- Oops!Something went wrong.Please try again later.
WASHINGTON – As the coronavirus crisis tore through the country last month, Illinois Comptroller Susan Mendoza knew she had to act quickly to clinch a deal for 1.5 million masks from China to protect health care workers.
The vendor needed a $3 million check within hours, and Mendoza worried she might lose out to a Russian competitor who offered cash for the masks.
Mendoza’s aide Ellen Andres jumped in her car and sped down the expressway to meet the vendor in the parking lot of a McDonald’s in Dwight, Illinois – 126 miles from Springfield, the state capital. After scanning the make and model of the vehicles, Andres found her contact and handed over the check.
"You feel like you have a gun up against your head, and if you don't get it done, you're going to lose 1 and a half million masks," Mendoza said. "You feel like you're doing some kind of sketchy drug deal, but you're really working hard to try to save people's lives."
The transaction underscores the challenges states have faced to obtain masks, gloves and other protective gear for health care workers, along with ventilators and test kits. The process has led to tensions between President Donald Trump and governors such as J.B. Pritzker of Illinois and Andrew Cuomo of New York who urged the federal government to take the lead role in ordering equipment, a request Trump rejected.
"Who would have ever thought that the state government, in order to acquire something that keeps people alive, somebody would have to speed down a highway and meet somebody at a McDonald's?" Pritzker said in an interview with USA TODAY.
"We not only have to outbid other states and other folks who are trying to acquire personal protective equipment by price, but we also have to move more quickly. It's about speed and price," Pritzker said.
The national stockpile is too depleted to fill widespread shortages of face masks, gloves, ventilators and other medical supplies, so some states have taken extraordinary steps to procure the critical equipment. Trump said governors should take the lead in obtaining supplies for their own states while the federal government plays a "backup" role.
Governors vs. Trump: At state coronavirus briefings, experts run the show
The strategy has pitted states against each other – and sometimes against the U.S. government – as they navigate a fierce global marketplace Pritkzer described as the "Wild West." Some governors relied on personal connections to usher in shipments from abroad; others chartered private jets to ensure they wouldn't be outbid by other players – including potentially the federal government – while their orders were in transit.
Illinois chartered two flights to Shanghai through FedEx Trade Networks, each with a price tag of $888,275, to ferry millions of masks and gloves back to the state.
Illinois is hardly the only state forced to explore unconventional avenues. As Trump forges ahead with plans to reopen the economy, health care workers struggle to keep up with the more than 737,000 cases in the USA – the most confirmed cases in any country, according to Johns Hopkins University data. COVID-19 has killed more than 39,000 Americans.
Governors complained they compete against the Federal Emergency Management Agency in a global bidding war that has thrown state budgets into disarray. Some supplies go for 10 times their normal price, according to Illinois Comptroller Mendoza. A ventilator, a breathing machine that can determine whether a COVID-19 patient lives or dies, has seen the typical price tag of $12,000 balloon to $65,000, Mendoza said.
Kentucky Gov. Andy Beshear said last month his state expected an order of equipment when "FEMA came out and bought it all out from under us."
"It is a challenge that the federal government says, 'States, you need to go and find your supply chain,' and then the federal government ends up buying from that supply chain," he said.
The New England Patriots football team provided a plane to carry nearly 1 million N-95 masks from China to Boston on April 2 after Republican Gov. Charlie Baker said at a news conference that a previous order was "confiscated in the port in New York."
Facing an anticipated surge in novel coronavirus cases in Massachusetts, Baker scrambled to arrange another order from China. This time, he opted for the Patriots' jet.
Tonight's arrival of a major shipment of N95 masks on the @Patriots' plane was a significant step in our work to get front-line workers the equipment they need.
And its an example of how collaboration and partnership can lead to real solutions during these challenging times. pic.twitter.com/THwofdrTlt
— Charlie Baker (@MassGovernor) April 3, 2020
“It’s not a secret that securing PPE has been an enormous challenge, and we’ll continue to come up with ways to chase more gear to keep our front-line workers and patients safe," Baker said.
FEMA isn't seizing supplies from states, according to Juliette Kayyem, a former assistant secretary at the Department of Homeland Security who coordinated federal and local responses to disasters such as the H1N1 pandemic and the BP oil spill under the Obama administration.
"They're basically coming in and offering a higher bid to the seller, and because it's a seller's market, the seller is willing to break the contract with the state and get more money from FEMA," she said. "It's not stealing it or taking it. It's brutal contract negotiations in which the states are losing."
New Hampshire got a FedEx shipment Sunday from Shanghai of 91,000 pounds of protective equipment that the state bought. The state Department of Health and Human Services is distributing the supplies where needed, including 6.6 million masks, 50,000 face shields and 24,000 Tyvek suits.
“This is how we do it in New Hampshire,” Gov. Chris Sununu tweeted.
Sununu credited Dean Kamen, a New Hampshire business leader who created the Segway, with facilitating the delivery through his connections in China.
This is how we do it in New Hampshire. pic.twitter.com/qmeswOfbCi
— Chris Sununu (@GovChrisSununu) April 13, 2020
At a news conference April 10, Sununu said SoClean, a Peterborough company, tapped its overseas connections to lead a charitable effort to distribute 200,000 masks to 200 locations statewide. Sig Sauer, a firearms manufacturer in Newington, was bringing in 20,000 masks for health care facilities, Sununu said.
“Every day, we hear kind of a different, good news story about the private sector or a commercial provider stepping up, just trying to do their part to help the people of this state,” the New Hampshire governor said.
FEMA acknowledged it was not built to handle a disaster that affects all 50 states. The agency usually responds to hurricanes or mass flooding, natural disasters that affect one state or a region. Amid a shortage of medical supplies, the agency has struggled to meet state demands but launched such efforts as "Project Airbridge," a partnership with medical distributors to expedite supplies from the global market to the USA.
Even those efforts have complicated the market for states. Upon arrival, FEMA directs some of the equipment to be sent to medical distributors in areas of greatest need while the remainder is "infused into the broader U.S. supply chain," according to a FEMA spokeswoman.
Some state officials and lawmakers suggest that fractured approach could have been avoided if the U.S. government acted to organize the supply chain.
'Whim of the market'
Pritzker, a Democrat who has criticized Trump's handling of the pandemic, said states wouldn't have to deal with such a chaotic market had the president earlier invoked the Defense Production Act, a wartime authority that allows the U.S. government to force American manufacturers to prioritize its orders of critical supplies, such as ventilators.
"Everybody is very much at the whim of the market, which is now completely disorderly because the federal government didn't do what it's supposed to in an emergency," Pritzker said.
"I don't want to compete with Maryland or California," he said. "I don't want it to be the case that I'm buying a ventilator over another state and determining who gets what, you know, because I need to do what I need to do for my people."
The patchwork strategy has left holes in the supply chain, forcing states to rely on third-party brokers and cast aside rules around purchasing and vetting products, shrinking a three- to six-month process down to a two- to three-day exchange. Mendoza said sellers require a check upfront before the products even arrive on American soil.
"We're really taking a gamble, not just in Illinois, but every state who's playing in this market," she said. "You're hoping these checks that are going out the door are actually going to result in physical products that work."
Good cop, bad cop: Vice President Pence shows alliance with governors, despite Trump's attacks
Pritzker said the Trump administration has delivered on some requests, not all. Though the U.S. government sent 600 ventilators to Illinois, Pritzker said he asked for 4,000 breathing machines. The administration provided staff for a makeshift hospital at Chicago's McCormick Place Convention Center, but Illinois has received only 3% of what it requested for personal protection equipment.
"I have to just keep moving forward to get what I need, because most of the time, I'm not getting from them what they're promising," Pritzker said.
Racing against the clock
Mendoza recalled losing an order of ventilators to New York, which paid more than twice Illinois' bid. Though she said she was happy the order went to a state in dire need, losing it was a blow.
"You feel like you get punched in the face, and you're like, even if we needed these right now, we wouldn't be able to afford them at this price," she said.
The high-stakes marketplace has led to some ingenuity as states race against the clock to keep their number of COVID-19 cases from surging, creating an "all hands on deck approach" Trump has encouraged.
Though governors have been forced to outbid one another, they've started forming regional consortiums to address purchase and distribution needs as well as plans to lift social distancing restrictions, circumnavigating the U.S. government's approach.
"In the past, you've always had Homeland Security response as the local, state and federal government working together under unity of effort to save lives," said Kayyem, the former DHS assistant secretary. "The idea that local and states have one mission and the federal government has another, it's just inconsistent."
Whether that ingenuity will benefit the federal crisis management system in the long term is less clear. Some of that state creativity on resource deployment is built into the system, Kayyem said. State officials ask for federal assistance once they can no longer handle the response on their own.
Governors also rely on a system in which they count on FEMA to step in and utilize the national stockpile and Defense Production Act to take charge, Kayyem said. If the government changes the rules midstream, she said, it may not be ingenuity as much as desperation.
Two days after the Illinois comptroller's office secured the masks in a McDonald's parking lot, Chicago Mayor Lori Lightfoot closed the city's popular lakefront, warning that the latest estimates of COVID-19 patients would "break our hospital system."
The same day, the comptroller's office deployed another aide to a roadside meeting to close a deal on equipment. Director of Administration Cortez Gillespie drove more than 100 miles and pulled off the highway to hand over a $3 million check for gloves and goggles at the Road Ranger gas station in Minonk, Illinois.
"Every time we win one of these deals, we're happy for a split second. And then it hits you," Mendoza said, "that us winning that day means somebody else just lost who just as equally probably needs those masks, gloves or whatever product it is."
Contributing: Bart Jansen, USA TODAY; Tessa Duvall, Louisville Courier Journal
This article originally appeared on USA TODAY: Coronavirus creates PPE bidding war for states like Illinois, New York