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Evaluation of Defense Logistics Agency Contracts for Ventilators in Response to the Coronavirus Disease-2019 Outbreak (DODIG-2021-042)

Evaluation

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Publicly Released: December 29, 2020

Objective

The objective of this evaluation was to determine whether the Defense Logistics Agency (DLA) properly contracted to acquire ventilators in response to the global coronavirus disease-2019 (COVID-19) pandemic, including how the DLA identified contract requirements and provided oversight of the time-phased delivery of ventilators. To determine whether the DLA properly acquired ventilators through its contracts, we evaluated whether the DLA acquired sufficient numbers of ventilators to meet demand, whether the DLA obtained the ventilators in a timely manner, and whether the ventilators met DLA customers’ expectations.

Background

COVID-19 is a viral respiratory illness caused by a novel coronavirus. On January 31, 2020, the U.S. Secretary of Health and Human Services (HHS) declared a public health emergency for the United States, and on March 13, 2020, the President declared a national emergency.

According to the Centers for Disease Control and Prevention, all 50 states have reported cases of COVID-19. The virus can cause damage to the lungs, making it difficult to breathe and causing the body’s oxygen levels to drop, which can result in death. A ventilator can be used to push air with increased levels of oxygen into the lungs of a patient. In a DoD press release on March 17, 2020, the Secretary of Defense stated,

As part of the President’s whole-of-government approach to fighting the coronavirus
pandemic, the Defense Department has agreed to provide medical supplies and capabilities
to the Department of Health and Human Services to help combat further infections.

To provide the medical supplies, the DLA contacted six vendors with existing DLA contracts to determine the quantity and timeframe required for each vendor to deliver the ventilators. Four of the six vendors notified the DLA that they would be able to collectively deliver a total of 8,000 ventilators.

 

Defense Logistics Agency Ordered Ventilators in Anticipation of Customer Requests During the COVID-19 Pandemic

Beginning on March 26, 2020, the DLA used multiple existing ID/IQ contracts to place delivery orders for 8,000 ventilators in response to the global COVID-19 pandemic. The DLA took initiative to acquire these ventilators due to projected national shortages, prior to having customer requests for ventilators.

By acquiring ventilators in anticipation of customer requests, the DLA eliminated the time it would take to issue new contracts, and thus shorten the customer’s waiting period. Although one customer experienced initial delivery delays due to customer-requested changes to the order, the other 15 customers did not report significant delivery delays to the DLA from the dates approved in the orders. Furthermore, the DLA’s procurement approach utilizing its working capital fund and established ID/IQ contracts enabled the DLA and its customers to receive delivery of 4,200 ventilators totaling $43,971,536 to customers on schedule by August 2020, with no identified quality assurance concerns. As of April 21, 2020, an additional 1,639 ventilators were on order with scheduled deliveries from December 2020 through February 2021. DLA contracting officers canceled 1,300 of the remaining ventilators from the Combat Medical contract on July 15, 2020, and stated that July 31, 2020, would be the cutoff date for customers to place orders. As of September 17, 2020, the DLA did not have customers for the remaining 861 ordered ventilators and canceled the delivery orders on September 21, 2020.

This report is the result of Proj. No. D2020-DEVSA-0124.000.