Washington, DC – Representatives Jackie Speier (CA-14), Raúl M. Grijalva (AZ-03), Deb Haaland (NM-01), Ben Ray Luján (NM-03), Tom O’Halleran (AZ-01) Jamie Raskin (MD-08), and Jan Schakowsky (IL-09) sent a letter today to Acting Chair of the Pandemic Response Accountability Committee Michael Horowitz requesting an investigation into the hundreds of federal contracts entered with first-time contractors related to the COVID-19 response efforts, including many contractors who are ill-suited to provide the critical services that are needed.
In their letter, the Members state, “According to an in-depth analysis by ProPublica, 345 first-time federal contractors have been promised at least $1.8 billion in federal contracts related to the COVID-19 pandemic. Of those 345 contractors, more than half of the companies did not have to compete for their contracts, compared with 32 percent of overall pandemic-related contracts. The lack of competition paired with the lack of a federal law to prevent price-gouging not only increases the risk of price gouging, but also for fraud and faulty products”
The Members added, “Not only are contracts being awarded to companies attempting to do work completely outside of their industries, contracts are also being awarded to companies that were formed mere weeks or even days before applying for a federal contract. A former White House aide received a $3.24 million contract to supply respirator masks to Navajo Nation hospitals in New Mexico and Arizona. Zach Fuentes LLC was created just eleven days before it was awarded a contract through the Indian Health Service (IHS). The Navajo Nation has been rocked by the pandemic. On June 1, the Navajo Department of Health reported 5,348 positive COVID-19 cases and 246 known death. Yet the IHS reported that 247,000 of the masks delivered by the company, at a cost of around $800,000, may be unsuitable for medical use and another 130,400 are not the type of masks specified in the procurement data.”
“While payment of federal contracts is contingent on performance and companies may have to pay the difference if their failure to deliver causes the government to use a more expensive contractor, it is simply unacceptable for the government to enter into contracts with unreliable, unproven vendors. We understand that the unprecedented circumstances call for new and innovative solutions, but that does not mean due diligence must be abandoned.”
A copy of the letter is attached to this release.
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