Grassley and Bipartisan Colleagues Push Pentagon to Crack Down on Military Contractors’ Price Gouging, Enforce Cost Transparency

Grassley and Bipartisan Colleagues Push Pentagon to Crack Down on Military Contractors' Price Gouging, Enforce Cost Transparency

BUTLER COUNTY, IOWA - U.S. Sens. Chuck Grassley (R-Iowa), Elizabeth Warren (D-Mass.), Joni Ernst (R-Iowa) and Elissa Slotkin (D-Mich.) sent a bipartisan letter to the U.S. Department of Defense (DOD) requesting DOD hold defense contractors accountable and bolster its August 18 directive on Supplier Cost and Pricing Transparency.

The senators are also urging DOD to support their bipartisan Transparency in Contract Pricing Act in the Fiscal Year 2027 National Defense Authorization Act (NDAA). The bill would better arm contracting officers with statutory backing during negotiations, improve pricing transparency and ensure taxpayers get a fair deal.

The DOD's Supplier Cost and Pricing Transparency directive seeks to improve access to contractors' cost and pricing data and help the Pentagon's contracting officers negotiate fair prices. The senators welcomed the directive but raised concerns that a key gap in the policy - applying a $10 million threshold for obtaining certified cost and pricing data - could leave the DOD without access to critical information for more than 60% of its contracts. They urged the Pentagon to apply its new directive to lower-value contracts and use its existing authority to make contractors ineligible for awards when they refuse to provide requested data.

For decades, defense contractors have taken advantage of the Pentagon's inability to prevent price gouging. The DOD notoriously paid $436 for hammers and $640 for toilet seats in the 1980s. More recently, Boeing charged the Air Force a nearly 8,000% markup on lavatory soap dispensers.

"The culture of overcharging within the defense industry that has driven this behavior has come with significant costs to both readiness and the American taxpayer," the senators wrote.

"To ensure our understanding of how this directive 'resets the Department's expectations regarding supplier cost and pricing information' and how it will gain transparency through 'modern information technology and current business best practices,' we seek to clarify how the Department will gain such data from refusing companies, conduct consistent oversight, and hold non-compliant companies accountable," the senators concluded.

The senators requested answers to their questions by November 3, 2026, to inform legislation aimed at strengthening pricing transparency, preventing contractor abuse and protecting taxpayer dollars.

Read the senators' full letter HERE.

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