(Bloomberg) -- The Pentagon’s logistics agency has modified an existing contract and will spend $84.4 million to buy 8,000 ventilators from four vendors, with delivery of an initial 1,400 by early May.
The companies tapped to make the devices are Zoll Medical Corp., Combat Medical Systems LLC, Hamilton Medical Inc., and VyAire Medical Inc., according to a Defense Logistics Agency spokesman.
“This will be a time-phased delivery over the next several months and we expect orders to begin shipment within the next few days” with delivery locations to be determined by the Federal Emergency Management Agency, spokesman Air Force Lt. Col. Mike Andrews said in a statement.
Projected shortages in ventilators have made the crucial life-saving equipment a central focus of U.S. efforts to cope with and manage response to the Covid-19 crisis. New York Governor Andrew Cuomo said the state would need 140,000 hospital beds and 30,000 ventilators to prepare for the peak of the coronavirus outbreak.
President Donald Trump on Friday invoked the Defense Production Act, empowering the federal government to “use any and all authority” under the Act to require General Motors Co. to prioritize orders for the number of ventilators that the secretary of Health and Human Services deems to be appropriate.
The Pentagon announcement made good on a promise earlier this week from acquisition chief Ellen Lord that she’d provide details on how the department was mobilizing the defense industrial base.
Contract Modifications
Lord set up a “Joint Acquisition Task Force” integrated within FEMA’s National Coordination Center, “and will help communicate demand signals for medical products” to the defense industry, Andrews said.
The Pentagon’s contracts management agency is implementing “a mass modification” to about 1,500 contracts to raise the limits on progress payments from to 90% from 80% for large businesses, and to 95% from 90% for small businesses, following up on a policy announced a week ago.
“This will provide immediate cash flow to industry, especially small businesses in the supply chain, once incorporated into the contract,” Andrews said. “The department has a high expectation level that prime companies are also ensuring cash flow is moving to small businesses in their respective supply chains,” he said.
The logistics agency has stocked the USNS Comfort and USNS Mercy with over $2 million in pharmaceuticals and medical supplies and 975,000 gallons of fuel as they sail to New York City and Los Angeles, respectively.
Separately, Air Force Air Mobility Command C-17 transports have continued to deliver from Aviano Air Base in northern Italy Covid-19 test kit swabs from the Italian unit of Copan Diagnostics. The transports since last week have delivered three million test kit swabs under the director of the Pentagon’s Defense Threat Reduction Agency.
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