Committee Seeks Comprehensive Review of TransDigm Overcharges in Contracts with DOD

Jun 6, 2019
Press Release
Company Already Forced to Return $16 Million After Oversight Hearing on Small Sample Examined by IG

Washington, D.C. (June 6, 2019)—Today, Rep. Elijah E. Cummings, the Chairman of the Committee on Oversight and Reform, Rep. Stephen F. Lynch, the Chairman of the Subcommittee on National Security, and Committee Members Reps. Jackie Speier and Ro Khanna sent a letter requesting that the Inspector General (IG) of the Department of Defense (DOD) conduct a comprehensive review of TransDigm overcharges in the company’s contracts with the Pentagon.

This request comes in the wake of TransDigm being forced to return $16 million after the Committee held a hearing last month highlighting a report by the Inspector General identifying millions of dollars in excess profits in its review of a small sample of the company’s contracts.

“In light of your testimony, and the testimony of Assistant Inspector General Theresa Hull, the Committee is concerned that TransDigm is charging DOD unjustifiably high prices for mission-critical spare parts,” the Members wrote. “Because you identified so many overcharges in just the small sample of contracts you examined, we believe it is highly likely that TransDigm is receiving additional excess profits that have not yet been identified.”

At the Committee hearing in May, the Inspector General testified that he examined only a small sample of TransDigm’s contracts.  His office reviewed 47 spare parts purchased from TransDigm under contracts awarded by the Defense Logistics Agency (DLA) and the Army. 

The Inspector General determined that TransDigm made “excess profit on 46 of the 47 parts it sold to the DLA and the Army.”  He also determined that “TransDigm earned $16.1 million in excess profit for 46 parts it sold to the DLA [Defense Logistics Agency] and the Army for $26.2 million between January 2015 and January 2017.” 

TransDigm has a huge number of contracts with the Defense Department worth hundreds of millions of dollars.  Based on information provided by TransDigm, the company received $782,121,815 in revenue from 7,931 contracts with DOD between January 1, 2015, and April 23, 2019.

Read today’s letter here.

 

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116th Congress