Defense contractors that refuse to hand over cost and pricing data could lose awards, and contracts under $10 million could face the same scrutiny as larger ones, if four senators get their way. In a bipartisan letter to Deputy Defense Secretary Steve Feinberg, Sens. Elizabeth Warren (D-Mass.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Elissa Slotkin (D-Mich.) are pressing the Pentagon to explain how it will obtain cost and pricing data from contractors, including on contracts below the $10 million threshold, and whether it will terminate negotiations with companies that refuse.
The letter centers on Feinberg's Aug. 18 directive on "Supplier Cost and Pricing Transparency." The senators asked for answers by Nov. 3, 2026, and said they will use them to inform legislation aimed at strengthening pricing transparency, preventing contractor abuse and protecting taxpayer dollars.
Why the $10 Million Certified Data Threshold Worries the Senators
The core complaint targets a change Congress itself made. Last year, lawmakers raised the threshold for submitting certified cost or pricing data from $2.5 million to $10 million. A House Armed Services Committee analysis later found that the change would prevent the department from accessing cost or pricing information for more than 60% of its contracts, according to Federal News Network. The senators' release makes the same point about the $10 million threshold in the Aug. 18 policy, saying it could leave the department without access to critical information for more than 60 percent of its contracts.
The senators see the Aug. 18 directive as a way to address that gap. They want the department to apply the directive's reviews to lower-value contracts rather than limiting them to awards above the certified data line.
"The Pentagon can implement the Aug. 18 directive in a way that limits the scope of these problems and ensures contracting officers have the necessary data to negotiate fair and reasonable prices," the lawmakers wrote. "Specifically, the reviews under the Aug. 18 directive should not be limited only to those contracts that exceed $10 million. A lower limit would allow review of the vast majority of the Department’s contracts and provide fresh opportunities to return billions of dollars to the military and taxpayers."
The letter frames the issue in readiness terms as well as budget terms. "The culture of overcharging within the defense industry that has driven this behavior has come with significant costs to both readiness and the American taxpayer," the senators wrote. The press release text reproduced by WATDmedia recalls the $436 hammers and $640 toilet seats of the 1980s and a nearly 8,000% markup Boeing charged the Air Force on lavatory soap dispensers.
Will the Pentagon Disqualify Contractors That Refuse to Share Pricing Data?
The second set of questions concerns enforcement. The senators want to know whether DoD will disqualify contractors that refuse to provide necessary pricing data, and whether it will pursue contract terminations or modifications when a contractor fails to submit required cost data after award.
According to the senators' release, they urged the Pentagon to use its existing authority to make contractors ineligible for awards when they refuse to provide requested data. The letter's closing passage quotes the directive's own promise to reset expectations and asks how the department plans to follow through.
"To ensure our understanding of how this directive ‘resets the Department’s expectations regarding supplier cost and pricing information,’ and how it will gain transparency through ‘modern information technology and current business best practices,’ we seek to clarify how the Department will gain such data from refusing companies, conduct consistent oversight, and hold non-compliant companies accountable," the senators wrote.
How Feinberg's August Memo and His Later Retreat Set Up the Letter
Feinberg's Aug. 18 memo suggested the Pentagon would install application programming interfaces to "pull cost information directly from contractors’ enterprise resource planning or other financial systems," Federal News Network reported. That idea drew industry pushback.
A later Feinberg memo appears to be at odds with the August directive. After the pushback, Feinberg said the department would ask companies for cost and pricing data only "when necessary to foster transparency and fairness."
The senators did not reject the August approach. They said it "could be an important step to make the Pentagon a more intelligent buyer of weapon systems and save taxpayer dollars," but "not enough to address the breadth of issues." The letter in effect asks Feinberg how the department will gain such data from companies that refuse, and how it will hold non-compliant companies accountable.
FY2027 NDAA Price-Increase Notice and Two Pending Bills
The letter also ties the directive to the fiscal 2027 defense policy bill. Both the House and Senate versions of the FY2027 NDAA include provisions that would require defense contractors to notify DoD of price increases within 30 days of becoming aware of the rising costs. The provisions would also require the Defense Contract Audit Agency to report contractors that fail to comply with the notification requirement.
Congressional leaders tried to include similar pricing transparency provisions in the FY2026 bill, but those were dropped from the final version.
The senators urged the department to support two measures in the FY2027 NDAA: Warren's bipartisan Stop Price Gouging in the Military Act and the Transparency in Contract Pricing Act. "We urge you to support these measures that will better arm contracting officers with statutory backing during negotiations, improve pricing transparency, and ensure the taxpayer gets a fair deal," they wrote.
What It Means for Contractors
The letter does not change any rule by itself, but it signals where oversight pressure is heading. Contractors should plan around several possibilities.
- Data requests below $10 million. The higher certified data threshold does not guarantee that contracting officers will stop asking for cost information. If DoD adopts the senators' view, reviews under the Aug. 18 directive could reach contracts well under the line.
- Refusal carries more risk. The senators are pushing DoD to treat refusal as grounds for ineligibility and to consider terminations or modifications when required data does not arrive after award. Companies that have declined data requests in the past should review how they would respond if that position becomes formal policy.
- Price-increase notice. With the 30-day notification requirement in both NDAA versions, suppliers should check whether their pricing and accounting systems can flag cost increases quickly enough to meet a statutory deadline, and whether subcontract flowdowns would be needed.
- ERP access remains uncertain. The August memo floated direct API pulls from contractor systems, and the later memo appears to pull back from that approach. Firms should know what their financial systems could expose if the department revives the idea.
The Nov. 3 response deadline is the next marker. How DoD answers, and whether it answers publicly, will shape whether the senators press for statutory mandates or accept administrative fixes.
