General Motors

• Type: Automaker; pandemic medical-equipment contractor.
• Legal entities: General Motors Company (named in the Defense Production Act order); General Motors, LLC (the HHS contractor listed by HHS's Inspector General).
• Pandemic-relief role: Built V+Pro critical-care ventilators with Ventec Life Systems in Kokomo, Indiana, for the Strategic National Stockpile, March–August 2020.

On March 27, 2020, President Trump directed the Secretary of Health and Human Services to use the Defense Production Act "to require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate."¹ HHS's contract with General Motors, LLC was for 30,000 ventilators at $476,143,048, about $15,870 a machine, the third-largest of the ten ventilator contracts HHS signed that spring.² GM and its partner, Ventec Life Systems, said they delivered the 30,000th on August 31, 2020.³

The order

The President's signing statement that day said negotiations with GM had "been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course. GM was wasting time."⁴ The memorandum itself asked nothing about price: it directed the Secretary to use "any and all authority available" under the Act to make GM accept and prioritize ventilator orders.¹

The contract and the machines

HHS's Administration for Strategic Preparedness and Response signed ten ventilator contracts between March 30 and May 28, 2020, for $2,894,048,058 and 198,394 ventilators. By dollar value GM's ranked third, behind Philips North America ($646.7 million for 43,000) and Hamilton Medical ($552.0 million for 25,574).²

GM and Ventec said the team went "from an introductory phone call to delivering life-saving technology" in a month and completed the federal order in 154 days, about one ventilator every seven minutes. With the last shipment GM handed operational control of the Kokomo ventilator plant to Ventec.³

The audit

In September 2022 HHS's Inspector General audited the five largest ventilator contracts, GM's among them. It found that the preparedness office "did not consistently award and monitor contracts for ventilators" as federal requirements and HHS policy require. The office had not set out roles for communicating with other emergency-response teams, did not always report contract data accurately and did not always monitor contractor performance, so it "could not determine whether the use of taxpayer funds was reasonable." The stockpile ultimately received 71,739 ventilators, the report says, because three contracts were partially terminated; about $905 million was de-obligated from those three.² The findings are addressed to HHS and carry no penalty.

Related profiles

• AirBoss Defense Group: another no-bid federal protective-equipment supplier of 2020.

Sources

1. Memorandum on an Order Under the Defense Production Act of 1950 Regarding General Motors Company, Mar. 27, 2020 (Daily Compilation of Presidential Documents, DCPD-202000197). Original: https://www.govinfo.gov/content/pkg/DCPD-202000197/html/DCPD-202000197.htm ↩
2. HHS Office of Inspector General, "HHS Did Not Fully Comply With Federal Requirements and HHS Policies and Procedures When Awarding and Monitoring Contracts for Ventilators," A-02-20-02002, Sept. 2022. Original: https://oig.hhs.gov/documents/audit/6519/A-02-20-02002-Complete%20Report.pdf ↩
3. General Motors and Ventec Life Systems, "General Motors and Ventec Life Systems Complete Delivery of 30,000 V+Pro Critical Care Ventilators," PR Newswire, Sept. 1, 2020. Original: https://www.prnewswire.com/news-releases/general-motors-and-ventec-life-systems-complete-delivery-of-30-000-vpro-critical-care-ventilators-301121898.html ↩
4. Statement on Signing a Memorandum on an Order Under the Defense Production Act of 1950 Regarding the General Motors Company, Mar. 27, 2020 (DCPD-202000196). Original: https://www.govinfo.gov/content/pkg/DCPD-202000196/html/DCPD-202000196.htm ↩