Trump administration pays bankrupt firm with no employees $55 million for N95 masks

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Amazon blocks sale of N95 masks to public

The Trump administration awarded a $55 million contract for N95 respirator masks earlier this month to a company with no employees, no expertise in making medical equipment, and whose owner filed for bankruptcy protection last year, according to a report by The Washington Post.

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Virginia-based Panthera Worldwide LLC, which bills itself as a tactical training company for the U.S. military and government agencies, is scheduled to deliver the desperately needed masks on April 23, according to the Federal Emergency Management Agency, which said it has received written confirmation that the masks were already being shipped.

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In the scramble to provide more personal protective equipment to health care workers on the front lines of the coronavirus fight, the government has been turning to third-party vendors to make up for the severe shortages in the Strategic National Stockpile.

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Some of the most notable companies to win these contracts include Honeywell and 3M, which have received the biggest orders so far.

The Post reports that demand for the masks has created a “frenzied, freewheeling global market that has pitted U.S. states against the federal government and rich nations against poorer ones.”

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Since mid-March, the government has spent more than $600 million on masks, according to The Post.

The FEMA contract pays Panthera about $5.50 per mask, while established suppliers such as 3M charge about $0.63 per mask, the Post reports.

Panthera’s parent company filed for bankruptcy protection last fall, and reported having no employees since May 2018, The Post reports, citing a review of documents from legal disputes involving the company. The company has also lost its designation as an LLC in Virginia due to unpaid fees but has registered as an LLC in Delaware, the Post reports.

Beyond that, Panthera’s executives are also being sued over the lease of the company's training facility in West Virginia, The Post reported.

The Post reached out to a Panthera executive, who said the company was working with military sources to acquire the masks.

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“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,” James V. Punelli told 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, according to the Post.

A FEMA representative said Panthera was found to be a viable supplier.

“As with any contract, FEMA is bound by law to follow Federal Acquisition requirements and processes,” the representative said, according to the Post. “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. As with any contract if the company cannot deliver or delivers sub-standard product, the agency can use legal means against a company.”