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Chairwoman Maloney Announces New Legislation in Response to TransDigm’s Price Gouging on DOD Contracts

Washington, D.C. (Jan. 19, 2022) – At the start of today’s hearing examining excess profits TransDigm Group Inc. received from Department of Defense (DOD) contracts, Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, released a discussion draft of the Fair Pricing with Cost Transparency Act, legislation to ensure the government is paying a fair price on products and services from contractors like TransDigm.

“Congress must act to empower contracting officers when they are negotiating with greedy contractors like TransDigm,” Chairwoman Maloney said in her opening statement.  “Today, I am releasing a discussion draft that would require companies to provide cost information when necessary to determine if proposed prices are fair and reasonable.  This will enable government contracting officers to ensure the government is paying a fair price.  I urge my colleagues on both sides of the aisle to work with me on this reform.”

The Fair Pricing with Cost Transparency Act is based on a proposal from the Department of Defense, highlighted in the Office of Inspector General’s recent report, which found that TransDigm received nearly $21 million in excess profits on numerous contracts by acquiring companies with sole-source contracts for spare parts needed by the military and then raising prices dramatically.  The legislation is cosponsored by Rep. Ro Khanna, Chairman of the Subcommittee on Environment, Rep. Stephen F. Lynch, Chairman of the Subcommittee on National Security, and Rep. Jackie Speier.

The Fair Pricing with Cost Transparency Act:

  • Requires contractors to submit uncertified cost information if requested by a contracting officer.
  • Applies governmentwide, including at DOD.
  • Applies to contracts starting one year after enactment.
  • Requires agencies to report to Congress on compliance within 18 months of enactment. 

In her opening statement, Chairwoman Maloney also demanded that TransDigm pay back the $20.8 million in excess profit uncovered by the Inspector General’s report.

Click here to watch Chairwoman Maloney’s opening statement.

Click here to read the discussion draft of the Fair Pricing with Cost Transparency Act. 

Click here to read new documents released by the Committee on TransDigm’s tactics to price-gouge DOD.

Click here to read accounts from former TransDigm executives and employees.


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