Less than a month ago, a bill increasing the governments's power to recover "excessive" profits from defense contractors seemed headed for easy passage in Congress.
Then the defense industry started to play offense - and now the legislation, which sailed through the House Banking Committee earlier in the year, has run aground in the Rules Committee. Some say it may never come to vote on the House floor.
The bill, sponsored by Rep. Joseph G. Minish (D.N.J.), is intended to beef up the Renegotiation Board, the samll federal agency that takes back excess profits on the $41 billion in federal defense and space contracts written annually.
The board, which has existed on a "temporary" basis since the Korean War, earns the government about $40 million a year in recovered profits. Minish and his supporters claim that amount could increase tenfold or more if the bill were passed.
But defense contractors regard the board as an instrument of federal harassment, and it seems as if there is a defense contractor - or subcontractor - in every congressional district in the country.
Four weeks ago, several defense industry organizations began urging member companies to put pressure on House members to block the legislation. Minish says the major contractors "subbed out" this logbying work, just as defense contracts are subbed out. Affected local businessmen when urged to seek out congressmen when they were home during last month's Easter recess.
That personal contact has been followed by a steady flow of mail and telephone calls. And it has had results.
Minish says the small business involvement is "suspicious" because his bill would eliminate the Renegotiation Board's jurisdiction over any business with annual sales of less than $5 million.
"The little guys would be big giners under my bill," he said. "Most of them would never have to renegotiate again. And here they are fighting it, the morous.
"Either they're pretty stupid or the big guys have gotten to them. I think the prime contractors have put an arm on the little guys and ordered them to fight this bill."
Because of the lobbying, the Minish bill hit a roadblock whe it came up in the Rules Committee for routine there for two weeks, apparently because there are not enough favourable approval. The bill has been stalled votes to bring it to the floor.
"There's just an awful lot of dissatisfaction with this bill," said Richard Bolling (Mo.), ranking Democrat on the Rules Committee. It's been building up, and now there's a feeling that we ought to let it just fade away."
Late last week, Minish importuned House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) to intervene with the Rules Committee on the bill's behalf. At O'Neill's urging, a committee vote has been scheduled for Tuesday. But even if the bill gets out of Rules, its chance on the House floor seem even at be.
The contractors' battle on the bill has been aided by conflicting signals from the White House. Although President Carter has pledged his support for strengthening renegotiation, his senior executives have been conspicuously unenthusiastic about backing up that pledge.
Office of Management and Budget Director Bert Lance failed to back the Minish bill when it was introduced, and finally produced a lukewarm letter of support just before the Banking Committee approved it. The Pentagon openly opposes the measure.
%The lack of a clear administration position gave us a little time and a lot of adrenalin," said Ken Hagerty of the Western Electronics Manufacturers Association, which has led the fight against the bill.
"If the administration had come out strongly for this, we probably couldn't have gotten our members as motivated as they are to work against it." he said.
The board is empowered to review defense, space and certain other government contracts after the works is completed. If the board concludes that a firm has made "excessive" profits on its government dales, it can order the excess amount refunded.
The board receives thousands of filings from contractors each year, but lacks sufficient staff to audit most of them. As a result, almost all contractor statements are taken at face value: few of the reports filed by contractors show that high profits were earned.
Minish's bill would require the board to audit every filing and would permit it to use the Pentagon's audit agencry. The bill also would eliminate exemptions that have permitted many of the largest defense contractors to escape renegotiation.