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Federal agencies poised to compete over mask supply

Some experts call for more centralized decisions on federal purchases of personal protective equipment in different agencies

The billions of spending on personal protective equipment that Congress provided in late March could supercharge the already-intense competition for an inadequate supply of lifesaving masks, gowns, gloves, and face shields. 

The law directs $16 billion to the Strategic National Stockpile, which contains supplies the Federal Emergency Management Agency has begun distributing through its state and regional offices. Hospitals are set to receive at least another $100 billion and states will receive $46 billion in emergency response funds through the legislation, which could in part be used for personal protective equipment such as masks and face shields.

[OIG: Hospitals struggle with supply shortages, testing delays]

The law also directs billions to law enforcement — which will likely be competing for the same equipment. The legislation offers $850 million to state and local law enforcement through Department of Justice grants; $100 million to the Federal Bureau of Prisons; $20 million to the Federal Bureau of Investigation; $15 million for the Drug Enforcement Administration; $15 million for U.S. marshals; and $100 million for firefighters.

The offices of senators who oversee federal appropriations say the funds are in part meant for personal protective equipment, or PPE, though some will go toward salaries and other needs. 

The legislation also directs money for respiratory equipment to the departments of Veterans Affairs and Defense and the U.S. Forest Service.

FEMA said last week that no single authority is overseeing all federal purchases of personal protective equipment.

On Tuesday, the agency said in a statement to CQ Roll Call that FEMA is working with the General Services Administration to determine the need for PPE across agencies. FEMA said it has received multiple requests from agencies for PPE, and is working with other agencies to manage the acquisition strategies for protective gear.

The disaster relief agency assumed control of the national stockpile in mid-March when Trump declared a national emergency and formed a task force on March 30 to determine how to prioritize shipments. 

Experts say as FEMA responds on the fly to the nationwide public health emergency, it is clear its typical procedures to deal with hurricanes, floods and fires are not designed for a pandemic. 

“FEMA isn’t used to this type of emergency. Their specialty, and the muscle memory they’ve built since Hurricane Katrina, is localized disaster response,” said former Obama administration official Katrina Mulligan, a national security expert at the liberal Center for American Progress. “They haven’t ever dealt with a nationwide issue where all 50 states are competing for equipment and supplies, so their standard playbook  — acquire what we need wherever we can get it, then deliver it to those who need it — may be getting in the way.”

FEMA can compel other agencies to mobilize in a disaster. But it hasn’t overseen the spending of other agencies for a limited supply of emergency equipment, said Ernie Abbott, former FEMA general counsel.

“A national emergency is unusual. There has never been a nationwide declaration of an emergency declared under the Stafford Act. That said, it is not unusual that FEMA would not ‘oversee’ agency purchases outside the stockpile,” said Abbott. 

“This is really unprecedented. There is not some past scenario or exercise I can point you to for how this is supposed to go,” said Chris Currie, an expert in disaster response with the Government Accountability Office. “A lot of these agencies are trying to figure out how do we respond, get the best equipment for our own people and fulfill our own mission?”

[Less than 10 percent of the N95 masks requested have been received by 5 states]

The entry of a dozen federal agencies into the market for protective equipment could amplify what some governors and members of Congress are already describing as a “Lord of the Flies” atmosphere between hospital executives, state officials and FEMA as they scramble for supplies. 

“Keep in mind that for weeks governors have been on their own, receiving strong signals that the White House wasn’t going to help them,” Mulligan said. “It’s no surprise that they’ve taken matters into their own hands and aren’t thrilled now that the feds have finally decided they care and want to do something — and that something is disrupting the careful arrangements they’ve already made.” 

Experts say FEMA could ask other federal agencies to back off if their orders conflict with getting stockpile masks and gowns to hard-hit areas like New York and New Orleans.

But uncertainty remains about whether FEMA is exercising that authority, even among the senators who passed the massive spending law. 

“Is FEMA the lead federal agency coordinating distribution of the medical supply chain? How does FEMA work with other federal partners like the Departments of Defense (including the Defense Logistics Agency), Health and Human Services, Transportation, and Homeland Security?” Sen. Christopher S. Murphy, D-Conn., wrote in a letter to Vice President Mike Pence on Friday. 

Senate Minority Leader Charles E. Schumer, D-N.Y., said on CNN this week he suggested to White House Chief of Staff Mark Meadows the names of three people who would be good to oversee supply distribution. 

“You can’t have a giant scavenger hunt where 5,000 different groups and people are looking for the same supplies and bidding against each other,” said Schumer. “You need command and control. You need a czar in charge. I think a military person would be the right person.” 

Competition for protective gear

Democratic and Republican governors alike have already said they are competing with the federal government over masks and other PPE.

On a March 30 call between President Donald Trump and governors, Montana Gov. Steve Bullock, a Democrat, told the White House his state had lost bids on supplies to FEMA, CBS News reported.  

“I could give four or five examples over the last week where we have supply orders, and they’ve subsequently been canceled, and they’re canceled in part because what our suppliers are saying is that federal resources are requesting it and trumping that,” Bullock said on the call.

Hospital executives are scrambling for more supplies amid unreliable output from the national stockpile, according to their comments and a Department of Health and Human Services Office of Inspector General report. Many say as they turn to the private market, they are battling third-party vendors requiring inflated prices and requests to pay cash upfront.    

Jai Rajput, an executive with Beaumont Health, which oversees eight Michigan hospitals, said on a mid-March industry call with reporters that his health system had seen at least 20 deaths and was in “desperate need” of PPE.   

“Do the feds have more buying power? Yes, of course they do,” said Currie. “The real problem is there is a worldwide run on PPE. There’s just not enough.”

FEMA has not released details about how it is determining where to send supplies, stoking fears that political favoritism by Trump could play a role.

The stockpile began shipping all supplies to states according to need after the national emergency was declared, said a Department of Health and Human Services spokesperson.

Before FEMA assumed responsibility for the stockpile, just 25 percent was being distributed based on need, the spokesperson said. Another 25 percent was distributed based on population. Half of the supply was being conserved.

The national shortage has led to nurses reusing the same mask for multiple shifts and use homemade masks. Increasing numbers of health care providers have become sick with COVID-19, public health departments report.

“We’re begging. We wouldn’t be putting out this alarm if we had the supplies we needed,” said Denise Abbott, a registered nurse and director of health and safety for CWA Local 1168. “There are people dying. Our message could not be any louder.”

House Energy and Commerce Chairman Frank Pallone Jr. said he wanted to establish a federal coordinator to acquire, distribute and track personal protective equipment. The New Jersey Democrat said he’s urged Trump administration officials to put someone would be in charge of buying PPE and distributing it to areas where it’s most needed.

“Hopefully the Trump administration does this, provides this person and provides the data, but on the other hand if they don’t, then I think in our next piece of legislation, we would have to go about authorizing that or mandating that,” he told reporters on a call.

More forceful options

Another idea is to invoke the Defense Production Act more aggressively.

When a commodity is essential, and the normal coordination systems under the National Response Framework are not working, the Defense Production Act allows the federal government to force more production of that commodity and buy the existing inventory for distribution, said Abbott.

The Defense Production Act, a 1950 wartime law, would allow FEMA to quash the bidding wars.

“FEMA can shut down the auction,” said Joshua Gotbaum, a Brookings Institution expert and former Clinton administration Office of Management and Budget official. 

Under the DPA, the federal government’s orders for supplies would receive priority over other buyers. It would also set the price to the cost of production plus a percentage for profit, instead of letting the prices escalate with the surge of demand. 

Its use could also boost supply by mobilizing manufacturers of other goods — such as the garment industry, the auto industry, or electronics manufacturers — into the production of PPE and badly needed ventilators. 

Lobbies representing safety equipment manufacturers, medical device manufacturers and the Chamber of Commerce have resisted calls to use the act. 

Peter Navarro, a White House adviser overseeing the DPA, has downplayed the shortages.

“There’ll be pictures that you’re citing with people with garbage bags or whatever, but that’s gonna be the exception that proves the rule,” Navarro said in a recent CNN interview. “Let’s not sensationalize this crisis at a time where we’d create more anxiety or panicked behavior with people.”

Mary Ellen McIntire contributed to this story.

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