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How did an Oregon gift shop supplier get a $1 million federal contract for COVID-19 masks?

Despite no prior experience acquiring medical products or working with the government, an Oregon company landed a deal with the U.S. Bureau of Prisons.

PORTLAND, Ore. — In the early stages of the coronavirus pandemic, the U.S. government scrambled to find enough protective gear. A shortage of masks, gowns and gloves prompted federal agencies to turn to some unlikely suppliers.

“We make a lot of snow globes for our customers. We have about 75 snow globes,” Maggie Sperber, co-owner of The Clark Collection, said during a tour of the company’s Central Oregon warehouse.

Prineville-based Clark Collection supplies gift shops with custom items like Texas-shaped cookware, a mini-replica of the Willis Tower in Chicago and themed merchandise from The Hunger Games.

“If customers are looking for any product made in China, they come to us,” said Sperber, while holding a gemstone paperweight created for the Smithsonian Museum gift shop.

Credit: Kurt Austin

Despite having never worked with the government and no prior experience acquiring medical products, federal procurement records show in April, Clark Collection applied for and received a $1 million contract with the U.S. Bureau of Prisons to provide KN95 masks.

“We don’t do this on a grand scale. We have never been the grand scale importer of a half a million pieces of anything,” explained Lewis Sperber, who helped start Clark Collection in 2011 along with its sister company, The Original Source, in 2007.

The case illustrates a new medical supply chain, where the government raced to find and deliver vital protective equipment during the COVID-19 public health crisis through non-traditional sources.

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“We have been importing and manufacturing in Asia for over 20 years and it’s that footprint that allowed us to do this,” said Geoff Carroll, co-owner of the Clark Collection.

Unlike other companies, Carroll explained Clark Collection was uniquely positioned to acquire KN95 protective masks. The company had an existing supply chain, quality control measures and permanent staff in China.

“We weren’t selling a dream,” said Carroll.

Additionally, the small Oregon company had business relationships with suppliers and factories in China to help ensure quality products.

“I speak the language. I know how they think, which is very important,” said Maggie Sperber, a native of Beijing, listed on corporate filings as Yuping Liu.

The company quickly shifted from delivering boxes of custom giftware to KN95 masks.

Credit: Kyle Iboshi

 

Analysis of procurement data showed, nearly one out of every five COVID-19-related federal contracts for $1 million or more went to companies with no prior experience working with the government.

Not every deal has worked out.

Several first-time contractors, without competitive bidding or thorough vetting of their backgrounds left the government empty-handed or delivered subpar protective equipment, according to reporting by ProPublica.

“Your best indicator of whether or not you’re getting quality product is if that person or that vendor has delivered you that product in the past,” said Trevor Brown, professor of public management at Ohio State University. 

That’s not to say a new contractor can’t provide a quality product at a good price, Brown noted. There’s just some risk, because the government doesn’t have any past performance on which to make that decision.

“When there’s a pandemic ripping through the country, some of the normal rules of business aren’t going to apply,” sad Brown. “People are having to constitute supply chains that didn’t exist before.”

A co-owner of Clark Collection theorized opportunists, looking to cash in on the protective equipment shortage probably underestimated the logistics involved.

“This takes years and years of experience to actually get product out of Asia on time, inspected on a reliable basis,” said Carroll.

The Oregon company said it has fulfilled the federal contract by delivering the complete order of KN95 masks to the U.S. Bureau of Prisons in June.

Clark Collection will continue to offer personal protective equipment to customers but hopes to get back to selling custom items to gift shops.

“No question about it," said Carroll. “We are looking forward to getting back to our roots of selling giftware. It is much more enjoyable to talk about than a pandemic.”

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