NYC took hefty loss on surplus COVID-19 gear

Website: City got only $500,000 at auction for $224 million worth of unused medical supplies

A 90-day stockpile of medical supplies for which New York City spent millions of dollars during the pandemic's peak has been sold off for one-fifth of a penny for every dollar spent, according to a media report.

At the peak of the COVID-19 pandemic in 2020, New York City spent $224 million on contracts to purchase around 9.5 million pieces of COVID-19 medical equipment and safety gear. Recently, those items were auctioned off for only $500,000 — about 5 cents per item, according to The City, a nonprofit news website (thecity.nyc).

Mayor Eric Adams on Tuesday said he will order a reexamination of the rules governing auctions of government surplus goods, following the website's investigation.

Adams also cited a provision in the city charter that requires the Department of Citywide Administrative Services (DCAS) to sell off goods that are deemed by the agency to no longer be needed.

"I think that that needs to be reexamined, and I'm going to communicate with the team and figure out what options do we have, because taxpayers' dollars should be spent better," he said.

The City said its investigation has revealed that since last summer, DCAS has been attempting to sell millions of dollars' worth of COVID-19-related medical supplies and personal protective equipment (PPE), such as face shields, gowns, hand sanitizer, KN95 masks and N95 masks.

DCAS spokesperson Nick Benson told The City that the spending rush during the early days of the pandemic was to create a 90-day supply of medical supplies.

Some surplus items already were donated to Ukraine, Indonesia, Ghana, Haiti, South Africa or nonprofit organizations, he told The City. Auctioning off surplus, he said, "is required by the city charter".

The auction by New York City officials included nearly 3,000 mechanical ventilators that cost taxpayers $12 million, according to the investigative report. The ventilators were auctioned off on Jan 24 for just $24,600 as "non-functioning medical equipment for scrap metal", the website reported.

In April 2020, then-Mayor Bill de Blasio commissioned the breathing devices and called them "a story about doing the impossible".

"Our city is taking our future into our own hands. That's how we'll beat this crisis and prepare for the next," he said at the time.

A junk dealer from Long Island purchased the entire $12 million, 500,000-pound lot for just about $8 per device, The City reported.

Despite being new and in original packaging, many of the items have remained unsold even after being put up for auction. The City said that only two of 24 auctions held last summer resulted in sales, and bidders paid just $194,000 for goods that were originally purchased for $980,000, according to internal DCAS emails, The City reported.

New York City Comptroller Brad Lander in February issued a report noting that the city also paid an inflated price for certain items, such as face shields. For example, DCAS, which is handling the sales, purchased some face shields for $12.87 each, 250 percent more than the average price of $3.67.

Last week, there were 701,000 face shields reportedly put up for auctions with an opening bid of $1,000, less than 1 cent per shield.

DCAS also paid a contracted company $7.50 and $4.80 per cloth mask — 239 percent and 117 percent more than the average price of $2.21 per cloth mask, according to Lander's report.

Some products the city bought also came with expiration dates, including 2,800 cases of hand-sanitizing wipes that were set to expire on Jan 31. The administration attempted to sell these wipes for $56,000 on Jan 12, 19 days before the expiration date, The City reported.