The Protection Division distributed greater than $1 billion in federal contracts final month to corporations for disposable medical robes to guard these on the entrance traces of the coronavirus pandemic.
Greater than 100 massive and midsize corporations, many with observe data of efficiently finishing federal procurement contracts, bid for the work. However the majority of the awards finally went to a handful of sudden and inexperienced corporations that now discover themselves on the hook to supply a whole bunch of tens of millions of robes in a matter of months.
One deal, for $323 million, went to JL Kaya, whose solely prior federal contracting work was a $7,296 challenge to make gauze.
A batch of contracts value $194 million went to Well being Provide US, an organization based this yr by a former Trump administration official.
And an $88 million contract for robes went to Maddox Protection, which says it has carried out authorities subcontracting work however has by no means managed a significant contract of its personal.
Two of these corporations have been working with a retired Nationwide Soccer League participant and, in a single case, a former arms vendor who was barred from authorities contracting and was the inspiration for the film “War Dogs.”
The contracts for the disposable robes have been introduced final month by the Protection Logistics Company, a Pentagon division that’s engaged on behalf of the Division of Well being and Human Providers to replenish the federal government’s stockpile of protecting gear and different emergency provides. The contracts — awarded to a handful of corporations, virtually all of them small companies — require the businesses to ship as many as 260 million robes by early subsequent yr.
The contracts went to the businesses that supplied to supply robes on the lowest worth. Jordan Gillis, the assistant secretary of protection for sustainment, mentioned in a press release that in awarding the contracts, the Protection Division had thought of the “monetary functionality, manufacturing functionality, previous efficiency and verified references” of bidders.
Mr. Gillis mentioned bidders had “offered sourcing areas and manufacturing facility info to exhibit their means to adjust to” the contract necessities. For the reason that contracts have been awarded, he added, the Protection Division has met with the businesses and “applied strong contract oversight measures,” together with visiting manufacturing amenities.
However the administration’s collection of inexperienced corporations for an important job has raised questions throughout Washington.
At a Capitol Hill listening to final week, two senators expressed issues that the contracts went to unqualified corporations. In cellphone calls and letters, commerce teams for main garment producers have lodged complaints with the Protection Logistics Company. And a minimum of one firm filed a criticism concerning the robes contracts with the Authorities Accountability Workplace, which investigates federal spending.
“These are massive and pressing contracts,” mentioned Charles Tiefer, a former member of the federal Fee on Wartime Contracting in Iraq and Afghanistan and a professor on the College of Baltimore College of Legislation. “You’ll count on them to be shopping for from main contractors they’d gone to earlier than, not from unknown contractors, not from unknown entities.”
The federal authorities’s effort to obtain private protecting gear through the pandemic has been deeply troubled. This spring, a activity drive led by President Trump’s son-in-law and adviser, Jared Kushner, struggled to acquire masks as well being care staff reused respirators and nurses wore garbage bags after they ran out of robes. Mr. Kushner’s staff favored leads about out there gear that got here from Mr. Trump’s political allies and private acquaintances, The New York Times has reported.
Many states and hospitals have been left to fend for themselves. They’ve needed to type via a sea of scammers which have sent prices soaring. In a single occasion, New York State awarded an $86 million contract for ventilators to a person who had by no means bought one earlier than. The deal rapidly unraveled.
JL Kaya received the biggest award for disposable medical robes: as much as 85 million within the subsequent a number of months. The corporate is run by Jose Lagardera, who on LinkedIn mentioned his firm’s founding philosophy was to “ship high quality, innovation and repair in all of our dealings with our prospects, and suppliers.” Whereas the corporate has carried out federal subcontracting work earlier than, its solely earlier contract with the U.S. authorities was in 2016, when it received a small deal to supply surgical gauze to the Military, in response to public records.
It’s not clear how JL Kaya plans to rapidly produce tens of tens of millions of medical-grade robes. The corporate didn’t reply to quite a few requests for remark. The e-mail handle on its web site didn’t work.
Mr. Lagardera has teamed up with Bront Bird, who was a linebacker for the San Diego Chargers from 2011 via 2013 and is now a businessman. Mr. Chicken posted a YouTube video on Sept. 25 wherein he and Mr. Lagardera are in what seems to be a manufacturing facility the place staff are making robes. Mr. Chicken describes himself as an “agent and technical adviser” to JL Kaya. Mr. Lagardera seems within the background however doesn’t converse.
With the digital camera on a person modeling a shiny blue robe, Mr. Chicken mentioned within the video that he was looking for approval to switch the design of the JL Kaya robes to incorporate thumb straps, amongst different options.
Mr. Lagardera and Mr. Chicken didn’t reply to a number of requests for remark.
Since leaving soccer, Mr. Chicken has pursued a wide range of careers. He tried to win authorities work to rebuild the Puerto Rican electrical grid after Hurricane Maria in 2017 when he was chief govt of Foreman Electrical, a providers firm in Mr. Chicken’s hometown, Odessa, Texas. He later based Karla Mae Capital, whose web site says it supplies corporations with financing.
In current months, Mr. Chicken has turned his consideration to the increasing marketplace for private protecting gear. He has been working with Efraim Diveroli, the arms dealer portrayed by Jonah Hill in “Warfare Canine,” who’s co-owner of an organization known as Medlink.
JL Kaya subcontracted some work on the federal award to Medlink, in response to the Protection Division and Mr. Diveroli’s lawyer.
Mr. Diveroli is just not alleged to be engaged on initiatives for the U.S. authorities. In 2009, he pleaded guilty to promoting prohibited Chinese language ammunition to the Pentagon and was later sentenced to 4 years in jail. He was barred from federal contracting, according to a March 2011 debarment order.
Mr. Diveroli declined an interview request via his lawyer, Eric Montalvo. Mr. Montalvo mentioned the ban on his consumer’s involvement with federal contracts included an exemption that permitted him to work on commercially out there merchandise.
A spokesman for the Protection Division, Charles L. Prichard, mentioned the Protection Logistics Company had not been conscious of Mr. Diveroli’s involvement with JL Kaya when it awarded the corporate a $323 million contract. After receiving an inquiry from The Instances, the company contacted JL Kaya, which disclosed the subcontract with Medlink.
Mr. Prichard mentioned Medlink had “assisted JL Kaya with finding and vetting areas for manufacturing,” however had “no position” in making the robes. “JL Kaya has since disassociated itself from Medlink,” Mr. Prichard mentioned.
A Medlink official referred The Instances to Mr. Montalvo, who confirmed that Mr. Diveroli had stopped working with JL Kaya.
Consultants on the garment business mentioned small, untested corporations like JL Kaya could be arduous pressed to rapidly fulfill federal contracts for tens of tens of millions of robes.
“Given the quantity of the awards, that is going to take 1000’s of staff to satisfy,” mentioned Kimberly Glas, president of the Nationwide Council of Textile Organizations. The group represents some of the nation’s largest textile makers, together with some that utilized for however didn’t obtain the federal contracts.
Some lawmakers are anxious concerning the means of corporations like JL Kaya to satisfy the federal government’s orders.
“It’s my understanding that a few of these contracts have been to corporations which have little or no expertise producing that type of gear, that the requirements haven’t all the time been as much as par and it’s created some actual challenges,” Senator Jeanne Shaheen, Democrat of New Hampshire, mentioned throughout a congressional listening to final week.
Ellen Lord, the underneath secretary of protection for acquisition and sustainment, mentioned through the listening to that the Protection Logistics Company’s “very stringent standards have been met and adhered to” in awarding the contracts.
On Sept. 18, six commerce associations representing American manufacturing corporations wrote to the Protection Division expressing “severe issues in relation to sure contract awardees for reusable and disposable robe procurement.” The letter mentioned it was unclear whether or not the businesses that received contracts might meet the federal government deadline and “have the technical proficiency to supply the standard of merchandise obligatory to guard well being care staff.”
Among the many different corporations that received contracts to make robes was Well being Provide US. It was based this yr by Chris Garcia, who briefly served within the Trump administration as deputy director of the Minority Enterprise Growth Company and was appointed to a White Home advisory council in July. The corporate received a number of awards to make disposable robes, collectively value as a lot as $194 million.
Well being Provide US plans to fabricate its robes at a number of areas, together with a former Brooks Brothers shirt manufacturing facility in North Carolina. The corporate has additionally turned to a different agency, Maddox Protection, to make as many as 11 million robes on its behalf.
Along with doing work for Well being Provide US, Maddox Protection received a federal contract of its personal value as a lot as $88 million. It has arrange manufacturing in Houston, the place it’s producing a median of 55,000 robes per day, in response to the corporate’s chief govt, Jason Maddox. He mentioned the corporate had already produced tens of millions of robes for governments and hospitals.
Mr. Maddox mentioned Mr. Chicken had been working together with his firm as a technical adviser on the robes. He mentioned that Maddox Protection would be capable to fulfill the federal contract and that the commerce teams have been merely “sore losers.”
“They’re alway going to protest,” Mr. Maddox mentioned of his opponents. “They’re all the time going to attempt to dig up some dust that’s simply not true.”
Kitty Bennett contributed analysis.