PHOENIX, Ariz. (WTVQ/ARIZONA REPUBLIC) – A Lexington-based company known for its work in the community, especially with law enforcement, fire departments and first responders, is getting the wrong kind of national attention.
Now, the company, Galls has pledged no profit from selling protective masks to first responders (see the statement in this story).
And it likely is caused by the widely publicized national shortage of PPEs that has left state and local governments bidding against the federal government to meet demand and keep people on the front line of the coronavirus fight outfitted with the gear they need.
Two Arizona congressmen have reported Galls to the U.S. Attorney and Federal Trade Commission for price-gouging, according to Arizona media outlets.
But in response, Galls says it is trapped by the laws of supply and demand and a manufacturer that has increased prices and is demanding upfront payments.
According to the Arizona Republic newspaper, police and fire departments in two dozen Phoenix-area cities have been waiting for days on N95 face masks and other protective gear during the coronavirus pandemic after vendors marked up their prices nearly 500 percent in a matter of weeks.
In a letter to Attorney General William Barr and the Federal Trade Commission, Reps. Greg Stanton and Ruben Gallego called for an investigation into Galls, a company that supplies public safety agencies, for what they described as “price gouging, plain and simple” and “shameful, un-American conduct” by a vendor seeking up-front, 50 percent payment for the desperately needed items.
The two also forwarded their concerns to law enforcement, their offices told the newspaper.
But Galls Vice President Bryan Clarke said the company is fighting the worldwide shortage.
“We could not generally find any and just like anybody else, we couldn’t even find N95 masks to buy to sell to our customers,” Clarke said. “We were able to find production of KN95 masks, which are being made as we speak. So it wasn’t like we had a stockpile these in the warehouse. We didn’t have anything,” Clarke told the newspaper.
“Through our contacts in China we were able to source those masks at a very high cost, way higher than they would normally be,” he said, adding the Chinese manufacturer wanted cash up front.
“We’re talking about millions and millions and millions of dollars of demand for this item right now and our ability to kind of float, if you will, tens of millions of dollars isn’t practical for us right now,” Clarke is quoting as telling the newspaper. “So we have to pass along those same requirements that we’re getting.”
No state or federal agency has taken any action or made any statement.
In interviews in Arizona, the congressmen had harsh things – terms like “immoral” and “disgusting” — to say about Galls, which provides equipment to law enforcement, military, security and fire agencies across the country.
Nationally, N95 masks are in short supply as the pandemic continues to spread. According to the Republic’s report citing numbers from Arizona officials, the masks had sold for $1 each as recently as two weeks ago. Days after that, city officials bought supplies for $2.50 per mask, but stopped when the prices reached $2.95 per mask.
The latest order for Phoenix, and the Valley cities it is working with, seeks $5.95 each.
The city’s order calls for about one million masks and several million gloves and gowns, among other supplies.
The city typically pays for such purchases after receiving the items. It is now competing for scarce supplies with other government agencies and private organizations such as hospitals, which have purchasing rules that may be more flexible or can change more quickly, the newspaper said.