House report accuses Trump administration of ‘waste, fraud or abuse’ in US fan contract

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Technicians at the General Motors factory repair a ventilator at a hospital amid the COVID-19 pandemic on May 4, 2020 in Sao Caetano do Sul, Brazil.

Buda Mendes | Getty Images

The United States House Oversight Committee accused the Trump administration of “incompetent negotiations” for ventilators at the start of the coronavirus pandemic, saying it “wasted” more than $ 500 million in public funds on essential equipment.

“The waste of public funds caused by the Trump administration’s incompetent buying efforts for ventilators could reach $ 500 million or more,” according to one report published Friday by President Raja Krishnamoorthi, D-Ill.

The committee said the Trump administration mismanaged an existing contract with Philips Respironics, agreeing to pay $ 15,000 each for the Trilogy EV 300 ventilators this year after Philips repeatedly failed to deliver 10,000 Trilogy Evo Universal ventilators ordered in 2014 for $ 3,280 apiece, the report says.

The committee said there was no evidence the Trump administration attempted to negotiate a lower price for the ventilators.

The original contract called for the 10,000 Trilogy Evo ventilators to be delivered to the U.S. government by June 2019, according to the report.

“The Trump administration has mismanaged Philips’ repeated failures to meet contractual requirements. It has granted Philips three additional extensions, the latest of which delayed final delivery of the fans until June 2021,” the report says. . “If the Trump administration had held Philips under the Obama-era contract, the country would have had 10,000 ventilators it needed when the coronavirus crisis hit.”

Led by US trade adviser Peter Navarro, White House officials instead negotiated a new contract with Philips, agreeing to pay nearly five times the original price for the equipment, according to the investigation. The new contract called for 43,000 Trilogy EV300 fans at $ 15,000, which is also superior to a third model, the Trilogy Evo, which sells for a list price of $ 11,167.

The Trilogy Evo Universal and the Trilogy Evo appear to be two separate ventilation products. But the committee concluded, “Other than the price, there is no discernible difference in appearance or functionality between the Trilogy Evo Universal, Trilogy Evo and Trilogy EV300,” the report states. “The Trump administration’s efforts represent more than half a billion dollars in waste, fraud or abuse. Philips should return the surplus so it can help the nation’s response to the coronavirus pandemic . “

Frans van Houten, CEO of parent company Royal Philips, said the company has “been transparent about our production ramp-up plans, pricing and allocation policies. We have cooperated and provided the requested information to the subcommittee”.

Philips Respironics sells sleep, breathing and respiratory care equipment.

Van Houten said the company “does not recognize the findings of the subcommittee report, and we believe that not all of the information we have provided has been reflected in the report.”

Democrats on the committee said they had conducted the investigation to determine why the country had gone without a sufficient number of ventilators during the “critical first months” of the coronavirus pandemic.

The results were based on documents and information collected from Philips Respironics, a leading manufacturer of ventilators that allegedly negotiated contracts with the Trump administration, the report said.

A White House spokesman did not immediately return a request for comment.

This is a developing story. Please check back for updates later.

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