How a frantic trek to a McDonald’s parking lot shows the scramble states are facing for coronavirus supplies

How a frantic trek to a McDonald’s parking lot shows the scramble states are facing for coronavirus supplies

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 healthcare workers on the front lines of the pandemic.

The vendor needed a $3 million check within hours and Mendoza was worried she might lose out to a Russian competitor who had offered cash for the masks.

So 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, Ill. – 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 one and a half million masks," Mendoza recalled. "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 been facing to obtain masks, gloves and other protective gear for healthcare workers as they also try to get their hands on ventilators and test kits. The process has led to tensions between President Donald Trump and governors such as Gov. J.B. Pritzker of Illinois and Gov. Andrew Cuomo of New York who have been urging the federal government to take the lead role in ordering equipment, a request Trump has 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.

With a national stockpile too depleted to fill the gap for widespread shortages of face masks, gloves, ventilators and other medical supplies, some states have taken extraordinary steps to procure the critical equipment. Trump has said governors should take the lead in obtaining supplies for their own states, with the federal government playing a "back-up" role.

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The strategy has pitted states against each other – and sometimes against the U.S. government – as they navigate a fierce global marketplace that Pritkzer has described as the "Wild West." Some governors have relied on personal connections to usher in shipments from abroad while others have chartered private jets to ensure that they are not outbid by other players – including potentially the federal government – while their orders are 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 to back to the state.

llinois Gov. J.B. Pritzker speaks during a press conference in Hall C Unit 1 of the COVID-19 alternate site at McCormick Place on Friday, April 3, 2020 in Chicago, Illinois.

But Illinois is hardly the only state forced to explore unconventional avenues. As Trump forges ahead with plans to reopen on the economy, health care workers are still struggling to keep up with the more than 671,400 cases in the U.S. – the most confirmed cases in any country, according to Johns Hopkins University data. COVID-19 has killed more than 33,200 Americans.

Governors have complained they're competing against the Federal Emergency Management Agency in a global bidding war that has thrown state budgets into disarray, with some supplies going 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.

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Kentucky Gov. Andy Beshear said last month his state was expecting 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."

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 told reporters at a press conference 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. But this time, he opted for the Patriots' jet.

“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.

'Brutal' negotiations

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."

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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.

New Hampshire Gov. Chris Sununu, center, speaks to reporters as N.H. National Guard Major General David Mikolaities, left, and Sen. Jeanne Shaheen, D-N.H., right, look on as pallets containing personal protective equipment, behind, are unloaded from a FedEx cargo plane, Sunday, April 12, 2020, at Manchester-Boston Regional Airport, in Manchester, N.H.

“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 helping facilitate the delivery through his connections in China.

At his April 10 news conference, Sununu said SoClean Inc., 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 also bringing in 20,000 masks for healthcare 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 has acknowledged it was not built to handle a disaster that affects all 50 states. The agency historically responds to hurricanes or mass flooding, natural disasters that affect one state or a region. With a shortage of medical supplies, the agency has struggled to meet state demands, but has launched such efforts as "Project Airbridge," a partnership with medical distributors to expedite supplies from the global market to the U.S.

But 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 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, like 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 added. "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."

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In this March 20, 2017 file photo, Illinois State Comptroller Susana Mendoza speaks to the City Club of Chicago in Chicago.

Pritzker said the Trump administration has delivered on some requests, but not all. Though the U.S. government did send 600 ventilators to Illinois, Pritzker said he had asked for 4,000 breathing machines. The administration has stepped up and provided staff for the makeshift hospital at Chicago's McCormick Place Convention Center, but Illinois has still only received 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, considered the epicenter of the U.S. outbreak, in which the state paid more than twice that of Illinois' bid. While she was happy the order went to a state in dire need, losing out on 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 in order to keep their number of COVID-19 cases from surging, creating an "all hands on deck approach" that Trump has encouraged.

While governors have been forced to outbid one another, they've also started forming regional consortiums to address future 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 federal crisis management system in the long-term is less clear. Some of that state creativity on resource deployment is already built into the system, Kayyem said. State officials ask for federal assistance once they can no longer handle the response on their own.

But governors are also relying on a system in which they count on FEMA to step in, utilize the national stockpile and Defense Production Act to take charge, Kayyem said. If the government changes the rules midstream, she adds, it may not be ingenuity as much as it's desperation.

Two days later after the Illinois comptroller's office secured the masks in a McDonald's parking, Chicago Mayor Lori Lightfoot closed the city's popular lakefront, warning reporters that the latest estimates of COVID-19 patients would "break our hospital system."

The same day, the comptroller's office again 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 another $3 million check for gloves and goggles at the Road Ranger gas station in Minonk, Ill.

"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, Tessa Duvall, Louisville Courier Journal

Source: https://www.usatoday.com/story/news/politics/2020/04/18/coronavirus-creates-ppe-bidding-war-states-like-illinois-new-york/5144652002/

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