NDAA 2020 - GAO to Study and Report on DoD's Efforts to Ensure Price Reasonableness

Section 805 of the Senate Version of the 2020 NDAA (National Defense Authorization Act) contains a provision that, if enacted (and it probably will be enacted), requires the GAO (Government Accountability Office) to study and report on the Defense Departments efforts to obtain data from offerors to support the reasonableness of proposed pricing.

Recall the Transdigm case from last June where the contractor paid baqkc $16 million in excessive profits and Congress wants it to pay back an additional $350 million of excessive profits. These excessive profits were a result of Transdigm refusing to provide any cost or pricing support for the items they controlled and sold as sole-source to the Government. The Government, particularly DoD, needed the critical parts, had no bargaining power, and ended up paying what Transdigm demanded.

Is the Transdigm case an isolated event or just the tip of the iceberg? Inquiring minds and Congress wants to know. So they've conjured up requirement to find out. The GAO report must address the following. Item No. 4 will be the most interesting.

1. the number of, and justification for, any waiver of requirements for submission of certified cost or pricing data for sole source contracts for spare parts issued during fiscal years 2015 through 2019.
2. the number of and justification for any exception to the requirements for submission of certified cost or pricing data for sole source contracts for spare parts provided during fiscal years 2015 through 2019.
3. the number of contracts awarded for which a request for cost or pricing data, including data other than certified cost or pricing data, to determine price reasonableness was denied by any offeror at the time of award.
4. actions taken by DoD if an offeror refused to provide requested data.