrespective of the costs. If not done, companies will rely on cheaper material suppliers who will in turn resort to child labor and other cheaper ways of labor (paying extremely low wages). Thus, additional costs are justifiable and transparency should be imposed.

  49. Sruthy K M says:

    Chartered Institute of Purchasing and Supply (CIPS) defines ethical sourcing as procurement process that respects international standards against criminal conduct and human rights abuses and responds to these issues immediately if identified. ( The laggard attitude of the US Government in having second thoughts about whether or not to spend an additional $500k over and above the $1.5 Billion is appalling. In my opinion, no child labor 0r denial of basic human rights must be tolerated and complete adherence to humanitarian laws must be the Standard Operating Procedure. Starbucks is one such company that places immense importance on Ethical Sourcing. In fact, the 4 ideas at the heart of Starbucks’ sourcing system are : Quality, Economic Transparency, Social Responsibility and Environmental Leadership. ( With great power comes great responsibility. Hence, although organization will have to spend more in order to ensure adherence to Ethical Sourcing, this can be mitigated by use of more efficient systems and machinery, which will in turn break-even and prove even more profitable in the long-run.

  50. Anesh Krishna J N says:

    If one of the suppliers violate ethical methods of manufacturing and say, they are caught red-handed on the social media, it’s the OEMs name that gets tarnished on the headlines. This damages their reputation severely. So, the US government should ensure foreign suppliers should adhere to ethical manufacturing which needs to be verified from time to time by supplier audits. This might incur the OEMs a higher cost, but it is much more affordable compared to the lost reputation and sales resulting from suppliers violating the ethical codes.
    Yes, manufacturing locations for all US government purchases should be made transparent. If possible, OEMs and their suppliers can draw out an agreement which allows the OEMs to install an algorithm-controlled surveillance system to monitor the manufacturing activities happening at the supplier location. As long as there are no violations in the ethical codes or quality across production lines, the monitored footage gets erased after some point of time in the future; else, the lack of quality or breach in codes gets picked up by the system and the management of OEMs get notified.

  51. Chenglun, Fan says:

    Environmental issues, labor abusement, are all issues that could not resolve by the mechanism of the free market. That is to say, we do not expect companies to handle these kinds of issues themselves because they do not provide benefit in any sessions of their business. However, we all care about and know that ethical use of labor is not only essential to the business operation but also a ubiquitous value of respect of basic human right. Part of the responsibility for a developed country is to make sure developing countries are on the right track of their development, which includes the prevention of labor abuse. On the other hand, OEMs that involved in labor-intensive production should act proactively to conduct supplier audit and know the condition of each supplier. Government regulations can certainly help OEMs to have a better understanding of what to do and how to prevent and react to unqualified suppliers.

  52. Siddhanth Rajagopalan says:

    There is no stoppage of unethical work environments if the money inflow does not stop. As per the article, the US government outsources most of their contracts in developing or underdeveloped countries where legal laws are highly unstable. If the US government adhered to ethical sourcing, in one way it would at least shun the funding of such unethical work environments. However, having said that, transparency is needed at all the levels of the supply chain to ensure a guarantee of such a policy. Even after guaranteeing transparency the question in about integrity which may be of an issue in cases such as the countries talked about in the article. Although the costs would be high to ensure the policy sustains, the impact it provides would be at a greater value with lower repercussions. In addition, the government can even leverage other sources of supply in countries with trade free agreements in place.

  53. Sai Krishna Jayakumar says:

    In my opinion, ‘ethical sourcing’ comes under the umbrella of ‘responsible sourcing’. In today’s business world, responsible sourcing entails practices such as sustainable sourcing, carbon footprint reduction and also ethical sourcing. The case described in the article is similar to jewelers sourcing blood diamonds from Africa. In the late 20th century, the philosophy of lean transformed the manufacturing scenario and businesses progressed to the next level. Now, sustainable and ethical sourcing practices play a similar role in the next evolutionary step of business.

    In this information age of doing business, customers demand not just the product but also information pertaining to its supply chain. This being the case, corporations can no longer afford to be complacent about their suppliers’ practices. Ensuring compliance is necessary – even if it comes at a higher cost. Transparency is one way to check adherence to standards. Also, I think this is an area where blockchain tech will play a crucial role. Companies can leverage blockchain to enforce best practices, quality standards and contract compliance.

  54. Asmita Parashar says:

    As awareness and the for transparency grows, ethical sourcing has come into the picture and how. Ethical sourcing links to one major aspect of the business – brand/ public image. As we see a growing trend in areas of CSR, an organization cannot get away with unethical means to run their business. For the organization, the question remains – invest or not to invest? It boils down to cost vs. benefit. The cost is clearly significant as stated in the article. The cost of $500K is however not significant when the supply chain operations come into public view. In my opinion, a company must invest in resources that keep unethical operations out of its business. Sourcing from overseas suppliers certainly reduces costs and perhaps some of those savings can be invested in transparency – incentivize suppliers for their transparency, schedule “surprise” audits, etc. At the advent of the sourcing decision, ethics should be a priority. Due diligence must be carried out for any supplier that bids for the contract. Companies can get creative and create forms that ask their suppliers questions about ethics. Surveys are cheap to conduct but time-consuming, the results, however, are almost always insightful. Understanding and knowing your suppliers is key to improvements and keeps “damaging surprises” away.

  55. Apoorva Sahay says:

    There are ethical ways of doing business and there are other ways. Industries since its revolution have flaunted the working conditions of its labors. The owners and stakeholders of the companies around the glove have frequently cashed on the inhumane conditions they have pushed labors for business profits. Not just the smaller isolated firms at any remote location but even some of world’s largest firm put their blind eye towards the misery of their workers.
    BBC exposes inhumane working conditions in Apple factories
    However, it becomes extremely difficult for one company to adhere to ethical principles when there are no rules followed by intensely competitive companies. If we look at the history, there problems emerged at the provinces or states. Then state labor laws were created. Soon the business migrated to different states or employed migrants from different states. Then national laws were made. Now with the advent of global businesses and most companies offshoring their manufacturing units to garner highest profit margin, it’s imperative for international labor laws to be framed which are adhered by countries around the globe.
    More stakeholders of the companies are now concerned of their image. The internet and global connectivity have pushed firms to have a clean and transparent working condition. However, unless we see a bold step by the controlling authorities of the world to join hands to pull out workers from their miserable lives, this plague will be widespread and prevalent.

  56. Kaiyue Jin says:

    From the perspective of human nature and morality, it is extremely important for the US government to follow its promise on ethnic codes and make sure that the suppliers won’t violate morality codes when producing for US government. Since US government is a powerful buyer with huge negotiation power. In most developing countries, since the resource is quite limited and the law enforcement is not as effective as that in the states, it is hard for locals to eliminate all the immoral behaviors during the manufacturing. So if the US government really concern a lot on the morality issue, it can use their leverage to leave pressure on suppliers and push them to follow the morality codes. At the same time, to finally resolve the children labor problem, large US enterprises can help local government enhance local economic and donate some money in infrastructure and school construction.

  57. Nachiket Joshi says:

    It would definitely be a welcome step from the US government if it decides to source ethically even if it means higher cost. Transparency in the government’s sourcing strategy will reassure the tax-payers that the government’s sourcing strategy is based on morals. However, it is going to require a much larger and integrated effort to ensure that the complete supply chain of the sourced material is free from bad practices. Committed involvement from national and international bodies, participation of major companies in the private sector and use of latest technology (Ex. Blockchain technology) can help to identify the “Unethical” organizations based all over the world.
    Recently a few big companies from Electronics, Automobiles and few other industries have come together to form a group called “Responsible Business Alliance” (RBA). RBA aims at ensuring that the entire global supply chains of its partners are following stringent EHS (Environment, Health & Safety) standards. US government getting involved in some initiatives like these will prove its commitment towards “Ethical Sourcing”. Otherwise the deeper issues will remain unsolved forever.

  58. sai sravan akasam says:

    US government should adhere to the standards of ethical sourcing, the supply chain that the US currently works with will not make it easy to identify the path at which goods are coming from.The US government should invest in continuous monitoring of suppliers and supply chain transparency to achieve ethical sourcing.Transparency will reassure tax payers that their money is spent in right way and the people look up to the government. The main challenge will be trying to change practices of current suppliers due to different economic conditions, rules and regulations in respective countries or finding new cost efficient ethical suppliers.

  59. Aatira Benn John says:

    I agree with Christine’s comment mentioned at the beginning of this discussion, i.e the complexities of tracking the activities and practices by other elements of the supply chain make it increasingly difficult to ensure compliance. This is primarily due to information asymmetry problem in the supply chain. However, here I want to reiterate the points mentioned in a Deloitte report titled “Supply unchained: fighting labor abuse in the supply chain”. The report emphasizes taking ‘incremental steps’ in fighting such issues. This could be through greater transparency that reduces the asymmetric information issue. Secondly, the collaboration between competitors can improve compliance. And lastly, ubiquitous technology that can collect and monitor the activities at the supplier location can reduce this issue.

  60. Adam McKinney says:

    As the leader of the free world the US should absolutely be subjected to enforcing supplier audits for ethical sourcing. If they did not follow these practices they would not have the moral backing to enforce such requirements on others. Additionally the US would be unable to effectively combat unethical sourcing on both the part of the government and private entities.

  61. Adam M Hook says:

    I believe that the US Government should comply to using ethical practices when sourcing their goods. It seems that besides costs, the government does not want to be held liable by making an agreement that they will use ethical sources. It has been a trend for organizations to have more control over their supply chain and for increased transparency in order to decrease costs and improve efficiency. While there may be situations where complete transparency is not possible due to the sourcing of sensitive items, there are still ways for the US Government to monitor the sourcing without revealing sensitive information about their supply chain. If anything the government should be an example of ethical actions and a supporter of human rights, so if the government will not do it, how is it expected for anyone else to be interested in humane supply chains?

  62. Geetali Pradhan says:

    Every business should adhere to ethical practices. Even when the consumer is the US government, the standards in their supply chain should be maintained and the prices paid accordingly. Various ways should be introduced that allows audit of suppliers and other players in the supply chain without compromising and revealing sensitive information. Efforts should be made to make every stage transparent and adhere to ethical standards.

  63. Mayank Daga says:

    While human rights and ethics are much talked about, people, in reality, don’t abide by these basic tenets of humanity until they are exposed. There are very few companies and individuals who actually imbibe and practice such ethical and righteous principles because of their self-realized nature. Otherwise, fear of ill fame, loss of business or self-interest are the only driving factors for company’s or individual’s actions on this front. Take the example of the recent revelation on child abuse at the hands of church authorities, who are supposedly the embodiment of righteousness for human civilization. Similar examples of Nike and Unilever exists where the companies didn’t respond until there was a huge public outcry, because child labor was involved in the manufacturing of NIke shoes in Bangladesh or mercury as a by-product in manufacturing Unilever goods was damaging the environment in Coimbatore.

    Therefore, the answer to all the questions in the extract is yes because until we establish a mechanism to audit or track the decisions of individuals or companies, these entities would always tend to decide in their own self-interests, which is what the case is over here. Until the companies or individuals undertake the collective responsibility of eliminating wrongs that occur directly/indirectly because of their own actions, things won’t change at the ground level. Therefore, more transparency and stringent adherence policies would ensure more ethical and righteous response from companies and individuals.

  64. Puneet Pandey says:

    Yes, supplier audits should be a routine thing. For that Buyer should cut down the layer of contractors and deal with the factories directly. Obama’s initiative of putting a website to rack the procurement is an excellent idea if the name and location of the factories making the clothes or any product for that matter is mentioned. Having said that, its the “price pressure” that is forcing the suppliers to cut corner. The factories should be extended help from the buyer to make the working conditions better, Help can be in form of financial loan or putting up of safety features/machines in the factory.
    After giving a chance to the supplier to improve its working conditions.cameras should be put in the factories which can be monitored from the buyer’s location. Violations should be penalized appropriately.

  65. Seerat Anjay says:

    I don’t think there should be any doubt about spending the $500k to ensure to implement better plans.
    1. The “being ethical’ factors should always be considered, as better conditions are require because anyone should be not be devoid of the basic requirements( such as lower wages and unlawful restrictions).
    2. This has become an easy option because supplier audit is not done by the organization. Had the law and proper rules been followed stringently,manufacturers would be scared to go unethical way.
    3. Cost is an important factor and that definitely affects a lot of decisions. If organizations ensure to take audits seriously(e.g. as mentioned in class, putting video cameras at supplier location and to check in now and then or, setting an algorithm to detect deviations) ,then the manufacturers will focus on reducing cost by using other ideas e.g. book company came up with risk sharing, consolidation, strategic buying.
    In short, Companies continuously try to reduce cost, but going unethical is not the right way there are other options available.

  66. Tanya Arora says:

    I strongly believe that US government should adhere to the supplier audits that guarantee ethical sourcing practices. Although it is an additional cost to the OEMs, in the long run, negligence of the ethical sourcing practices is likely to create potential issues with Corporate Social Responsibility (CSR) practices of the companies, and it is likely that these issues can tarnish the public image of the company. As a result, small cost savings on the ethical sourcing would result in huge sales and reputation loss for the company. Moreover, to ensure that the US government is held in high regards by the citizens of its country, it is important that the government reflects transparency across all its purchases. Any wrong-doing by the government would damage the ethical working practices across the entire country.

  67. Devin Ewell says:

    The United States government should never knowingly allow any of its suppliers to use unethical practices and definitely not employ child labor. Especially given that the government expects that behavior from all US-based companies, it should be the leader of the US effort to stop these practices. And the financial cost compared to the overall moral cost is just too small.

  68. Neelesh Prakash says:

    I feel every entity should follow ethical practices of sourcing whether government or not. The unethical practices destroys the image of supplier and the customers ultimately leading to a huge loss of revenues for the company. The world is moving towards modern trends where customers are paying too much attention towards where the product they buy is coming for so it is totally logical to pay that extra premium to retain the customers So the manufacturing practices should be made more transparent so that the customer know they are not buying which is not made from unethically sourced materials.

  69. Archana Sinha says:

    Yes, the US government should have a mechanism to audit or monitor the working conditions/ practices of their suppliers. After all the buyer in most cases takes more risk than the supplier. Further, the suppliers should be appropriately penalized for not following the agreed upon practices. However, the suppliers should be extended help with regard to funds, expertise, training etc. Tie ups with financial institutions, training institutes, educational and research institutes should greatly reduce the problem addressed in the article. Even one weak link in the total supply chain can harm the whole chain. Taking initiatives, working with the suppliers will bring bring greater returns rather than just terminating contracts and ignorance.

  70. Jananee Parthasarathy says:

    The US government should adhere to supplier audits that guarantee ethical sourcing and the higher cost of such ethical sourcing should be accepted as a necessary condition for sourcing. Following could be acknowledged as one of the important reasons: Even if the supplier/manufacturer in foreign countries violate the ethical codes, the OEM is US based and it’s their name that goes on the product. Hence in case of any mishap, US government would be deemed responsible for the incident. Hence, it’s better if the manufacturing locations for all US government purchases are made transparent. This in a way would ensure ethical codes are not violated which will save the OEMs any embarrassment that could result from their supplier’s violation.

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