Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-03-23
Arms Probe Attacks
Contractor Profits
Needless Billions
Spent, House Unit
Report Charges
BY the Associated Press

The House Appropriations Com
mittee made public today staff
criticizing Defense De-
partment procurement practices
as "unrealistic" and as giving
contractors "a tremendous ad-
vantage"
Included in the 397-page doc
ument were formal replies from
the Defense Department, the
Army, the Navy and the Air
Force. In general. they defended
ed the criticized practices on
grounds the hurry-up or crash"
nature of the contracts involved
made normal procedure imprac-
teal.
Representative Written. Dem
ocrat of Mississippi, commit
tee member, commented in the
report that there were indica-
tons 1.-The Government is spend
ing billions needlessly to some
ones profit"
Corruption Charge Lacking
The report, on which three
teams of committee probers have
been working since last April.
made no charges of corruption or
wilful wrongdoing.
No specific time period was
covered by the survey, but much
of the material involved was Or
dered or delivered during the
Korean war. The report made no
distinction between Republicans
and Democratic administrations.
The wartime period included
parts of both.
The report cited examples it
said showed serious deficiencies
with respect to policy guidance
F.. unconscionable delays" in
making formal contracts, "un-
realistic" delivery schedules, di-
version of production funds into
research and development. in
adequate stock control, fragrant
deficiencies" in procurement and
contract operations and reports
of political pressure" in con-
tract dealings.
Secretary of Defense Wilson
replied:
II do not excuse these kinds
of things If they are true. There
is some explanation of it, prob
ably, because people do not pur-
Iposely do such sloppy things.
That is, they sort of drift into
it. All I can tell you is that
one way and another we are
trying to get hold of the thing"
Improvements Cited
The investigators said there
have been substantial improve
ments in procurement practices
and policies in recent years.
/ They complained that in all
three services, the greatest por-
ton of high-cost procurements
are established through nego-
Itiated contracts rather than
through competitive bidding.
| They said that at North
American Aviation. Inc, which
is SO per cent devoted to Gov
eminent business, the Govern
ment paid for most research and
development costs, but did not
share in the company's income
from licenses and royalty fees
resulting from non-govern-
Imenta business.
From one aircraft program
alone, they said, North Amer
lean received over SIS million in
royalties and license fees, main
ly from foreign manufacturers.
During one period, the report
said, the Ford Motor Co. made
a profit of 296 per cent on air.
plane engines before voluntarily
cutting its prices on the basis Of
cost experience. The refunds cut
the profits to 10 per cent for the
initial period. the report con-
tinued. while on total engines
delivered under the contract over
a three-year period the profit
was 8 per cent.
Find Costs Not Considered
The investigators said little
consideration" is given by the Air
Force to comparative costs in
determining which of several
sources shall continue when pro-
See DEFENSE, Page AT
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