TransDigms Excess Profits Show Weakness in Supply Chain Management, Not Pricing Practices

Abstract

The recent high-profile case of yet another federal contractor accused of price gouging the U.S. Department of Defense (DoD) has led to renewed condemnation of unacceptable waste, fraud, and abuse in the management of taxpayer dollars. The response from Congress and others has been rightly outraged, but criticism has focused too narrowly on price, profit and the tools available to government contracting officers for determining price reasonableness. These are just symptoms of a larger, underlying problem with the DoD's supply chain management.