WASHINGTON — The Pentagon wants more transparency from defense primes and their supply chains on the cost of building weapons and is considering the use of software that would pull data directly from companies’ financial systems to get it, according to memo reviewed by Breaking Defense.
The memo, signed off by Deputy Defense Secretary Steve Feinberg on Tuesday, is meant to “reset” the Pentagon’s expectations for supplier cost and pricing information, with the department seeking to use that data to ensure that contractors’ profit margins don’t get out of control.
“Full transparency throughout all tiers of the supply chain applies to all contractors and subcontractors,” Feinberg stated in the memo, which was addressed to senior Pentagon leaders and the directors of defense agencies and department field activities. “This requirement supports negotiations for products and services valued at $10 million or more, regardless of whether cost and pricing data requires certification.”
“Additionally, I have directed the Under Secretary of War for Acquisition and Sustainment (USW(A&S)) to establish fair and reasonable contract profit margins by applying commercial best practices tailored to each product or service line,” he said.
