Masks bought at above normal price
Chinese-made masks purchased by state for two to four times list price of respirators made by U.S. firm
In the throes of the COVID-19 crisis and amid a free-for-all among states to buy scarce personal protective equipment, New Mexico’s Department of Health purchased a half-million respirators this spring at a significantly higher cost than the normal list price for such products.
The agency bought the Chinese-made N95 masks in April and May for a total of $1.63 million, with each respirator costing $3.25, according to an invoice and purchase order obtained by The New Mexican. That’s anywhere from two to four times the list price for surgical N95 masks made by U.S. manufacturer 3M, which lists its models at 68 cents, $1.27 and $1.78 each, depending on design and level of resistance.
The masks bought by the state were made by Chinese company Qingdao Miuton Medical Co. and are approved by the U.S. Food and Drug Administration, state officials said.
State Auditor Brian Colón said Tuesday he was directing his office to look into the procurement, saying “there may be concerns over the purchase.”
“The State Auditor is extremely concerned with these types of purchases and the risks they present,” Colón said. “As such, these types of purchases will be assessed during the audit process.”
During the crisis, states like New Mexico have scrambled to procure personal protective equipment — or PPE, as it’s now often known — as supplies ran short nationwide. The N95 respirators are crucial for health care personnel as they block 95 percent of particles such as droplets that could contain the virus.
Reports have emerged across the country of middlemen and new suppliers jacking up prices for protective equipment amid the pandemic-fueled demand, as well as bidding wars that
pit some state governments and even nations against one another.
The Department of Health said because there is no federal purchasing system coordinating coronavirus-related purchases for states, New Mexico had to deal with demand for personal protective equipment from other states and globally. “There’s no pandemic ‘price match’ feature,” department spokesman David Morgan said. “The state has worked hard throughout the pandemic to bring PPE into the state in a timely fashion to protect health care workers and essential workers. That’s been the priority.”
Still, a key Democratic legislator voiced concern Tuesday that such protective equipment for COVID19 has been procured without consulting with the Legislature.
“I think we need to look into that during our next session,” said Rep. Patricia Lundstrom, chairwoman of the House Appropriations and Finance Committee. “I wouldn’t want to see those kinds of expenditures without having some legislative input.
“I would suspect that had we had a chance to take a peek at it, we might have been able to find some better purchases at the end of the day,” added Lundstrom, D-Gallup.
The Health Department used an emergency procurement declaration for the transaction, Morgan said. That provision, signed April 28 by the agency’s Chief Procurement Officer Roy McDonald, authorizes the agency to spend up to $200 million on goods and services for the coronavirus response.
The declaration allows the department to make purchases without going through the usual budgetary process.
Colón said purchases made through emergency procurement “present an elevated risk, especially during a crisis where supply may be low or shortages may exist and there is an immediate need for goods and services that would otherwise allow for normal purchasing procedures.
“We cannot afford any waste, fraud or abuse of these funds,” he added.
The agency originally paid for the order with money from the state’s general fund but later used federal funding from the coronavirus relief bill passed by Congress and added the money back to the general fund, he said.
The order placed by the Health Department also includes the purchase of 400,000 disposable gloves for “$1.00 each,” according to the invoice, though the invoice and purchasing order do not specify if that was the price for a pair of gloves or for a box of gloves. That brought the total amount of the order to $2.46 million, according to the purchase order.
While made in China, the N95 masks were purchased from RORA Manufacturing, a company located in Newport Beach, Calif. The email address on the company’s invoice to the state includes the domain roraclothing.com, which is a women’s clothes designer, according to its website.
Morgan said RORA has long-standing relationships with factories and distributors in China and is “a vendor that was referred to the state and has proved to be very beneficial.”
RORA did not respond to a request for comment Tuesday.
The invoice was made out to Diego Arencon, deputy chief of staff for Gov. Michelle Lujan Grisham, and the order was invoiced to be shipped to the Health Department in Santa Fe.
The purchase order was signed by Health Secretary Kathy Kunkel. There were two separate “due dates” for the equipment: April 7 and May 1.
Early on in the outbreak, Lujan Grisham said New Mexico was having difficulty securing personal protective equipment, noting federal officials had failed to administer supplies from the national stockpile effectively and had only sent the state a small part of its allocation.
“I’m dissatisfied with the federal response,” she said in March. “We’re pushing them.”