Just last week we posted a blog by Howard Weiss that dealt with “stockpiling.” Now comes a surprising revelation on how New York City’s then mayor Bill de Blasio stockpiled over $225 million in pandemic-related supplies that are now almost worthless.
Since last summer, the city has systematically tried to auction off millions of dollars worth of Covid-related personal protective equipment (PPE) and medical supplies — gowns, face shields, hand sanitizer, KN95 masks, N95 masks — that it decided are no longer needed. Many of these supplies remain in their original packaging and are brand-new. About 9.5 million items purchased by NYC for $224 million have been auctioned so far, garnering about $1/2 million, reports THE CITY (a NY weekly on Feb.21, 2023) .
A top NYC official fretted 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 email reveals. So officials “crafted talking points to address why the city is auctioning off PPE while Covid cases continue to persist.”
Here are a few examples:
Taxpayers paid $12 million for 3,000 “bridge vent” breathing devices. The devices were unloaded, unused, in an auction described as “non-functioning medical equipment sold as scrap metal.” A junk dealer picked up the entire $12 million, 500,000-pound load — for only $24,600. It took 28 truckloads to cart the stuff away.
In many cases, the city paid wildly inflated prices. One company sold the city 50,000 face shields at $6.70 per shield when the average open market price was $3.67. So taxpayers paid $335,000 for items that on average should have cost $183,500. This month, the city put up for auction a lot containing 701,100 face shields, with an opening bid of $1,000. That’s less than one penny per shield.
Huge discounts were also available for isolation gowns. NYC has been trying to sell off millions of these — still packed in their original boxes — for a tiny fraction of what taxpayers paid for them. Last month it offered a lot of 97,850 of their gowns for $1,000. It got zero bids and put the same lot up again last week, dropping the opening price to $280.
As of last week, taxpayers had shelled out $17.8 million for warehousing 13,500 pallets of these stacked medical goods. A city official recommended more aggressive marketing of auctions, lowering starting bids, breaking lots into smaller purchases, and giving some of the stuff away “in parks, subway stations.” And one other option: “destroying whatever can’t be auctioned.”
Classroom discussion questions:
- Evaluate this inventory situation.
- How would you resolve the problem?
