Pentagon’s Two-Year Probe of TransDigm Over Pricing Nears End
(Bloomberg) -- The Pentagon inspector general has almost completed a more than two-year review of TransDigm Group Inc.’s spare parts pricing, an inquiry triggered by 2019 revelations of massive overcharges by the defense contractor.
The report “is expected to come out around the end of October,” Acting Inspector General Sean O’Donnell told Bloomberg News in a statement.
The Pentagon watchdog announced the review in July 2019 following reports that TransDigm marked up prices on spare parts as high as 4,451% from 2015 through 2017. The review was requested by the House Oversight and Reform Committee, which asked then-Inspector General Glenn Fine to look into whether the company earned “excess profits” on an array of contracts.
The new watchdog, O’Donnell, said the upcoming report reviews a sample of procurement items and focuses on Cleveland, Ohio-based TransDigm’s history in providing cost and pricing information to DoD acquisition personnel.
“There is a need for Department to have more information before signing contracts,” O’Donnell said in the statement. “DoD wants to understand TransDigm pricing” and “they should get more information,” he added.
TransDigm spokeswoman Jaimie Stemen said in an email, “We are actively engaged with the Inspector General’s office and continue to provide them with information and analysis in full cooperation with their review.”
TransDigm emerged in recent years as a key sole-source provider of spare parts for airplanes and helicopters, including the AH-64 Apache, F-16 Fighting Falcon and CH-47 Chinook. From Oct. 1, 2014 through April 11, 2019, the Pentagon executed 4,697 contract actions with TransDigm and its subsidiaries valued at $634.7 million.
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