New York City taxpayers are facing significant financial losses due to hastily awarded, non-competitive contracts issued by Mayor Eric Adams’ administration to address the migrant crisis, as revealed in a recent audit.
According to the report released Tuesday by city Comptroller Brad Lander’s office, the emergency contracts enabled various for-profit companies to charge excessively high rates for staffing at migrant shelter sites, with minimal oversight.
“The city allowed for-profit companies to take advantage of an emergency in its nascency,” the report stated.
The audit scrutinized four such contracts and found glaring disparities in pay rates for supervisors and security staff across different asylum seeker shelters, despite similar job responsibilities. For instance, SLSCO and DocGo charged hourly rates that were significantly higher than those of Essey, another contracted company.
The audit also highlighted that the no-bid contracts authorized by the Adams administration were considerably more expensive than hiring city employees to provide staffing at the shelters. The potential savings from employing city personnel instead of resorting to emergency contracts could have amounted to approximately $50 million annually, the report estimated.
Three out of the four contracts were awarded without competitive bidding under emergency powers granted to the mayor in November 2022 to address the migrant influx.
One of the contracted firms, SLSCO, was reportedly paying nearly $1,500 per eight-hour shift for a shelter supervisor, while DocGo paid site managers $2,000 per day. In contrast, Essey, the only company that went through competitive bidding, paid supervisors significantly lower rates.
Furthermore, the audit revealed that hiring a Department of Health peace officer would have cost the city significantly less than the rates charged by the contracted firms.
The audit’s findings coincide with the Adams administration’s plan to implement a controversial no-bid $53 million contract with Mobility Capital Finance (MoCaFi) to provide migrants with prepaid credit cards. The absence of competitive bidding in this deal has drawn criticism from some City Council members.
Lander emphasized the importance of efficient management of emergency procurement, stating that the city’s failure to compare or control prices across contracts has likely resulted in millions of dollars in unnecessary expenditure.
