FEMA cancels $55 million mask contract

The Federal Emergency Management Agency (FEMA) said Tuesday that it canceled a multimillion-dollar contract for surgical masks that it had signed with a Virginia-based firm that lacked a history of producing medical equipment.

The administration had said last month that the contract with Panthera Worldwide, which describes itself as a tactical training company, was worth $55 million. The contract was canceled Tuesday "on the grounds of nondelivery," a FEMA spokesperson told The Wall Street Journal.

The contract originally stated that Panthera was to provide FEMA with 10 million N95 masks by May 1, and the agency said the deadline was extended to May 11. One official told the Journal that Panthera had requested an additional four-day extension, but FEMA denied the request.

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The Journal reported last month that both of Panthera's owners have been accused of fraud and that the IRS had field tax liens against them in 2018. Additionally, Panthera's parent company filed for bankruptcy last year. Panthera itself had won only one other government contract before, the Journal noted.

The company did not return the newspaper's request for comment on Tuesday. The Hill has reached out to FEMA and Panthera for comment.

Because of a global shortage of N95 respirators, the market for them has been chaotic since the onset of the coronavirus pandemic.

In total, the federal government has spent more than $110 million in contracts for the much needed masks, the Journal reported last month. At least 80 percent of the companies that the government contracted out to make the masks were either first-time government contractors or had only completed small-scale federal contracts previously, the newspaper reported.

Rep. Bennie ThompsonBennie Gordon ThompsonStates plead for cybersecurity funds as hacking threat surges House members race to prepare for first-ever remote votes Federal watchdog finds chemical facilities vulnerable to cyberattacks MORE (D-Miss.), chair of the House Homeland Security Committee, criticized the cancelation of the contract on Wednesday, calling Panthera’s failure to produce the masks “predictable.”

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"This is yet another example of a systemic problem affecting contracting at FEMA. As demonstrated during the 2017 hurricane season, FEMA unfortunately has a history of awarding contracts for critical goods and services to companies that ultimately can’t deliver what they promise,” Thompson said in a statement.

He added: “In this case, FEMA awarded a $55 million contract to a company for 10 million masks that it did not deliver by the initial May 1 deadline or extended deadline of May 11. This was predictable as the company has no prior experience obtaining medical supplies or equipment. FEMA must do better vetting companies during this pandemic. The health and safety of our first responders depends on obtaining a sufficient quantity of these essential N95 masks and other personal protective equipment."

Updated: May 13 at 10:08 a.m.