General Electric and Ford will produce 50,000 ventilators for the US government under the Defense Production Act for US$336m, media reports said.
The companies are expected to produce the life-saving devices at a facility in Michigan beginning next week.
According to the terms in the announcement, each ventilator would cost $6,720.
The companies are expected to produce all the ventilators by July 13, according to the Department of Health and Human Services, CNBC reported.
The cost of the ventilators is nearly $10,000 below a previous federal contract for 30,000 ventilators at $489.4m, or about $16,300 a unit, with General Motors and Washington-based Ventec Life Systems.
CNBC noted Ventilators have a wide range of pricing from thousands of dollars to tens of thousands. The GM-Ventec one is a more advanced critical care ventilator that delivers precise air. It has different settings to help improve blood-oxygen levels in someone suffering from acute respiratory distress syndrome and wean them off the ventilator.
The federal contract is the second for GE Healthcare regarding ventilator production. Earlier in the week, a deal was announced for 2,410 ventilators for $64.1m, or about $26,600 per unit, CNBC said.
A Ford spokesman told CNBC production of the ventilators would be done at cost. GM also said it would not be profiting from its ventilator production.
The ventilator Ford and GE are producing is being licensed from Florida-based Airon. The devices operate on air pressure without the need for electricity.