Reforms Up to Congress, Carlucci Says : Legislative System Faulted for Scandal in Pentagon Contracts

WASHINGTON — Defense Secretary Frank C. Carlucci said today the Pentagon contract fraud scandal should lead to reforms by the Congress, not the Defense Department.

Offering a personal “prescription for procurement reform,” Carlucci called on Congress to streamline its budget-making process, reduce the number of committees that oversee defense spending, shift the Pentagon budget to a two-year cycle and provide multiyear funding for more weapon programs.

The goal, he said, should be to limit the number of “intervention points where a skillful lobbyist can succeed” in gaining an advantage.

‘Purposes of Reform’

“For purposes of reform, the most important fact underscored by the current investigation is that illegally gained information has value only when the opportunity exists to use it,” Carlucci said in remarks to the Baltimore Council on Foreign Affairs.

“Unfortunately, the current system is highly unstable and offers far too many such opportunities,” he said. “No program ever stands still for very long; someone is always lobbying to change it.

“The message being sent to industry is that there is a higher payoff for investment in lobbying than for investment in research and development and long-term productivity enhancement.”

The speech was the most comprehensive statement to date by the secretary since the revelation of a major fraud investigation involving defense contractors and consultants.

The Justice Department inquiry, which became public in June, centers on allegations that defense contractors routinely used outside consultants to obtain proprietary information on the bids of competitors and that the consultants may have paid bribes to Pentagon employees.

Proposals Called Ill-Advised

Carlucci said he was aiming his remarks at Congress both because some of the reform proposals circulating on Capitol Hill were ill-advised and because the Pentagon has already taken steps to streamline its procurement process.

He said his department would do more, including placing limits on the number of bidding rounds allowed for major programs.

“But reform is really about prevention . . . ,” Carlucci said, adding the question should be, “How can we close these ‘windows of vulnerability’ in the procurement process?

“Right now, the defense budget bill must complete a 17-step process to final passage. Each point along the way is an opportunity for those bent on exerting improper influence.”