Back in 1985, the Project on Government Oversight led the way in exposing contractors who were charging the Pentagon $640 per toilet seat cover. Adjusted for inflation, that would be about $1,512 today. So why are taxpayers now on the hook for nearly seven times that amount, or having to pay contractors if the government produces the seats itself? Without access to cost or pricing information, the government can’t challenge the company’s ask, even after it was found to have exceeded anything else in the commercial marketplace.

The Department of Defense and Congress have totally abdicated their responsibilities when it comes to making sure taxpayers pay a fair price. Failing to secure upfront government ownership of intellectual property rights for systems it paid to research and develop is one of the main drivers of costs and a major source of contractor profits when it comes to operations and maintenance. It works well for the contractors. By owning the intellectual property rights, the prime contractor makes itself the only outfit capable of providing the necessary items. Moreover, that monopoly prevents other companies from providing maintenance support to the patented item. In many cases, contractors argue that the costs of these products shouldn’t be questioned because they are “commercial items,” supposedly available for sale and with prices set by the market. In cases like this, though, it’s clear the government is the only customer and pays accordingly high prices.

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