Warren, Slotkin, Grassley, Ernst Unveil Plan to Take on Military Contractors’ Price Gouging, Expand Transparency in Maintenance Contracts

Warren, Slotkin, Grassley, Ernst Unveil Plan to Take on Military Contractors' Price Gouging, Expand Transparency in Maintenance Contracts

Bill Text (PDF) | Bill One-Pager (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.), Elissa Slotkin (D-Mich.), Chuck Grassley (R-Iowa), and Joni Ernst (R-Iowa) announced the introduction of the new bipartisan Transparency in Contract Pricing Act of 2025 to take on price gouging by defense contractors.

The Government Accountability Office (GAO), Department of Defense (DoD) Office of the Inspector General (OIG), and other defense watchdogs have repeatedly found that 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 those 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, along with having DoD's contract officers investigate the price increase to ensure it is justified.

"Greedy contractors are threatening our military readiness by sneaking unreasonably high prices into our military's contracts for basic materials or spare parts," said Senator Warren. "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," said Senator Ernst. "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."

"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," Senator Grassley said.

The Transparency in Contract Pricing Act of 2025 acts on those recommendations and codifies the above requirements to ensure the 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.
• Require the Defense Contract Audit Agency (DCAA) to report contractors that fail to comply with the price notification requirements, audits conducted regarding noncompliance, and details regarding the product that was not reported on the publicly accessible Federal Awardee Performance and Integrity Information System through the Award Management website.

The Project on Government Oversight (POGO) has 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, Center for Defense Information for the Project On Government Oversight (POGO).

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