An investigation by The City has revealed that since last summer, the New York City Department of Citywide Administrative Services (DCAS) systematically has tried to auction off millions of dollars’ worth of COVID-19-related personal protective equipment (PPE) and medical supplies — gowns, face shields, hand sanitizer, KN95 masks, N95 masks — that the department deemed to be no longer needed. Many of these supplies remain in their original packaging and are brand-new, The City noted.
About 9.5 million items bought by the city government from $224 million in COVID-19-related contracts at the pandemic’s 2020 peak have been auctioned so far, earning about $500,000, The City reported.
Many other COVID-19 items have remained unsold after going up for auction, with no bidders, the news outlet reported.
In one round last summer, only 2 of 24 auctions yielded sales. Even then, bidders paid $194,000 for goods originally bought for $980,000, according to internal DCAS emails, The City reported.
DCAS spokesperson Nick Benson defended the agency’s actions during a crisis, calling the early days of the pandemic “a dark and difficult time for all New Yorkers” and noting the global shortages of critical supplies.
“Thankfully, New Yorkers and our heroic frontline medical workers came together to avert some of the worst-case scenarios,” Benson said. The spending rush at the start of the pandemic was meant to create a 90-day supply of medical supplies, he said, according to The City.
Some of the surplus has already been donated to Ukraine, Indonesia, Ghana, Haiti, South Africa or nonprofit organizations. Auctioning off surplus, he said, “is required by the city charter.”
A top DCAS official worried in July 2022 that if the public learned about the auctions, it would prompt an inquiry “about the city’s over-buying during COVID,” an internal email revealed. “In direct consultation” with Mayor Eric Adams’ office, DCAS had “crafted talking points to address why the city is auctioning off PPE while Covid cases continue to persist.”
Comptroller Brad Lander issued a report noting that despite the pandemic, city agencies still had the responsibility to vet the credibility of vendors to see if they would deliver what they promised and if the prices offered were reasonable, The City reported.
Lander discovered that New York paid upfront for millions of dollars’ worth of defective goods or supplies that were never delivered.
Digital Gadgets, an electronics firm, was prepaid $9.1 million for ventilators that it failed to deliver, so the city applied that payment to surgical masks the company did supply. But Digital’s initial delivery of N95 masks were of “poor quality or not FDA-certified,” and were sold to the city for $4 a piece — well above the average per-mask price of $3.10, Lander found.
A company, Fastenal, sold the city 50,000 face shields at $6.70 per shield when the average price at the start of the pandemic was $3.67, the comptroller found. That means taxpayers paid $335,000 for items that on average should have cost $183,500.
In 39 auctions where The City was able to obtain records from the private auction service, almost all the goods were offered with starting bids that provided huge discounts, in most cases for pennies on the dollar.
Huge discounts were also available for isolation gowns purchased in the first few weeks of the pandemic. Since last summer DCAS has been trying to sell off millions of these gowns — still packed in their original boxes — for a tiny fraction of what taxpayers paid for them. The gowns helped protect front-line hospital workers from seriously ill COVID-19 patients.
DCAS originally signed a $5.7 million contract to buy millions of isolation gowns from a Jersey City, N.J.-based men’s fashion store, Faded Royalty. Ultimately the firm was paid only $263,000 for whatever gowns they were able to deliver, and last fall DCAS began auctioning them off, The City reported.
In the first auction, DCAS tried to sell about 176,000 Faded Royalty gowns for $64,000 — about $2.75 per gown. At a second auction, DCAS’ new opening bid was $1,000 for 98,175 Faded Royalty gowns — about a penny per gown.
As of this week, they had received zero bidders and have since reduced the price to $400. Faded Royalty is now listed as “permanently closed.”
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