II 

117TH CONGRESS 

2D SESSION S. 4374 

To prevent price gouging at the Department of Defense. 

IN THE SENATE OF THE UNITED STATES 

JUNE 9, 2022 

Ms. WARREN introduced the following bill; which was read twice and referred 

to the Committee on Armed Services 

A BILL 

To prevent price gouging at the Department of Defense. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Price Gouging 

5 the Military Act’’. 

6 SEC. 2. STRENGTHENING TRUTH IN NEGOTIATIONS ACT 

7 PROVISIONS. 

8 (a) REQUIRED COST OR PRICING DATA AND CER9 TIFICATION.—Section 3702(a)(1) of title 10, United 

10 States Code, is amended by striking ‘‘only expected to re11 ceive one bid shall be required’’ and replacing with ‘‘only 

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1 reimbursement contract is contemplated regardless of the 

2 number of offers received, shall be required’’. 

3 (b) EXCEPTIONS.—Section 3703(a) of title 10, 

4 United States Code, is amended— 

5 (1) in paragraph (1)(A), by striking ‘‘adequate 

6 competition’’ and all that follows through ‘‘bids’’ and 

7 inserting ‘‘adequate price competition, except for the 

8 award of a cost-reimbursement contract, that results 

9 in at least two responsive and viable competing 

10 offerors’’; and 

11 (2) in paragraph (2), by inserting ‘‘based on 

12 adequate price competition that results in at least 

13 two responsive and responsible offers’’ after ‘‘com14 mercial service’’. 

15 (c) CONFORMING AMENDMENT RELATED TO CIVIL16 IAN CONTRACTS.—Section 3503(a)(2) of title 41, United 

17 States Code is by inserting after ‘‘commercial service’’ the 

18 following: ‘‘based on adequate price competition that re19 sults in at least two responsive and responsible offers’’. 


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1 SEC. 3. REVISION OF DEFINITION OF TERM ‘‘COMMERCIAL 

2 ITEM’’ FOR PURPOSES OF FEDERAL PRO3 CUREMENT STATUTES PROVIDING PROCE4 DURES FOR PROCUREMENT OF COMMERCIAL 

5 ITEMS. 

6 (a) ELIMINATION OF ‘‘OF A TYPE’’ CRITERION.— 

7 Section 103 of title 41, United States Code, is amended 

8 by striking ‘‘of a type’’ each place it appears. 

9 (b) ELIMINATION OF ITEMS AND SERVICES MERELY

10 OFFERED FOR SALE, LEASE, OR LICENSE.— 

11 (1) ITEMS.—Section 103(1)(B) of title 41, 

12 United States Code, is amended by striking ‘‘, or of13 fered for sale, lease, or license,’’. 

14 (2) SERVICES.—Section 103a(2) of title 41, 

15 United States Code, is amended by striking ‘‘offered 

16 and’’. 

17 SEC. 4. PROGRESS PAYMENT INCENTIVE PILOT. 

18 (a) PILOT PROGRAM.—The Secretary of Defense, 

19 acting through the Under Secretary of Defense for Acqui20 sition and Sustainment, shall establish and implement a 

21 pilot program, to be known as the ‘‘Progress Payment In22 centive Pilot Program’’, to make accelerated progress pay23 ments contingent upon responsiveness to Department of 

24 Defense goals for effectiveness, efficiency, and increasing 

25 small business contract opportunities. 


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1 (b) PURPOSE.—The purpose of the pilot program is 

2 to reward Department of Defense contractors who meet 

3 contract delivery dates, respond to Department solicita4 tions for required certified cost or pricing data, meet small 

5 business contracting goals, and provide subcontracting op6 portunities for AbilityOne contracts. 

7 (c) PROGRESS PAYMENTS.— 

8 (1) LIMITATIONS FOR LARGE CONTRACTORS.— 

9 Except as provided under paragraph (2), under the 

10 pilot program, the Department of Defense may not 

11 award to large business contractors progress pay12 ments in excess of 50 percent. 

13 (2) EXCEPTIONS.—The Department of Defense 

14 may increase the rate of progress payments, up to 

15 a total of 95 percent, by the following percentages: 

16 (A) 10 percent if the relevant division of 

17 the contractor met contract delivery dates for 

18 contract end items and contract data require19 ment lists or performance milestone schedule, 

20 as the case may be, at least 95 percent of the 

21 time during the preceding Government fiscal 

22 year. 

23 (B) 10 percent if the division does not 

24 have open level III or IV corrective action re25 quests. 


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1 (C) 7.5 percent if all applicable contractor 

2 business systems are acceptable, without signifi3 cant deficiencies. 

4 (D) 10 percent if at least 95 percent of the 

5 time during the preceding Government fiscal 

6 year, when responding to solicitations that re7 quired submission of certified cost or pricing 

8 data, the division met the due date in the re9 quest for proposal. 

10 (E) 5 percent if the contractor discloses 

11 first tier subcontractor data, the prime contrac12 tor’s beneficial owners, and total compensation 

13 for recipient executives. 

14 (F) 5 percent if the contractor has met its 

15 small business subcontracting goals during the 

16 preceding Government fiscal year. 

17 (G) 3 percent if the contractor has pro18 vided subcontracting opportunities for the blind 

19 and severely disabled. 

20 (d) DEFINITIONS.—In this section: 

21 (1) BENEFICIAL OWNERS.—The term ‘‘bene22 ficial owner’’ has the meaning given the term in sec23 tion 847 of the National Defense Authorization Act 

24 for Fiscal Year 2020 (Public Law 116–92; 133 Stat. 

25 1505; 10 U.S.C. 2509 note). 


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1 (2) COMPENSATION FOR RECIPIENT EXECU2 TIVES.—The term ‘‘compensation for recipient ex3 ecutives’’ refers to the names and total compensa4 tion of the five most highly compensated officers of 

5 the entity pursuant to section 2(b)(1) of the Federal 

6 Funding Accountability and Transparency Act of 

7 2006 (Public Law 109–282; 31 U.S.C. 6101 note). 

8 (3) FIRST TIER SUBCONTRACTOR.—The term 

9 ‘‘first tier subcontractor’’ means a subcontractor 

10 who has a subcontract directly with the prime con11 tractor. 

12 (4) LARGE DEFENSE CONTRACTOR.—The term 

13 ‘‘large defense contractor’’ means a contractor 

14 (other than an institute of higher education or a fed15 erally funded research and development center) that 

16 received more than $10,000,000 in annual revenue 

17 from the Department of Defense contracts or li18 censes in any of the previous three years. 

19 (5) PROGRESS PAYMENTS.—The term 

20 ‘‘progress payments’’ means payments provided for 

21 under section 3804 of title 10, United States Code. 

22 SEC. 5. DISCLOSURE BY LARGE DEFENSE CONTRACTORS. 

23 (a) ANNUAL REPORTING.—Not later than 60 days 

24 after the date of the enactment of this Act, the Secretary 

25 of Defense shall amend the Department of Defense SupVerDate Sep 11 2014 22:13 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4374.IS S4374

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1 plement to the Federal Acquisition Regulation to provide 

2 that large defense contractors shall be required to annu3 ally report to the Under Secretary of Defense for Acquisi4 tion and Sustainment the following information with re5 gard to the covered year, as compared with the year pre6 ceding that covered year: 

7 (1) The percentage change in the volume of 

8 goods or services sold and the percentage change in 

9 the average sales price of those goods or services, 

10 which shall be broken down by material product cat11 egories, when relevant, and presented in a tabular 

12 format. 

13 (2) The gross margins of the large defense con14 tractor, which shall be broken down by material 

15 product categories, when relevant, and presented in 

16 a tabular format. 

17 (3) Presented in tabular format, the share of 

18 the increase in revenue of the large defense con19 tractor that is attributable to— 

20 (A) a change in the cost of goods or serv21 ices sold by the large defense contractor; and 

22 (B) a change in the volume of goods or 

23 services sold by the large defense contractor. 


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1 (4) The percentage change in the costs of the 

2 large defense contractor, which shall be broken down 

3 by category and presented in tabular format. 

4 (5) In dollars, the change in the costs of the 

5 large defense contractor, which shall be presented in 

6 tabular format. 

7 (6) A detailed narrative disclosure of the pric8 ing strategy of the large defense contractor, which 

9 shall include— 

10 (A) an explanation for any increase in the 

11 gross margins of material product categories, 

12 including— 

13 (i) all material causes for such an in14 crease; 

15 (ii) an explanation of how each such 

16 material cause affected such an increase; 

17 and 

18 (iii) a description of the relative im19 portance of each such material cause with 

20 respect to such an increase; 

21 (B) an explanation for the decisions made 

22 by the large defense contractor with respect to 

23 the prices of goods and services sold by the 

24 large defense contractor; 


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1 (C) if the large defense contractor in2 creased prices at a rate that was greater than 

3 the rate at which the costs incurred by the 

4 large defense contractor increased, the rationale 

5 and objectives for increasing prices in such a 

6 manner; and 

7 (D) a description of conditions under 

8 which the large defense contractor plans to 

9 modify pricing after the date on which the large 

10 defense contractor submits the report. 

11 (b) PUBLICATION.—The Under Secretary of Defense 

12 for Acquisition and Sustainment shall annually publish on 

13 a publicly available internet website the previous year’s re14 ports received under subsection (a). 

15 (c) PENALTIES.—A knowing failure to disclose or up16 date information in accordance with subsection (a) may 

17 result in— 

18 (1) entry of the violation in the database for 

19 Federal agency contract and grant officers and sus20 pension and debarment officials defined in section 

21 2313 of title 41, United States Code; 

22 (2) imprisonment for not more than 5 years or 

23 a fine under title 18, United States Code, or both; 

24 (3) a civil fine of not more than $200,000, de25 pending on the extent and gravity of the violation; 


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1 (4) liability pursuant to section 3729 of title 

2 31, United States Code; or 

3 (5) suspension or debarment. 

4 (d) LARGE DEFENSE CONTRACTOR DEFINED.—In 

5 this section, the term ‘‘large defense contractor’’ means 

6 a contractor (other than an institute of higher education 

7 or a federally funded research and development center) 

8 that— 

9 (1) received more than $10,000,000 in annual 

10 revenue from the Department of Defense contracts 

11 or licenses in any of the previous three years; and 

12 (2) earned more than 20 percent of its total an13 nual revenue from Department of Defense contracts 

14 or licenses in any of the previous three fiscal years. 

Æ 


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