THE Defence Department is investigating claims of impropriety over a multimillion-dollar contract for the army's new backpack.

The Office of the Inspector General is examining detailed allegations sent last month to Defence Minister Joel Fitzgibbon. The claims centre on favourable treatment for British arms company BAE as it bid for a $20 million defence contract for 20,000 new rucksacks.

The allegations are believed to include rigged test results, sabotage of rivals' equipment and irregularities in the tendering process.

BAE was last month listed as the favoured tenderer over an Australian consortium to provide modular load carriages, which have compartments for ammunition and weapons, survival gear, water, maps and communications equipment.

The new packs were to be the next generation of technology in rucksacks, more comfortable and easier on soldiers' backs.

Some serving soldiers and veterans of Middle East operations wrote in a restricted unofficial website for military people, called Fire Support Base, that the BAE packs were inferior. One said it would be a "travesty of justice" if BAE won the tender.