On February 17, Bloomberg News reported the Department of Defense Inspector General had subpoenaed pricing data from engine-maker Pratt & Whitney that the company had “repeatedly refused to turn over” to its Air Force customer. Coming as it did only a week after the Air Force designated Pratt as one of its best contractors, the story caught many observers by surprise. It turns out the I.G. has been seeking the pricing data since last Summer and Pratt has been trying to comply, but the commercial-type contract governing its work on a military version of the PW2000 engine did not require collection of such data. So it takes a while to assemble the data — Pratt has already delivered 5,500 files totaling 3.5 gigabytes — and additional time is needed to get subcontractor permission to release competition-sensitive information. It also turns out that Pratt is charging its military customer pretty much the same amount it charges commercial customers for sustainment services. But that isn’t good enough for the I.G., which issued its subpoena only weeks after clarifying what specific data it was seeking. Incidentally, the Air Force seems to be happy with the way Pratt & Whitney supports its engines. Which raises the obvious question, if this is the way the defense department treats its best suppliers, what does it do to the average ones? I have written a commentary for Forbes here.
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