Defense Industry Pricing Transparency Act
- Bill Number
- H.R. 5176
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Armed Forces and National Security
- Status
- Introduced
- Latest Action
- 2025-09-08: Referred to the House Committee on Armed Services.
- Last Updated
- 2026-06-23T17:16:57Z
AI-Generated Summary
Purpose
The Defense Industry Pricing Transparency Act (H.R. 5176) aims to increase transparency in defense contracting by requiring contractors to report significant price increases for certain non-competitive contracts. This helps the government monitor and address potential overpricing in military procurement.
Key Provisions
- Reporting Requirement: Contractors (referred to as "offerors") must submit a report to the relevant contracting officer within 30 days if they become aware that the price of a product or service under a "covered contract" exceeds specified thresholds. These thresholds are:
- 25% more than the price in the original contract bid.
- 25% more than what the government paid for the same item in the previous calendar year.
- 50% more than what the government paid at any point in the five years before the contract was awarded.
- Penalties for Noncompliance: If a contractor fails to report, the Director of the Defense Contract Audit Agency or the relevant service acquisition executive (a senior official overseeing purchases) must record the violation in the Federal Awardee Performance and Integrity Information System (PIIS, a government database tracking contractor performance and issues). The record includes:
- Identification of the contractor and the specific product or service.
- Details like the national stock number (a unique identifier for items), order quantity, unit cost, total cost, purchasing entity, and order date.
- Definition of Covered Contract: Applies only to contracts awarded without competition, specifically those under Section 3204 of Title 10 (exceptions to competition in defense acquisitions) or Section 6.302 of the Federal Acquisition Regulation (similar exceptions in federal rules).
Significant Changes to Existing Law
This bill adds a new section (3709) to Chapter 271 of Title 10, United States Code, which governs major defense acquisition programs. Previously, there was no specific federal requirement for contractors to proactively report price increases in non-competitive defense contracts. This introduces mandatory disclosure and ties noncompliance to a public performance database, potentially affecting future contract eligibility.
Potential Impacts
- On Government Agencies: The Department of Defense (DoD) gains better tools for auditing and negotiating prices, which could lead to cost savings and reduced waste in military spending. Agencies like the Defense Contract Audit Agency will handle more reporting and database updates.
- On Citizens: Indirectly benefits taxpayers by promoting accountability for defense budgets, potentially lowering the cost of military goods and services funded by public money.
- On International Relations: Minimal direct impact, though it could enhance U.S. credibility in defense procurement by demonstrating fiscal responsibility, which might influence alliances or arms deals.
Main Stakeholders Affected
- Defense Contractors: Primary targets, as they must comply with reporting and face reputational or eligibility risks for future contracts if noncompliant.
- Department of Defense and Related Agencies: Contracting officers, auditors, and acquisition executives will enforce the rules and use the data for oversight.
- Congress and Oversight Bodies: Gain improved transparency to monitor defense spending, aiding in budget reviews and investigations.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens contract oversight without altering core procurement laws, but could lead to more disputes over price calculations or reporting timelines. Noncompliance entries in PIIS may serve as evidence in future legal actions, like contract terminations.
- Constitutional: No apparent conflicts; it aligns with Congress's authority over military spending (Article I, Section 8) and promotes efficient use of public funds.
- Political: Encourages accountability in the defense industry, potentially reducing perceptions of profiteering during high-stakes military needs. It may spark debate on balancing transparency with contractors' proprietary information, but focuses on non-competitive deals where oversight is already limited.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Deluzio, Christopher R. [D-PA-17]
Recent Actions
- 2025-09-08: Referred to the House Committee on Armed Services.
- 2025-09-08: Introduced in House
- 2025-09-08: Introduced in House
Bill Versions
- Defense Industry Pricing Transparency Act — issued 2025-09-08 — PDF (3 pages)