The Army paid $40 million for new combat helmets later determined to be "substandard," the Defense Department acknowledged yesterday.

Pentagon spokesman Glenn Flood said that 461,000 helmets made by Gentex Corp., of Carbondale, Pa., failed to meet ballistic test standards required by the Army in three contracts awarded in 1983.

The Pentagon, according to Flood, is "aggressively pursuing its rights under these contracts," considering such remedies as replacement or alteration of the helmets. He said the department also is investigating possible fraud.

According to Flood, Gentex used a less costly method for constructing the helmets, which were supposed to provide 50 percent more ballistic protection than the traditional "steel pot" worn by American soldiers in World War II.

Ballistic tests performed in May show that the new helmets are more protective than older models, but far short of their contract requirement, Flood said.

Flood was unable to explain why the Pentagon only discovered the deficiencies in May, more than a year after the Army received its first shipment of the helmets.

The Pentagon revealed the contract problem after receiving inquiries from reporters earlier this week.

In interviews with The Associated Press, Gentex President L. Peter Frieder denied any wrongdoing by his firm. Frieder described the dispute as a controversy "over interpretation" and "poorly defined specifications."

"This is absolutely incredible," he said, when informed of the Pentagon's statement.

Flood said the first contract awarded to Gentex, on Feb. 4, 1983, called for 253,460 helmets at a cost of $85.20 each, to be delivered between January 1984 and December 1985. Gentex also served as a subcontractor for two other companies that received contracts in 1983 for 240,440 helmets at about the same price, Flood said.

Army Maj. Phil Soucy said the contracts specified that each helmet be made from 17 layers of Kevlar, a bulletproof fiber, using a single piece of the material. He said Gentex saved money by layering the helmets with separate pieces of Kevlar.

Pentagon officials estimate that the alleged shortcut saved Gentex more than $42 per helmet, compared with the cost of producing the item with a single piece of Kevlar.

"We paid for helmets made the way we wanted them made, and that's not what we got," Soucy said.

All but about 30,000 of the helmets have been delivered and paid for by the Army, according to Flood. On June 27, he said, the Pentagon told Gentex it would not accept the remaining helmets until they complied with the contract specifications.