States navigate shortages, price-gouging and feds to secure PPE, test kits
- By Mark Rockwell
- Apr 23, 2020
With states and hospitals shouldering the burden of acquiring medical devices and personal protective equipment for COVID-19 response, they’re facing shortages, substandard and counterfeit products, competition-driven inflation, a confusing supply chain and a patchwork of federal rules, according to experts, lawmakers and some former federal officials.
That federal response to the pandemic -- leveraging the Defense Production Act, bolstering the federal stockpile and pursuing law enforcement and customs concerns about price gouging -- is driving cloak-and-dagger deals by state governments.
The Chicago Sun Times reported on April 15 that Illinois Gov. J.B. Pritzger planned to acquire millions of masks and gloves from China and bring those supplies back to the state on chartered jets. Pritzger said he is keeping details of the deal secret for fear that the cargo might be seized by the Trump administration for the federal stockpile.
Maryland Gov. Larry Hogan said at an April 20 news conference that he navigated a web of federal red tape to get 500,00 COVID test kits into the U.S. from South Korea. Hogan said he and his Korean-born wife had personally negotiated with South Korean test kit suppliers for the shipment. Yet after spending almost a month vetting and setting protocols with state agencies and doctors, he said, at the last minute the shipment faced clearances from multiple U.S. agencies, including the Food and Drug Administration, the Department of Agriculture and Customs and Border Patrol.
"If someone is depending on their wife to get test kits, it shows the federal response is a patchwork," said Rep. Bennie Thompson (D-Miss.), who chairs the House Homeland Security Committee. "We should be doing better. With a national disaster, we should be in a position to allocate through the Defense Production Act" and through the Federal Emergency Management Agency, he said.
Some federal procurement executives speaking on background conceded that the White House's relatively late response to the pandemic is pushing states to such extremes. However, they said supply and demand was bound to enter the picture too, especially as needs escalated.
"Earlier coordination may have mitigated some of this," said one official. "FEMA and the Defense Logistics Agency are the central sources" for PPE gear from the federal government.
Those agencies are moving on two fronts to procure PPE federally, which can conflict with individual efforts by states to satisfy their immediate needs, they said. The first federal front is to build the national stockpile for PPE. FEMA decides how to dole out those supplies to states based on demand. The second is for new PPE, which can involve the use of the Defense Production Act (DPA).
Although it took some time, the administration has used the DPA to compel federal contractors to produce PPE and other gear, such as ventilators. One procurement expert noted that the DPA can't force companies to make products. Companies must accept federal work before the act can be invoked, they said. Those companies can then get prioritized federal procurement orders that can jump ahead of commercial contracts.
A longer version of this article was first posted to FCW, a sibling site to GCN.
Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.
Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.
Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.
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