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House panel opens probe of White House trade advisor Navarro after abrupt cancellation of ventilator contract


Peter Navarro, director of the National Trade Council, speaks to members of the media outdoors the White House in Washington, D.C., on Friday, Aug. 28, 2020.

Stefani Reynolds | Sipa | Bloomberg | Getty Images

A House oversight subcommittee has opened a probe of all federal contracts negotiated by White House trade advisor Peter Navarro after the Trump administration abruptly canceled the majority of a $646 million ventilator contract with Royal Philips, Rep. Raja Krishnamoorthi, D-Ill., instructed CNBC on Monday.

Krishnamoorthi, chairman of the Subcommittee on Economic and Consumer Policy, mentioned the panel is trying into Navarro as half of an ongoing investigation into contracts awarded by the Trump administration associated to the coronavirus pandemic.

“Under the management of Peter Navarro, Senior Advisor to President Trump, the administration was taken advantage of by Philips Respironics when negotiating the price of life-saving ventilators,” Krishnamoorthi mentioned in a press release to CNBC. Philips Respironics is a subsidiary of Netherlands-based Royal Philips.

The Philips contract, introduced by the Department of Health and Human Services in April, sought to bolster the U.S. nationwide stockpile of ventilators as hospitals, primarily within the New York space, confronted shortages on the peak of their Covid-19 outbreak final spring. The contract ordered 2,500 ventilators due by the top of May with a further 43,000 ventilators due by the top of 2020 from the Dutch well being expertise firm. 

But Philips mentioned Monday that HHS abruptly canceled the rest of the contract, requiring Philips to as an alternative provide solely 12,300 ventilators. Shares of the corporate traded about 3% decrease in noon buying and selling.

HHS declined to offer remark for this story as a result of “this contract is subject to an internal HHS investigation and legal review,” Stephanie Bialek, spokeswoman for the Office of the Assistant Secretary for Preparedness and Response in HHS, mentioned in a press release.

Nicky Loh | Bloomberg | Getty Images

Krishnamoorthi beforehand printed a report on the contract, criticizing it as a “waste of taxpayer funds” attributable to the Trump administration’s “incompetent negotiating.” The report mentioned the contract’s negotiations have been led by Navarro, who didn’t get an affordable value for every ventilator.

“American taxpayers just saved over $400 million dollars after my subcommittee shined a spotlight on just one of the Trump Administration’s wasteful contracts for COVID-19 supplies,” Krishnamoorthi mentioned Monday. “My subcommittee will continue to press Philips to repay the remaining money it owes the federal government. We will also be requesting documentation from all the contracts that Peter Navarro has negotiated regarding Covid-19 response.”

Frans van Houten, CEO of Netherlands-based Royal Philips, beforehand defended the contract, saying the corporate was “transparent about our production ramp up plans, pricing and allocation policies.”

In the early months of the pandemic, well being methods throughout the U.S. and the world scrambled to accumulate scarce ventilators, which can be utilized to assist sufferers with extreme respiratory issues breathe. The Trump administration used the Defense Production Act to require American corporations, together with General Motors, General Electric and Ford, to make use of their factories to ramp up manufacturing of the medical tools.

However, the usual of look after Covid-19 sufferers has advanced as new therapy methods have emerged and new medication come to market, leaving many of the brand new ventilators unused, the Washington Post reported earlier this month. 

In the frenzy to extend manufacturing of doubtlessly life-saving medical provides, HHS and different federal businesses have awarded billions of {dollars} in contracts that haven’t confronted the identical degree of scrutiny as they usually would. 

“The Trump administration is spending more money on contracts, than we’ve ever seen spent on contracts, by far, and they’re doing it in an environment where there simply aren’t enough people to watch what’s going on,” mentioned Benjamin Brunjes, an assistant professor on the Daniel J. Evans School of Public Policy and Governance on the University of Washington.

Brunjes printed a report earlier this yr exhibiting that the typical authorities contracting official is at present answerable for about 1,400 contracts per yr, and that was earlier than the pandemic started. He added that underneath the Obama administration, contracting officers have been accountable, on common, for about 370 contracts per yr. 

— CNBC’s Noah Higgins-Dunn contributed to this report. 



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