[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4409 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 4409

         To prevent price gouging at the Department of Defense.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 30, 2023

 Mr. Garamendi (for himself and Mr. Deluzio) introduced the following 
  bill; which was referred to the Committee on Armed Services, and in 
addition to the Committee on Oversight and Accountability, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
         To prevent price gouging at the Department of Defense.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Pentagon Price Gouging Act''.

SEC. 2. STRENGTHENING TRUTH IN NEGOTIATIONS ACT PROVISIONS.

    (a) Required Cost or Pricing Data and Certification.--Section 
3702(a)(1) of title 10, United States Code, is amended by striking 
``only expected to receive one bid shall be required'' and replacing 
with ``only expected to have one offeror, or for which award of a cost-
reimbursement contract is contemplated regardless of the number of 
offers received, shall be required''.
    (b) Exceptions.--Section 3703(a) of title 10, United States Code, 
is amended--
            (1) in paragraph (1)(A), by striking ``adequate 
        competition'' and all that follows through ``bids'' and 
        inserting ``adequate price competition for other than the award 
        of a cost-reimbursement contract that results in at least two 
        responsive and viable competing offerors''; and
            (2) in paragraph (2), by inserting ``based on adequate 
        price competition that results in at least two responsive and 
        responsible offers'' after ``commercial service''.
    (c) Conforming Amendment Related to Civilian Contracts.--Section 
3503(a)(2) of title 41, United States Code, is by inserting after 
``commercial service'' the following: ``based on adequate price 
competition that results in at least two responsive and responsible 
offers''.

SEC. 3. REVISION OF DEFINITION OF TERM ``COMMERCIAL ITEM'' FOR PURPOSES 
              OF FEDERAL PROCUREMENT STATUTES PROVIDING PROCEDURES FOR 
              PROCUREMENT OF COMMERCIAL ITEMS.

    (a) Elimination of ``of a Type'' Criterion.--Section 103 of title 
41, United States Code, is amended by striking ``of a type'' each place 
it appears.
    (b) Elimination of Items and Services Merely Offered for Sale, 
Lease, or License.--
            (1) Items.--Section 103(1)(B) of title 41, United States 
        Code, is amended by striking ``, or offered for sale, lease, or 
        license,''.
            (2) Services.--Section 103a(2) of title 41, United States 
        Code, is amended by striking ``offered and''.
    (c) Adjustment of Threshold Relating to Prior Sales.--
            (1) Commercial products.--Section 103(6)(B) of title 41, 
        United States Code, is amended by striking ``substantial 
        quantities'' and inserting ``like quantities''.
            (2) Commercial services.--Section 103a(2) of title 41, 
        United States Code, is amended by striking ``substantial 
        quantities'' and inserting ``like quantities''.

SEC. 4. PROGRESS PAYMENT INCENTIVE PILOT.

    (a) Pilot Program.--The Secretary of Defense, acting through the 
Under Secretary of Defense for Acquisition and Sustainment, shall 
establish and implement a pilot program, to be known as the ``Progress 
Payment Incentive Pilot Program'', to make accelerated progress 
payments contingent upon responsiveness to Department of Defense 
requests for cost or pricing information.
    (b) Purpose.--The purpose of the pilot program is to reward 
Department of Defense contractors who work with the Department in the 
pre-award process to prevent excessive costs and establish guardrails 
against excessive prices.
    (c) Progress Payments.--
            (1) Limitations for traditional contractors.--Under the 
        pilot program, the Department of Defense may not award to 
        traditional business contractors progress payments in excess of 
        50 percent.
            (2) Exceptions.--The Department of Defense may increase the 
        rate of progress payments to 80 percent if the division of the 
        company provides certified cost or pricing information within 
        30 days of the Department's request for the information. The 
        progress payment rate may not exceed 95 percent.
    (d) Definitions.--In this section:
            (1) Traditional defense contractor.--The term ``traditional 
        defense contractor'' means a contractor (other than an 
        institute of higher education) that is currently performing or 
        has currently performed for at least the one-year period 
        preceding the solicitation of sources by the Department of 
        Defense for the procurement or transaction, any contract or 
        subcontract for the Department of Defense that is subject to 
        full coverage under the cost accounting standards prescribed 
        pursuant to section 1502 of title 41, United States Code, and 
        the regulations implementing such section.
            (2) Progress payments.--The term ``progress payments'' 
        means payments provided for under section 3804 of title 10, 
        United States Code.

SEC. 5. DISCLOSURE BY TRADITIONAL DEFENSE CONTRACTORS.

    (a) Annual Reporting.--Not later than 60 days after the date of the 
enactment of this Act, the Secretary of Defense shall amend the 
Department of Defense Supplement to the Federal Acquisition Regulation 
to provide that traditional contractors shall be required to annually 
report to the Under Secretary of Defense for Acquisition and 
Sustainment the following information with regard to the covered year, 
as compared with the year preceding that covered year:
            (1) 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.
            (2) The gross margins of the traditional contractor, which 
        shall be broken down by material product categories, when 
        relevant, and presented in a tabular format.
            (3) Presented in tabular format, the share of the increase 
        in revenue of the large defense contractor that is attributable 
        to--
                    (A) a change in the cost of goods or services sold 
                by the traditional defense contractor; and
                    (B) a change in the volume of goods or services 
                sold by the covered issuer.
            (4) The percentage change in the costs of the traditional 
        contractor, which shall be broken down by category and 
        presented in tabular format.
            (5) In dollars, the change in the costs of the traditional 
        defense contractor, which shall be presented in tabular format.
            (6) A detailed narrative disclosure of the pricing strategy 
        of the traditional defense contractor, which shall include--
                    (A) an explanation for any increase in the gross 
                margins of material product categories, including--
                            (i) all material causes for such an 
                        increase;
                             (ii) an explanation of how each such 
                        material cause affected such an increase; and
                            (iii) a description of the relative 
                        importance of each such material cause with 
                        respect to such an increase.
                    (B) An explanation for the decisions made by the 
                traditional defense contractor with respect to the 
                prices of goods and services sold by the large defense 
                contractor.
                    (C) If the large defense contractor increased 
                prices at a rate that was greater than the rate at 
                which the costs incurred by the traditional defense 
                contractor increased, the rationale and objectives for 
                increasing prices in such a manner.
                    (D) A description of conditions under which the 
                large defense contractor plans to modify pricing after 
                the date on which the traditional defense contractor 
                submits the report.
    (b) Publication.--The Under Secretary of Defense for Acquisition 
and Sustainment shall annually publish on a publicly available internet 
website the previous year's reports received under subsection (a).
    (c) Traditional Contractor Defined.--In this section, the term 
``traditional contractor'' means a contractor (other than an institute 
of higher education) that is currently performing or has currently 
performed for at least the one-year period preceding the solicitation 
of sources by the Department of Defense for the procurement or 
transaction of any contract or subcontract for the Department of 
Defense that is subject to full coverage under the cost accounting 
standards prescribed pursuant to section 1502 of title 41, United 
States Code, and the regulations implementing such section.
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