The Trump administration awarded hundreds of millions of dollars’ worth of urgent work to small companies with scant experience.
By David Gelles and Rachel Abrams
The Defense Department distributed more than $1 billion in federal contracts last month to companies for disposable medical gowns to protect those on the front lines of the coronavirus pandemic.
More than 100 large and midsize companies, many with track records of successfully completing federal procurement contracts, bid for the work. But the majority of the awards ultimately went to a handful of unexpected and inexperienced companies that now find themselves on the hook to produce hundreds of millions of gowns in a matter of months.
One deal, for $323 million, went to JL Kaya, whose only prior federal contracting work was a $7,296 project to make gauze.
A batch of contracts worth $194 million went to Health Supply US, a company founded this year by a former Trump administration official.
And an $88 million contract for gowns went to Maddox Defense, which says it has done government subcontracting work but has never managed a major contract of its own.
Two of those companies have been working with a retired National Football League player and, in one case, a former arms dealer who was barred from government contracting and was the inspiration for the film “War Dogs.”
The contracts for the disposable gowns were announced last month by the Defense Logistics Agency, a Pentagon division that is working on behalf of the Department of Health and Human Services to replenish the government’s stockpile of protective gear and other emergency supplies. The contracts — awarded to a handful of companies, almost all of them small businesses — require the companies to deliver as many as 260 million gowns by early next year.
The contracts went to the companies that offered to produce gowns at the lowest price. Jordan Gillis, the assistant secretary of defense for sustainment, said in a statement that in awarding the contracts, the Defense Department had considered the “financial capability, production capability, past performance and verified references” of bidders.
Mr. Gillis said bidders had “provided sourcing locations and production facility information to demonstrate their ability to comply with” the contract requirements. Since the contracts were awarded, he added, the Defense Department has met with the companies and “implemented robust contract oversight measures,” including visiting production facilities.
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