Government watchdog finds procurement violations in migrant facility contract

A government oversight body has reportedly uncovered significant procurement irregularities in how the previous administration awarded a massive contract to handle unaccompanied migrant children, according to a new inspector general’s report released Thursday.

The Administration of Children and Families, operating under the health ministry, allegedly awarded $529 million in March 2021 to a nonprofit organization called Family Endeavors Inc. to establish and manage an emergency intake facility in the southern region. However, the watchdog report claims officials failed to follow federal procurement requirements for competitive bidding, citing “insufficient planning” rather than the COVID-induced emergency the government had initially claimed.

Observers note that the contract price reportedly exceeded the agency’s own cost estimate of $244 million by more than double. The inspector general found that officials “subsequently modified” the award 15 times, extending the period until May 2022 and increasing the value to more than three times the original estimate.

“The agency knew well in advance that it was projected to need more shelter beds than existing sites could provide and should have begun contract planning at that time,” the report states, according to sources familiar with the findings. “Officials failed to reasonably conduct the necessary advanced planning to execute a contract for procurement using full and open competition.”

The report alleges that the agency made only limited attempts to conduct necessary research for the contract and did not follow its own findings. Timeline documents reportedly show that Family Endeavors contacted officials on March 5, 2021, offering emergency assistance, followed by an unsolicited proposal on March 13. Three days later, on March 16, the agency awarded the sole-source contract.

The arrangement has drawn scrutiny due to timing concerns. The contract was reportedly “by far the largest ever” for Family Endeavors Inc., coming months after the company hired Andrew Lorenzen-Strait, who had served as an advisor to the previous administration’s transition team. The contract was also allegedly the second largest ever awarded by the agency.

“Despite multiple requests, officials could not provide support for their review of the company’s quote, the price analysis techniques used, or an independent government cost estimate dated before the contract was awarded,” the inspector general’s report states. “When asked for documentation, the agency cited significant time constraints.”

By April 2021, federal procurement records reportedly showed the agency had already paid $255 million of the no-bid contract to the nonprofit, which observers note had dwarfed the organization’s total $43 million budget from 2018.

Legislative investigators had previously raised concerns about the arrangement. In September 2023, conservative lawmakers from the lower chamber sent a letter to Lorenzen-Strait about his connections to both the previous administration and the nonprofit organization. The letter requested an interview and mandated preservation of records on communications with leaders involved in granting other sole-source contracts.

“Family Endeavors named you Senior Director for Migrant Services and Federal Affairs on the same day the new administration took office,” the letter stated. “Immediately preceding your position with the organization, you served on the transition team and previously was an immigration enforcement official.”

The letter cited undercover recordings in which Lorenzen-Strait allegedly referred to the contract as a “corrupt bargain” and discussed “brokering” additional deals worth nearly $2 billion with the health ministry.

A health ministry spokesperson said the current administration is implementing stricter accountability measures and strengthening oversight. “The previous administration wasted more than $1.8 billion on a facility intended to house migrants that was not even used in the last year,” the spokesperson said. “This contract was canceled in the early months of the current administration as soon as this mismanagement was discovered.”