Origins of DII

In 1985, when the U.S. was rapidly building ships, aircraft, weapons and supporting systems to defend against the Soviet threat, widespread fraud allegations called into question the integrity of the defense acquisition process. Scandalous allegations of criminal misconduct and government mismanagement prompted President Reagan to appoint the Packard Commission, or “The President’s Blue Ribbon Commission on Defense Management,” to recommend reforms.

The Packard Commission, in its February 1986 Interim Report, observed that waste, fraud and abuse had eroded the public’s confidence in the defense industry and the Defense Department. The Commission urged defense contractors to improve the defense acquisition process through greater self-governance.

“To assure that their houses are in order, defense contractors must promulgate and vigilantly enforce codes of ethics that address the unique problems and procedures incident to defense procurement,” the Packard Commission wrote. “They must also develop and implement internal controls to monitor these codes of ethics and sensitive aspects of contract compliance.”

Heeding the Packard Commission’s call, Jack Welch of General Electric and the CEOs and senior officials of 17 other defense contractors voluntarily met and drafted the principles that became known as the Defense Industry Initiative on Business Ethics and Conduct. By July 1986, 32 major defense contractors had pledged to adopt DII’s core principles.

DII members still observe the principles, which first appeared in the Appendix to the Packard Commission's June 1986 final report to the President, "A Quest for Excellence". They are:

  • Have and adhere to written Codes of Conduct;
  • Train employees in those Codes;
  • Encourage internal reporting of violations of the Code, within an atmosphere free of fear of retribution;
  • Practice self-governance through the implementation of systems to monitor compliance with federal procurement laws and the adoption of procedures for voluntary disclosure of violations to the appropriate authorities;
  • Share with other firms their best practices in implementing the principles, and participate annually in “Best Practices Forums”; and
  • Be accountable to the public.

Original DII Signatories (July 1986)

Aeronca Inc.
Allied-Signal, Inc.
American Telephone & Telegraph Co.
The Boeing Company
Burroughs Corporation
E-Systems, Inc.
Eaton Corp.
FMC Corporation
Ford Aerospace & Communications Corp
General Dynamics Corporation
General Electric Company
Goodyear Aerospace Corporation
Grumman Corporation
Hercules Incorporated
Hewlett-Packard Company
Honeywell Inc.
Hughes Aircraft Co.
IBM Corporation
Lockheed Corporation
Martin Marietta Corporation
McDonnell Douglas Corporation
Northrop Corporation
Parker Hannifin Corporation
Pneumo Abex Corporation
Raytheon Company
Rockwell International Corp.
The Singer Company
Sperry Corporation
TRW Inc.
Textron Inc.
United Technologies Corporation
Westinghouse Electric Corporation
  • ©2012 Defense Industry Initiative on Business Ethics and Conduct