Manitoba paid Minnesota company $13M US for masks that failed fit requirements, lawsuit claims
Minnesota company sues Manitoba government for $6M US it says it's still owed
Manitoba ordered five million N95 masks for use in hospitals, only to realize they didn't meet the province's fit requirements and can't be used, according to a lawsuit filed against the province.
Minnesota company Private Trading Group, LLC (PTG) filed a lawsuit against the province and Deputy Minister of Crown Services Scott Sinclair, saying it's owed the Canadian equivalent of $6 million US for a shipment of personal protective equipment delivered to Manitoba in May.
In a statement of claim filed in Manitoba's Court of Queen's Bench, PTG says it entered into a purchase order with Manitoba on April 7 to deliver, among other things, five million N95 masks.
The lawsuit says each mask was priced at $3.80 US for a total of $19 million US, and $6 million of that was withheld — which PTG says it was to receive on delivery but never did.
"Thereafter, Manitoba advised PTG that the N95 masks delivered were allegedly not fit for the purpose intended .... because the N95 masks did not pass Manitoba's fit testing requirements," the lawsuit claims.
PTG says there was never any discussion about fit testing between the parties, nor did Manitoba request any samples of the N95 masks before issuing the purchase order.
According to the lawsuit, Scott Sinclair wouldn't approve the payment of the remaining $6 million to PTG because the masks were "allegedly not approved by NIOSH [National Institute for Occupational Safety and Health]" and couldn't be used in Manitoba hospitals.
Neither of those requirements was a term of the purchase order or contract, the lawsuit says.
"Accordingly, the defendant Scott Sinclair is personally liable for misfeasance in public office," the lawsuit alleges.
PTG is asking for $6 million US, plus 18 per cent interest and damages.
"The defendants have acted in bad faith and have deliberately engaged in unlawful acts and morally reprehensible conduct that have inflicted significant financial damages on PTG," says the statement of claim.
"This is just pure sloppiness on the part of this government," said Manitoba Liberal Leader Dougald Lamont after question period. "It's absolute incompetence."
Lamont said this isn't the first time the province spent millions on something it couldn't use.
"They bought over $1.2 million worth of hand sanitizer that was made from fuel grade ethanol. Neither one of these things was actually acceptable for sale in Canada. So how do you have that happen?" Lamont asked.
This is just pure sloppiness on the part of this government. It's absolute incompetence.- Manitoba Liberal Leader Dougald Lamont
"They're not doing the basic due diligence to make sure that the product they're buying is useful," he said.
He said it's especially egregious at a time when families and businesses are struggling to stay afloat during this pandemic.
"So you have people going broke and there are $13 million [worth] of masks that we can't use. And who knows where that hand sanitizer is. It's unbelievable incompetence," Lamont said.
Manitoba paid PTG $47 million for PPE
Manitoba signed an untendered contract with PTG for $46,871,800 on April 7, according to the province's proactive disclosure of contracts posted on its website. That money went to the supply of PPE, but doesn't state specifically what was ordered.
The province won't say if the five million masks supplied by PTG were used, or why a copy of Manitoba's fit testing requirements wasn't sent to the company before the order was placed.
"The respirator masks supplied by PTG did not meet fit-testing standards, and therefore were not fit for their intended purpose of medical use related to COVID-19," a provincial spokesperson said in an email to CBC News.
"Manitoba will therefore be defending against the claim filed by PTG seeking further payment, and will be filing its own claim to recover amounts already paid to PTG. Because the matter is now before the courts, Manitoba will not be making any further comment on these issues," said the spokesperson.
With files from Kristin Annable and Ian Froese