Oklahoma spends millions on coronavirus purchases, but won’t say who it’s done business with

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Boxes of personal protection equipment (PPE) and medical supplies in Oklahoma City, Okla. on Tuesday, April 7, 2020 in a warehouse where the State of Oklahoma has amassed a stockpile for its COVID-19 response. [Chris Landsberger/The Oklahoman]

Update: The Oklahoma State Department of Health released the information Wednesday evening.

As Oklahoma scrambled to secure face masks and other life-saving equipment to respond to the coronavirus pandemic, the state issued orders totaling around $80 million to businesses it has refused to disclose to the public.

Though government contracts are public under Oklahoma law, the information is made private by an executive order from Gov. Kevin Stitt, the health department said.

A review of purchasing records, which were obtained by The Frontier through an open records request to the Oklahoma Office of Management and Enterprise Services, the state’s purchasing agency, shows the state made dozens of attempts to source respirators, gloves and other equipment from businesses between late March and April.

However, the state redacted all business and supplier information, including names, from the records.

Shelley Zumwalt, a spokeswoman for the health department, said the state has “worked hard to find vendors” and because of global equipment shortages and supply-chain issues, disclosing the sources would cut Oklahoma out of the running to secure the equipment.

“Due to the competitive global market in acquiring PPE the state doesn’t want those vendors disclosed to other competitors/states that are in competition with OK (Oklahoma) for the same goods,” Zumalt said in an email.

The governor’s executive order, which put in place policies for COVID-19 response, in part says “State agencies shall continue to follow guidance for interaction with the public provided by the Oklahoma Department of Health.”

“The Health Department identified a risk if PPE vendors were disclosed to the public,” Zumwalt said.

A spokeswoman for the governor said the vendor names would be released to the public once the personal protective equipment supply chain was “more stable.”

“The Governor’s first priority is protecting the health and lives of Oklahomans and the State will do whatever necessary during times of emergency to acquire PPE in unprecedented global market conditions,” said spokeswoman Baylee Lakey in an emailed statement.

It’s unclear how much has been paid out for orders so fair.

As of April 1, the state had spent more than $2.26 million on personal protective equipment, according to an OMES spokesman. More than $16 million in orders had been issued, he said. An updated figure was not immediately available on Wednesday.

Oklahoma isn’t the only state that has shielded the details of multi-million dollar deals.

States have raced to secure personal protective equipment and other material, which have been in short supply, in response to the pandemic, and many have found themselves competing with other states and the federal government.

There have been reports of questionable transactions and fraud across the country.

Stitt’s executive order suspended many of the requirements of the normal purchasing process, such as obtaining competitive bids or buying through preferred states vendors, so agencies could quickly respond to urgent needs for personal protective gear and other equipment.

Oklahoma Attorney General Mike Hunter on April 28 requested an investigative audit into the health department’s spending of state-appropriated funds after media reports disclosed steps the health department had taken to procure N95 masks and other protective equipment during the pandemic. Critics called the agency’s methods risky.

Oklahoma Attorney General Mike Hunter. KASSIE McCLUNG/The Frontier

The Oklahoman reported last month health officials had been moving forward with a $9.5 million purchase of N95 masks from a company even though they were told the FBI was investigating it.

The state received criticism in late April after the Associated Press reported it spent $2 million to buy a supply of hydroxychloroquine, a malaria drug touted by Trump to treat patients with COVID-19.

Stitt said his administration has strong reporting requirements in place.

“In light of Congress providing Oklahoma with $1.2 billion in funds to respond to COVID-19, my administration arranged a few weeks ago a strategic financial team of public employees to closely monitor COVID-related transactions and to be prepared to account for every penny to Congress and the federal government,” Stitt said in a new release in April.

“It is disappointing that the Attorney General would see the need to entangle the agency with an investigation when it is in the midst of responding to the most historic pandemic of our time. I fully expect quick and thorough compliance as we have already put strong reporting requirements in place.”

Health Commissioner Gary Cox in the release said the health department had been dedicated to “full transparency with COVID information.”

The purchasing records show state officials approved around $80 million to purchase equipment, but many of those orders were canceled.

An order of more than $14.1 million for millions of respirators, gowns and other equipment was placed on April 28 but was canceled, records show. The contract stated if the equipment wasn’t delivered within two days, the order would be called off.

On April 27, the state issued an order for a $4.4 million purchase of 800,000 N95 respirators with deliveries starting May 8. The state agreed to pay $5.50 per mask. Meanwhile, U.S. manufacturer 3M’s prices range between 63 cents per N95 mask and up to $1.50 for some models. A member of the governor’s cabinet referred the vendor, emails show. The name of the vendor and the name of the cabinet member were redacted in the emails.

An email sent by State secretary of health Jerome Loughridge to PPE supply chain leader Gino DeMarco on April 27, 2020.

An order of $1.27 million for KN95 masks was approved in late March and the supplier was an Oklahoma City resident “known to a cabinet-level” official, emails show. 

Gino DeMarco, who Stitt has called his “PPE czar” has been making purchasing decisions for the health department. State secretary of health Jerome Loughridge on March 26 issued a memo to Cox and other health department employees designating DeMarco as head of PPE procurement for the following 30 days, records show.

DeMarco had a limit of $3 million per order, but emails obtained by The Frontier show he received permission from Loughridge for several larger multi-million dollar purchases.

Personal protection equipment (PPE) czar Gino DeMarco, left, speaks as Gov. Kevin Stitt listens during a press conference in Oklahoma City, Okla. on Tuesday, April 7, 2020 where the State of Oklahoma has amassed it stockpile of personal protection equipment and medical supplies for the State’s COVID-19 response. [Chris Landsberger/The Oklahoman]
On April 27 Loughridge renewed the designation.

“For the avoidance of doubt, this renewal, and the original authorizations before it, is specifically aimed at providing expedited purchasing capacity for particular pieces of protective gear – including, but not limited to, the scarce N-95 respirator mask – that appear on the market rapidly and cannot wait for standard purchasing processes,” he wrote in an email.

State officials have acknowledged securing personal protective equipment during the pandemic has been challenging.

“Right now the entire world is competing for the same thing. It’s not just another country, it’s hospitals, it’s everybody,” DeMarco said in an interview with The Frontier in mid-April.

“It’s been extremely competitive. I think we’ve done very well from a purchasing standpoint.”

DeMarco, a deputy tourism director, said it was challenging to get equipment in from China, where much of the orders were coming from. The supplies were often delayed or didn’t come at all, he said.

The state had more than 600,000 N95 masks on hand as of Tuesday, according to the state health department.

On Tuesday, Stitt announced the formation of an advisory group of state legislators to help distribute the roughly $1.2 billion in CARES funds provided by the federal government. Stitt’s administration is establishing a tracking and reporting system for the funds.

Stitt this week signed a bill that will require OMES to publish daily reports on all expenditures made from the CARES fund.

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Kassie McClung

Staff writer

Kassie McClung joined The Frontier in May 2016. She reports on health, criminal justice and other state issues. Kassie holds a bachelors degree in multimedia journalism from Oklahoma State University. She likes dogs, maps and data. She can be reached at Kassie@readfrontier.com or 918-935-1044. Follow her on Twitter @KassieMcClung.
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