Manitoba cancels $5-million order for medical gowns in move local supplier calls 'ineffective and uninformed'

The Manitoba government is being accused of being ineffective in its attempts to secure protective personal equipment in the fight against COVID-19 after a Winnipeg supplier watched a $5-million PPE deal go sour because officials balked at the terms. 

The CBC has learned the provincial government cancelled the $5-million order for gowns and goggles at the last minute because it refused to send money directly to China.

"Slow, ineffective and uninformed," said wholesale supplier Craig Henderson, when asked about his experience working with procurement officials. 

"(The government has) been presented with an absolutely honest and straightforward offer by two guys who have worked as hard as they can for almost three weeks now to try to get the PPE."

Henderson is the owner of Big Top Fireworks in West Kildonan and has spent decades importing fireworks for wholesale, with the majority of the product coming from China.

When Health Minister Cameron Friesen issued a public plea on March 25 asking for businesses to help supply them with PPE to combat COVID-19, Henderson saw an opportunity to use the business relationships he built with suppliers in China to bring in these items. 

"And as soon as I heard that I went, 'Well, I'm pretty sure I can do that.' And I went to look into it, contacted my guy over in China and began researching it," he said.

"And by one day after the governments asked, we realized that we could supply masks and gowns and hand sanitizer and every other piece of PPE that they were requesting in very large quantities."

Government initially interested in N95s, secures deal for gowns

Using an agent on the ground in Hebei, an industrial hub in China, Henderson says he was able to find factories that could produce medical-grade gowns, N95 masks and other coveted PPE. Henderson had worked with this agent, Lai Weichang, for decades. 

On March 27, Henderson began emailing government officials, explaining what he could offer. 

Emails between Henderson and officials within the finance department show their initial interest was in obtaining N95 masks — which it then abandoned because of an "export ban" on N95s from China, according to an email from a civil servant to Henderson.

Eventually, a $300,000 deal to purchase 100,000 Class 1 safety goggles was in the works and a $4.7-million purchase order was signed for 500,000 isolation gowns on April 12.

These are medical-grade gowns used by health-care staff to protect them from infection.

"We firmly had been told and were firmly of the opinion that the money was going to be transferred. We could lock down those factories at that price and that delivery schedule," Henderson told CBC last week. 

Government won't send money directly to China

And within days, it all fell apart. 

"I received a one-line email … essentially saying, 'No, we're not gonna do this,'" Henderson said. 

The email told Henderson they were cancelling the purchase order for the gowns, because "government is not going to make payments to a Chinese agent for this type of equipment."

Which baffled Henderson, as the purchase order was issued to a Chinese company, with a Chinese address.

"I feel sorry for the health-care workers with the ineffective purchasing that's now occurring from the Manitoba government," Henderson said. 

As for the order for goggles, the procurement officer told Henderson he would prepare a purchase order on April 13 and then stopped returning his emails. 

Andrea Slobodian, a spokesperson for Manitoba's Central Services department, said the order was cancelled because the terms were changed to involve a direct payment to China. 

"The province has made the conscious decision to work with local suppliers as much as possible and to source materials through and provide direct payment to Canadian and U.S.-based suppliers in order to provide legal and contractual protections," she said in a prepared statement.

She said no one noticed it was a payment to a Chinese company until they went to add in the banking information.

New PPE protocol announced Tuesday

Manitoba's drive to get PPE to front line workers has been front and centre throughout the pandemic. While the Manitoba government announced in March it was first to sign up to work with federal health officials to secure PPE in a co-ordinated national effort, there have been multiple setbacks. 

Millions of supplies were ordered through the feds but the province only "received a fraction of that," Manitoba Shared Health Chief Nursing Officer Lanette Siragusa said on April 8.

This prompted the province to temporarily scale back a universal personal protective equipment protocol introduced at the beginning of April. 

On Tuesday, Siragusa announced a new protocol, abandoning the universal protocol in favour of a new guideline that ranks the level of PPE based on those with the highest risk and need. 

"Supply levels and demand continues to be a challenge and changes day by day," she said. "We are taking every possible step to ensure appropriate protection remains available for staff in risk situations and settings for the duration of this pandemic."

The province announced this week, following the CBC's questions, that it had made a deal to purchase up to 200,000 isolation gowns from MWG Apparel Corp. — a Winnipeg-based company which specializes in industrial workwear.

In total, they have issued purchase orders for more than $100 million in COVID-related PPE, supplies and equipment since March 29, 2020, from suppliers in Manitoba, across Canada and internationally.

A 'gamble' to order from unknown sources: supply chain expert

Fraser Johnson, a supply chain expert and professor at the Ivey Business School at Western University, says this pandemic has been a learning experience for governments, which aren't used to fighting for access to these resources.

"So you get some provinces going from buying anywhere from 20,000 to 50,000 N95 masks to buying over a million," he said. 

"The system isn't built to be able to support that kind of volume."

Johnson called it a "gamble" for governments to use an unknown overseas supplier.

"I've heard horror stories of people and organizations who brought stuff from Southeast Asia, China, shipped in and air-freighted it in and then to find out that it's counterfeit," he said.

"So that is a significant problem."

Henderson said he is not in this for financial gain, but wants to see Manitobans get access to the PPE they need. 

The agent Henderson worked with in China has been his partner for two decades and he said he trusts him to only deal with licensed medical equipment. 

"There are thousands of factories in China. That's what people have to be able to picture. He (his partner) works at those factories as hard as he can, finding qualified factories, making sure they're certified," Henderson said. 

Doctors wait weeks for PPE through Shared Health

Henderson is not alone in his frustration when it comes to the government's PPE procurement approach. 

Doctors across the province are feeling the pinch after a promise by Shared Health in mid-March to secure them the necessary PPE to open their offices to see patients has stalled. 

A survey of 400 doctors last week by Doctors Manitoba found that only 36 per cent received their PPE order through Shared Health Logistics and half of the orders were incomplete.

Almost 60 per cent of those surveyed said they do not have the gowns recommended by provincial authorities and 43 per cent don't have appropriate eye protection.

Danielle Paradis is a doctor in rural Manitoba, who splits her time between East Parkland Medical Group, a private clinic, and the Ste. Rose General Hospital. 

While she hasn't had to worry at the hospital, her clinic has been waiting since mid-March to get the PPE it ordered through Shared Health. 

"Shared Health said, 'Yes if you contact us we will help ensure that PPE gets out to you,'" she said. 

Instead, she was forced to purchase face shields, surgical masks and goggles out of pocket as they waited.

"At this point it has been too slow and it's inadequate," she said of the government's response to getting them the PPE.

"This is a rapidly changing pandemic here … the fact that we are still continuing to await PPE for weeks on end at this point, I think that is putting health-care providers and the community at large at risk."