The cost of comparable migrant services provided by contractors hired by Mayor Adams’ administration “varied widely” and came in “significantly higher” than what the city typically pays, leading to mismanaged taxpayer dollars, a report released Tuesday by city Comptroller Brad Lander revealed.
The audit, which focused on four of an estimated 340 contracts involving migrant services, shows that in one “particularly egregious instance” the emergency contractor SLSCO charged hourly rates 237% higher for a city contract similar to one granted to another vendor, the Essey Group.
In another example, Lander found that the controversial DocGo contractor charged 146% more than the Essey contract “for the same positions.”
DocGo is the subject of a probe launched by state Attorney Letitia James last year to examine whether it mistreated asylum seekers who took part in its city-funded effort to move them outside the city.
“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,” Lander said in a written statement. “The result is that city agencies likely spent millions of dollars more than necessary for the same services.”
Of the four contracts the comptroller focused on, three were arrived at under an emergency order, which effectively lifts competitive bidding requirements. All four contracts rely on subcontractors, but in the procurement process for each one, Lander found that a precondition to utilize minority- and women-owned subcontractors was waived — in what his report described as a “a missed opportunity.”
Lander also took a dig at the mayor’s policy of imposing time limits on migrants’ stays in city shelters, saying that “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.”
The comptroller’s findings come at a time of fiscal uncertainty for the city. While the mayor is quick to point to the city’s strong bond ratings — which he took the opportunity to highlight again on Tuesday — he has also instituted a series of unpopular austerity measures and come under fire for lowballing revenue projections that City Council members have argued should not have been used as the basis for some of his cuts.
In his report, Lander contends that one way the city could be saving money is on its contracts, noting that the ones he analyzed were hammered out at the same time city agencies “are facing budget cuts and hiring freezes.”
“The analysis of just one site found that hiring new city employees instead of staffers supplied by the vendor would deliver as much as $50 million in savings in a single year, even when factoring in the costs of fringe benefits for city employees,” his report said. “The current practice is a recipe for fiscal waste.”
Costs even varied under the same contract in at least one instance, Lander found.
Under the contract with Garner Environmental Services Inc., the NYC Health + Hospitals network pays more than $117 an hour for security staff, while the city’s Emergency Management agency pays about $79 an hour.
“The difference is simply that one agency chose to negotiate its terms and the other did not,” the report notes.
Hours after the report was released, Adams defended the contracts, pointing out that within a two-year window the city had to expand its shelter capacity considerably to accommodate incoming migrants. Some of the contracts for those services had to be hammered out on an emergency, no-bid basis, he added.
The mayor also stressed that critics should keep in mind that while keeping costs down is a priority — and the city is renegotiating some contracts to that end — there’s also been considerable pressure on the administration from advocates for the homeless to ensure that migrants are provided with shelter in a timely manner.
“We were getting thousands a week coming into our city, and you have to go and say what can we open right away,” he said. “Because remember: We were in court constantly [with people] saying you didn’t open things fast enough. So, while we were getting pressure of people coming in, we were getting also pressure from the advocates saying, ‘It’s taking you too long.’ “
