{"id":14942,"date":"2020-05-15T16:16:09","date_gmt":"2020-05-15T16:16:09","guid":{"rendered":"https:\/\/smg.go-vip.net\/defensenews\/uncategorized\/2020\/05\/15\/citing-transdigm-dod-seeks-new-acquisition-powers-and-trade-groups-oppose\/"},"modified":"2026-08-07T21:29:35","modified_gmt":"2026-08-07T21:29:35","slug":"citing-transdigm-dod-seeks-new-acquisition-powers-and-trade-groups-oppose","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/congress\/2020\/05\/15\/citing-transdigm-dod-seeks-new-acquisition-powers-and-trade-groups-oppose\/","title":{"rendered":"Citing TransDigm, DoD seeks new acquisition powers, and trade groups oppose"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2015 Four defense industry trade associations \u201cstrongly oppose&#8221; a handful of Pentagon-backed procurement reform proposals that they say would harm the defense industrial base, and they\u2019re asking Congress to reject them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two of the proposals aim at controversial pricing practices used by <a href=\"https:\/\/www.defensenews.com\/congress\/2019\/06\/06\/lawmakers-order-deeper-transdigm-probe-by-dod-watchdog\/\" target=_blank>TransDigm<\/a> by requiring contractors to submit cost information for commercial items and by requiring contracting officers to conduct a commercial item determination for every procurement. Others would set a preference for performance-based contract payments and authorize the Defense Department to release or disclose detailed manufacturing or process data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The May 6 protest <a href=\"https:\/\/www.ndia.org\/about\/media\/press-releases\/2020\/5\/7\/arwgletter\" target=_blank>letter<\/a> came from the Acquisition Reform Working Group \u2014 made up of the National Defense Industrial Association, American Council of Engineering Companies, the Computing Technology Industry Association and the Information Technology Industry Council \u2014 to the the House and Senate armed services committees. It comes as the panels were readying their drafts of the 2021 National Defense Authorization Act.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Pentagon has worked to monitor its network of suppliers from the economic shocks associated with the coronavirus pandemic and to protect suppliers by using emergency funding from Congress to speed payments and<a href=\"https:\/\/www.defensenews.com\/coronavirus\/2020\/03\/23\/pentagon-loosens-cash-flow-for-industry-more-measures-likely-coming\/\" target=_blank> improve cash flow<\/a> along the supply chain.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The trade groups noted they represent \u201cthousands of small, mid-sized, and large companies in addition to hundreds of thousands of employees that provide goods, services, and personnel to the Department of Defense,\u201d and said the four proposals a \u201ccould have significant consequences for the defense industrial base.\u201d<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/industry\/2019\/02\/27\/pentagon-requests-voluntary-refund-of-millions-of-dollars-from-contractor-transdigm\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"169\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/D3-The_Pentagon_US_Department_of_Defense_building.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Pentagon requests voluntary refund of millions of dollars from contractor TransDigm<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">TransDigm, a parts manufacturer, made more profit than it should have off of its DoD contracts, per a new report.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.defensenews.com\/congress\/2019\/05\/15\/defense-firms-excess-profits-land-in-congresss-crosshairs\/\" target=_blank>Congress focused ire at TransDigm<\/a> last year after the Defense Department\u2019s Inspector General found for $26.2 million in parts the military bought from TransDigm, it earned $16.1 million in excess profit. Transdigm was the only manufacturer of the majority of the parts, which let it set the market prices even for competitively awarded parts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Though DoD has argued its contractors need new latitude to make commercial item determinations and obtain cost or pricing information to prevent the excessive pricing TransDigm was accused of, the trade groups argue the TransDigm\u2019s actions weren\u2019t facilitated by an inappropriate reliance on improper commercial item determinations, or insufficient access to pricing data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAs illustrated by the TransDigm Group, Inc\u2019s pricing practices, generally once a conversion to a commercial product or commercial service is made, it is common for prices to increase and subsequent contracting officers find it difficult to obtain data necessary to determine price reasonableness and negotiate fair and reasonable prices on behalf of the taxpayer,\u201d the department said in its proposal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another proposal would require a contractor to submit uncertified cost information for commercial item proposals or contracts less than $2 million. The idea behind the reform is DoD wants to be able to get more insight into the costs of sole-source items and put itself in a more favorable position to negotiate with sole-source companies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Congressional hearings on TransDigm\u2019s excessive pricing showed Defense leaders need the authority to obtain the data \u201cto the extent necessary to determine price reasonableness is paramount in ensuring that such excessive pricing practices are curtailed.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the trade groups argue that levying the new regulations would \u201cadd a significant barrier to commercial item acquisition, reduce information sharing, further burden the system, and impede\u2014rather than enable\u2014the delivery of capabilities to the warfighter at the \u2018speed of relevance\u2019\u2014all with little to no added protection for the government or the taxpayer.&#8221;<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/congress\/2020\/05\/02\/interview-ndias-wesley-hallman-on-a-liability-shield-and-other-defense-priorities-for-the-next-stimulus\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"225\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/IMG_0367-1.jpeg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">NDIA\u2019s Wesley Hallman on a liability shield and other defense priorities for the next stimulus<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">Retired Air Force Col. Wesley Hallman is NDIA\u2019s senior vice president of policy, spoke with Defense News about NDIA\u2019s priorities as Congress mulls what to do after its third coronavirus response bill,<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">The trade associations also opposed DoD\u2019s legislation to set a preference for performance-based contract payments. The groups said a DoD proposal to \u201crecouple\u201d total performance-based payments to total cost incurred would reverse Congress\u2019s previous work to emphasize performance over cost and contradict a spate of defense acquisitions rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DoD\u2019s argument is that it shouldn\u2019t be reimbursing a contractor more than its actual costs, or it \u201cwould result in negative levels of contractor investment,\u201d and create a disincentive for contractors to deliver.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another disputed proposal would let DoD release detailed manufacturing or process data, or DPMD, pertaining to privately funded commercial or noncommercial items outside of the government to third parties seeking to compete against the original equipment manufacturer. It\u2019s the latest episode in a running game of tug-of-war between industry and DoD over intellectual property.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While Congress has in recent years prodded DoD to set intellectual property strategies early in acquisition programs and negotiate for IP rights on a case-by-case basis, the trade groups argue the proposal would give DoD \u201can automatic default authority\u201d and \u201celiminate the possibility of a negotiated solution.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Four defense industry trade associations \u201cstrongly oppose&#8221; a handful of Pentagon-backed procurement reform proposals that they say would harm the defense industrial base, and they\u2019re asking Congress to reject them.<\/p>\n","protected":false},"author":7,"featured_media":28796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":8,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[8,9,160,12,36],"tags":[],"coauthors":[3446],"class_list":["post-14942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-congress","category-coronavirus","category-daily-news-roundup","category-industry","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"CPCZLZUH5RHHFHC4BPG467ONMQ","arc_canonical_url":"\/congress\/2020\/05\/15\/citing-transdigm-dod-seeks-new-acquisition-powers-and-trade-groups-oppose\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Citing TransDigm, DoD seeks new acquisition powers, and trade groups oppose - Defense News<\/title>\n<meta name=\"description\" content=\"Four defense industry trade associations \u201cstrongly oppose&quot; a handful of Pentagon-backed procurement reform proposals that they say would harm the defense industrial base, and they\u2019re asking Congress to reject them.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Citing TransDigm, DoD seeks new acquisition powers, and trade groups oppose\" \/>\n<meta property=\"og:description\" content=\"Four defense industry trade associations \u201cstrongly 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