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Trump Invokes Powers of DPA to Prevent Price Gouging for Ventilators

Over the last 24 hours, we have seen President Trump do a massive shift regarding invoking the powers of the Defense Production Act.

After a reported price gouging attempt by General Motors, Trump has decided to invoke the DPA and has handed power over to his coronavirus task force to mandate what equipment is to be made and by whom.

Too Good to Be True

When this crisis first started, GM was among the first companies to step up and offer to make ventilators and other equipment needed for hospitals.

Numerous other companies also came forward to offer assistance, which is why Trump was so hesitant to invoke the powers granted to the President with the activation of the DPA.

However, after receiving a bid from GM, which Trump apparently thought was way out of the ballpark of where it should have been, Trump has decided to invoke the DPA.

Now, rather than allow the companies to present bids, the government will lay out the terms of the contact and the manufacturers must produce the equipment needed based on those terms.

This, of course, could have all been avoided had the initial bid not been deemed as an attempt to price gouge during the crisis.

While we still don’t know what the price per ventilator was, we do know that GM reportedly requested hundreds of millions upfront to retool its factories and to buy supplies and the overall value of the contract was reportedly more than $1 billion.

GM also reportedly came in under the number that Trump had requested, which prompted a tongue lashing on Twitter from the commander-in-chief…

Trump also addressed the issue during a briefing at the White House, stating, “We will not hesitate to use the full authority of the federal government to combat this crisis.

“We thought we had a deal with, as an example General Motors, and I guess they thought otherwise.

“They didn’t agree, and now they do.”

The measure drew applause from many Democrats, who have been begging Trump to use the DPA since he first activated the legislation about a week ago.

How long it will take for the new ventilators to roll off the line remains unknown, however, as all these factories have to be refit for the manufacturing of ventilators rather than cars.

Once they get rolling, though, we should see massive production numbers in a relatively short period of time.

Source: CNBC & Politico

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