Evening star., 1947-12-03
No Way 10 Prevent
Repetition Of Meyers
Case, Army Concede,
By John A. Giles


upon the United States, there is
practically no way to prevent a
repetition of the Bennett E, Meyers
case, top Army General Staff off,
GERS conceded today.
1t is impossible Ito legisiate hon
esty," one high ranking officer in
the Service Supply and Procure
ment Division said.
The Departments announce
r11ent said that, when an admins
trative audit of contracts or regular
or special Inspector General re-
ports or any other inspection
method indicates that ''it appears
probable that criminal war fraud
has been committed, the Army De-
.partment brings the matter to the
attention of the Justice Department
for investigation.
"And that department invariably
pursues the matter vigorously" it
added
Aids In Prosecution.
The Justice Department prose-
cutes such fraud cases in the civil
courts, and the Army "co-operates
fully in all investigations and
prosecutions" the statement said.
In wartime, however, contractors
find they are unable to fill the huge
demands and must seek the aid OF
subcontractors. In many instances,
these subcontracts have run into the
hundreds, each making part OF
tnyoly yN1ona
The Aviation Electric Co., which
Mai. Gen. Meyers is alleged to have
formed, was such subcontractor.
1t is in the case Of the subcon-
tractors that fraud may develop
because, with so great a num-
Der and never enough auditors to
do a thorough job even with the
prime contractors, not many Of the
subcontracts are studied. AS a mat
ter of fact, many cost-plus-fixed-
fee contracts made during the war
did not even list the subcontracts.
Suhcontractors also may find
themselves unable to undertake all
the operations necessary to produc-
ton of their end product and, as
result, may be forced to let sub
subcontracts," an Army official ex-
planned. AS an example, he told OF
one war contractor who, after let
ting subcontracts, found himself to
be the "subcontractor for his own
contract on the 10th level" In
other words. after Is subcontracts
had been let. one of the subcon-
tractors hired the prime contractor
to help him deliver the goods.
Wright Field Negotiations.
All plane contracts are negotiated
at Wright Field, but those involv-
ing more than 100000 and certain
other special cases must be reviewed
by the Department in Washington
both in peace and war. The Air
Force will take over its own plane
purchasing activities shortly after
January l. but such buying now is
still done by the Army.
Before a contract is let for any
kind of equipment or goods, inter-
ested divisions must agree on de-
sign, etc. Then a negotiated con-
tract is let for model II this
proves satisfactory, a larger produc-
ton contract may be let. In peace
time, bids must be sought; but in
war, cost-plus-fee contract may be
negotiated In such cases the Army
uses knowledge gained from con-
struction of the model to arrive at
fair mass production costs. :.
There has been a steady tighten
ing up on purchasing methods and
regulations since last April when
Army Secretary Royal issued an
order stating that top-level permis-
sion must be sought before any con-
tract can be negotiated. All these
moves have had the effect of SLOW
ing purchasing, which can be toler-
ated in peacetime but not during a
war. The Department now operates
under more than 1000 pages of pro-
curement regulations based on law.
The armed forces now are finding
it harder to fill petroleum needs than
any other item, because reflneries
would rather supply their own COM
mercial outlets. Next on the critical
list is steel.