Incredible (or not) Contractual Greed

As was reported in popular media just a few days ago, a politically connected firm, Bear Mountain, recently earned a contract with the state of California to provide 600 million face masks for a total value of $800 million.  However, the company apparently failed to deliver most of the supply in a timely manner.  The state thus “cancelled” the agreement on May 2, but will pay the company for the masks that had been delivered at that point in time.  In another instance, California had to terminate a deal after paying $500 to the company and having to claw that back when that company also failed to perform acceptably under the contract.

Sadly, it is not new that in times of crises, the worst in humankind often seem to come out: greed, disregard for other people’s lives, ineptness, and opportunism.  Even the administration in one of the world’s largest economies is not beyond contractual fraud at worst or at least becoming the victim of material breach.  That raises the question of how to best vet companies with which one enters into contracts?  The state of California had never done business with Bear Mountain before, which might have been one red flag.  There were worse ones: the founder was Alabama’s attorney general from 2004-2011.  He now heads a small personal-injury law firm in Alabama. 

Of course, in a case such as this, the state also had to act fast to get the equipment it needed, but it still seems amazing how much gall some companies have to try to take advantage of the situation and the extent everyone has to go to in order to avoid contractual scams of various sorts.  Apparently, no or little upfront vetting took place here.  Private and public contractual parties should be even more aware of the scam artists always ready to strike when one party may have let its guard down. Loyalty to known vendors may have paid off time-wise here.