September 21, 2023
City Hall – On Thursday, September 21, Council Member Julie Won, Chair of the Committee on Contracts, and Council Member Gale Brewer, Chair of the Committee on Oversight and Investigations, held a joint oversight hearing at City Hall called “Revisiting City Contracts Serving Asylum Seekers in New York City.” At the hearing, the Chairs, Council Members, and the general public questioned representatives from several city agencies — the Department of Social Services (DSS), the Department of Housing Preservation and Development (HPD), New York City Emergency Management Department (NYCEM), New York City Health + Hospitals (H+H), and the Mayor’s Office of Contract Services (MOCS) — to bring transparency to the City’s emergency contracting process used for migrants and asylum seekers.
With Mayor Adams forecasting an anticipated $12 billion cost burden to the city due to the asylum seeker crisis, the Council is focused on understanding how the administration is spending those funds. While the administrative responsibilities for managing this crisis fall on several city agencies, the direct services for asylum seekers are provided by a complex network of for-profit and nonprofit private vendors and their sub-vendors. These vendors are mainly being contracted through emergency procurement, which absolves the administration from having to abide by traditional procurement rules, and thus necessitates greater scrutiny to ensure that public dollars are not wasted.
The Council’s Oversight and Investigations Division (OID) reviewed and analyzed contracts and publicly available spending data related to the asylum-seeker crisis to better understand and map out the network of non-profit service providers, agencies, and for-profit companies receiving public dollars and how those dollars are being spent. Findings include:
- Of the 196 contracts that OID examined that were related to asylum seeker spending, only 3 were procured through competitive bidding.
- The 125 of the City’s emergency-procured contracts represent nearly $2 billion of contract value.
- Many of the vendors contracted through emergency procurement are not M/WBEs.
- Nearly 40% of vendors providing asylum-seeker services had also provided services during the COVID emergency.
- The Hotel Association of New York’s (HANYC Inc.) $237 million dollar contract — already one of the City’s largest for the asylum seeker crisis — has an amended contract amount of $1.365 billion, making it the City’s largest asylum seeker contract and over three times the total amount of DocGo’s $432 million dollar contract.
“Only 1.5% of City Contracts for asylum-seekers were awarded through the typical competitive bidding process,” said Council Member Won. “This means that nearly all asylum-seeker contracts were emergency procurements, which allows vendors to be hired without adequate due diligence, in a no-bid process that all but guarantees that City taxpayers will be overcharged. Without necessary guardrails around these contracts over the last 18 months, we have observed major lapses in accountability from many vendors—from inflating costs, to overpromising capacity, and even misrepresenting services being provided. The City should immediately limit these emergency procurement practices and return to standard competitive bidding for our most predictable costs, such as shelter providers, food, and case workers. As we brace ourselves for a series of painful budget cuts, the City must award contracts based on a procurement process that will lower costs, provide transparency, and hold negligent or fraudulent vendors accountable.”
“The city has awarded no-bid contracts to an array of for-profit vendors with virtually no oversight to provide asylum seekers with housing, food, and other services,” said Council Member Gale A. Brewer. “At a time when the Administration has called for stark budget cuts across city agencies to pay for asylum seeker expenses, I don’t understand why we’re spending so much money on private companies that are obligated to their shareholders and not to the people of New York City. The Administration is already renewing emergency contracts into 2026 which lets them skip competitive bidding for a second time. At what point is this crisis no longer an emergency from a procurement perspective?”