HERCULES SAYS RULE FOR PACTS FALLS SHORT

The Defense Department proposed language this week in a rule to protect Hercules Inc. and other defense contractors from being discriminated against in contracts because of the presence of Soviet monitors at their plants. Hercules officials said they are outraged at the language, and promised to go to the Pentagon next week to try to get it rewritten.

The rule would prohibit the denial of contract awards exceeding $25,000 to contractors subject to on-site inspection under INF treaty solely or in part because of the presence of Soviet inspectors at the facility, unless reviewed by a senior procurement executive and approved by the undersecretary of defense for acquisitions.The top Defense Department officials are operating now under a policy of non-discrimination ordered by Secretary Frank Carlucci.

The language does not satisfy Hercules because it appears to give the department a possibility of denying a contract. A Pentagon spokesman said the department retains the right to deny a contract if a Soviet presence affected it, but said the language bars the denial of contracts where no security problems exist.