President Carter has pledged his "full support to improve the efficiency and operations" of the Renegotiation Board, the small federal agency responsible for recovering excessive profits from defense contractors.
Goodwin Chase, elevated by Carter from member to chairman of the board, reported this to the agency staff last week along with a disclosure that the sales volume in the backlog of cases to be examined has grown to an "incredible" $150 billion and is escalating.
"Many of these cases have been languishing at the board for 10 years or more," Chase said. He added that there is "no justification" for the backlog to continue to exist at the expense of taxpayers and of "uncertainty for the contractors involved."
Chase termed the backlog "a discredit to the administration that furthered it . . . "
This was a reference to the White House Office of Management and Budget in the Ford Administration. After President Ford promised in 1974 to "reinvigorate" the board as an instrument in the fight against inflation, OMB denied funds for a major staff expansion.
The staff currently numbers 177. It is too small to give "even cursory examination" to the 3,400 filings made anually by contractors for sales approaching $30 billion, Chase said.
He also expressed concern about the historic board focus on recovering excessive profits "generally in minimal dollar amounts" - from small defense contractors.
"After many years of delay," he said, "they find themselves obliged to meet extensive legal, accounting and consultant expenses which have in many instances jeopardized their continued existence or solvency."
Chase said he will seek "expeditious processing" of cases involving small contractors to "lessen or eliminate this inequity."
Chase frequently dissented to board actions and inactions that, he charged, cost the taxpayers hundreds of millions of dollars.
On March 4, the day Chase met with Carter, the White House dismissed the three other board members, all of them appointees of Presidents Ford and Nixon. Later, Carter promoted Chase and nominated as replacements, two other critics of the board, William F. McQuillen and Harry R. Van Cleve. Two vacancies remain.
Recalling this meeting with Carter, Chase said:
"The President's considerable knowledge and remarkable understanding of the renegotiation process and board problems impressed me immensely . . . When the President pledged to the American people he would undertake to eliminate waste in the Department of Defense, he meant it."
In related developments:
Sen. Charles McC. Mathias (R-Md.), citing Rickover's description of the board as a "sieve," has introduced a bill to abolish the board. He proposed to substitute efforts to insure "effective procurement practices" in the Pentagon.
Rep. Joseph G. Minish (D-N.J.), chairman of the House Banking Subcommittee on Renegotiation, set hearings for March 29 through 31 on a bill to eliminate loopholes in renegotiation with a comprehensive overhaul of the law.
Among other things, the bill would make the board permanent rather than dependent on Congress to keep extending its life for short period. Board members would have fixed, staggered terms, rather than serving at the pleasure of the President.