[Congressional Record Volume 168, Number 99 (Thursday, June 9, 2022)]
[Extensions of Remarks]
[Page E607]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  STOP PRICE GOUGING THE MILITARY ACT

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                          HON. JOHN GARAMENDI

                             of california

                    in the house of representatives

                         Thursday, June 9, 2022

  Mr. GARAMENDI. Madam Speaker, today I introduce the ``Stop Price 
Gouging The Military Act.'' I thank U.S. Senator Elizabeth Warren (D-
MA) for sponsoring the companion legislation in the United States 
Senate.
  Our ``Stop Price Gouging The Military Act'' would prevent defense 
contractors from overcharging the Department of Defense on equipment 
parts, closing loopholes in regulations that affect taxpayers, American 
service members, and businesses that fairly support military readiness. 
As chair of the Armed Services Subcommittee on Readiness, I know how 
much it costs to keep our military ready and this bill would ensure 
that prices for equipment parts are fair and defense contractors are 
rewarded for quality performance.
  The Truthful Cost or Pricing Data Act requires contractors to provide 
accurate cost and pricing data to the government. However, current 
broad definitions for ``commercial items'' prevent military contracting 
officers from accurately assessing fair prices. While prices for these 
``commercial items'' should already be reasonable because of assumed 
competition in the commercial market, these parts are often only sold 
to the Department of Defense or are drastically changed from their 
original commercial counterpart. Some defense contractors can then 
overcharge the Defense Department because there are no market checks on 
the price, and they are not required to provide accurate data to 
military contracting officials.
  The Defense Department also pays companies before work is completed, 
and money is rarely recouped if the contractor is behind schedule or 
work quality is poor. With this model, there is no way to incentivize 
performance.
  This legislation would strengthen competition requirements by 
amending government acquisition laws to only waive requirements to 
provide cost or pricing information when there is price competition. It 
would also restore market dynamics to the commercial item definition by 
closing loopholes for when a good or service has been modified from 
what is sold on a commercial market, create a pilot program to tie 
payments to performance, and require annual disclosure of changes in 
costs of goods sold, gross margins, and pricing strategies.
  Madam Speaker, I encourage all Members to cosponsor my ``Stop Price 
Gouging The Military Act'' and support our service members, provide 
accountability to the taxpayer, and reward quality business that 
support military readiness. The legislation I introduce today would 
ensure just that.

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