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Defense Contracts

July 27, 1988

In view of the continuing instances of fraud, bribery, unconscionable prices and profits in the defense industry, which have been assisted by willing Pentagon officials, isn't it past time to revive the World War II Renegotiation Act?

Many of us who have had experience with the Renegotiation Act will recall that each major World War II and Korean War defense contract was reviewed on an after-the-fact basis, covering all aspects of contract performance, after which the Renegotiation Board, composed of a number of conservative and knowledgeable persons appointed by the President, made a determination whether profits were excessive or unconscionable and, if deemed excessive, decided the amount, if any, the contractor was required to refund to the government on that contract. This provided an efficient method of keeping defense contractors in line with reasonable profit expectations.

This method of government review was highly successful over a lengthy period of defense procurement. It is badly needed now.

When the Renegotiation Act was in effect, it was not unusual for a refund to be made to the government of millions of dollars on a single defense contract. Wouldn't it be refreshing to have such reviews on current defense procurements? Isn't it the only sure way to prevent unconscionable behavior on defense contracts?

PAUL A. HANNA

Orange

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