The US government paid suppliers more than $ 5 per N95 respirator, nearly eight times the price if they went to buy it in January and February, when intelligence alerted Covid-19.
The N95 respirator is essential for medical personnel treating Covid-19 patients because they are at higher risk. The surge in demand has led to a fiercely competitive mask market, prompting US states to bid with the federal government, even causing countries to argue over masks shipments.
According to the Washington Post, the US government started importing the page late, after which it paid a heavy price. Some government agencies bought small amounts of masks before the first half of March, but most were ordered later by the US government (total value of $ 600 million), according to the Washington Post, based on purchase records. government.
Big companies like Honeywell and 3M take most of the orders, but the government also signs big orders with questionable suppliers, according to the Washington Post.
The federal emergency response agency (FEMA) awarded Panthera Worldwide a $ 55 million contract for a facemask, while the company was engaged in military training.
One of Panthera’s owners said Panthera’s parent company had no employees since May 2018, according to a court record of a dispute between the company and its affiliates.
Accordingly, Panthera’s parent company has never produced or traded medical supplies, and is no longer recognized in Virginia, where it has its main office, for reasons of not paying some state fees.
But James Punelli, a company manager, said he was working with military contacts to buy masks. He confirmed that the company will provide a full range of masks, with high quality, before May 1.
“They do not have masks. They don’t work in that area, ”Robert Starer, a Viriginia entrepreneur who once hired a training center from Panthera’s owners, told the Washington Post. “Whether they have any contacts who can provide masks – I don’t know either.”
Mr. Starer is suing two Panthera directors – Punelli and Raymond Jones – accusing them of fraud that caused his company damage.
The contract to buy 10 million masks that FEMA for Panthera does not go through bidding, according to the Washington Post. A FEMA spokesman explained that Panthera is not a “manufacturer, but a distributor of N95 masks.”
FEMA is paying Panthera $ 5.5 per mask, far beyond what the government is paying companies like 3M.
Meanwhile, the price of masks supplied by 3M company is as low as 63 cents / mask, the average price is 1.5 USD depending on the quality.
Another company, Prestige Ameritech, the largest supplier of masks in the United States, is charging 80 cents a mask, for FEMA’s 12 million masks, as part of a $ 9.5 million contract. signed on 7/4.
“In addition to the federal government paying too high a price for Panthera, the decision to award a contract to an entity that went bankrupt and clearly had no expertise in the field is making experts feel unusual,” Washington said. Post a comment.
“Something is missing here,” Chuck Hagel, a former defense minister and senator of the Nebraska Republican Party, told the Washington Post. “That’s not the way the government procures supplies. You should not work with such a party. ”
The US emergency response agency FEMA currently imports medical supplies mostly through government-charter cargo planes to reduce delivery times. FEMA then transfers about half of the shipments to major healthcare providers, which then distribute to customers, according to FEMA.
Critics of the process say this is no different from “free” to private companies, but the government argues that it is the fastest way to get medical equipment to hospitals. .
“Every traditional rule of procurement is being thrown out the window,” Rick Grimm, executive director of the National Public Procurement Institute, regularly training local governments on public procurement, told Washington. Post.
Mr. Grimm said that when the market is unstable, it is easy to manipulate prices and the ability to “have poor quality products and unusable”.
Jennifer Ehrlich, a spokesman for 3M company, said the company has not yet increased the price of masks, and is suing the distributors who are selling 3M masks at very high prices. 3M plans to increase production from about 1.1 billion masks a year to 2 billion a year, over the next 12 months.
3M has sued several companies over the past week for “slashing” and selling counterfeit goods, including a company trying to sell 45 billion 3M masks to New York City officials at high prices, and one company. another wants to sell “tens of thousands of 3M masks they don’t have for the federal strategic stockpile,” and pretend to be a subsidiary of 3M.