A group of lawmakers is pressing the Pentagon to explain how it will obtain cost and pricing data from defense contractors, including for contracts below a $10 million threshold, and whether it will use its authority to terminate contract negotiations with companies that refuse to provide that data.
In a letter to Deputy Defense Secretary Steve Feinberg, the lawmakers expressed support for the department’s latest efforts to improve cost and pricing transparency across all tiers of the supply chain, but warned that a change in the 2026 defense policy bill could leave the Pentagon without access to critical information for a significant portion of its contracts.
The lawmakers want to know whether DoD will disqualify contractors that refuse to provide necessary pricing data and pursue contract terminations or modifications if contractors fail to submit required cost data after a contract is awarded.
“For far too long, defense contractors have taken advantage of the Department’s inability to prevent price gouging… 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,” Sens. Elizabeth Warren (D-Mass.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Elissa Slotkin (D-Mich.) wrote.
The letter follows Feinberg’s Aug. 18 memo on cost and pricing that suggested that the Pentagon would install application programming interfaces to “pull cost information directly from contractors’ enterprise resource planning or other financial systems.”
His later memo, however, appears to be at odds with the August directive — after industry pushback, Feinberg said the department would only ask companies for the cost and pricing data “when necessary to foster transparency and fairness.”
The lawmakers said Feinberg’s August memo “could be an important step to make the Pentagon a more intelligent buyer of weapon systems and save taxpayer dollars,” but “not enough to address the breadth of issues.”
Last year, Congress raised the threshold for submitting certified cost or pricing data from $2.5 million to $10 million. A House Armed Services Committee analysis later revealed that the change would prevent the department from accessing cost or pricing information for more than 60% of its contracts.
“The Pentagon can implement the Aug. 18 directive in a way that limits the scope of these problems and ensures contracting officers have the necessary data to negotiate fair and reasonable prices. Specifically, the reviews under the Aug. 18 directive should not be limited only to those contracts that exceed $10 million. A lower limit would allow review of the vast majority of the Department’s contracts and provide fresh opportunities to return billions of dollars to the military and taxpayers,” the lawmakers said.
Both the House and Senate versions of the fiscal 2027 defense policy bill include provisions that would require defense contractors to notify the Defense Department about price increases within 30 days of becoming aware of the rising costs. It would also require the Defense Contract Audit Agency to report any contractors that fail to comply with the price notification requirements.
“We urge you to support these measures that will better arm contracting officers with statutory backing during negotiations, improve pricing transparency, and ensure the taxpayer gets a fair deal,” the lawmakers said.
Congressional leaders sought to include pricing transparency provisions in the fiscal 2026 defense policy bill, but the measure was ultimately dropped from the final version of the bill.
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