Editorial: Military once again cash cow for overcharging contractors
Is the $600 taxpayer-funded toilet seat making a comeback?
Not if Senator Elizabeth Warren has anything to say about it.
She and fellow Democrat Rep. John Garamendi of California have ramped up campaigns to stem what they call widespread “price gouging” in contracts for military spare parts.
The two members of their chamber’s Armed Services Committee made their case in a pair of letters obtained by CQ Roll Call.
Warren has sounded alarms over price-gouging before, blaming greedy corporations for inflation to deflect from Washington’s runaway spending.
But sometimes she’s right.
Warren and Garamendi claim defense contractors are exploiting loopholes so the companies can regularly refuse to provide the Defense Department legally required data to document that their parts’ prices are fair and reasonable on contracts awarded without competition.
We’ve been here before, of course.
Back in 1985, Sen. William S. Cohen (R-Maine) charged that the Navy had been paying more than $600 each to Lockheed-California Co. for toilet seats, which he said gave “new meaning to the word ‘throne.’ ”
Pentagon spokesman William Caldwell said the Defense Department didn’t not know how much the toilet parts should cost, “but we obviously feel this is too much.”
The overcharging came to light when the Pentagon put the part out for competitive bid, he said.
Warren and Garamendi’s letters went to Defense Secretary Lloyd J. Austin III and Kevin M. Stein, president and CEO of Cleveland-based TransDigm Group Inc., a company at the center of the spare parts pricing controversy for years.
“Contractors who consistently refuse to turn over cost and pricing data continue to rake in DoD contracts,” Warren and Garamendi wrote to Austin.
They wrote Stein that his company’s “ongoing refusal to provide DoD with pricing data is unacceptable given the company’s record of ripping off the government and taxpayer.”
Warren and Garamendi also called out Boeing Co., one of the Pentagon’s top contractors, as having “particularly egregious” records on this score. Both companies have publicly denied wrongdoing.
So what kind of money are we looking at? The Pentagon inspector general’s office disclosed in December 2021 that TransDigm owed the department nearly $21 million for overcharges on spare parts.
Did they pay up? The lawmakers noted in their letter to Stein that there has been “no public update of the status” of the $21 million refund. They asked Stein to provide one.
Lawmakers on Capitol Hill keep finding new reasons to spend taxpayers’ money, so it’s a welcome relief that Warren and Garamendi are determined to kink the hose of overcharges to the military.
That companies aren’t turning over pricing data but still land DoD contracts is particularly galling. A private sector business would be bankrupt if it kept rewarding companies with contracts while turning a blind eye to overcharges.
Who is keeping the books at the DoD?
Warren is tenacious, and in this instance that’s a good thing. She and Garamendi must hold military contractors’ feet to the fire to stop the wholesale waste of taxpayer money by keeping us in the dark about how much things cost.
Editorial cartoon by Bob Gorrell (Creators Syndicate)