Preparing for the DoW’s New Cost and Pricing Transparency Requirements

The Pentagon’s Updated CSDR Expectations

Recently, the Department of War (DoW) released a memorandum calling for significantly greater transparency into supplier cost and pricing data. The stated goal is to “establish a new standard for transparency, competition, and performance” across the acquisition workforce. This move will give contracting officers greater insight into what products and services cost.

Additionally, the memorandum calls for a renewed emphasis on Cost and Software Data Reporting (CSDR) during post-award execution, citing thousands of delinquent reports across its acquisition portfolio. According to the department, the data deficit makes it difficult to determine which programs are delivering value and which require intervention to remain on schedule and budget.

Currently, DoW already has an established CSDR framework designed to capture expenditure, technical, and programmatic information for acquisition programs. What is changing is the department’s expectation for how extensively that information is available and how it is used.

Existing model: Collect required cost data primarily to support cost estimating and program oversight.

Emerging model: Use actual cost information more systematically to support negotiations, evaluate prices paid, assess contract outcomes, and determine whether programs are delivering value.

The memo specifically directs the department to use submitted CSDR data to evaluate sole-source contracts and, where CSDR is not being used, compare actual costs against prices paid. Cost data is therefore becoming a more active input into acquisition decisions and negotiations.

Cost Transparency Depends on Good Systems

Greater transparency is only useful if contractors can reliably produce the information the government wants. The existing CSDR framework requires reporting entities to capture and report actual costs against defined work breakdown structures.

For contractors, that means cost information needs to be:

Accessible → Structured → Traceable → Timely

Having a system that supports this information is essential. ERP and accounting systems cannot operate independently from estimating, scheduling, program controls, WBS structures, subcontractor reporting, and data governance.

That capability could become even more important as DoW explores application programming interfaces that could pull cost information directly from contractors’ ERP and financial systems. While automation could reduce manual reporting, it also increases the importance of the quality and structure of the underlying data.

Who Does This Affected?

The immediate impact is on contractors and subcontractors involved in negotiations for products or services valued at $10 million or more. They are now expected to make available actual cost information at both prime and supplier levels (excluding commercial off-the-shelf items). The implications are particularly significant for organizations with complex supply chains, fragmented program systems, or limited internal infrastructure for connecting cost information to program performance.

What Contractors Should Be Doing Now

Right now, contractors should begin evaluating whether their existing program infrastructure can support the level of visibility DoW is seeking.

1. Locate Your Cost Data: Identify where your organization stores actual cost information and confirm that your team can retrieve it. Review the data available across ERP, accounting, estimating and program management systems, and identify areas that still require manual intervention.
2. Reconcile Your Program Data: Cost information should tell the same underlying program story as the schedule, WBS, estimate, and performance data. Contractors should identify disconnects between systems before those inconsistencies emerge during negotiations or reporting.
3. Assess Your Suppliers: Review subcontractor reporting capabilities and existing flow-down mechanisms. Prime contractors should understand where supplier cost visibility is strong and where additional processes may be necessary.
4. Review Your Reporting Requirements: Understand your existing CSDR requirements, including required deliverables, reporting structures and submission timelines. Confirm that your systems and processes can produce the information specified in your CSDR Plan.
5. Assess Your CSDR Readiness: The immediate direction on delinquent reports makes this a logical place to start. Contractors should assess the timelines, accuracy, and completeness of current CSDR submissions and address weaknesses before stronger enforcement exposes them.

DoW’s renewed focus on cost transparency makes CSDR readiness more crucial than before. Meeting the new expectations requires contractors to understand the reporting requirements, align those requirements with existing business systems, structure the underlying data, and prepare compliant submissions.

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CSDR Express

SMA: The Program Lifecycle Company can help. We have the tools and experts to help government contractors strengthen their CSDR readiness through CSDR Express.

CSDR Express is end-to-end CSDR support without the need to build the capability in-house. Our team starts by reviewing, or helping you develop, your CSDR Plan along with your program documentation, accounting system, and (where applicable) EVMS. We support you through the CSDR Readiness Review, where reporting requirements are tailored to your systems and approach.

From there, our team codes and structures your data, runs it through our tool suite, and produces the required CCDR reports for submission to DCARC through the CADE Portal. We remain available to support any additional government questions after submission.

Contact us to access the CSDR capability you need without having to build and maintain it in-house.