Advice from Admiral Rickover

Following is a substantial part of Admiral Hyman Rickover’s prepared statement to the Joint Economic Committee of Congress on January 28. He testified before the committee shortly after meeting with the Secretary of the Navy who told him, as Admiral Rickover put it, that “he wanted my termination with the Navy within three to six months.”

Excerpts from Admiral Rickover’s testimony follow the text of his statement.

…How to promote greater efficiency and economy in the Defense Department? As you know, I have testified often before congressional committees, including yours, on various aspects of this problem. In some cases, Congress implemented my recommendations for reforms. Eventually, however, defense contractor lobbyists have generally learned how to get around them or have them rescinded.

Former Congressman Chet Holifield, working with the House Armed Services Committee, was instrumental in enacting the Truth-In-Negotiations Act of 1962. I assisted him in that venture. Today there are still contractors that are not in compliance with the act.

In the late 1950s Senator Russell Long insisted that the statute authorizing the National Aeronautics and Space Administration, which at that time was at the forefront of advancing American technology, preserve for the American taxpayer title to inventions developed by government contractors at the public’s expense. This was consistent with the general government policy as embodied in various statutes including the Atomic Energy Act.

In 1980, Congress reversed this longstanding government policy by giving universities and small businesses title to inventions developed at government expense. Now patent lobbyists are pressing Congress to extend that giveaway practice to large contractors. This would generate more business for patent lawyers but, in the process, will promote even greater concentration of economic power in the hands of the large corporations which already get the lion’s share of the government’s research and development budgets.

In the late 1960s Senator William Proxmire, Congressman Henry Gonzalez, and former Congressman Wright Patman were instrumental in enacting legislation requiring the establishment of cost accounting standards for defense contracts and a Cost Accounting Standards Board to set these standards. In 1980 Congress eliminated the Cost Accounting Standards Board by cutting off its funding. And today, defense contractor lobbyists are promoting legislation that would give the Office of Management and Budget authority to waive or amend the standards. I predict that within a few years the standards established by the Cost Accounting Standards Board will have been watered down to the point that they will be worthless.

In the late 1960s and early 1970s Senator William Proxmire, Congressman Jack Brooks, and Congressman Joe Minish were at the verge of getting congressional approval of legislation which would strengthen the Renegotiation Board and make it an effective means of recouping for the US taxpayer any excessive profits made on defense contracts. By 1976 defense contractor lobbyists had persuaded Congress to let the Renegotiation Act expire. Three years later, in 1979, Congress cut off funding for the Renegotiation Board, which promptly went out of business. This left only the profit-limiting provisions of…

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