Defense Bill Demands Price Hike Reports: Contractors Must Disclose 25% Jumps on No-Bid Deals

This new legislation, the Defense Industry Pricing Transparency Act, is pretty straightforward: it aims to stop the government from getting gouged on defense contracts where there isn’t any competition. It works by setting up mandatory tripwires for price increases on items bought under non-competitive contracts, also known as sole-source deals.

Specifically, if a defense contractor is working on one of these “covered contracts,” they now have to report the price to the contracting officer within 30 days if it jumps significantly. How significant? The bill sets two clear thresholds: either the new price is 25% higher than the original bid price, or it’s 50% higher than the government paid for that same item in the last five years. Think of it as a mandatory “Hey, this is getting expensive” alert for the Pentagon.

The 'No-Bid' Watch List

This reporting requirement doesn't apply to every single defense contract, which is key. It’s strictly focused on what the bill calls “covered contracts”—deals awarded without full, open competition. These are the situations where the government didn't shop around, often because the item is unique, or only one company can provide it. This is where the risk of overpaying is highest, and that's exactly where this bill steps in to enforce oversight. If your company is supplying the military under a competitive bid, you’re off the hook for this specific reporting requirement.

What Happens When Contractors Don't Talk?

If a contractor hits one of those 25% or 50% thresholds and fails to file the required report within the 30-day window, there’s a real consequence. The Director of the Defense Contract Audit Agency (DCAA) or the relevant acquisition executive must log the non-compliance into the Federal Awardee Performance and Integrity Information System (FAPIIS). FAPIIS is essentially the government's public report card for federal contractors. That entry will include the contractor’s name, the product, the unit cost, and the total cost. For contractors, having a public black mark in FAPIIS is a big deal; it can hurt their chances of winning future government work.

The Real-World Impact: Keeping Taxpayer Money in Check

For the average person paying taxes, this bill is a win for fiscal sanity. We’ve all heard the stories about the military paying astronomical prices for simple items—a famous example being the $640 toilet seat cover. This bill is designed to prevent that kind of price creep when the government is essentially locked into buying from a single source. By forcing contractors to explain major price hikes in non-competitive environments, the government gets better data for negotiations and audits. It's a mechanism to ensure that when the DoD has to rely on a sole provider, that provider isn't taking advantage of the lack of competition. While contractors might grumble about the new administrative burden and the 30-day clock, this transparency is crucial for ensuring defense spending is responsible and accountable to the public.