Congress took aim at a key defense contractor Wednesday for what the Pentagon’s acquisition chief called “gouging our taxpayers” using “a disgraceful business model” designed to exploit the law.
A review of a sample of parts TransDigm Group sold the military revealed the company made excess profit ranging from 17% to 4,451% on 46 of 47 part purchases examined. A former TransDigm sales director told the House Oversight and Reform Committee the company saw dealing with the Pentagon like “taking candy from a baby.”
The article goes on to state the following:
“TransDigm’s basic business model consists of identifying relatively small companies that make spare parts for the military — especially parts that no other companies make,” California Democrat Ro Khanna said Wednesday at the committee’s hearing. “TransDigm then buys up these small companies, purchases the rights to produce their products, and then jacks up the prices. The Pentagon has to pay, knowing that they have a monopoly.”
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