Here’s big reason why businesses can’t reopen — and what EDA is doing to help

By Tom Bergeron
Trenton | Jun 22, 2020 at 5:38 am
Editor’s Desk

It’s the question all businesses are facing — one we’re facing at ROI-NJ, too.

Like everyone else, we need personal protective equipment to reopen, but where do we get it? And how do we get it at a fair price — since our needs in a small office are limited? And then, there is this: How can we be certain that it will be available whenever we need it?

Economic Development Authority head Tim Sullivan, who is one of the co-chairs of the governor’s Restart and Recovery Advisory Council — an assortment of business groups across nine subcommittees — said the question has come up early and often.

“It’s not just an office, it’s retail,” he said. “If you’re a pizza shop or a beauty shop, you need a lot of masks and a lot of gloves, a lot of hand sanitizer. It has to be reliable. It has to be affordable. And it can’t be your full-time job chasing down PPE.

“You need to be able to order like a regular supply, which is just not what’s happening right now.”

Which leads to the kicker.

“This is going to be at least a couple of months, if not several years,” he said.

It’s why the EDA put out an RFI — request for information — last week. It’s seeking solutions. And it wants them to be built around purchasing power, Sullivan said.

“The idea here is, ‘How do you aggregate a lot of small business demand to get the kind of purchasing power and pricing power that really big businesses have?’” he said. “If you can tell a supplier, ‘We’re good for one order of $10 million worth of masks a month,’ that will get prioritized over a million orders of 10 masks.”

If this sounds like another government program, Sullivan promises it is not. And there are plenty of examples to show why it doesn’t need to be.

“There are plenty of co-op purchasing models like this that exist in the world,” he said. “Think of how school districts might buy pencils and other products that they need without competing against each other. This might be better served for a nonprofit or a for-profit that may want to do it at cost, because they have the technology solution or the bulk-buying contract.”

It’s why Sullivan and the EDA want to hear from Jerseyans with ideas.

“There’s two ways to do this:  You could imagine a model in which it’s fully integrated, where someone who owns a big warehouse buys millions of pieces of PPE and they get distributed through a truck or van platform,” he said.

“There also are models where someone is essentially representing a consortium of small businesses; they can negotiate a contract with a big supplier — or even multiple suppliers — and then that supplier delivers.”

Sullivan is just looking for an answer to the most vexing question. And if someone comes up with one — and makes a little money while doing it — that’s OK, too, he said.

“If someone can figure how to do this and make a profit doing it, that’s fine,” he said.

Sullivan just hopes the money stays in the state.

In fact, he thinks this is an ideal way for someone to work with the state’s existing manufacturers — keeping both the purchasing dollars and the jobs here.

“We have manufacturers who can do this work,” he said. “So, it would be ideal if we can get a co-op with this type of purchasing power agreeing to purchase from our own manufacturers.”

Sullivan said responses to the FRI are due by next Friday.

“We want to move pretty quickly here,” he said. “This isn’t an RFP. We’re not going to award a contract office. We’re going to basically try to identify market players and figure out whether there’s a need for the government to do something. Or is this something that we can kind of help other organize. Or, maybe it’s in motion already and there’s a solution that’s been identified.”

Sullivan repeated that this isn’t about bigger government, just government helping business. That could include some sort of state support or a connection to a philanthropic organization.

“I would be surprised if this ended up being a state enterprise,” he said. “We’re in search of a solution, not necessarily a program.”

It’s a solution many in the business world will need to reopen.

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