Big Apple taxpayers are being fleeced out of millions of dollars thanks to rushed, no-bid contracts being doled out by Mayor Eric Adams’ administration to deal with the migrant crisis, a new audit shows.
The deals, inked under the city’s emergency-contracting system, have allowed various for-profit companies to charge “exorbitant rates” for staffing at some migrant shelter sites — with very little oversight and vetting, according to the report.
“The city allowed for-profit companies to take advantage of an emergency in its nascency,” the report, released by City Comptroller Brad Lander’s office Tuesday, said. 5 Comptroller Brad Lander’s report stated the city allowed for-profit companies to “take advantage” during an emergency. Matthew McDermott
The comptroller’s review of four such deals found that supervisors and security staff at various asylum seeker shelters were being paid “wildly different rates” — despite delivering the exact same services.
In one “particularly egregious instance”, SLSCO was charging hourly rates that were 237% more than Essey for a similar contract role, while DocGo charged 146% more than Essey, the audit found.
A comparison of similar job descriptions showed that under the SLSCO and DocGo contracts, security guards were being paid roughly $90 and $50 per hour, respectively.
The no-bid deals pushed through by the Adams administration were also “radically more expensive” than just hiring new city employees to provide staffing at the shelters, according to the report.
“Annualized, the savings would total approximately $50 million if certain staffing had been provided by hiring city employees rather than through the emergency contract,” it said.
Three of the four contracts were dished out without any competitive bidding under emergency powers the comptroller granted the mayor in November 2022 to deal with the relentless influx of migrants, per the audit.
One of the contracted companies, SLSCO, a Texas-based disaster firm, was found to be shelling out nearly $1,500 per eight-hour shift for a shelter supervisor at the start of its contract, while DocGo — a COVID testing-turned-migrant-shelter firm — was paying site managers $2,000 per day, the report states. 5 The deals have allowed various for-profit companies to charge “exorbitant rates” for staffing at some migrant shelter sites — with very little oversight and vetting. Helayne Seidman
In comparison, Essey — the only contract out of the four analyzed that went through the competitive bidding process — paid supervisors just under $550 per day.
But a currently advertised Department of Health peace officer would have set the city back just $29.80 per hour, the audit showed.
“The Comptrollers Office estimates that certain staffing costs to provide services to asylum seekers at the Row Hotel were approximately 2.5 times higher under an emergency contract with SLSCO than if the city had delivered those same services with city employees,” the report notes. 5 Supervisors and security staff at various asylum seeker shelters were being paid “wildly different rates” — despite delivering the exact same services. Matthew McDermott 5 The no-bid deals pushed through by the Adams administration were also “radically more expensive” than just hiring new city employees to provide staffing at the shelters. Matthew McDermott 5 Three of the four contracts were dished out without any competitive bidding under emergency powers the comptroller granted the mayor in November 2022. William Farrington
The audit comes as the Adams administration is set to roll out a controversial no-bid $53 million contract with a New Jersey-based company to provide migrants with prepaid credit cards.
That one-year deal with tech finance company Mobility Capital Finance (MoCaFi) has raised eyebrows with some members of the City Council pointing out the contract didnt undergo the usual competitive bidding process, skirting scrutiny.
“The asylum-seeker contracts show the dangers of this process run amok wildly high staffing prices with little consistency across agencies, costing much more than traditional procurements or hiring city employees,” the comptroller’s report states.
“Vendors are supplying staff to perform comparable functions at wildly different rates from one another and, in addition, at rates that are significantly higher than the rates usually paid to existing New York City shelter vendors and, in most cases, higher than public sector civil servants.”
Lander said Tuesday that the city’s “haphazard approach to entering these contracts and their subsequent failure to compare or control prices across them underscores the pitfalls of inadequate management of emergency procurement.
The result is that city agencies likely spent millions of dollars more than necessary for the same services.
“Rather than evicting people from shelter in the middle of winter, the City should insist on getting the most competitive prices from its own contractors in order to keep costs down.
