The Nation - News from Sept. 18, 1988

The Pentagon, citing the protection of the government’s interests, said it has slightly relaxed the “truth-in-contracting” regulations it imposed after this summer’s disclosure of a massive fraud investigation. But it refused to drop the rules altogether, as industry asked. The certification and profit recapture regulations had targeted defense contractors named in search warrants obtained by the Justice Department. The certification clause requires contractors who receive a contract worth at least $100,000 to certify they have not obtained any inside information, while the profit recapture regulation specifies the Pentagon can reclaim profits from companies that obtain sensitive information improperly. Officials said the Pentagon was narrowing the certification rule by specifying that the written pledge would be required only when a contractor is competing with other firms.