Sec. 5. Disclosure by large defense contractors
584 words·~3 min read·
/bill/117/s/4374/is/section-5·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Not later than 60 days after the date of the enactment of this Act, the Secretary of Defense shall amend the Department of Defense Supplement to the Federal Acquisition Regulation to provide that large defense contractors shall be required to annually report to the Under Secretary of Defense for Acquisition and Sustainment the following information with regard to the covered year, as compared with the year preceding that covered year: The percentage change in the volume of goods or services sold and the percentage change in the average sales price of those goods or services, which shall be broken down by material product categories, when relevant, and presented in a tabular format.
The gross margins of the large defense contractor, which shall be broken down by material product categories, when relevant, and presented in a tabular format. Presented in tabular format, the share of the increase in revenue of the large defense contractor that is attributable to— a change in the cost of goods or services sold by the large defense contractor; and a change in the volume of goods or services sold by the large defense contractor. The percentage change in the costs of the large defense contractor, which shall be broken down by category and presented in tabular format.
In dollars, the change in the costs of the large defense contractor, which shall be presented in tabular format. A detailed narrative disclosure of the pricing strategy of the large defense contractor, which shall include— an explanation for any increase in the gross margins of material product categories, including— all material causes for such an increase; an explanation of how each such material cause affected such an increase; and a description of the relative importance of each such material cause with respect to such an increase; an explanation for the decisions made by the large defense contractor with respect to the prices of goods and services sold by the large defense contractor; if the large defense contractor increased prices at a rate that was greater than the rate at which the costs incurred by the large defense contractor increased, the rationale and objectives for increasing prices in such a manner; and a description of conditions under which the large defense contractor plans to modify pricing after the date on which the large defense contractor submits the report.
The Under Secretary of Defense for Acquisition and Sustainment shall annually publish on a publicly available internet website the previous year’s reports received under subsection (a). A knowing failure to disclose or update information in accordance with subsection
(a)may result in— entry of the violation in the database for Federal agency contract and grant officers and suspension and debarment officials defined in section 2313 of title 41, United States Code; imprisonment for not more than 5 years or a fine under title 18, United States Code, or both; a civil fine of not more than $200,000, depending on the extent and gravity of the violation; liability pursuant to section 3729 of title 31, United States Code; or suspension or debarment. In this section, the term large defense contractor means a contractor (other than an institute of higher education or a federally funded research and development center) that— received more than $10,000,000 in annual revenue from the Department of Defense contracts or licenses in any of the previous three years; and earned more than 20 percent of its total annual revenue from Department of Defense contracts or licenses in any of the previous three fiscal years.