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A group of Republican and Democrat lawmakers have demanded the Pentagon provide information related to defense contractors’ pricing practices, which are reportedly costing the US military billions in overpayments each year.

In a letter to Defense Secretary Lloyd Austin, Senators Elizabeth Warren (D-Mass.), Chuck Grassley (R-IA), Mike Braun (R-IN), and John Fetterman (D-PA) expressed concerns about defense contractors exploiting loopholes, specifically citing the tactic of “sweeping.” This practice involves delaying the submission of cost or pricing data, which hinders the government’s ability to negotiate fair prices.

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In their letter, the lawmakers wrote, “We continue to be concerned by audits and press reports that find defense contractors regularly gouge the military. This practice costs billions of dollars and allows contractors to collect excessive profits on the backs of the taxpayers.” They continued, “DoD contractors should not be getting away with price gouging, and these abusive practices. DoD must better explain the challenges it faces with the contract process that has caused the government to overpay for goods and services and what steps [the Defense Department] has taken to solve the problem.”

The senators’ letter comes after a CBS News report revealed that some defense contractors overcharged the Pentagon by 40 to 50 percent by withholding crucial cost information until after contracts were finalized, which is “sweeping.”

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Not the first time:
In 2019, a Department of Defense Inspector General report revealed that one defense contractor, TransDigm, charged $4,361 for a half-inch metal pin, a 9400% markup.

The lawmakers have demanded Secretary Austin’s response by June 12.


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