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Senators Warren, Braun, Representative Garamendi Reintroduce Bipartisan Stop Price Gouging the Military Act [1]
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Date: 2023-11
Senators Warren, Braun, Representative Garamendi Reintroduce Bipartisan Stop Price Gouging the Military Act
Legislation would Strengthen Acquisition Laws and Close Loopholes to Prevent Defense Contractor Price Gouging
One Pager (PDF) | DoD Study (PDF) | Bill Text (PDF)
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Chair of the Armed Services Subcommittee on Personnel, Senator Mike Braun (R-Indiana) and Representative John Garamendi (D-Calif.) Ranking Member, House Armed Services Committee Subcommittee on Readiness, reintroduced the bipartisan Stop Price Gouging the Military Act which would close loopholes in current acquisition laws, tie financial incentives for contractors to performance, and provide the Department of Defense (DoD) the information necessary to prevent future rip-offs. Senator Warren originally introduced this legislation with Rep. Garamendi last year.
As they stand, current acquisition laws contain loopholes that make it nearly impossible for DoD to obtain the necessary data to combat price gouging. The legislation would require contractors to provide cost or pricing information to DoD if there isn’t adequate price competition that results in at least two responsive and responsible offers.
With the introduction of the Stop Price Gouging the Military Act, Senator Warren also made public a recent study from DoD on which contractors denied information requested by contracting officers to determine price reasonableness.
“Defense contractors have been exploiting loopholes in the law and raking in massive profits by price-gouging the Pentagon and American taxpayers,” said Senator Elizabeth Warren. “My bipartisan bill with Senator Braun and Representative Garamendi would close these loopholes and ensure that DoD has the necessary tools to prevent these abuses.”
“As a senior member of the House Armed Services Committee, I know how much we pay for parts to keep military equipment ready,” said Representative John Garamendi. “We know that taxpayers and service members are routinely overcharged by defense contractors due to loopholes in current regulations. We cannot allow taxpayer money to be wasted to inflate the bottom lines of giant defense contractors. Our service members need the tools to properly negotiate prices. This is just common sense, and that’s why we introduced the ‘Stop Price Gouging the Military Act’. I thank Senators Warren and Braun for doing the same in the United States Senate. We will work together to ensure this legislation becomes law.”
“Defense contractors are taking advantage of the DoD and American taxpayers by charging more and delivering less,” said Senator Mike Braun. “This bipartisan legislation will inject transparency and accountability into the process by closing loopholes to prevent defense contractor price gouging.”
Specifically, the Stop Price Gouging the Military Act would:
Strengthen Truth In Negotiations Act Provisions. Closes a loophole in the law to require contractors to provide the federal government cost or pricing information if there isn’t adequate price competition that results in at least two responsive and responsible offers.
Closes a loophole in the law to require contractors to provide the federal government cost or pricing information if there isn’t adequate price competition that results in at least two responsive and responsible offers. Revision of Definition of Term “Commercial Item” for Purposes of Federal Procurement Statutes. Restores market dynamics to the commercial item definition by adopting an Obama administration proposal to tie to whether a good or service is actually sold to other customers.
Restores market dynamics to the commercial item definition by adopting an Obama administration proposal to tie to whether a good or service is actually sold to other customers. Progress Payments Incentive Pilot. Initiates a Department of Defense pilot first proposed by the Trump administration to tie payments to performance by lowering advanced payments for companies to 50% while providing contractors the opportunity to receive payments up to 95% if they meet certain conditions. Specifically, contractors would be rewarded for:
Initiates a Department of Defense pilot first proposed by the Trump administration to tie payments to performance by lowering advanced payments for companies to 50% while providing contractors the opportunity to receive payments up to 95% if they meet certain conditions. Specifically, contractors would be rewarded for: Meeting program schedules and milestones 95% of the time;
Not having major outstanding corrective action requests;
Having required business systems;
Timely responses to requests to provide certified cost or pricing information;
Disclosing first tier subcontractor data, beneficial owners, and total executive compensation;
Meeting small business subcontracting goals; and
Providing subcontracting opportunities for the blind and severely disabled.
Disclosure by Traditional Defense Contractors. Mirroring disclosures already required by publicly traded companies, requires traditional defense contractors to annually share with the Under Secretary of Defense for Acquisition and Sustainment changes in the volume of goods or services sold, changes in the average price, and gross margins.
As a champion for American consumers and a secure and healthy economy, Senator Warren has engaged in oversight over corporations, including military contractors, for their role in increasing prices for consumers as Americans face inflation.
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[1] Url:
https://www.warren.senate.gov/newsroom/press-releases/senators-warren-braun-representative-garamendi-reintroduce-bipartisan-stop-price-gouging-the-military-act
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