CONTRACT RENEGOTIATION.: It Destroys Incentive to Cut Defense Costs


RENEGOTIATION is a threat to national security." With this flat accusation the defense contractors' National Security Industrial Association took dead aim at an old enemy entering the congressional battlefields once more: the highly controversial Renegotiation Act of 1951, which is before the House Ways and Means Committee for renewal this year. In its role as examiner—and judge—of thousands of defense contractors annually, the Government's Renegotiation Board since 1952 has ruled that the suppliers have made some $700 million in "excessive profits." In doing so, say businessmen, it has seriously hampered effective procurement and demoralized large segments of vital industry.

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