In search of protective gear, state officials turned to unlikely sources ::

– At the start of the pandemic, MJ Shaar and her husband watched nurses cry on the news from their home in Wake Forest.

Medical care for COVID-19 patients has been hampered by a shortage of personal protective equipment – masks, gloves, gowns and other equipment designed to prevent the spread of the virus.

“How come one of the richest countries in the world cannot provide PPE in the event of a pandemic?” MJ Shaar said in an interview on Tuesday. They wanted to contribute.

In the weeks that followed, Shaar and her husband Robert, a real estate developer with statewide plans, started a business that used his contacts to hunt down PPE – solving what they call a mismatch. between buyers and suppliers.

On the same day in early April that Robert Shaar incorporated Optimal Sante into the state, the company made its first sale to North Carolina emergency officials, who, like other states, were scrambling to secure PPE after the collapse of the national stock.

“We kind of took the plunge, took a little risk and made some good contacts,” said Robert Shaar.

State data shows Optimal Sante sold $ 4.8 million of PPE to the Division of Emergency Management through June 3, making the new company North Carolina’s second-largest supplier during this period. But the company is just one of more than 100 companies the state has paid for equipment related to COVID-19, according to WRAL News analysis of purchase data obtained through a public registration request.

Among the best sellers are companies known for industrial supplies. Others are manufacturers who have shifted gears to produce PPE using their existing production lines. And some, like Optimal Health, are new: brokers or companies that quickly established niche PPE businesses or websites within days of their first sales to the state.

State emergency management officials say the $ 119 million they have spent to date on PPE has gone through a carefully vetted process. No salesperson gets paid up front, and checks aren’t cut until health experts certify the quality of the equipment.

Robert Shaar, for example, said he submitted dozens of product samples to the state to prove he could deliver.

But the data also highlights serious gaps in the healthcare supply chain, one that – in North Carolina and around the world – relied heavily on newcomers to fill the gaps.

“At the state level, at the county level, people started to reach out wherever they could,” said Rob Handfield, professor of supply chain management at State University of North Carolina. “What you’re starting to see here in this data is that there are just a lot of suppliers in a lot of these larger categories buying from everywhere.”

The players

Much of the supply chain failure, Handfield said, is rooted in the economy. The vast majority of PPE is made in China, in high volume and low cost.

“The issue of burnout, or the issue of resilience in healthcare, has never occurred to anyone,” he said. “So when COVID happened, there was this sudden recognition, ‘Oh my God, we don’t have access to the masks.’”

Procurement data provided by the state through June 3 details approximately $ 59 million in PPE sales by state emergency management officials, purchases made largely at the behest of hospitals , first responders and other essential workers. But until the end of the month, state officials said sales exceeded $ 119 million.

“You have a bunch of different types of players in there,” said Handfield, who reviewed on-demand buy data from WRAL News. “But they’re all trying to exploit a situation where there is a shortage and try to fill it very quickly.”

Among the state’s top 10 suppliers are companies like Fastenal, a US-based industrial supplier that has a long history of selling personal protective equipment to buyers around the world. In early June, the company sold masks, gowns and other equipment to the state for $ 3.8 million.

But it’s way behind the state’s main supplier, a New York-registered company called Coolest USA, which sold North Carolina officials $ 13.1 million worth of surgical masks and isolation gowns. . Of the society mask sales site premiered on March 13, about two weeks before its first sale to the state.

The company did not respond to a request for comment.

Fastenal began to prepare for the surge in demand in early 2020, spokeswoman Brooke Mlsna said. But with increasingly limited supplies from their Chinese manufacturers as the disease began to spread, the company had to change focus and prioritize some customers over others.

“We had to say no to some of our big customers because there were hospitals and food manufacturers that we needed to direct our efforts to,” Mlsna said.

In Minnesota, Summit Medical chief executive Kevin McIntosh has seen the impacts of COVID-19 on medical devices his company normally supplies for elective surgeries. As hospitals across the country scaled back those procedures to make room for sick patients, he faced the prospect of layoffs.

Instead, it used an open source design to load its production lines with a new product: plastic face shields.

“It took a few days and we were pretty much ready to go,” McIntosh said.

The company sold about $ 3.7 million of these face shields to North Carolina alone. Instead of layoffs, the effort actually required McIntosh to add staff.

Other manufacturers based in North Carolina – King International Corp. and Dubose Industries in Clinton – have also supplied the state with face shields and masks after tweaking their own production lines.

“It’s a sign of how thousands of businesses have risen to the challenge and have said, ‘We can help you,’” McIntosh said.

Other providers are less conventional.

Gann Memorials, based in Myrtle Beach, SC, normally produces custom plush toys. Their creations include a 15ft tall plush bunny with floppy ears who shared the screen with Robert Downey Jr. in “Iron Man 3”.

But after seeing sales plummet in early 2020, owner Chris Gann used his existing suppliers in China to source bulk orders of masks. With around $ 900,000 in sales in North Carolina through early June, he said the state was his biggest buyer.

He recognized a learning curve for some of the masks, which must meet regulatory specifications. But he was able to use his experience of working with Chinese manufacturers to cut costs.

“If someone isn’t familiar with importing, I can absolutely see it will benefit,” Gann said.

It is also a concern for Robert Shaar.

“This is what I do 10 hours a day: on the phone, determining who is honest and who is dishonest,” Shaar said. “Madness is rampant in this industry.”

Hospitals and PPE

“Thorough control”

Although state officials had to be creative in finding the equipment they needed, North Carolina Emergency Management Director Mike Sprayberry said they had taken steps to eliminate fraudulent suppliers and equipment.

“You can’t just go out and buy with everyone,” Sprayberry said in an interview this week.

By law, the state cannot pay in advance. After the equipment is actually delivered, he said, a team of industrial hygienists from the state Department of Health and Human Services inspect the shipment to make sure they are getting their money’s worth. .

“It’s a careful monitoring process,” Sprayberry said. “I’m not a buying and subcontracting guy. All I know is that at the very beginning, when we were putting together this whole operation, I wanted to make sure that all of the world was legitimate. I wanted to make sure that was a price. “

So far, he said, the process has been “pretty darn good.”

It also resulted in many rejections. Emergency management spokesman Keith Acree said the state has so far canceled orders worth $ 218 million that companies have been unable or unsuccessful to deliver. to pass the inspection.

Although shortages have started to stabilize somewhat, Handfield warns that nationwide, a record number of new cases, reopening economies and mask requirements will put additional pressure on the chain. supply of PPE.

This will mean more gaps for businesses in North Carolina and nationwide.

Robert Shaar, who said he pooled his savings in Optimal Health to secure products, acknowledges the startup worked well despite the risk. But he said doing something about the shortage – not making a profit – was his motivation. That’s why he said he routinely refuses orders that “do not pass the odor test” and donates a portion of each shipment to first responders, hospitals and other organizations. .

“Has it turned into an opportunity? No doubt about it,” said Robert Shaar. “But that’s not how it started.”

For her part, Fastenal’s Brooke Mlsna said she was encouraged to see more players in the market. Even though the rush for products in March calmed down somewhat, she said the company was still not operating at 100% capacity.

And with the virus still on the rise, she said even a business as large as hers could use the aid.

“Competition means less right now,” Mlsna said. “I think there is a bigger battle to be fought”,

WRAL Statehouse reporter Travis Fain contributed reporting.

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