Defense Firm Excess Put at $244 Million

A team of auditors ordered to scrutinize the administrative expenses of General Dynamics Corp. has concluded that the Pentagon paid a total of $244 million in excess overhead claims to the giant defense contractor, a Pentagon spokesman announced today.

Of that amount, about $120 million already has been recovered by the government through the withholding of expense claims, said the spokesman, Michael I. Burch.

The Pentagon is still debating how it will recover the remaining $124 million, Burch said, but is considering either a demand for full payment or a continuation of a freeze imposed last month by Defense Secretary Caspar W. Weinberger on monthly overhead payments.

Found in Audit

Burch disclosed for the first time that:

--The audit ordered by Weinberger on March 5 had turned up excess “administrative and general” overhead payments totaling $154 million.

--An additional $90 million in what the Pentagon considers improper overhead claims already has been withheld, producing the total of $244 in excess claims.

--The overpayments apparently were made over a long period, but Burch could not say exactly how far back the auditors went in their examination.

--The $154 million worth of overcharges uncovered in the latest audit involve “technical-type issues” such as claims for data processing costs and Worker’s Compensation.

“We will collect (the overpayments),” Burch said. “If the corporation wants to contest the amount they may do so, but we will be holding the money.”

‘Get-Tough’ Campaign

The audit was ordered on March 5 by Weinberger as part of a “get-tough” campaign against defense contractors. Weinberger said he was ordering the withholding of all monthly overhead payments to General Dynamics for at least 30 days while he awaited “a complete and comprehensive review of billing procedures at all General Dynamics locations.”

Weinberger indicated that he expected his auditors to determine whether the giant defense contractor had improperly billed taxpayers for corporate trips and other expenses.

The action followed congressional hearings that spotlighted a number of questionable bills submitted by General Dynamics, including country club expenses and a claim for the cost of boarding a dog in a kennel.

No Comment From Firm

A spokesman for General Dynamics, Alvin A. Spivak, said this morning the company had not been informed of the audit results and he had no immediate comment.

General Dynamics, which in fiscal 1983 was the nation’s largest defense contractor, builds all the Navy’s Trident missile-firing submarines, most of its attack subs, Army tanks, F-16 jet fighters, Tomahawk cruise missiles and a variety of other weaponry.

When Weinberger announced his crackdown on General Dynamics, Burch estimated that the freeze on monthly overhead payments would affect about $40 million in administrative claims.

He lowered that estimated today, saying roughly $30 million had been withheld so far. That $30 million, when coupled with the $90 million previously withheld, produces the total $120 million that the government has so far recovered, Burch said.

Burch also said that while General Dynamics announced two weeks ago that it was voluntarily withdrawing $23 million in overhead claims submitted from 1979 to 1982, “General Dynamics has not given us a check for $23 million.”