A subsidiary of Chinese manufacturer BYD failed to deliver N95 masks to California with the necessary certification, as required under the $1 billion deal for protective equipment.
As a result, the company must refund California nearly a quarter billion dollars, half the down payment for the deal that was cut in early April.
The details of the agreement (see below) were made public Wednesday night by the Governor’s Office of Emergency Services.
Gov. Gavin Newsom’s administration had refused to release the contract to lawmakers and the public and denied multiple records requests from CapRadio for the agreement.
The contract required BYD subsidiary Global Health Product Solutions LLC to obtain National Institute for Occupational Safety and Health certification for the masks by April 30. In an amendment to the agreement, which was finalized Wednesday, it pushes that date to May 31. It also requires the company to return $247,500,000 to the state for not meeting the original deadline.
Global Health Product Solutions must wire the money in the next two days, according to the contract.
“The state will not pay for any of these until they are certified by NIOSH,” said Brian Ferguson, Deputy Director for Crisis Communication & Public Affairs at CalOES. The N95 masks are still in China, but should arrive “within a handful of days” of certification.
So far, the state has received more than 10 million paper surgical masks. More than 9 million have already been distributed to counties, Ferguson said.
It also shows the state paid $3.30 per N95 mask and $.55 per paper surgical mask.
Lawmakers have been critical of Newsom’s handling of the deal, claiming the process has lacked transparency. Many lawmakers first heard about the deal when Newsom announced it on MSNBC’s The Rachel Maddow Show.
A letter from Democratic state Sen. Holly Mitchell, chairperson of the Joint Legislative Budget Committee, to the administration underscored lawmakers’ desire for more information. During Senate and Assembly hearings in recent weeks, lawmakers pressed for more details with little success.
Newsom has defended the deal, but until now refused to release the contract.
Earlier Wednesday, he said the shipments had begun to arrive “consistently.”
“We want to be as transparent as possible,” he said, but at the same time “deliver on what’s so foundational, so important, that literally can impact the lives of thousands of people.”
This story will be updated.
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