California again extends major contract for protective masks

SACRAMENTO (AP) – California is giving a Chinese manufacturer it contracted with for hundreds of millions of protective masks one more week to get federal certification after the company twice missed the deadline.

California signed a nearly USD1 billion contract in April with BYD, a Chinese company with Los Angeles-area offices, for 200 million protective masks per month. They were set to start arriving in May. But the company has twice failed to get certification from the National Institute for Occupational Safety and Health for its N95 masks, the tight-fitting respirators used by healthcare professionals and none have been supplied to the state.

The latest deadline in the contract was May 31. If the masks weren’t certified by then, the state could have sought a refund on roughly a quarter-billion dollars it had paid up front. But state officials on Friday amended the contract to give the company until June 12, said Brian Ferguson, a spokesman for the Governor’s Office of Emergency Services.

A BYD spokesperson did not immediately respond to requests for comment.

It’s the latest twist for a deal Governor Gavin Newsom announced with fanfare on Rachel Maddow’s MSNBC show in early April before his administration had finalised the deal. The majority were set to be N95 masks, at a cost of USD3.30 per mask, according to the contract.

In an unusual move, the state paid nearly USD0.5 billion – half the deal’s total cost – upfront. BYD refunded half of that money – USD247 million – in May when it failed to meet its first certification deadline.

The state still casts the contract as a success because it has received more than 90 million looser-fitting surgical masks from BYD. They’ve been distributed to local governments, farm workers, retail workers, schools and various other sectors of the economy, Ferguson said.

Newsom previously said taxpayers won’t lose money in the deal because the state can get its money back if the deal collapses.