California’s effort to buy thousands of COVID-19 ventilators falls behind schedule

Gov. Gavin Newsom’s drive to obtain 10,000 ventilators to help California hospitals treat COVID-19 patients has fallen well behind schedule as coronavirus infections continue to surge.

The state Department of General Services has received 188 ventilators out of 8,000 promised by Ashli Healthcare Inc. of Bakersfield, the state’s main supplier, department spokeswoman Monica Hassan said this week.

Ashli was supposed to have delivered more than 1,000 by the end of July and another 3,500 in August, with the balance of the shipments due in September.

Hassan said the department is now trying to find ventilators through other sources.

“Ashli, like other suppliers, is facing the same supply chain and raw material problem that suppliers across the nation are facing,” she said in an email. “DGS recently received a list of additional ventilator models from the state Emergency Medical Services Authority and is working to procure those models as a back-up plan to acquire as many ventilators as possible.”

The problems with Ashli’s $139 million contract come as California struggles with a surge in COVID-19 cases in recent weeks. The state reported Thursday that 2,029 coronavirus patients were in intensive care units, where they’d have access to ventilators. That’s roughly twice as many as in early June, when the first batch of 20 ventilators arrived from Ashli.

Although Ashli isn’t the state’s only supplier, its contract is by far the largest ventilator deal signed by Newsom’s administration since the pandemic struck in March.

The state has procured a total of 1,764 ventilators from various sources, said Elaine Kong, spokeswoman for the state Office of Emergency Services.

Newsom’s goal of obtaining 10,000 new ventilators, announced in March, was certainly ambitious — it would roughly double the total supply of the respiratory machines in California’s hospitals.

The governor was concerned about an explosion in coronavirus cases that would overwhelm the state’s hospitals and force doctors to conduct lotteries to determine which patients would be put on ventilators.

Company ‘more than confident’ it could supply ventilators

At the same time, California was so successful of controlling infections in the early weeks of the pandemic that Newsom loaned 500 machines in April to New York and other states that were experiencing shortages. Kong said the ventilators have been returned.

State officials stressed that under California’s no-bid contract with Ashli, the company gets paid only for units that are delivered.

Ashli’s chief executive, Heriberto Diaz, couldn’t be reached for comment. In May he told The Sacramento Bee he was “more than confident” about Ashli’s ability to deliver on the contract.

Ashli’s supplier, Ventec Life Systems of Bothell, Wash., also couldn’t be reached for comment.

Ventec expressed similar optimism in May that it could make good, saying it was in “constant communication” with state officials and Ashli on production of the ventilators. Ventec is a major producer of ventilators. In late April, Vice President Mike Pence visited a factory in Kokomo, Ind., where Ventec is building the units in a partnership with General Motors.

The Ashli contract has been under scrutiny since May, when The Bee reported that the Bakersfield company was raided by FBI agents in 2013 searching for evidence of Medicare fraud. Diaz predicted at the time of the raid he would be vindicated, and no charges were ever filed.

Cal Matters reported last month that the FBI agent overseeing the Ashli investigation, Sharron Cannella, was reprimanded by a federal magistrate judge in Texas in 2015 for distorting facts in an affidavit filed in connection with a bank robbery case. Her affidavit led to the false imprisonment of a suspect, who later was paid $400,000 in damages by the government.

It wasn’t clear if Cannella’s reprimand undermined the Bakersfield investigation. She has left the FBI.

The troubled ventilator deal is one of several controversial contracts that Newsom’s administration has brokered for hundreds of millions of dollars worth of personal protective equipment and healthcare supplies that were delayed or canceled because of concerns the companies wouldn’t deliver.

Republican state lawmakers had requested an audit, but on Thursday announced the hearing had been canceled.

“This is beyond belief — rubbish,” State Senator Jim Nielsen, R-Tehama, said Thursday in a statement. “The Administration has botched one billion dollar contract after another, and now legislative leaders are looking in the other direction, and quietly walking away without reviewing how the state spent all that money — monies that could have gone to help businesses and unemployed Californians.”

This story was originally published July 31, 2020 at 5:00 AM.