Governments Have Screwed Up Mask Purchase and Distribution. Maybe Everyone Should Be a Libertarian in a Pandemic. – Reason

Posted: May 9, 2020 at 12:46 pm

The government has not been an efficient or competent dispenser of the masks so vital to protecting health care workers and patients from COVID-19.

As of mid-April, The Wall Street Journal reports, the federal government had for whatever reason dedicated millions in contracts, involving at least 80 percent of the 20 million N95 masks it was trying to procure, from "suppliers that either had never done business with the federal government or had only taken on small prior contracts that didn't include medical supplies." Predictably, some of those vendors"missed delivery deadlines or have backed out because of supply problems. The parent company of one supplier is in bankruptcy and its owners have been accused of fraud in lawsuits by multiple business partners."

One contractor, who usually works in hospital renovation for the government, told the Journal he just figured he'd be able to find the masks somehow through suppliers he typically worked with. After he agreed to a $5.5 million contract, the paper says, he was "stymied by sellers that don't really have high-quality masks or who jack up the price."

At least one would-be contractor has now been nabbed for fraud on such a mask deal.

ProPublicatagged along with what theJournalcalled the "largest N95 mask contract given out by the VA [Veterans Administration], for an initial $35.4 million." The company, Federal Government Experts, "agreed to provide the VA six million masks for $5.90 apiece by April 25, with potential for another five million masks at the same price at a later date, for a total of $64.9 million, according to federal contracting data."

It didn't work out. As Robert Stewartthe boss at Federal Government Expertswondered to the ProPublica reporter himself, "Awarding a $34.5 million contract to a small company without any supply chain experience.Why would you do that?"

Stewart let that reporter tag along on fruitless (and expensive) private jet rides (including picking up what Stewart hoped would be his proud parents) on his way to cities where he didn't know he'd find any masks, and in general to witness him get jerked around by other unreliable potential sources for the masks he promised to deliver.

The fiasco ended with no masks deliveredbut at least, according to the VA, no money paid either. (This contract paid only on delivery.) Despite months of scrambling, the Veterans Administration was not prepared to keep its hospitals equipped with masks. As of now over 2,000 V.A. employees have tested positive.

Stewart's absurd deal is only the tip of the iceberg in questionable procurement practices. ProPublica notes that the administration "has handed out at least $5.1 billion in no-bid contracts to address the pandemic."

The feds aren't the only ones making bad mask decisions. California is currently trying to get a refund on a $456.9 million wire transfer it sent as a down payment on a $600 million contract for 110 million N95 masks. It paid the money to a firm called Blue Flame Medical, which, The Wall Street Journalinforms us, was "founded days earlier by former Republican fundraiser Mike Gula.Blue Flame struck a flurry of deals with states looking for medical supplies in late March and the first weeks of April, most of which have unraveled." Maryland and Alabama are also cancelling orders with the company, having decided that they are unlikely to be fulfilled.

Meanwhile, the Los Angeles Timesreports that Gov. Gavin Newsom of California is refusing "to reveal the contents of a $990-million contract for purchasing protective masks from a Chinese electric car manufacturer." All the state would cough up was that they committed to buying 200 million masks a month for two months, of which 150 million were N95, but "all other details, including the price paid per mask, have been kept confidential." Even the state's legislators are being blocked from learning details of the deal. Such secrecy is not comforting when such enormous amounts of public funds are being spent.

When it does have the masks, the government hasn't been a great or intelligent caretaker or distributor of them. The Transportation Security Agency decided to hoard more than 1.3 million N95 respirator masks (which it received from Customs and Border Protection) rather than distribute them to hospitals or agencies or people who might lack themeven, as ProPublica reported, "as the number of people coming through U.S. airports dropped by 95% and the TSA instructed many employees to stay home to avoid being infected."

Other wasteful, clumsy, or even macabre stories have arisen from government attempts to help with or procure medical equipment. In Seattle, the county Public Health Department sent a Native American community health board body bags instead of requested medical supplies.

Before COVID-19 hit, certain pundits were promoting "state capacity libertarianism"the idea that it is silly to focus on how much government spends or taxes, or the ways it dictates how people live, buy, sell, or behave, or the breadth and width of tasks it takes upon itself: What's important, this argument holds, is how effective and smart government is at doing what it tries to do.

The idea was, at best, an attempt to turn libertarian energies toward making government better at what it does. But these not-at-all-shocking snafus show no obvious way the concept could help, other than hand-waving calls to have better people making better decisions.

Mask procurement is not going awry because government lacks the capacity to do anything. They have plenty of money, essentially as much as they want to have, and they have plenty of staff. It's not because they don't have professional experts and bureaucrats trying to manage things, and it's not because Republicans hate government and want it to fail.

Even in a relatively free market, fraud and incompetence exist. The government in its mask decisions have shown a keen ability to find market actors who are very bad (deliberately or not) at what they do and offer them ungodly amounts of money. But government's unique combination of endless money and impunity for messing things up mean that the state is going to get things more wrong, more often. And that's true even, or perhaps especially, when it's urgent that the state get things right. The evidence is in the news every day, even if ideological blinders prevent non-libertarians from acknowledging it.

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Governments Have Screwed Up Mask Purchase and Distribution. Maybe Everyone Should Be a Libertarian in a Pandemic. - Reason

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