Texas rejects faulty, delayed virus supplies
AUSTIN — In its mad dash to buy masks, gowns and other medical supplies to protect against the coronavirus, Texas is spending millions of dollars in no-bid deals and tapping vendors that have no history doing business with the state.
The results have been mixed, according to state payment records and court documents. A Californiabased fabric firm new to the medical supply business successfully delivered thousands of gowns on a plane chartered from China. But last month, the state rejected over 200,000 face masks from another vendor because they turned out to be faulty.
In one unusual arrangement, the state is relying on the Lower Colorado River Authority and the private Dell Foundation for creative financing for a large shipment of personal protective equipment from Asia.
As cases of coronavirus climbed, Texas, like many states, had to compete for scarce personal protective equipment in a turbulent market rife with soaring prices, hordes of vendors and tales of fraudsters across the country.
The Texas Division of Emergency Management says it has safeguards in place, such as paying vendors only after supplies arrive and are inspected for quality, a step government watchdogs endorse.
Since the pandemic began, the division has ordered over $1.1 billion worth of medical supplies, but has cancelled over half the deals because products never arrived or were defective, a spokesman said. The division has spent $200 million to date on personal protective equipment, which is being distributed statewide to health care workers and first responders.
“The primary goal has been to provide desperately needed PPE to health care workers and those who needed it to help stop the spread of COVID-19,” TDEM spokesman Seth Christensen said in a statement. “In order to meet the need and to continue preparation for responding to COVID-19 moving forward, diversifying vendors was and still is a necessity, as no one vendor has been able to meet our increased demand for product.”
The state has paid 106 purchase orders for personal protective equipment, Christensen said. At least a dozen vendors the division used had no recent history doing business with the state, according to a review of payment records on the Texas Comptroller’s website.
They include medical equipment suppliers, but also a defense contractor and a California-based fabric sourcing company that turned to medical gowns when the pandemic began. The company, ICU Production, chartered a plane to fly “a few hundred thousand” gowns to Texas from factories in China, said CEO Joseph Cohen.
“We just wanted to help with the supply chain,” he said. “When the pandemic started, our overseas teams had access to the right factories.”
Another vendor, South Carolina-based InFocus Healthcare Consultants, filed a lawsuit against its supplier last week. It alleges the supplier delivered 207,360 KN-95 masks to TDEM that did not meet federal standards. The state rejected the masks and they were sent back to the Illinois-based supplier, the lawsuit says. Neither company offered a comment on the lawsuit.
The pivot to unfamiliar vendors for PPE is not unique to Texas, said Michael Carome, director of the Health Research Group at the Washington D.C.based advocacy group Public Citizen.
“Here we are in circumstances because of critical shortages and states looking for any possible supplier they are faced with these choices where they have to pick companies and they don’t know whether they are reputable,” he said.
TDEM found many vendors through an online portal it created early on in the pandemic that attracted over 4,600 submissions from companies looking to sell the state supplies, Christensen said.
To vet the vendors, the agency goes through a process to verify they can operate in Texas and to see whether they have done business in the past with other governmental entities, he said.
“This step gives our team insight into how familiar the vendor is with government procurement and payment processes,” he said.