Congress Asks How to Support DoW Supplier Cost and Pricing Transparency Efforts

On October 20, 2026, a bipartisan group of Senators sent a letter to Department of War (DoW) Deputy Secretary Andrew Feinberg. The Senators wrote in support of the Deputy Secretary’s August 18, 2026, memorandum titled “Supplier Cost and Pricing Transparency.” The Senators hailed this memorandum for holding defense contractors accountable for overcharging the department and for allowing the Pentagon to obtain cost and pricing data from industry to negotiate the best price for the Warfighter, the taxpayer, and Nation.

The Senators state:

“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 [and] has come with significant costs to both readiness and the American taxpayer.”

What Did the Senators Like in the Deputy Secretary’s Memorandum

The Senators specifically liked the following:

• Using modern information technology and current business best practices to support negotiations with defense contractors valued at or over $10 million, including the use of automated Application Programming Interfaces to pull cost information directly from contractors’ enterprise resource planning or other financial systems.
• The need to pursue action against contractors that are not in compliance with their Cost and Software Data Reporting (CSDR) requirements.

What Do We Think the Senators Are Looking For

The Senators make the point that the increase in the Truthful Cost or Pricing Data Act Threshold to $10 million, will limit the department from requiring certified cost or pricing data on “over 60 percent of its contracts.” Seeing as Congress directed the increase in the Fiscal Year 2026 National Defense Authorization Act (NDAA), the Senators are not looking to have the threshold changed. However, they are looking to see the Department request uncertified cost or pricing data to ensure “contracting officers have the necessary data to negotiate fair and reasonable prices.”

10 U.S.C. § 3705(b) provides that “an offeror who fails to make a good faith effort to comply with a reasonable request to submit data … is ineligible for award,” unless determined otherwise by “the head of the contracting activity, or the designee.” The Senators do not believe this powerful tool is being adequately used. They point to a Fiscal Year 2021 report showing that 10,934 times when contractors refused to give contracting officers reasonable pricing and cost information, the head of contracting authority still determined it was in the best interest of the Department to make an award anyway.

While the Senate version of the Fiscal Year 2027 NDAA has not been released as of the date of this article, the Senators claim that both the Senate and House versions of the Fiscal Year 2027 NDAA will include:

• Fiscal Year 2022, Stop Price Gouging the Military Act; and
• Fiscal Year 2025, Transparency in Contract Pricing Act.

This may be wishful thinking as both acts introduced by Senator Warren did not get very far when originally introduced.

Stop Price Gouging the Military Act

This act is intended to strengthen the Truthful Cost or Pricing Data Act. The act would make the following changes:

• 10 U.S.C. § 3702(a)(1)
  • Change “bid” to “offeror;”
  • Require “certified cost or pricing data” for all cost reimbursement contracts regardless of the number of offers received;
• 10 U.S.C. § 3703(a) (DoW Contracts)
  • Brings back the requirement for at least two responsive and viable competing offerors to have adequate price competition, except for cost reimbursement contracts; and
  • Allows for a commercial exception only when there is adequate price competition.
• 41 U.S.C. § 3503(a) (Civilian Contracts)
  • Allows for a commercial exception only when there is adequate price competition.
• 41 U.S.C. § 103 (All Contracts)
  • Remove “of a type” from the definition of commercial products and services; and
  • Removes the allowance of simply offered for sale, lease, or license to the general public.
• Progress Payment Incentive Pilot – Allowing for accelerated progress payments contingent upon responsiveness to Department of Defense goals for effectiveness, efficiency, and increasing small business contract opportunities:
  • Large businesses limited to 50 percent, unless:
    • Contractor met contract delivery dates for contract end items and contract data requirement lists or performance milestone schedule (10 percent increase);
    • Contractor does not have level III or IV corrective action requests (10 percent increase);
    • All applicable business systems are acceptable (7.5 percent increase);
    • 95 percent of the time the contractor submits certified cost or pricing data by the due date in the request for proposal (10 percent increase);
    • Prime contractor is timely and up to date on reporting first tier subcontractors (5 percent increase);
    • Contractor has met its small business goals in the prior Government fiscal year (5 percent increase); and
    • Contractor has provided subcontracting opportunities for the blind and severely disabled.
• Disclosure by Large Defense Contractors – Annual reporting of the following information with regard to the covered year, as compared with the year preceding that covered year:
  • The percentage change in the volume of goods or services sold and the percentage change in the average sales price of those goods or services, which shall be broken down by material product categories, when relevant, and presented in a tabular format;
  • The gross margins of the contractor, which shall be broken down by material product categories, when relevant, and presented in a tabular format;
  • Presented in tabular format, the share of the increase in revenue of the contractor that is attributable to—
    • A change in the cost of goods or services sold by the contractor; and
    • A change in the volume of goods or services sold by the contractor.
  • The percentage change in the costs of the contractor, which shall be broken down by category and presented in tabular format;
  • In dollars, the change in the costs of the contractor, which shall be presented in tabular format;
  • A detailed narrative disclosure of the pricing strategy of the contractor, which shall include—
    • An explanation for any increase in the gross margins of material product categories, including—all material causes for such an increase; an explanation of how each such material cause affected such an increase; and a description of the relative importance of each such material cause with respect to such an increase;
    • An explanation for the decisions made by the contractor with respect to the prices of goods and services sold by the contractor;
    • If the contractor increased prices at a rate that was greater than the rate at which the costs incurred by the contractor increased, the rationale and objectives for increasing prices in such a manner; and
    • A description of conditions under which the contractor plans to modify pricing after the date on which the contractor submits the report.
  • The Department will make the reported information publicly available.
  • Failure to report and update annual may result in:
    • Suspension or debarment;
    • Imprisonment for not more than 5 years or a fine under title 18, United States Code, or both;
    • A civil fine of not more than $200,000, depending on the extent and gravity of the violation; and
    • Liability pursuant to section 3729 of title 31, United States Code.
  • A large business is defined as a contractor receiving more than $10,000,000 in annual revenue from Department of Defense contracts or licenses in any of the previous three years; and earned more than 20 percent of its total annual revenue from Department of Defense contracts or licenses in any of the previous three fiscal years.

This act is flat out terrifying. The commercial exception to certified cost or pricing data would be gone. Plus, you better get your cost and revenue reporting by product and service just right or face up to 5 years in jail. Not to mention the additional resources to make this reporting happen. We are at a loss for words.

Transparency in Contract Pricing Act

This act would require contractors to report to the contracting officer anytime the potential current price of a contract awarded without competition reaches or exceeds:

• 25 percent above the price specified in the contract bid or the government paid for that product or service the previous calendar year; or
• 50 percent above the price paid for such a product or service 5 years earlier.

The act would also require the Defense Contract Audit Agency (DCAA) to perform audits of compliance.

Yes, we find this confusing as well. We believe what the requirement would contractually require the contractor to report to the contracting officer on any of its current contracts, when it believes future pricing would be greater than the percentages. So; even if the department does not have a current solicitation issued, the contractor would still be required to notify the contracting officer of potential price increases with no idea of future quantities or contract awards. This just leaves us shaking our heads.

Some Concerning Questions from the Senators

“Has the Department conducted an analysis of how much money it has saved due to Congress removing the regulatory burden on defense contractors having to supply certified cost and pricing data for applicable contracts under $10 million?” CONCERN: Without documented savings are they going to be looking to push the threshold back down?

“Will the Department commit to using its authorities under 10 U.S.C § 3705(b) to make contract offerors ineligible if they refuse to provide necessary data to contracting officers?” CONCERN: Will your refusal be a onetime option?

“Will the Department pursue contract terminations or modifications for companies that fail to provide ‘accurate and timely submission of Cost and Software Data Reporting (CSDR)’ post-award data?”

“Has the Department established accountability measures for companies that are delinquent in submitting CSDR data?” CONCERN: You better make sure you are current on your CSDR reporting or your contracts will be at risk.

“What current limits does the Department have in understanding subcontractor supply chains to assess price reasonableness?” CONCERN: Are you ready for the likely significant increase in DCAA audits of your cost or price analyses of your subcontractors?

“Previous Department IG reviews have assumed that profits in excess of 15 percent were not reasonable. Has the Department established a percentage profit level that represents excessive profits, and if so, what is that percentage?

“Has the Department established fair and reasonable contract profit margins for each product and service?” CONCERN: There is currently no cap of profit under a fixed price contract. However, that may not be the case for much longer.

“Is the Pentagon aware of any defense contractors that have a company policy that prohibits sharing of cost or pricing data between business units?” CONCERN: If you are not treating your interdivisional effort as you would an unrelated party subcontract, you may need to start.

“Would the Pentagon benefit from legislation from Congress to support efforts in pricing and cost transparency and empower contracting officers in negotiations, such as the Stop Price Gouging the Military Act and the Transparency in Contract Pricing Act?” CONCERN: Simply put the Senators are asking if the Department would like them to expand the cost data requirements in the current statutes.

This is going to discourage new entrants in the defense industrial base. Additionally, the commercial companies the Department is looking for are going to be able to provide the cost data and track prices like this.

What Should Government Contractors Do?

If your DoW contracts have the Defense FAR Supplement (DFARS) clause DFARS 252.234-7004, Cost and Software Data Reporting System, in them and you are not current on your required reporting get current as soon as possible.

Government contractors need to understand that even if your proposal is under the Truthful Cost or Pricing Data threshold or some exception applies, it is going to be very likely that you are going to be requested to provide cost data. It appears the path forward to limiting the need for cost data is going to be adequate price competition. Short of that you can expect a request for cost data, whether certified or not. Make sure your estimators understand this and develop the necessary supporting documentation before your proposal is submitted.

Preparing for Cost and Pricing Data Requests

Redstone Government Consulting assists government contractors with evaluating cost and pricing data requests and preparing supporting documentation for proposals and negotiations. Our consultants review estimating policies and internal controls to identify gaps in how cost information is collected, reviewed, and retained. We also provide targeted training to help estimating and contracts personnel understand applicable requirements and reporting obligations, so teams can prepare supportable responses before missing documentation delays a proposal or negotiation.