Illegal-Profit Clause Sought in Future Defense Contracts

Seven senior members of the House Armed Services Committee said Tuesday that the Pentagon should add a clause to future defense contracts to ensure that any illegally gained profits can be recovered by the government.

“There is an urgent need to protect both the national security and the interests of the U.S. taxpayer in defense procurement,” they said in a statement.

“A clause in all future contracts allowing the Defense Department to recover the profit from illegally obtained contracts would go a long way toward doing that,” it said.

The statement arises from the current Pentagon bribery investigation, which involves allegations that private consultants illegally bought information about future contracts from Defense Department employees. No charges have been filed in the case, which became public June 14.

Defense Secretary Frank C. Carlucci and other top Pentagon officials have said that if any of the contracts involved in the investigation turned out to have been won on the basis of illegal information, the Pentagon can use existing laws to recover the profits.

Carlucci last month ordered that a new clause be inserted into some contracts with firms involved in the investigation.

The clause should be put into all contracts, the statement said.

“Without such protection, the government is not in a position to feel comfortable entering into future contracts” with any of the defense firms mentioned in the investigation, the statement said.