American Notes Defense

With the speed of a Tomahawk missile, the charges of improper billings against General Dynamics, the nation's largest defense contractor, continue to mount. Last week the Pentagon announced that a team of 20 auditors had determined that the company had overcharged the Government by $244 million during the past twelve years for "overhead" and administrative costs. The Pentagon has already withheld $120 million in payments and intends to demand the additional $124 million "to adequately protect the Government's interest." The new figures represent another disclosure in a spreading investigation that has turned up such charges to the Government as country- club dues and babysitting fees.

General Dynamics responded that it had "no idea of the origin of the figures quoted." The Pentagon is undecided as to how it will recoup the money. Said a Pentagon spokesman: "We could continue to withhold overhead payments until the account is filled, or we could ask for a lump payment." The Northrop Corp., a competitor, last week suggested one form of punishment for General Dynamics: to share some of the Government contracts with it. Northrop offered to sell the Pentagon about 400 of its newly developed F-20s, sleek fighter jets it is having trouble marketing, for substantially less than General Dynamics' comparable F-16s--and to guarantee the price of spare parts for 20 years.