The Trump administration paid a bankrupt company with zero employees $55 million for N95 masks, which it’s never manufactured
The coronavirus pandemic has created a desperate clamber for vital medical supplies, like N95 masks, that has led the federal government to award massive contracts to third-party vendors to help fill the gaps.
In this chaotic effort to obtain supplies, the Trump administration awarded a $55 million contract to Panthera Worldwide LLC, a company with no expertise in the world of medical equipment, for N95 masks, The Washington Post reported on Wednesday.
Panthera’s parent company filed for bankruptcy protection last fall, and one of its owners last year said it’d had no employees since May 2018, The Post reported, citing sworn testimony. It’s no longer listed as an LLC in Virginia, where its main office is, after fees went unpaid, the newspaper said.
Panthera, which describes itself as a tactical training company for the US military and other government agencies, has no record of producing medical supplies or equipment, The Post said.
The company’s website says it “provides elite, scenario-based tactical, aviation and intelligence training and instruction for Defense Department, State Department, Federal Agency and Law Enforcement teams who operate in sensitive environments worldwide, to enable those teams to meet their mission goals and requirements.”
Panthera’s executives are being sued by a Virginia businessman who leased the company’s primary asset, a training facility in West Virginia, The Post reported.
James V. Punelli, one of Panthera’s executives, told The Post that the company was working with military contacts to obtain the masks.
“We’ve done [Department of Defense] medical training over the years and through those contacts with that community were brought sources of supply in order to assist in the COVID-19 response,” Punelli said in a text message to The Post. “We made the connection with FEMA and offered these supplies to them.”
“We will provide these masks before May 1 for certain, in full and with a very high-quality product,” Punelli said, adding that the company is registered as an LLC in Delaware.
The Post reported that the Federal Emergency Management Agency was paying Panthera about $5.50 per mask, decidedly more than what the government pays companies with an established background in producing medical supplies such as 3M, which charges about $0.63 per mask.
Chuck Hagel, a former defense secretary, told The Post something was “amiss” about this order. “This is not how the government procures training or any type of supplies,” he said. “You just wouldn’t do business with somebody like that.”
A FEMA representative told Insider that there was nothing in the standard background checks conducted in relation to government contracts that indicated Panthera “isn’t responsible.”
“As with any contract, FEMA is bound by law to follow Federal Acquisition requirements and processes. Per these Federal Acquisition requirements and processes, the Contracting Officer conducted a contractor responsibility determination. The Federal Awardee Performance and Integrity Information System (FAPIIS) was examined and Panthera met the necessary requirements. The company did not appear on the Excluded Parties List System (EPLS),” FEMA said, adding that a review did not find Panthera showing “any delinquent federal tax (of more than $3,500) in the last three years.”
“FEMA does not enter into contracts unless it has reason to believe they will be successfully executed. The required review led us to conclude that Panthera would able to deliver on their contract,” the representative said. “As with any contract if the company cannot deliver or delivers sub-standard product, the agency can use legal means against a company.”
The representative said that the ordered equipment hadn’t arrived yet but that Panthera had provided written confirmation that the masks were in the shipping phase of delivery. The 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 mouth and nose with a cloth when they’re around others but says to “not use a facemask meant for a healthcare worker.”
Gov. Andrew Cuomo said this week that residents in New York, which has been hit hardest by the coronavirus outbreak in the US, will be required to wear masks or face coverings in public when it’s not possible to follow social-distancing guidelines.