HHS awarded group with Biden ties $530M no-bid contract to house migrant children
An organization with ties to the Biden administration was awarded a $530 million no-bid federal contract to care for unaccompanied migrant children after they have come across the southern border, a person familiar with the contract confirmed to the Washington Examiner.
The Biden administration has, for the second time in a month, awarded a massive federal contract to the group without allowing other businesses and nonprofit groups to submit their proposals and bids for the job, Axios reported late Tuesday. Family Endeavors, a Texas-based nonprofit organization whose senior director for migrant services and federal affairs vetted and selected President Joe Biden's political appointees to the Department of Health and Human Services, was awarded an $87 million no-bid contract by HHS in March.
HHS's Administration for Children and Families awarded Family Endeavors the $530 million contract to help with the "emergency intake" and "wrap-around care" of children once they are transferred from Border Patrol facilities to Pecos, Texas, for longer-term care. There, social workers will search for an adult sponsor in the United States to release the child to. Children are in HHS custody for roughly one month.
The contract is the second-largest ever to be awarded by ACF and the second from HHS to go to Family Endeavors. Already, HHS has opened more than a dozen emergency facilities in southern border states, as well as Michigan and Pennsylvania, to hold the more than 18,000 children in its care as of Monday.
Tax documents obtained by the Washington Examiner last week revealed that the organization pulled in just $43 million in 2018. The new contract is 12 times greater than the work it did three years ago, calling into question whether the organization is capable of taking on such a significant project as the number of single children being taken into law enforcement custody at the border has grown every month since President Joe Biden took office and stopped immediately expelling Central American children south of the border.
The earlier contract between Immigration and Customs Enforcement (an agency of the Department of Homeland Security) gave $87 million for Family Endeavors to acquire and oversee an operation involving 1,239 hotel beds to house migrant families in Arizona and Texas. The organization has no contracting history with ICE.
But Family Endeavors does have a former senior official on the Biden transition team in its leadership: former ICE official Andrew Lorenzen-Strait, identified as a potential broker in the deal by Rep. Andrew Clyde of Georgia, who is tracking the ICE contract, as well as two others with knowledge of the situation.
On Jan. 20, Inauguration Day, Family Endeavors announced that Lorenzen-Strait would become its senior director for migrant services and federal affairs, meaning that he would be the organization’s liaison to the federal government. Within two months, Lorenzen-Strait secured the contract, and now, a second larger one.
Government contracts are supposed to be awarded through an open competitive process, outlined in the Federal Acquisition Regulation. ICE and ACF never opened the contracts to outside companies and organizations but went with an internal candidate who had significant insider connections.
The only exception for no-bid awards are for emergencies, such as disaster relief, according to Carol Thompson, a partner with the Washington-based Federal Practice Group law firm. ICE provided the Washington Examiner with a “Justification and Approval” document explaining why it did not solicit bids for the $87 million contract to house migrant families. It cited "unusual and compelling urgency" as the reason for not complying with federal contract law.
ACF did not immediately respond to a request for comment or provide justification for not soliciting bids for the newly reported $530 million contract.
Family Endeavors had had contracts with several other federal agencies, including the Bureau of Indian Affairs and the Federal Acquisition Service. However, the contracts were valued at less than $1 million, except for one that was $1.4 million. Family Endeavors took in $43 million in 2018, according to tax documents from that year. Its $87 million contract is more than double the money it took in last year. Despite its nonprofit status, its seven top executives made six-figure salaries in 2018, as much as $312,000 that year.
“It seems pretty profitable for a nonprofit,” said one person who was familiar with the situation.
Before Lorenzen-Strait joined Family Endeavors, he was on the Biden-Harris transition team working on the DHS policy team, where he vetted political appointees for the Department of Health and Human Services, the department that paid out this most recent contract.
Lorenzen-Strait worked at ICE starting in 2008 through May 2019, where his last responsibility was overseeing the 45,000-person capacity detention facilities. His immediate boss at the time was Tae Johnson, who has since been promoted to become the acting director of ICE and would have the final say on the $87 million contract.
Family Endeavors did not immediately respond to a request for comment.