Managing managers : The art of whitewash ?

A couple of evenings ago, during dinner with a visitor from the US - someone I know very well, the issue of outsourcing to India and the problems experienced came up as a natural point of debate.

Background
- A major networks product company has outsourced their product development to an Indian vendor. The vendor has been late in delivering the project to such an extent that the original US company has lost it's competitive advantage in the market and with the downturn it may have also lost the window of opportunity.

We started to discuss the different approaches that are taken and why this has either worked / not worked in this particular case
- Getting a 3rd party to validate work : This is being done by an US company and the process has not been effective : could the main reason be that that this "validation" company does not
a) Understand the onsite-offshore play and is hence stuck in-between with no value add ?
or b) The intermediary is not involved in the product development process and hence is always having to fall back on "process" compliance / status reports to understand viewpoints ?
or c) A combination of the above 2 with a the real issue being that the intermediary is playing a "relay" role only and is not capable / empowered to make decisions ?


- Ensuring that a senior person capable of making decisions is working with the offshore team to validate delivery.
On this point, the discussion moved to the next question ie. "what is the value then of the offshore delivery team ?"

- Ensuring that someone from the offshore team acts on-behalf of the onsite team ?
Apparently, this was tried with very little success and the main reason for this being
a) Tendency of the senior management of the offshore team in taking the status mechanism and obscuring the real status !
b) Mixed messages between the team on ground and the reviewers
c) Incapable team leadership in terms of priority of issues to be addressed / sequencing (always supply driven sub-optimal solutions)

Notice though, that at NO time during the discussions, was there a question on the CAPABILITY of the delivery team ?


In the end, does it mean that we have just incapable project managers / general managers in the system ?

Or, are they supremely capable in "whitewashing projects" ?