Oversight Committee Holds Hearing on New Findings of Price Gouging by TransDigm in DOD Contracts

Jan 13, 2022
Press Release

Washington D.C. (January 13, 2022)— On Wednesday, January 19, 2022, at 10:00 a.m., Rep. Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, will hold a remote hearing to examine the results of an audit by the Department of Defense Office of Inspector General (DOD OIG), which found that a defense contractor, TransDigm Group Inc., has received nearly $21 million in excess profits on numerous contracts by acquiring companies with sole-source contracts for spare parts needed by the military and then raising prices dramatically. 

 

On May 15, 2019, the Committee held a bipartisan hearing examining a DOD OIG report that found TransDigm received $16.1 million in excess profits on 46 of the 47 parts reviewed.   After Committee Members called on the company to refund the money during the hearing, TransDigm repaid the full $16.1 million to DOD.

 

On December 13, 2021, the DOD OIG released a new report requested by the Committee revealing that TransDigm received an additional nearly $21 million in excess profits on 105 of 106 types of spare parts purchased by the Pentagon.  The DOD OIG also confirmed that TransDigm’s business model is to acquire companies with sole-source contacts, and then hike up prices on the spare parts those companies manufacture.

 

The hearing will examine the new report as well as potential legislative and administrative reforms to increase transparency and accountability in government contracts.

 

WHAT:  

 

Full Committee hearing entitled, “Price Gouging in Military Contracts:  New Inspector General Report Exposes Excess Profit Obtained by TransDigm Group.”

 

WHEN:

Wednesday, January 19, 2022, at 10:00 a.m.

 

WHO:    

 

Ms. Theresa S. Hull

Deputy Inspector General

Office of Inspector General, Department of Defense    

 

Mr. John Tenaglia

Acting Principal Deputy Assistant Secretary of Defense for Acquisition and Principal Director, Defense Pricing and Contracting

Department of Defense  

   

Mr. Kevin Stein

Chief Executive Officer

TransDigm Group Inc.

 

Mr. Nicholas Howley

Founder and Executive Chairman

TransDigm Group Inc.

 

WATCH:

A livestream will be available on YouTube and the Committee on Oversight and Reform website.  

  

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117th Congress