The House Armed Services Committee yesterday announced a program to audit seven major defense contractors to determine whether the companies are making illegal or questionable claims.
"We are making what amounts to a survey of a cross section of firms," said Rep. Charles E. Bennett (D-Fla.), chairman of the seapower and strategic and critical materials subcommittee. "We are not pointing the finger at anyone."
The companies facing billing audits are General Dynamics Corp., Boeing, Sperry Rand Corp., Newport News Shipbuilding and Dry Dock Co., Bell Helicopter, McDonnell Douglas Corp. and Rockwell International Corp.
Over the next 45 days, 14 auditors from the General Accounting Office and the Defense Contract Audit Agency will examine the contractors' books, according to Rep. Bill Nichols (D-Ala.), chairman of the panel's investigations subcommittee.
When the audits are completed, two subcommittees will hold joint hearings on the issue of questionable defense costs. "With this cross section, we hope to get some perspective on the scope of the improper billing issue," Nichols said. "Perhaps it is a broad and general problem; perhaps it is a narrow one."
In recent weeks, several major defense contractors have been accused of improper defense billings. A federal grand jury in Philadelphia indicted General Electric Co. last week on charges of fraud in connection with billings for nuclear missile warheads. General Dynamics has been accused of various improper billings, including charging the government for kennel fees to board an executive's dog.
Yesterday, on CBS' "Face the Nation," a senator, assistant defense secretary and defense consultant presented different views of the causes of excessive and wasteful defense spending.
Sen. Charles E. Grassley (R-Iowa) said lack of publicly advertised competitive bidding is a major factor in mounting defense costs.
Assistant Secretary Lawrence J. Korb said Congress' votes for "pork-barrel" spending result in the waste of up to $10 billion a year.
Consultant Edward Luttwack said the Pentagon let the procurement bureaucracy grow so large that, to justify its existence, each section set its own contract specifications, forcing up costs.