May 30, 2023 10:50 a.m.

On Monday, Senator Ron Wyden said he and Senate colleagues from both parties have sent a letter urging the Secretary of Defense to conduct a thorough investigation over allegations alleging repeated instances of defense contractors overcharging the Department of Defense to secure excess profits of forty to fifty percent.

A release from Wyden said this has cost U.S. taxpayers hundreds of millions of dollars.

Wyden said a recent CBS News report found the Defense Department would often negotiate fixed price contracts providing private profits of twelve to fifteen percent, only for Pentagon analysts to find overcharges that boosted total profits to nearly forty percent or more. Wyden claims that massive overcharges from defense contractors accounting for hundreds of millions of dollars were uncovered in the investigation.  Wyden alleges that Lockheed Martin, Boeing, Raytheon and TransDigm are among the offenders. Wyden claims these companies are reaping enormous profits, seeing their stock prices soar and handing out massive executive compensation packages.

The release said the letter comes after a Government Accountability Office report earlier showed the Defense Department accounting systems cannot generate reliable and complete information and are unable to even capture and post transactions to the correct accounts, in violation of statutory requirements. In 2021, a separate GAO report showed the Defense Department had failed to implement a comprehensive approach to combat department-wide fraud, despite regularly awarding contracts worth hundreds of billions of dollars.

The letter was led by U.S. Senator Bernie Sanders. Alongside Wyden it was signed by three other senators.

The text of the letter is linked: https://www.sanders.senate.gov/wp-content/uploads/Letter-to-Secretary-Austin_5.24.2023.pdf