Ray Bellia had a good business before the coronavirus pandemic. He topped $4 million in annual sales from his New Hampshire store that specialized in protective gear for police.
Then he got a call from a buyer with the state of Massachusetts asking if he had anything that could protect people from COVID-19. As it happened, he did. He went on to sell the state 300,000 disposable masks for 97 cents each.
“From that point on, it’s been just insanity,” Bellia said.
While countless other businesses tanked amid coronavirus shutdowns, Bellia’s store — Body Armor Outlet — rapidly evolved into one of the nation’s 20 largest suppliers of personal protective equipment to states this past spring, according to a nationwide analysis of state purchasing data by The Associated Press.
The AP tallied more than $7 billion in purchases by states this spring for personal protective equipment, or PPE, and high-demand medical devices such as ventilators and infrared thermometers.
The data, obtained through open-records requests, is the most comprehensive accounting to date of how much states were buying, what they were spending and whom they were paying during a chaotic spring when inadequate national stockpiles left state governments scrambling for hard-to-get supplies. Much of the buying happened outside normal competitive bidding procedures, and in many states a lack of transparency from governors’ administrations made it difficult for the public — and even lawmakers — to see how taxpayer money was being spent.
The spending data covers the period from the emergence of COVID-19 in the U.S. in early 2020 to the start of summer.
Some governors described the early personal protective equipment marketplace as the Wild West, where supplies often went to the highest bidder, even if they had already been promised to someone else. States set up their own fraud tests, rejecting masks that failed to meet safety specifications or lacked medical labeling.
In some states, normal recordkeeping went by the wayside. Idaho didn’t initially itemize how much it paid for each mask and glove ordered from each supplier. That’s because the state’s buyers were preoccupied with trying to buy large quantities as quickly as possible against hundreds of competitors — all while working from home because of the pandemic, said J.P. Brady, senior buyer for the Idaho Department of Health and Welfare.
“It was chaos, pandemonium,” Brady said. “None of us knew what we were doing.”
Though states have spent millions more this fall as COVID-19 cases surged again, the initial protective equipment spending panic has subsided as production increased and supply chains improved.
California spent the most during the pandemic’s initial months — at least $1.5 billion in the AP’s data — followed by Texas, Maryland, Massachusetts and Washington. New York also spent several hundred million dollars on protective equipment and ventilators through November, though it’s unclear how much of that occurred in the spring.
The AP’s data shows that millions of dollars flowed from states to businesses that had never before sold personal protective equipment, including a Chinese electric vehicle manufacturer, an American tribal organization and consultants with international connections. Idaho officials bought 50,000 N95 masks from a women’s clothing store in Los Angeles, and Ohio purchased 3 million gowns from an in-state marketing and printing company. In both cases, the businesses used their connections with Chinese manufacturers.
Traditional safety equipment suppliers also saw a surge in PPE sales, offsetting their losses from other products amid the sudden recession.
But the states’ burst of spending wasn’t a boon for everyone. Some businesses that tried to supply protective equipment lost millions of dollars when states canceled orders that failed to meet aggressive delivery deadlines or strict product specifications. Businesses selling PPE faced a treacherous market, with backlogs at foreign manufacturers, shipping delays and multiple intermediaries.
All of that led to a spike in prices.
States paid an average cost during the spring of about 14 cents per glove, a fourfold increase over pre-pandemic prices. But the AP’s analysis found that more than half the states at times paid much more than that to certain vendors: up to 50 cents per glove.
Before the pandemic, an N95 mask that filters out tiny particles might have cost about 50 cents. This spring, states paid an average of $3 each. Some states paid more than $10 a mask to get them quickly.
In mid-March, Louisiana paid $57,450 for 5,000 N95 masks — at $11.49 each — from Grey Wolf Safety Group in Broussard. Grey Wolf owner Sean McClellan said that to fulfill the state’s order, he had to buy out whatever his competitors had in stock.
“All the cheap masks that were N95, those were already gone,” McClellan said. “So I basically bought up the expensive ones that were left.”
Then he marked up the price a bit more and resold them to the state, making a couple of dollars per mask.
“I’m not price-gouging,” McClellan said. “I have to make something, and I then have to pay my salesperson something.”