Independent · not SAM.gov
DoD supplier cost and pricing transparency, August 2026
Updated 30 September 2026
You are reading this because you are a prime or subcontractor trying to hold or win a Department of War contract worth 10 million dollars or more. ZeroGov is an independent information site. It is not the Department of Defence, not SAM.gov, not a federal agency, and not your lawyer. The 18 August memo is a policy directive on contracts you may already hold, and it changes how a contracting officer reads your cost data from the day it lands.
What the 18 August memo actually says
The memo is titled Supplier Cost and Pricing Transparency and was signed on 18 August 2026 by Deputy Secretary of War Stephen Feinberg. The three operative lines, as reported by Federal News Network and GovConic, decide who the memo reaches.
Full transparency throughout all tiers of the supply chain applies to all contractors and subcontractors. The threshold is 10 million dollars. Contracting officers are directed to get actual cost information at both the prime and supplier level, with one named exception for commercial off the shelf items. It is a directive under existing contract terms, not a new vehicle.
Why the direction reversed in eighteen days
The memo is harder to read on its own, because eighteen days earlier the same Pentagon was asking for the opposite. On 31 July 2026 the department's top acquisition official Michael Duffey and the acting Pentagon comptroller Michael Powers sent a letter to industry asking for common sense contract accounting changes aimed at aligning Department of War audit rules with Generally Accepted Accounting Principles and with the Sarbanes-Oxley controls companies already maintain.
The July letter asked industry to use what it already has. The August memo tells industry the Pentagon wants to pull from contractor systems directly. Read the two documents side by side and the direction reverses in under three weeks.
Who is in scope and what is exempted
The threshold is 10 million dollars at the contract level, not the task order level. A prime with multiple task orders under one contract sees the threshold tested against the contract ceiling. A subcontractor sees it tested against the value of its own subcontract.
Products and services worth 10 million dollars or more, certified or not, are in scope. The one named exemption is commercial off the shelf items, defined in the Federal Acquisition Regulation. If you sell through a prime, assume you are in scope unless the prime tells you in writing that your line is COTS.
The profit margin clause you will see first
The clause most likely to land first in a negotiation is how the Under Secretary of War for Acquisition and Sustainment is being told to set profit margins. The memo directs USW(A&S) to use commercial best practices tailored to each product or service line, rather than one flat formula across the board.
A contracting officer who previously applied a uniform markup is being told to look at what comparable commercial work is paid at. USW(A&S) is also being told to work with the Cost Assessment and Program Evaluation office, CAPE, and with the Defense Contract Audit Agency, DCAA, to compare actual costs against prices paid on sole source deals.
The 30 day cure window that already ran
The memo set a 30 day cure deadline for delinquent cost reports on CSDR covered programs. The Contract Status and Discrepancy Report is the tool DCAA uses to flag cost reports not filed on time. A contractor with an open CSDR flag had 30 days from the memo to cure it. Counting from 18 August 2026, that window closed on or about 17 September 2026.
If you held a flag and did not cure it, your status is something you resolve with your administrative contracting officer. The standard administrative consequence for a delinquent cost report is payment hold and potential offset against sums owed.
What industry is worried about
The most consistent concern in industry commentary is the confidentiality of pricing data. A contractor's cost and pricing data is the substance of how it wins work, and if that data leaks to a competitor or a foreign adversary through an inadequately secured system, the loss is permanent. The Professional Services Council's commentary made that point explicitly.
The reference point is the 2015 OPM breach, which exposed personal data on roughly twenty two million federal employees and contractors. The August memo does not address those safeguards, and that is a gap.
What this page is not
ZeroGov is an independent information site, not the Department of Defence, not SAM.gov, not a federal agency, and not a source of legal advice. This page summarises the 18 August 2026 memo as it has been reported in trade press and through industry briefings. It is not a substitute for reading the memo itself, or for advice from a lawyer who does federal procurement work.
The figures here are taken from reporting by Federal News Network and GovConic on the memo as signed.
What to do in the next thirty days
If you are a prime or subcontractor on a Department of War contract worth 10 million dollars or more, the next thirty days are about three things.
Pull your own CSDR status. The 30 day cure window expired on or about 17 September 2026, and any unresolved flag should be on your desk today. Your administrative contracting officer is the contact for resolving it.
Identify the cost data the memo wants. The memo points at API based access to your enterprise resource planning and financial systems. Walk through what your cost and pricing data looks like at each tier, and identify the gaps before a contracting officer does it for you.
Map your COTS exposure. The one named exemption is commercial off the shelf items, and the exemption is narrower than it sounds. Identify the lines that genuinely qualify so you are not making the call on the spot when a contracting officer asks.
Quick answers
- Does the 18 August 2026 memo apply to GSA Schedule contracts?
- The memo applies to Department of War contracts worth 10 million dollars or more. A GSA Schedule contract is administered by the General Services Administration, not the Department of War, and is out of scope unless the underlying task order is a War Department task order that crosses the 10 million dollar threshold.
- What is the dollar threshold for the new transparency rules?
- The threshold is 10 million dollars at the contract level. Subcontracts at or above that value are in scope even if the prime is small, and commercial off the shelf items are the one named exemption.
- Is the certification threshold still the same as the transparency threshold?
- No. Under the August memo the certification threshold and the transparency threshold are no longer the same line. A contract with no certified cost data history is not exempt once it crosses 10 million dollars.
- When did the 30 day cure window for delinquent CSDR cost reports end?
- Counting from 18 August 2026, the 30 day cure window closed on or about 17 September 2026. An unresolved CSDR flag after that date should be raised with your administrative contracting officer.
Independent information, not legal advice. Confirm status and rules on sam.gov and the current FAR text.