ICE blew $17M on 'largely unused' beds at border in sole source award to inapt contractor: DHS IG

The Golden Horseshoe is a weekly designation from Just The News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s.

This week's Golden Horseshoe is awarded to Immigration and Customs Enforcement for wasting $17 million on 1,239 hotel rooms for migrants which were largely unused, according to public spending transparency watchdogs OpenTheBooks.com. 

ICE signed an $87 million contract with nonprofit social service agency Family Endeavors without soliciting competing bids, according to an inspection report by the Department of Homeland Security Office of Inspector General.

"ICE did not adequately justify the need for the sole source contract to house migrant families and spent approximately $17 million for hotel space and services at six hotels that went largely unused between April and June 2021," the inspection found. "ICE's sole source contract with Endeavors resulted in millions of dollars being spent on unused hotel space."

The inspectors also found that ICE did not "accurately determine the number of beds needed to address the anticipated surge" of migrants, and its contract required payment for the beds whether they were used or not.

"We reviewed costs and usage rates at hotels operated by Endeavors to house migrant families between the dates the hotels opened and June 2021 and found none of the facilities used more than half of the number of beds ICE paid for under its contract," according to the IG report.

The inspector general found no justification for the sole source contract. Family Endeavors "sent ICE a proposal for housing migrant families without ICE requesting such a proposal," and the agency did not have the supporting documentation to show the nonprofit was the only contractor that was able to provide the services, the report explained.

Family Endeavors "had no experience providing the services covered by the sole source contract, including hotel beds or all-inclusive emergency family residential services," the inspector general found. 

The contractor's conspicuous link to the Biden administration has provoked investigative scrutiny by the press and government spending watchdogs in the public and nonprofit sectors.

The New York Post reported that Family Endeavors received the contract from DHS around the same time it received a larger contract from the Department of Health and Human Services. Both of the contracts were awarded after Family Endeavors had hired Biden transition team member Andrew Lorenzen-Strait as a senior director for migrant services and federal affairs.

"Whether this was a result of nepotism or not, all federal agencies should use competitive bidding to be efficient, and not waste millions on exclusive contracts with unvetted contractors," OpenTheBooks.com CEO and Founder Adam Andrzejewski wrote in his column.

While ICE agreed that it should better assess how many beds and rooms are needed before entering into a contract, the agency claimed the sole source contract was justified.

"The ICE Office of Acquisition Management utilized a valid exception to competition given the urgency of the migrant crisis on the SWB [Southwest border]," ICE Chief Financial Officer Stephen A. Roncone replied in a March letter to DHS Inspector General Joseph V. Cuffari. "Based on market research, ICE determined that utilizing exception to [Federal Acquisition Regulation] 6.302-2, was appropriate to meet the urgent housing needs of the agency on the SWB for the migrant crisis in 2021."

Family Endeavors was "the only known qualified source" able to meet "the immediate needs of the SWB crisis for bedding and other required ancillary support for the migrant population," claimed Roncone.

Just The News found the HHS's Office of Inspector General has now initiated an audit of that agency's sole source contract with Family Endeavors to provide services for unaccompanied children.