Trump administration paid $ 55 million to bankrupt company with no employees for N95 masks it never made

  • The Trump administration has awarded a $ 55 million contract for N95 masks to a bankrupt company with no experience in the production of medical supplies.
  • The Federal Emergency Management Agency told Insider that the Panthera company is scheduled to deliver the masks on April 23.
  • Former Secretary of Defense Chuck Hagel told the Washington Post something was wrong with the order.
  • The Centers for Disease Control and Prevention recommends that people cover their mouths and noses with a cloth when they are near other people, but say Americans should “not use a professional face mask. health”.
  • Visit the Business Insider homepage for more stories.

The coronavirus pandemic has created a desperate rush for vital medical supplies, including N95 masks, which has seen the federal government award massive contracts to third-party vendors to help fill in the gaps.

Amid this chaotic effort to secure supplies, the Trump administration paid $ 55 million to a bankrupt company with no employees and no expertise in the world of medical equipment for N95 masks, the Washington Post reported.

The company, Panthera Worldwide LLC, filed for bankruptcy last fall and one of its owners said last year that it had no employees since May 18, based on a affidavit obtained by mail. It is no longer listed as an LLC in Virginia, where its main office is located, after the fees are unpaid.

Panthera has no history of producing medical supplies or equipment and is a self-proclaimed tactical training company for the U.S. military and other government agencies.

The company’s website states, “Panthera Training provides elite, tactical, aeronautical, and intelligence scenario-based training and instruction for teams from the Department of Defense, State Department, United States. federal agency and law enforcement agencies that operate in sensitive environments around the world, in order to enable these teams to fulfill their mission. objectives and requirements. “

But Panthera is currently being sued by a Virginia businessman who has leased the company’s main asset – a training center in Virginia.

James V. Punelli, one of Panthera’s executives, told the Post that the company was working with military contacts to obtain the masks.

“We have done [Department of Defense] medical training over the years and through these contacts with this community have been brought in to provide sources of supply to help with the COVID-19 response, ”Punelli said in a text message to the Post. “We established the link with FEMA and offered these supplies. for them.”

“We will deliver these masks by May 1, for sure, in their entirety and with a very high quality product,” Punelli said, telling the Post that the company is now registered as an LLC in Delaware.

The Federal Emergency Management Agency (FEMA) pays Panthera $ 5.50 per mask, the Post reported, which is significantly more than what the government pays companies with established experience in producing medical supplies such than 3M (the company charges about 63 cents per mask).

FILE PHOTO: Various N95 respirator masks at a 3M lab in Maplewood, Minnesota, US March 4, 2020. REUTERS / Nicholas Pfosi / File Photo

Chuck Hagel, a former secretary of defense, told the Post something was wrong with the order. “That’s not the way the government gets itself training or any kind of supplies. You just wouldn’t do business with someone like that.”

A FEMA spokesperson told Insider that there was nothing in the standard background checks performed for government contracts on Panthera that stated “this supplier is not responsible.”

As with any contract, FEMA is required by law to follow federal procurement requirements and processes. In accordance with these federal procurement requirements and processes, the contracting agent has determined the liability of the contractor. Federal Recipient Integrity and Performance Information System (FAPIIS) was reviewed and Panthera met the necessary requirements. The company did not appear on the Excluded Party List System (EPLS), ”said the FEMA, adding that a review found Panthera showing “no overdue federal taxes (over $ 3,500) in the past three years.”

“FEMA does not enter into contracts unless it has reason to believe that they will be carried out successfully. The review required led us to conclude that Panthera would be able to fulfill its contract,” the holder continued. word of FEMA. “As with any contract, if the business cannot deliver or deliver a substandard product, the agency can take legal action against a business.”

The spokesperson said the equipment ordered has not yet arrived, but Panthera has provided written confirmation that the masks are in the shipping and delivery phase. Delivery is scheduled for April 23.

Since mid-March, the government has purchased more than $ 600 million worth of masks, according to the Post.

The Centers for Disease Control and Prevention recommends that people cover their mouths and noses with a cloth when they are near others, but says Americans should “not use a face mask intended for a healthcare professional.” .

New York State Governor Andrew Cuomo said on Wednesday that residents of his state, which has been hit harder than any other by the coronavirus pandemic, would be required to wear face masks or face coverings in public when it is not possible to engage in social distancing.

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