A senior official from the U.S. Department of Homeland Security blamed the nation's Food and Drug Administration for a no-bid $10 million contract that went to a now defunct company a U.S. senator said had made shoddy COVID-19 test kits.
Soraya Correa, chief procurement officer for Homeland Security, told lawmakers her agency depended on the FDA's "certification" of Fillakit LLC to enter into the contract and acquire products from the company.
However, the FDA said it provided no such assurances about the company.
Florida-based Fillakit was established in early May and within weeks, the U.S. Federal Emergency Management Agency, or FEMA, had awarded the company three contracts totaling over $10 million for COVID-19 testing swabs and transport media supplies.
FEMA is part of Homeland Security, where Correa oversees procurement.
Sen. Debbie Stabenow, D-Mich., said her state worked with FEMA and the U.S. Department of Health and Human Services to secure testing supplies and received more than 322,000 tubes of COVID-19 transport media manufactured by Fillakit.
Transport media is the liquid that maintains a specimen sample while it is transported to a laboratory.
But the COVID-19 test kit supplies were defective, Stabenow said during a July 28 Senate Finance Committee hearing.
Michigan subsequently discovered Fillakit was using repurposed miniature plastic soda bottles instead of standard vials, Stabenow said.
The packaging process involved unmasked employees who were using "snow shovels dumping these things into plastic bins before squirting saline [solution] into them — all in open air," the Michigan senator said. "They were not the appropriate size for the laboratory equipment, they were not manufactured in sterile conditions and they would not provide reliable test results."
After the Michigan health department's laboratory raised "deep concerns," FEMA and HHS told the state not to use Fillakit's products, she said.
"So that's more than 300,000 tests we couldn't do, which is a week's worth of tests in Michigan," Stabenow said.
Fillakit was headed by an "untrustworthy individual who had been fined in the past for running telemarketing scams," Stabenow said. "And despite the concerns, FEMA awarded Fillakit, a company with no demonstrated ability to fulfill its terms, a no-bid contract for testing supplies."
The lawmaker noted she wrote in early July to FEMA Administrator Pete Gaynor and HHS Secretary Alex Azar about the situation and got no reply from the two Trump administration officials.
Stabenow pressed Correa on what criteria her agency uses during the contracting process to verify the accuracy of any representations made by companies like Fillakit.
Correa said her agency would not have awarded the contract to Fillakit but for the FDA's backing of the company.
"Often in these emergency situations, especially when we're buying commercial products, we rely on certifications or other authorizations from known bodies," Correa said. "In this case, Fillakit had an emergency use authorization provided by the Food and Drug Administration. We relied on that certification to enter into the contract."
However, the FDA confirmed to S&P Global Market Intelligence that Fillakit was never granted an emergency use authorization, or EUA.
"Nor was one required," FDA spokeswoman Nikki Mueller said in an email response.
The FDA generally regulates vials, tubes and phosphate buffered saline when used as transport media as medical devices exempt from premarket notification requirements.
However, the makers of those types of devices are subject to other requirements, such as registration and listing and quality system requirements, Mueller said.
Correa told lawmakers she could not guarantee that a situation like Fillakit would not happen again. "But we certainly include inspection and acceptance clauses in our contracts and those clauses are based on the particular product that we're buying and how we're going to inspect to test the product," she said.
After complaints about Fillakit, Correa said the Trump administration discontinued use of the company's products and Homeland Security has called on its Office of Inspector General to investigate the company.
"And, of course, we are pursuing remedies under the contract," she told the Senate Finance Committee.