NDIA opposes cost and pricing data amendment

June 19, 2019 at 10:26 AM

The National Defense Industrial Association said today it "strongly opposes" an amendment in the House version of the fiscal year 2020 defense authorization bill that would require companies to disclose cost or pricing data for contract proposals under $2 million.

"Expanding the requirement for this data will be a burden for both industry and government," the industry group said in a statement. "Small businesses, surviving on contracts that are mostly below the [Truth in Negotiation Act] threshold, will bear the brunt of this burden."

The organization said the amendment would increase uncertainty and add accounting and administrative costs.

"It also would deter new entrants from bidding for contracts, as added regulatory costs are absorbed in contract negotiations," NDIA writes. "This amendment is anti-competitive and runs counter to the spirit of past congressional reform efforts to streamline the acquisition process."

The industry group writes that contracting officers can already request data for proposals under $2 million, arguing the amendment creates "duplicative regulations."

Cost and pricing data have come under scrutiny recently, after the Defense Department inspector general found that defense contractor the TransDigm Group had earned $16.1 million in excess profit.

During a hearing on Capitol Hill, the top IG official noted that TransDigm did not provide cost data requested by Pentagon contracting officers because the company is not required to do so by law.

"I would say that we ought to look at the legislative structure to require companies to provide cost information when asked for by contracting officers," acting IG Glenn Fine said at the time.

Kevin Fahey, assistant secretary of defense for acquisition, announced during the same hearing that he has directed the heads of DOD contracting activities to report contractors who refuse to provide cost and pricing information.

"This will provide the department holistic insight into such denials of requests for cost or pricing data," he said in written testimony.