They have had their bags packed for a week waiting for the call. And when it comes – if it comes – two top Erie County commissioners are hopping the first plane to Minneapolis to oversee the loading of five tractor trailers with N95 face masks bound for Erie County.
They aren't letting taxpayer money get flushed on a $5 million deal. They already have dealt with broken promises and canceled purchase orders over the past two months.
"We want to make sure we get what we’re buying," said Geary, the county's Public Works commissioner, who has assumed a key role as a logistics coordinator during the county's state of emergency.
Geary and other county officials have witnessed six- and seven-figure deals to buy critically needed protective equipment for health care workers fall apart overnight. They have had vendors promising to deliver one thing show up at the county's doorstep with something different. They have had well-meaning intermediaries assure the county that their supply chain was solid, only to fail to meet commitments.
Erie County is not alone it its struggles. With most protective health equipment produced overseas and U.S. manufacturers unable to meet overwhelming demand, the competition among local governments stateside is immense.
Many suppliers and middlemen that public organizations have counted on aren't getting supplies. And those with access are reneging on signed purchase orders to fill orders from other buyers who are willing to pay more, county leaders said.
Tense negotiations
This, Neaverth said, has left the county resorting to tactics he said feels vaguely like negotiating with a drug cartel."Our attempts to try and secure, in some cases, lifesaving equipment could be made into a movie," said Neaverth, the county's commissioner of the Department of Homeland Security and Emergency Services.
Erie County has millions of dollars to spend on equipment and supplies that it redistributes to hospitals, nursing homes and first responders.
It has also been bombarded with offers from all sides from people offering to supply these materials.
But only about a fraction of all county purchase orders are being filled. In order to protect taxpayer money, County Executive Mark Poloncarz has required all orders to be paid on delivery only.
The first $1 million order for N95 masks that Poloncarz publicly announced last month was among the many purchase orders from Asia that never came through.
"Some flags started going up when they said they would fly direct from Taiwan to Cleveland," Geary said.
Cleveland is not known as a flight hub for international cargo. Geary, an Air Force reservist attached to the 914th Air Refueling Wing in Niagara Falls, was easily able to verify that fact through his pilot friends.
When vendors said they had medical equipment shipments for the county sitting in Cleveland, Geary offered to fly right out to inspect the shipments.
"I said, 'OK, great, we have an airplane. I’ll be jumping on. We’ll be there two hours,' " Geary recalled. "All of a sudden the vendor was like, ‘Oh wait, wait, that product’s not here. It’s still in Taiwan.’ "
Similar offers to meet Chinese shipments that supposedly had landed in New York City or Las Vegas resulted in vendors later confessing their deals had fallen apart.
"We’ve literally had orders sold out from underneath us, and you ask, 'Can they do that?' " Neaverth said. "Well, they are and they have."
One vendor had promised to load 400,000 N95 masks worth about $1.5 million onto a tractor trailer and send it from Texas to Buffalo. But when the truck arrived at the warehouse, it was loaded with regular surgical masks instead. The vendor waited until the truck was within an hour of arriving to inform the Purchasing Department that the county's original order had been substituted.
The shipment was refused.
New tactics
In the Covid-19 era, many pre-existing procedures for county purchasing have been dumped. The county isn't just paying twice as much as it used to pay for the same goods prior to the health crisis; it's also building its own supply chain practically from scratch.It used to be the county would work through a known supplier, who would in turn work through several other larger suppliers to get needed items from a manufacturer. But that supply chain had many links, many of which are now broken.
Initially, county officials were bombarded with up to 70 emails a day from vendors sounding like a "long lost high school buddy" with roots in Western New York who were ready to go to work on behalf of Erie County, Neaverth said. Most turned out to be vendors trying to get a piece of the action without possessing any actual goods.
At the same time, Erie County calls directly to manufacturers weren't producing any better results. County officials likened those attempts to trying to buy a car from Detroit. Administrators would wait on hold for hours, only to be told the manufacturer couldn't take their order.
Through trial and error, and hospital system referrals, the county has now cut out out several layers of intermediary vendors to create a more direct supply chain to North American manufacturers.
"We’ve eliminated the street-level vendor," Neaverth said. "We’ve eliminated three and four people between where we need to be."
To prevent fraud, the county administrators say they are keeping tabs on the market rates for supplies. They also are double-checking equipment orders against lists approved by the U.S. Centers for Disease Control and Prevention's National Institute for Safety and Health.
They also are keeping up with fraud and piracy bulletins released by the FBI and inspecting all equipment that arrives before accepting delivery.
Ready and waiting
For the much-anticipated Minneapolis deal, which involves purchasing 1.25 million N95 masks from American manufacturer 3M, officials said Erie County is working through a higher level supplier based out of Chicago.Right now, the county is waiting to hear that legal issues regarding the transaction have been resolved.
"You’re talking about two commissioners from Erie County potentially going to some warehouse somewhere in Minneapolis to do a transaction of $5 million, to verify a load of lifesaving equipment, and then to jump on a plane and fly back after it’s been loaded into a tractor trailer and sent to Erie County," Neaverth said. "It's crazy. It's absolutely crazy."
He added, jokingly, "The only thing that distinguishes this from a drug transaction is that we’re not sampling the product."
Aside from electronically transferring the money to the supplier while in Minnesota, they also want to shake some hands, build relationships and prove to 3M that Erie County is worthy of future multimillion-dollar deals.
The Chicago-based supplier the county is working through has fulfilled smaller orders for the county and found a way to piggyback Erie County's order to a larger $24 million order for the State of Illinois, Neaverth said. For that reason, county leaders are more optimistic of success.
But they are still taking precautions. They will be armed with information about how to distinguish 3M's genuine respirator masks from counterfeit models. Geary and Neaverth said that if they make it to the Minneapolis warehouse, they intend to break open a few of the pallets at random and open the boxes of masks.
Then Geary has arranged for five tractor trailers from a national trucking firm to meet them at the warehouse where he and Neaverth will supervise the truck loading.
They also plan to greet the trucks when they arrive in Buffalo a day later and supervise the unloading of the masks, which will be distributed to health organizations throughout the county.
Assuming this huge transaction succeeds, Erie County plans to work more exclusively with this supplier and 3M, which is based in Minneapolis and has another manufacturing plant in Los Angeles. The county also will use its contacts to benefit other smaller counties across Western New York.
For now, the county is getting by with smaller shipments coming through multiple sources. Obtaining procedural/surgical masks is less of a problem than getting disposable gloves in different sizes. Some gowns and face shields are coming from local small businesses.
The county has also reached out to Grainger, a major distributor of industrial supplies, Neaverth said. He sent one of the vice presidents a statement of need for N95 masks and explained the county's mask distribution plan to health care organizations and first responders.
"We’re managing to get by," he said.
But this deal with 3M could be a game changer. That's why Geary and Neaverth remain on alert, waiting for the call that will have them scrambling for the first flight to Minnesota.
"If there’s anybody who’s going to take the heat for messing up," Neaverth said, "it’s us two, not anybody below us."
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