Senate Votes Restrictions on Defense Firms

The Senate, reacting to what many senators portrayed as public outrage over wasteful Defense Department spending, voted overwhelmingly Monday to impose new restrictions on defense contractors and Pentagon employees who leave government to go to work for them.

The new military procurement restrictions were added by a vote of 89 to 0 to a bill that would authorize the Defense Department to spend $302 billion in fiscal 1986. But a more stringent procurement measure was defeated, 67 to 22.

The successful amendment, sponsored by Sen. Dan Quayle (R-Ind.), would require the secretary of defense to seek second bidders on major defense contracts whenever feasible.

Restricts ‘Revolving Door’

It would also restrict the so-called “revolving door” system under which Pentagon employees frequently leave government to take jobs with defense contractors whose work they have supervised.

It would require the Pentagon to issue reports on so-called “sole-source” projects, estimating what they should cost, and puts the burden of proof on the contractor when the reasonableness of his costs are questioned.

Although a number of senators criticized Quayle’s amendment as too weak, the Senate rejected a more stringent measure put forward by Sens. David Pryor (D-Ark.) and Charles E. Grassley (R-Iowa).

Pryor and Grassley wanted to require the Defense Department to seek second bids on all major defense contracts except in cases in which Congress approves a so-called “sole-source” contract. Their measure would also have prohibited any Pentagon employee from accepting a job with a defense contractor for three years after leaving government.

50 Amendments Expected

The two procurement votes were the first of as many as 50 amendments expected to be offered before the overall bill is voted on. Among the amendments are several that would limit deployment of the MX missile and cut back funding for President Reagan’s space defense system, popularly known as “Star Wars.”

The Senate decided to tackle the procurement issue in response to many recent reports of excessive prices paid by the Pentagon for mundane items--$9,600 for an Allen wrench, $426 for a hammer, $6,000 for a coffee maker and $600 for a toilet seat. Supporters of the amendment said that their constituents are very upset about what they view as profligate Pentagon spending.

“There’s a perception that the Department of Defense purchases nothing but hammers and toilet seats that are overpriced,” Quayle said. “That’s not true, but that’s the perception.”

Sen. Dale Bumpers (D-Ark.) added: “I am tired of reading about these scandals--I’m tired of going home and apologizing for them.”

Big Surplus

In addition, some senators said that the Pentagon had undermined its own credibility by withholding from Congress until recently the news that it has some money left over from the current fiscal year. Defense Secretary Caspar W. Weinberger recently disclosed a $4-billion surplus, and House Armed Services Committee Chairman Les Aspin (D-Wis.) announced Sunday that the Pentagon had accumulated $18 billion in recent years because inflation was less than anticipated.

“I think the tide has turned in the American public a long time ago against the Defense Department and against the $6,000 coffee pots,” said Sen. John Glenn (D-Ohio), who threatened to offer an amendment that would force Weinberger to return the disputed $4 billion to the U.S. Treasury. “They are not just given a sack of money over there to decide how to use it.”

Sen. Carl Levin (D-Mich.) disclosed that the number of former Pentagon employees who went to work for defense contractors increased to 3,308 in 1985 from 2,240 in 1984. In addition, he said, Martin Marietta led other defense contractors in 1985 by hiring 181 Pentagon employees. Lockheed hired 159; Hughes, 132; General Dynamics, 119; BDM Corp., 117; Boeing, 116; Northrup, 116; TRW, 102; McDonnell Douglas, 76, and Rockwell, 66.

Must Disqualify Self

Under Quayle’s amendment, a Pentagon procurement employee who begins discussing a job with a defense contractor must immediately notify his superiors and then disqualify himself from supervising work by that contractor. The penalty for failing to do so would be a 10-year ban on employment in the defense industry and fines up to $20,000.

The bill before the Senate seeks also to prohibit contractors from charging the government for overhead costs such as golf outings and political contributions. Appearing at a joint hearing of two House Armed Services subcommittees, Deputy Defense Secretary William H. Taft IV said that the Pentagon supports legislation to impose financial penalties on contractors who seek reimbursement for such unallowable expenses.

Taft said that the department already has taken steps to curb abuses but told panel members: “If legislation is the route you prefer to go, we have no problems with that.” He specifically endorsed the part of the proposed law that would impose a penalty of twice the amount of unallowable costs for which a contractor repeatedly seeks reimbursement.

Staff writer Gaylord Shaw contributed to this story.