Much of the business world is moving toward greater transparency these days. Some clothing retailers even explicitly state their costs per garment while touting their openness. In the defense industry, things don’t work like that. In fact, sole-source contractors for the Department of Defense were just given free rein to sell more to Uncle Sam without providing any cost info for labor or materials.
Funding the military meets with wide agreement, even among members of Congress. As David Dayen of The Intercept recently wrote, the National Defense Authorization Act passes on-time more than any other recurring vote.
Cost data must be provided for competitive contracts as part of the bidding process. For supplies or services with a sole-source contractor, there was previously no need to share cost data for contracts up to $500 million. That just got quintupled up to a $2.5 million limit.
As you can imagine, this means that suppliers who already have a monopoly on their work can now do even more business without transparency.
Smaller contractors have to worry about the cost of DoD contractors’ equipment needs and labor while bidding competitively. One could argue that’s the best thing for taxpayers’ interests and for maintaining a free market.
As Dayen notes in his coverage, this preferential treatment for larger, sole-source contractors takes away focus on minimizing costs for DoD spending. It also lets certain players avoid disclosure to rig the system in their favor.
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