- Pentagon is considering automated access to contractor cost data
- The proposed software could connect with companies’ financial systems
- New guidance calls for greater transparency throughout defense supply chains
The Pentagon is considering an automated system to obtain cost information directly from defense contractors’ financial systems as part of an effort to strengthen pricing transparency, Breaking Defense reported Thursday.
What Is the Pentagon’s Cost Data Plan?
According to a memo by Deputy Secretary of War Stephen Feinberg, the under secretary of war for acquisition and sustainment is tasked with establishing an automated approach that would use application programming interfaces to obtain cost information from contractors’ enterprise resource planning or other financial systems.
Feinberg’s transparency directive would extend to every tier of the supply chain for contracts of $10 million or higher, whether or not certified cost and pricing data is required. The department also intends to set fair and reasonable profit margins on contracts by applying commercial practices suited to each product or service.
Why Is the Pentagon Seeking More Cost Transparency?
Feinberg said additional cost data would support contract negotiations and help the department assess whether programs are delivering value. The memo also directs acquisition personnel to ensure contractors submit mandatory cost and software data reporting—dubbed CSDR—information on time to help address thousands of delinquent reports across the acquisition portfolio. The Pentagon said the delinquent CSDR reports create gaps in its ability to evaluate program performance and determine which efforts require adjustments.
The effort follows earlier calls for greater visibility into defense contractor pricing. In September 2025, a bipartisan group of senators introduced the Transparency in Contract Pricing Act of 2025, which would require certain contractors to notify the War Department of covered price increases on noncompetitive contracts.
How Could the Automated System Affect Contractors?
The memo says the proposed system is intended to reduce regulatory and compliance costs, but industry groups have raised concerns that additional requirements could create new burdens.
The Aerospace Industries Association said the approach could add to acquisition timelines and create barriers for companies seeking to work with the Pentagon.
The directive does not specify how the system would be implemented or financed. Retired Army Maj. Gen. John Ferrari said the system could standardize how companies provide cost information rather than give the Pentagon unrestricted access to their financial data.
The initiative also fits into the Pentagon’s broader acquisition-reform agenda. A November 2025 draft memo called for changes to the Defense Acquisition System aimed at reducing bureaucracy, speeding capability delivery and giving acquisition officials greater authority over programs.
