Evening star. [volume] (Washington, D.C.) 1854-1972, 1947-09-09
Half Billion 0verpaid
On War Contracts,
House Unit Charges
Inquiry to Open Today;
Top Sum Went to Plane
Firm, GAO Official Says

iuUIy INV SlilIiuI SNyS
Representative Bender, Re-
publican, of Ohio today esti-
mated overpayments on can
celed war contracts have totaled
nearly $5Oo,o0O,oOo and said a
public explanation will be de-
manded of companies which fail
to return the money.
MIR. Bender is the chairman OF a
House Expenditures Subcommittee
investigating contract Examinations.
The group was called into session
today.
| As the first witness, E. L. Fisher,
an official of the General Account
ing Office, filed a report Using over
payments by which he said ranged
as high as $3.50, 1855. The top sum was
received by an aircraft manufacturer
Mr.. Fisher did not identify.
S625,459 Overpayment Cited.
Mr.. Fisher listed a settlement of a
contract with the Consolidated Vul-
tee Aircraft Corp of San Diego in
volving an overpayment of 1925, 459.
He also listed an overpayment to
the same company at Tucson, Ariz.,
of $24,896.
Two other contracts which Mr..
Fisher described were with the Gui-
berson Diesel Engine Co. of Dallas.
He said under one contract "for
which the firm was paid $3,078,174
the Government received nothing.
while under the other contract it
received only As or the 1913 engines
called for"
Mr.. Fisher said under a settlement
of these contracts an excess pay
ment by the Government amount
ing to 500 ,982 resulted.
| In another case Mr.. Fisher said
settlement of a contract with the
Puffer Engineering Co. of Detroit
resulted in an overpayment of 81. 125.
Some Voluntary Settlements.
The witness said most cases in which
overpayments were made on settle
ment grew out of inventory ap-
praisals and improper accounting
practices. He said in some cases VOL
untary settlements had been made
when the concerns were advised OF
overpayment.
| The witness was asked about the
practice of Government contract Of
fcers quitting Government employ
ment for jobs with those with whom
they had been doing business.
He said the controller general be-
lieves this is a vicious practice"
and added that there were specific
examples of this practice in the War
and Navy Departments.
Recovery Efforts to Be Watched.
| Mr.. Bender said the committee
will watch closely the effectiveness
of the Federal agencies in securing
recoveries by voluntary means" in
overpayment cases where no legal
machinery for recovery now exists.
IF recoveries are not effected dur
ing the next six weeks" he said in a
statement, "the subcommittee will
summon representatives of the indi-
vidual companies which have re-
ceived the largest overpayments to
present their reasons for not making
return of money which they have
received from the Government which
was not properly due them"
He said the committee will ques-
ton Justice Department officials
Thursday concerning prosecution of
cases in which the general account
ing Office has reported actual fraud.
Seek to Improve Procedure.
A review of contract settlements,
he said. shows that excessive pay
ment in which no fraud was ap-
parent exceed the amount of actual
fraud.
Mr.. Bender said a sampling of
IL per cent of settlements indicated
overpayment of more than $6,000,-
600, with the total likely to reach
half a billion dollars.
The committee, he said, is con-
cerned not only with exposing an
evil to be remedied Immediately,
but also with the improvement of
administrative procedures generally
and, where necessary, recommends
lions for new legislation which will
prevent a recurrence In the future
of y,oiSIlco and wa ste"