April 13, 2020

As States Face PPE Shortfall, Reed & Whitehouse Press Trump Administration for Information About Outsourcing the Distribution of Critical Medical Supplies to Private Companies

Senators concerned that over-reliance on private companies for personal protection equipment (PPE) raises serious ethical questions, could result in supplies not being delivered to those in need

Washington, D.C. – With Rhode Island and states across the country facing severe challenges to secure lifesaving supplies from the federal government amid the COVID-19 pandemic, U.S. Senators Jack Reed and Sheldon Whitehouse have joined 45 of their Senate colleagues in raising serious concerns about the Trump Administration’s reliance on private companies to distribute desperately needed medical supplies.

Reed and Whitehouse are directly urging Vice President Mike Pence, who the President charged with leading a coronavirus taskforce, to better manage the national stockpile of supplies and the distribution of those supplies to states in need of federal assistance.

They also note that need, not political patronage, should determine where federal resources are allocated and say they are troubled by recent comments and social media posts President Trump has made disparaging some elected officials while the federal government blocks shipments to states and rewards others with public announcements about ventilators and desperately needed supplies.  

Although President Trump has declared a national emergency and mobilized the Federal Emergency Management Agency (FEMA) to help distribute supplies, FEMA is currently relying on private companies to distribute masks, N95 respirators, gowns, gloves, and other critical supplies to states, without clear guidance from the federal government on which areas or facilities should be prioritized.  This practice raises serious questions about the use of taxpayer dollars, the government authorities delegated to private companies, and whether supplies will be delivered to the areas that need them most.

“While we agree that the existing supply chains and unique capabilities of the commercial market should be used to the greatest extent practicable, the process the task force has decided to use is, at best, opaque and inefficient,” the Senators wrote in a letter to Vice President Pence.  “We are concerned that the federal government is using taxpayer dollars to bring supplies to the United States, just to have six private distributors step in and sell those very supplies to desperate states, tribes and health care systems for a profit.  In the private market, states, tribes, federal agencies, hospitals, and other entities must all compete for the same supplies, where resources are allocated according to existing commercial relationships or the highest bidder instead of greatest need.”

In the letter, the 47 Senators expressed concern that, without sufficient oversight, the Administration’s strategy for distributing medical supplies is vulnerable to waste, fraud, and abuse.  Currently, only half of the supplies procured by the federal government are distributed to areas considered to be “hotspots” by medical experts, with the other half left to commercial distributors to deliver wherever they choose.  Earlier this month, the Department of Defense transferred more than 5 million desperately needed N95 respirators to FEMA, which then turned them over to private companies for distribution, rather than working with state emergency management offices to coordinate delivery to localities with the greatest need.  The Senators raised concerns that private businesses’ commercial interests could lead to allocation according to the highest bidder, rather than on a basis of need.

The Senators requested detailed information on how private distributors are allocating medical supplies to Coronavirus hotspots through programs like “Project Airbridge,” and how the Administration is using its authorities under the Defense Production Act to guide distribution efforts.  The Senators are also seeking information on the oversight efforts conducted by FEMA – including details on how the federal government is ensuring the delivery of supplies to communities with the greatest need and the Administration’s strategy to prevent favoritism or price gouging by private companies. 

The letter is available here.

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