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Pallone and DeGette Send Letter to Blue Flame Medical LLC Demanding Answers on COVID-19 Contracts

May 18, 2020
Press Release

Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) sent a letter to Blue Flame Medical LLC today with a series of questions following reports that the company failed to follow through on contracts to provide critical medical supplies and personal protective equipment (PPE) to state and local governments, as well as a nonprofit health care provider.  The Committee leaders first announced their inquiry into the company last week.

“The serious consequences stemming from PPE shortages are pushing states and localities to turn to new and unproven companies with limited experience in the medical supply industry to supply this critical medical equipment,” Pallone and DeGette wrote.  “[Blue Flame] purports to be ‘one of the largest global network [sic] of COVID-19 medical suppliers’ and reportedly supplies ventilators, respirators, COVID-19 test kits, surgical masks, and other hard to find types of PPE.  Yet, despite claiming to have ‘only the highest quality of product delivered with the fastest service,’ Blue Flame has reportedly failed to fulfill multiple orders placed by state and local entities working closely on the pandemic response.”

The Committee’s inquiry follows a series of alarming reports, including:

  • The State of Maryland terminated a $12.5 million contract with Blue Flame because the company failed to deliver 1.5 million N95 masks and 110 ventilators on the timeline promised;
  • The Melbourne Florida Police Department demanded a full refund from Blue Flame after the company failed to fulfill the Department’s order;
  • Blue Flame abruptly canceled most of an order placed by a non-profit that runs medical clinics for the economically disadvantaged in Los Angeles County the day before the order was due—leaving the non-profit without the thousands of masks, gowns and bottles of hand sanitizer it was expecting to receive;  and
  • The State of California canceled an agreement with Blue Flame for 100 million N95 masks at a cost of over $456 million after the state’s bank flagged the transaction as risky, forcing the state to find other suppliers.

“These reports, if true, are deeply troubling.  Among other concerns, delays associated with some of Blue Flame’s contracts may be causing further delays in the ability of providers to locate critical protective equipment,” Pallone and DeGette continued in their letter.  “Given continued shortages of critical medical supplies and the pandemic’s devastating fiscal impact on many state and local governments, those on the front lines of the COVID-19 response efforts must be assured they will promptly receive the medical equipment they order under the terms agreed upon.”

As part their inquiry into Blue Flame Medical LLC, the Committee leaders requested answers to a series of questions by June 1, 2020, including:

  • A complete description of Blue Flame’s policies and protocols for evaluating whether suppliers and vendors have the capacity and capability to fulfill orders;
  • A list of all contracts, orders or agreements that Blue Flame has entered into with federal, state or local governments or governmental entities for medical supplies or equipment;
  • A complete description of any contract, order or agreement for medical supplies or equipment that Blue Flame has failed to fulfill in full (for any reason), and a detailed explanation as to why Blue Flame failed to fulfill the contract, order, or agreement; and
  • For any contracts, orders or agreements entered into where Blue Flame failed to deliver the agreed upon medical supplies or equipment by the time specified under the contract, a detailed explanation as to what steps Blue Flame has taken or intends to take to reimburse the purchaser or deliver the agreed upon medical supplies or equipment.

To read the full letter, click HERE.