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Companies Offer FEMA Critical Supplies the Government Can't Buy

The Wall Street Journal. logo The Wall Street Journal. 4/7/2020 Rachael Levy
Brett Giroir wearing a suit and tie © Stefani Reynolds/Zuma Press

More than 1,000 companies responded to the Federal Emergency Management Agency’s call about two weeks ago to provide needed supplies to fight the coronavirus pandemic, according to a person familiar with the matter.

As of early Monday, only three companies had supplies the agency could actually buy.

Many of the offers, for items ranging from protective medical gear to tests and body bags, didn’t work out, according to people familiar with the matter, because some companies have asked for payment up front, something FEMA can’t agree to. Another issue: Some companies have oversold what they can actually get to FEMA.

“There’s a lot of disappointment in how the business community is responding,” the person said.

Inside FEMA, efforts to acquire supplies that fail to materialize are known as “vaporware,” borrowing the term from the technology industry referring to products that are announced but never actually manufactured. Company offers can require hours of vetting by FEMA’s procurement staff, costing the agency precious time as the pandemic spreads.

Staffers are calling vendors to find out what they have on offer. But those discussions go from “‘I’ve got’ to ‘I can find’ within three or four phone calls,” the person familiar with the matter said. The person declined to say which companies would likely win out.

FEMA didn’t respond to a request for comment.

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FEMA has requested products ranging from body bags “suitable for burial or cremation” to protective eyewear, face shields and coveralls with hoods, its request for proposals shows.

In some cases, companies seeking to do business with FEMA have contacted Jared Kushner, senior adviser to the president and Mr. Trump’s son-in-law, who has referred them to FEMA’s procurement department, people familiar with the matter said.

A spokesperson for Mr. Kushner and the White House didn’t respond to a request for comment.

The supplier mismatch has resulted partly from the agency’s facing its biggest-ever disaster: a global crisis that has throttled many supply chains. Since taking over pandemic response coordination from the Department of Health and Human Services in mid-March, FEMA has been focusing on the shortfall in supplies at the state and local levels.

One challenge is that FEMA’s expertise is largely in dealing with disasters like hurricanes and wildfires, which usually are localized in one region. With the coronavirus pandemic, the agency is working in unfamiliar territory and grappling with how to manage a crisis affecting all areas of the country.

Related video: Making sense of the N95 mask shortage

There are few vendors that aren’t “already stretched or tapped out,” said Craig Fugate, the agency’s administrator under the Obama administration.

Never before has FEMA struggled to find supplies in such a way, say current and former employees. Meantime, hospitals continue to face shortages of critical supplies and testing capabilities, according to a new report from the inspector general of the Department of Health and Human Services.

The agency has faced issues with procurement during disasters before, Mr. Fugate said. Some companies can’t deliver what they propose, while others “are absolute rip-off artists,” he said. “This isn’t new. When you put these proposals out there, you get that mixed bag of companies.”

President Trump said Monday that the government would buy nearly 167 million masks from 3M Co. over the next three months after invoking the Defense Production Act on the company. 3M isn’t working with FEMA through its request for proposals, the person familiar with the matter said.

The few companies that look like potential wins in FEMA’s call for help couldn’t be learned. Those companies are currently going through FEMA’s fuller vetting process, one of the people said. However, orders that might come from them are unlikely to be large, the person said.

The agency has had more success with its “air bridge” program, which has involved Mr. Kushner, some of the people said. In that program, FEMA has been covering the cost of flights from overseas factories to the U.S. The agency has said that process has cut “the amount of time it takes to ship supplies from weeks to days.”

As of Monday, FEMA had overseen 13 flights bringing in gloves, gowns, goggles and masks. Its first flight, on March 29, delivered 80 tons of protective equipment to New York, New Jersey and Connecticut, FEMA said. Additional flights brought 83.5 million gloves, 5 million surgical masks and 1.2 million gowns, according to the Department of Homeland Security.

Under the program, half of supplies on each flight go to hot-spot areas, determined by HHS and FEMA based on data from the Centers for Disease Control and Prevention. The remainder goes into “distributors’ normal supply chain and onto their customers in other areas across the U.S.,” FEMA has said.

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