They give it to their 5 preferred distributors. Those distributors resell it to the highest bidder.

Sources:

Here’s a clip of the head of FEMA saying as much:

https://twitter.com/joshtpm/status/1245878992336556033

Here’s FEMA’s web page explaining the scheme:

https://www.fema.gov/news-release/2020/04/08/fema-covid-19-supply-chain-task-force-supply-chain-stabilization

Here is a memo by the justice department saying the distributors are immune from price fixing lawsuits:

https://www.justice.gov/atr/page/file/1266511/download

It also lists the distributors:

>McKesson Corporation, Owens & Minor, Inc., Cardinal Health, Inc., Medline Industries, Ind., and Henry Schein, Inc.

Here’s another one from the justice department saying that they are in fact seizing medical supplies:

>We will also work closely with the Administrator of FEMA in exercising his authority under the Stafford Act to seize necessary healthcare and medical items, where appropriate, and to redeploy them to the people who need them most.

https://www.justice.gov/file/1262776/download