NYC Swindled In $8M Pandemic Ventilator Deal, Comptroller Says

New York City NY

27 April, 2021

3:43 PM

Description

NEW YORK CITY — New York City ended up losing $2 million in a sketchy deal with a company that promised 130 ventilators at the coronavirus pandemic's height but didn't deliver one machine, a new report details. City Comptroller Scott Stringer on Tuesday released a report — titled "Nothing Gained" — detailing officials' costly mad dash to buy ventilators. The report faulted city officials for ignoring red flags and suspending fail-safe procurement rules before they prepaid $8.26 million to a company called Global Medical Supply Group LLC — a business didn't exist two weeks before the hefty payment. The city never received the ventilators and ended up suing the company to recover its payment. Officials never recouped all the losses, as detailed in Stringer's report. "Our investigation found that the City lost nearly $2 million on lifesaving equipment that it never received," Stringer said in a statement. "I am again calling on the City to immediately restore City procurement rules to protect taxpayers from abuse by unreliable vendors and from costly mistakes. While the pandemic took us by surprise, there is no excuse not to learn from our misfires going forward. If we fail to heed these findings and take sensible measures to safeguard taxpayer dollars for the next emergency, then the City will once again let New Yorkers down." Mayor Bill de Blasio on Tuesday said he hadn't yet read the report but defended officials. The early pandemic wasn't "business as usual," he said. Ventilators were almost nowhere to be found, he said. "We had to take calculated risks," he said. "I think the folks who did this work were smart. They were careful. But their number one job was to save lives. And overwhelmingly they achieved, I think some miraculous outcomes." But the report indeed details the frantic early days of the coronavirus pandemic, when officials suspended normal purchasing rules to quickly acquire medical supplies desperately needed as hospitals swelled with COVID-19 patients. Days after the rules were suspended, de Blasio said the city needed 15,000 ventilators and Global's owner incorporated the company in Florida, the report states. Global's salespeople contacted city officials a few days later on March 27, 2020, kicking off a sales push that included an offer for 20,000 ventilators for $1.27 billion, the report states. A series of exchanges eventually cut the deal down to 130 ventilators the company claimed were "on hand in Florida," according to the report. Officials eventually advanced $8.26 million to a company, despite difficulty confirming the company's existence, verification it even had ventilators and its implausible claims, the report states. "Had the City required more specific information, officials might have learned that Global had existed for less than two weeks and that its ability to deliver would have to be taken on blind faith, because it had no track record or even a bank account ready to accept the City's payment," the report states. Global, after 11 days of extensive contacts with the city, eventually reneged on the contract, according to the report. Stringer, who is running for mayor, recommended a series of safeguards for future emergency purchases.