TransDigm executive says IG investigation isn't taking a toll on defense sales

By Marjorie Censer / February 4, 2020 at 3:23 PM

TransDigm said it has been having positive interactions with the Pentagon and the Defense Logistics Agency, despite an ongoing inspector general investigation.

The company became a target of criticism last year after a Defense Department IG investigation found it in some cases earned profits of more than 4,000% on sole-source contracts for military aircraft parts. In July 2019, the IG announced an audit to investigate whether TransDigm's "business model affects the DOD's ability to pay fair and reasonable prices for spare parts."

During a call with analysts today, Kevin Stein, TransDigm's chief executive, was asked whether the company is seeing reduced DOD orders given the investigation.

"Initially, we saw some slowdown," Stein said. "We have been meeting frequently with DOD, DLA, IG and other important stakeholders in the process to continue to communicate and answer questions. Once we started doing that, I think some of the pent-up demand started to flow."

"We have seen that our interaction with the DOD, DLA has been positive," Stein added. "We're communicating, spending time going through the issues."

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