H.R. 5176: Defense Industry Pricing Transparency Act

This legislation, known as the Defense Industry Pricing Transparency Act, aims to enhance transparency regarding price increases for certain defense contracts. It requires contractors to report price increases that exceed specified thresholds for products or services provided under specific types of contracts.

Requirements for Reporting Price Increases

Contractors must submit a report to the relevant contracting officer no later than 30 days after becoming aware that the price of a product or service under a covered contract meets or exceeds any of the following three specific conditions:

• The price is 25% more than the price specified in their initial contract bid.
• The price is 25% more than what the government paid for that product or service in the previous calendar year.
• The price is 50% more than the price the government paid for the product or service at any time in the five years preceding the contract.

Consequences for Noncompliance

If a contractor fails to report the required price increase, specific actions will be taken:

• The Director of the Defense Contract Audit Agency or a relevant service acquisition executive will record information about the noncompliance in a database called the Federal Awardee Performance and Integrity Information System. This record will include:
• The contractor's identity and the specific product or service that was supposed to be reported.
• Details about the product or service, including national stock number, order quantity, unit cost, total cost, purchasing entity, and order date.

Definition of Covered Contract

For the purposes of this report requirement, a "covered contract" is defined as any contract awarded without competitive procedures, specifically those awarded under procedures outlined in section 3204 of Title 10 or as per section 6.302 of the Federal Acquisition Regulation.

Relevant Companies

• BA - Boeing Company: As a major defense contractor, Boeing would need to comply with the reporting requirements for any defense contracts it holds where prices increase above the specified thresholds.
• RTX - Raytheon Technologies Corporation: Raytheon, another significant player in the defense sector, could be affected by the reporting requirements regarding pricing increases on contracts they have for defense systems.
• NOC - Northrop Grumman Corporation: Northrop Grumman would be impacted as it must adhere to the transparency mandates for any of its defense contracts seeing significant price increases.
• LDOS - Leidos Holdings, Inc.: Leidos would also need to ensure compliance with the new reporting rules on defense contracts that experience price hikes.