Grassley, Colleagues Introduce Legislation to Expand Transparency in Government Defense Maintenance Contracts, Crack Down on Price Gouging

Grassley, Colleagues Introduce Legislation to Expand Transparency in Government Defense Maintenance Contracts, Crack Down on Price Gouging

WASHINGTON - Sen. Chuck Grassley (R-Iowa) joined Sens. Elizabeth Warren (D-Mass.), Elissa Slotkin (D-Mich.) and Joni Ernst (R-Iowa) to introduce the bipartisan Transparency in Contract Pricing Act of 2025 to crack down on costly price gouging by defense contractors.

"My oversight has shown that wasteful spending is alive and well at the Pentagon. We need to step up our efforts to end the Defense Department's misuse of taxpayer dollars, and our legislation is an important next step. By requiring a notification for certain price increases, we can ensure our military continues protecting our nation while efficiently and wisely spending the American people's money," Grassley said.

"Greedy contractors are threatening our military readiness by sneaking unreasonably high prices into our military's contracts for basic materials or spare parts," Warren said. "Our common-sense bill puts these contractors on notice and requires them to justify major price increases - and they can bet we'll double-check their math to ensure we are getting a fair shake."

"Defense dollars should be spent on making our military the most lethal fighting force the world has ever seen, not padding the pockets of slick government contractors," Ernst said. "As part of my war on waste, I am exposing all price gouging attempts at the Pentagon. You cannot stop what you cannot see. With the additional clarity of knowing where the bloated contracts are, our Armed Forces will be able to identify and eliminate wasteful spending to increase efficiency and better equip our warfighters."

The Project on Government Oversight (POGO) endorsed the bill.

"POGO believes strongly in transparency and is pleased to endorse the Transparency in Contract Pricing Act of 2025 as a way of shedding light on skyrocketing prices and contractors who fail to report them as required by law," said Greg Williams, Director of POGO's Center for Defense Information.

Background:

The Government Accountability Office (GAO), Department of Defense (DoD) Office of the Inspector General (OIG) and other defense watchdogs have repeatedly found contractors overcharge the military for spare parts.

In an October 2024 report, DoD's OIG found Boeing had sold the Air Force spare parts at unreasonably high prices, including a 7,943 percent markup for a soap dispenser. The report also found that, in just one sustainment contract, at least 25 percent of the parts had unfair and unreasonable prices. The OIG recommended that contractors be required to notify the military's contracting officers when the prices of spare parts increase by 25 percent or more during a contract. The OIG also recommended having DoD's contract officers investigate the price increase to ensure it is justified.

The Transparency in Contract Pricing Act of 2025 would codify those recommendations to ensure DoD gets the pricing information it needs to combat price gouging. Specifically, the bill would:

• Require contractors to report price increases to DoD contracting officers within 30 days of becoming aware of a covered price increase;

• Define a covered price increase as 25 percent above the price specified in the contract bid that the government agreed to, or the price the government paid for the item in the previous calendar year. It also defines a covered price increase as 50 percent above the price the government has already paid for an item within the past 5 years;

• Define a covered contract as one that was awarded without a competitive bidding process; and

• Require the Defense Contract Audit Agency (DCAA) to report contractors for certain criteria, including failing to comply with the price notification requirements and audits about noncompliance

Text of the legislation can be found HERE.

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