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STATEMENT: Warren, Khanna, Ryan Release Joint Statement in Response to New DOD IG Report on TransDigm Pricing

February 27, 2019
Press Release

2017 Letter Requesting Report (PDF) | 2017 DOD IG Response

Washington, DC - United States Senator Elizabeth Warren (D-Mass.), Representative Ro Khanna (D-Calif.), and Representative Tim Ryan (D-Ohio) issued a joint statement today in response to a new report released by the Department of Defense Inspector General, which found evidence of price gouging by private defense contractor TransDigm in an audit of 113 contracts with DOD.

In separate letters sent in Spring 2017, Senator Warren and Representatives Khanna and Ryan urged the DOD Inspector General to investigate contracts between TransDigm and DOD, following reports that TransDigm intentionally obscured its pricing structure to extract excess profits.

At the lawmakers’ request, the DOD IG reviewed 113 TransDigm contracts. It found that TransDigm’s profit margins were between 17% and 4,451% on 46 out of 47 parts it sold to the DOD, margins that produced a total of $16.1 million in excess profits.

“We’re pleased that the DOD Inspector General acted on our request. The audit’s findings clearly show that egregiously excessive profit was the norm on virtually all of TransDigm’s contracts and parts. We also look forward to the completion of the GAO report on monopolistic practices in the military spare parts market that we requested in the FY18 NDAA [National Defense Authorization Act] to see if there are more TransDigms out there,” said the lawmakers.

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Contacts:

Ashley Woolheater (Warren): 202-224-2292

Heather Purcell (Khanna): 202-225-2631

Michael Zetts (Ryan): 202-225-5621