GM to produce 30,000 ventilators under $500M Defense Production Act contract

The Health and Human Services Department (HHS) on Wednesday announced a $500 million contract with General Motors under the Defense Production Act (DPA) to deliver 30,000 ventilators to the Strategic National Stockpile by August. 

President Trump said last month that he’d use the powerful Korean War-era law to compel GM to help the federal government address a surge in hospitalizations stemming from the outbreak of the novel coronavirus in the U.S. 

The new contract between HHS and the automaker includes a production schedule in which more than 6,000 ventilators will be transported to the national stockpile by June 1, HHS said. A total of 30,000 ventilators will be manufactured and shipped to the stockpile by the end of August. 

It is unclear how many ventilators will be shipped to the stockpile each month until the end of August. 

“By rating contracts under the DPA, HHS is helping manufacturers like GM get the supplies they need to produce ventilators as quickly as possible, while also ensuring that these ventilators are routed through the Strategic National Stockpile to where they’re needed most,” HHS Secretary Alex Azar said in a statement. “We’re grateful to the GM team for working with the federal government to expand our nation’s supply of ventilators as the pandemic evolves.”

The announcement marks the first federal contract for ventilator production under the Defense Production Act. Trump said earlier this month that he would expand the use of the law to help several manufacturers secure supplies for ventilators.

The U.S. has reported nearly 400,000 confirmed COVID-19 cases and roughly 12,000 deaths caused by it, according to a Johns Hopkins University database. The rapid outbreak has overwhelmed health care systems in states such as New York, leading to growing warnings from governors and other officials about a lack of testing and necessary medical equipment. 

New York Gov. Andrew Cuomo (D) has said his state would need 37,000 ventilators once the outbreak reaches its “apex.” 

Trump claimed last month that GM was “wasting time” and that the Defense Production Act would “help ensure the quick production of ventilators that will save American lives.”

He issued a memorandum April 2 allowing Azar to use authority under the law to help six companies, including General Electric and Medtronic, secure supplies for ventilator production. 

Federal government officials warned House lawmakers last week that demand for ventilators is exceeding the national stockpile’s capacity. The House Oversight and Reform Committee said officials from the Federal Emergency Management Agency told them that only 9,500 ventilators were in the national stockpile. 

California, Washington and Oregon have sent hundreds of ventilators back to the national stockpile to help states experiencing more severe impacts of the outbreak.