Grassley, Warren, Braun and Fetterman Push DoD to Address Contractor Sweeping, Wasteful Price Gouging

WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Elizabeth Warren (D-Mass.), along with Sens. Mike Braun (R-Ind.) and John Fetterman (D-Pa.), are demanding the Department of Defense (DoD) crack down on rampant taxpayer waste caused by military contractors’ price gouging tactics. In a letter to Defense Secretary Lloyd Austin, the lawmakers target “sweeping,” a practice where military contractors delay submitting cost data to prevent the government from negotiating fairer prices. 

 

“Instead of providing appropriate information prior to reaching an agreement, contractors…[drown] DoD contracting officers in a deluge of documents and data immediately post-handshake, using this tactic to release themselves of liability and potentially hide data that might give DoD a better price,” the senators wrote. “This practice costs billions of dollars and allows contractors to collect excessive profits on the backs of the taxpayers.” 

 

The senators pressed Austin to provide a full explanation for flaws in DoD’s contracting process and outline a solution to prevent further contractor sweeping and future overpayments. 

 

Read the full letter HERE.

 

DoD spends a vast sum on contracts to the defense industrial base, awarding $414.5 billion in contracts in fiscal year 2022 alone. But, reports revealed several defense contractors repeatedly overcharged DoD to secure excess profits of 40 to 50 percent – causing the Pentagon to burn hundreds of millions of dollars in taxpayer cash.

 

DoD’s Defense Pricing and Defense Procurement and Acquisition Policy Department in 2018 issued a memo outlining suggested changes to address contractor sweeping practices. The memo called for contractors to submit current cost or pricing data “as soon as practicable, but no later than five business days” after they reach price agreements. It additionally directed officers to consider “sweep data” after the contract award and recommended the data that would have changed the price the government paid be deemed defective. If a contractor’s “sweeping” is habitual, the memo instructed DoD contracting officers to take corrective action.

 

Persistent abuse of the Pentagon’s contracting process has landed DoD on the Government Accountability Office’s “High Risk List,” of “programs and operations that are vulnerable to waste, fraud, abuse or mismanagement.”

 

Grassley for decades has acted as a watchdog of wasteful DoD spending. He conducted a multi-year investigation into price gouging by the TransDigm Group, a large defense contractor, and has urged thorough investigation of Pentagon price gouging.