Pentagon redirected pandemic funds to defense contractors

The Pentagon redirected most of its $1 billion in pandemic funding to defense contractors who exchanged the money for jet engine parts, body armor, dress uniforms and other military needs, The Washington Post reported on Tuesday.  

The CARES Act passed by Congress in March granted the Department of Defense $1 billion to both prevent and get ready to respond to the coronavirus, but the Post reported that in the weeks that followed, hundreds of millions of the taxpayer money was instead utilized to obtain military supplies.

This was a change from the intent of Congress, the Post noted.

Meanwhile, U.S. health officials are still requesting funding for pandemic response, including $6 billion for states to make vaccines available when they are developed and to address a shortage in N95 masks for hospitals. The Pentagon has also requested that $11 billion be provided in a potential new stimulus bill being debated by Congress. 

Congress instructed the $1 billion in the CARES Act to go to Defense Production Act (DPA) efforts, which permits President Trump to direct U.S. companies to manufacture necessary products, such as personal protective equipment (PPE). 

Months after the funding was allocated, department lawyers concluded the money could be used for defense production, including projects that had little to do with responding to the pandemic, the Post reported. Smaller firms received more than a third of the funding for less than $5 million, but hundreds of millions of dollars went to several large companies.

At least 10 of the about 30 contractors awarded with DPA funding also received money from the Paycheck Protection Program (PPP), the Post found. 

Jessica Maxwell, a spokesperson for the Department of Defense, told The Hill in a statement that the DPA funding and PPP program are not “in conflict or duplicative.” 

She said the CARES Act did not restrict the funding to medical resources and certain defense spending was “appropriate as long as they addressed COVID related impacts in the industrial base.”

“The law set forth no limitation requiring use only in the medical supply industrial base,” she said.

She noted that the law authorized the Department of Health and Human Services to expand the medical resource supply. Maxwell added that economic impacts from the pandemic “necessitated prompt action … to sustain and strengthen essential domestic industrial base capabilities.”

Ellen Lord, the undersecretary of defense for acquisition and sustainment, defended the actions in a statement to the Post. 

“We are thankful the Congress provided authorities and resources that enabled the [executive branch] to invest in domestic production of critical medical resources and protect key defense capabilities from the consequences of COVID,” Lord said. “We need to always remember that economic security and national security are very tightly interrelated and our industrial base is really the nexus of the two.”

The Democratic-led House Appropriations Committee said in a report that the Defense Department’s spending on money allocated from the CARES Act was not distributed as intended.

“The Committee’s expectation was that the Department would address the need for PPE industrial capacity rather than execute the funding for the DIB (defense industrial base),” the committee wrote in its 2021 defense bill report.

Defense industry groups said the funding was needed to keep certain contractors in business during the economic downturn caused by the pandemic.

Updated: 5:20 p.m.

Tags CARES Act Coronavirus defense contractors Defense Production Act Department of Defense Donald Trump DPA Pandemic Pentagon Personal protective equipment PPE

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