Warren, Garamendi Renew Call for TransDigm to End Price Gouging, Provide Pricing and Cost Transparency to Defense Department
Letter
"(T)he Truthful Cost or Pricing Act, requires the government to obtain data to determine whether prices are fair and reasonable. This data is necessary for the Department to ensure government contractors are not overcharging taxpayers. DoD has reported, however, that there are "chronic issues' with contractors refusing to provide that data Contractors who consistently refuse to turn over cost and pricing data continue to rake in DoD contracts. For example, three previous inspector general reports, and a subsequent DoD report, have found TransDigm and its subsidiaries have repeatedly refused to provide requested cost or pricing data."
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"The explanation for the discrepancy between TransDigm's claims and the DoD IG findings is that TransDigm appears to be taking advantage of loopholes in contracting law.
Other defense contractors have worked to make it easier for military products to be labeled as "commercial,' and TransDigm has benefited greatly from this loophole. TransDigm informed us that "products manufactured for commercial aircraft have near identical military counterparts' which allows for a loophole to deny producing cost or pricing data by claiming "commerciality.' In the latest report to Congress, TransDigm claimed "commerciality' in about 90 percent of cases."
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"When TransDigm refuses to act in good faith, there are two options for the DoD: buy from TransDigm at their exorbitant prices, or walk away without the parts they need, putting mission readiness at risk. This lack of market competition leaves our military and national security vulnerable. In a statement before the House Committee on Oversight and Reform, the DoD's Principal Director for Defense Pricing and Contracting, John Tenaglia, stated "the price we pay matters because the more we pay, the less combat capability we can acquire for a ready force." DoD has also highlighted these concerns, sharing with us that "there could be instances where the Department purchases less due to increases in prices." TransDigm's ongoing refusal to provide DoD with pricing data is unacceptable given the company's record of ripping off the government and taxpayers."
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