By Paul Emanuelli and Bethany Pentesco

When enacting emergency powers, governments need to ensure that they adhere to due diligence in the procurement process. Procedures should be put in place to safeguard proper vetting of contractors before contract award to mitigate against cost overruns and performance delays. The following reports from the global newsreel illustrate the impact of hasty pandemic procurement decisions.

On April 24, 2020, Fox 13 Now reported in “Governor orders review of Utah’s hydroxychloroquine stockpile” that the $800,000 purchase of the anti-malaria drug was made without the governor’s knowledge. Utah’s Department of Health relied on emergency procurement procedures for the contract and are defending the purchase, claiming that it could be necessary to help people recover from COVID-19. It was revealed that $8 million was set aside to purchase a stockpile of experimental medications, which may or may not work. While the governor halted any future orders of the drug, it remains to be seen whether the state will take possession of the already ordered supplies or seek a refund.

Also, on May 14, 2020, in “Wilk, Lackey want audit of masks contract”, the Antelope Valley Press reported that state lawmakers requested an audit for contracts made through the emergency response to COVID-19. One of the contracts in question is a $1 billion award to BYD, a Chinese company  that is headquartered in Los Angeles and is known for the production of electric buses. The contract was kept hidden until a month after the award. The second contract in question is with Blue Flame LLC, a medical supplies contractor, for half a billion dollars. The company was only three days old at the time of the contract award, which was quickly rescinded. The state is calling for an audit to shed light on why these decisions were made under cover of pandemic purchasing.

On May 26, 2020, in a story entitled “Congressman Demands USDA End Controversial $39M Contract with San Antonio Event Planner”, the San Antonio Current reported that US Representative Lloyd Doggett called on the White House to cancel a $39 million food distribution contract awarded to an events company. The company, CRE8AD8 LLC, which reportedly made dubious claims about its past work and list of clients and certifications, is required to deliver 750,000 packages of food to families in need by June 30, 2020, but had yet to deliver a single box.

In Guam, on May 23, 2020, The Guam Daily Post reported in “Public auditor seeks records” that the Public Auditor, Benjamin Cruz, was “seeking records from the governor and other officials on the procurement of hotels used for COVID-19 quarantine”. The audit will look into the use of public funds during the state of emergency and investigate why the government selected and paid for hotels for quarantine without the signing of a formal contract.

On May 26, 2020, in “Ukraine’s anti-graft bureau probes state tender for medical suits”, the Chronicle Herald reported that a tender for 71,000 protective hospital gowns was under investigation after the sole-sourced supplier delivered the suits late and at an inflated price. The tender was initially set for award to a supplier that met the criteria and had 23,500 suits ready to deliver; however, the government cancelled that award, stating that the suits were not acceptable, and directed the contract to a company that planned to import the suits from China. The government denies any wrongdoing in the situation.

Similarly, on May 25, 2020 in Poland, Trend News Agency reported in “Polish health minister denies wrongdoing in procurement spat” that the Polish Health Minister Lukasz Szumowski was accused of buying masks with a fake certificate from a friend. The Minister blamed these allegations on the upcoming election, explaining that he was targeted because he is leading in the polls.

As these articles illustrate, even when emergency powers are enabled, governments need to apply due diligence to the process to avoid delays, unforeseen costs, and procedural controversies. When non-compliant procedures are followed, governments remain subject to media scrutiny and potential audit review. It is therefore in the best interest of all taxpayers that the proper procedures be followed from the outset even during an emergency.