Mayor Eric Adams on Tuesday said he’ll order a reexamination of the rules governing auctions of government surplus goods, after an investigation by THE CITY revealed that medical supplies the city bought during the pandemic’s peak are getting sold off for one-fifth of a penny for every dollar spent.
“I think that that needs to be re-examined, and I’m going to communicate with the team and figure out what options do we have, because taxpayers’ dollars should be spent better,” Adams said during a City Hall press conference on an unrelated topic.
During a global race to acquire protective equipment and ventilators as the pandemic raged in April 2020, City Hall aimed to create a 90-day stockpile required by the state to ensure front-line medical workers had adequate supplies.
But as the crisis eased, much of that gear sat unused in a New Jersey warehouse.
Last summer, the Department of Citywide Administrative Services (DCAS) began quietly selling off those supplies, attempting to unload surgical masks, isolation gowns, face shields and hand sanitizer originally acquired via more than $224 million in emergency contracts.
DCAS managed to sell 9.5 million items, but only for $500,000 — about 5 cents per item.
That included nearly 3,000 devices called “bridge vents” that served as backup for the ventilators much in demand at the start of the pandemic. The city paid $12 million for them, and in January auctioned off nearly all of them — still in their original boxes — as “non-functioning medical devices sold as scrap metal.” A Long Island junk dealer paid $24,600 for the lot.
Asked about this at City Hall on Tuesday, the mayor cited a provision in the city charter that requires DCAS to sell off goods that are deemed by the agency to be no longer needed. That applied to the 90-day stockpile — a requirement the mayor said may need to be changed.
“This is a case where the rule does not fit the circumstance,” Adams said. “The charter calls for a 90-day stockpile. After that 90-day, we have to make the determination, of my understanding, either to auction it off, give it away, or discard it. That’s just a bad rule. And so, as you stated, hundreds of millions of dollars will auction off for $500,000? We need to reexamine that rule.”
The mayor defended the purchases as a crisis necessity — while also contending that the rule as it exists is too rigid and needs modification.
“COVID created an environment that none of us expected, and so we had to purchase far more than what we would have traditionally purchased,” he stated. “So, somewhere in the charter rule, we need to state that under certain circumstances, we are not forced with, ‘Hey, it’s 90 days, let’s get rid of this stuff, no matter what the cost is that’s associated with it.’”
DCAS officials say they managed to donate some of the supplies to other countries, including Ukraine and Haiti, and gave away more to several local nonprofit groups. But the agency has struggled to unload the rest at auction. THE CITY found numerous examples where items attracted zero bidders and were then put up for re-auction at even steeper discounts.
Agency officials have declined to release specific details about the original value of the items that were sold off and the amount each item generated at auction.
In an internal email reviewed by THE CITY, a top DCAS official back in July made clear that the big sell-off of these supplies was a potentially sensitive topic. The official noted that the agency, in coordination with Adams’ office, had “crafted talking points to address why the city is auctioning off PPE while Covid cases continue to persist.”
THE CITY asked Christopher Miller, a spokesperson for the city Health + Hospitals Corporation, the agency that runs the city’s 11 public hospitals, whether the hospitals currently have an adequate supply of PPE on hand in the event of another emergency like the arrival of COVID-19.
Miller replied: “NYC Health + Hospitals’ supply chain team were among the heroes through the pandemic. They ensured that we never ran out of PPE or ventilators. Their skill continues to keep our health system prepared and ready to keep our employees safe and ensure New Yorkers receive the highest quality of care.”
The 90-day stockpile requirement, put in place by the state Health Department in July 2020 as COVID hospitalizations and deaths skyrocketed, was modified in January. Hospitals are now required to maintain a 60-day stockpile.
This story has been updated to add a statement from the New York City Health and Hospitals Corporation.