Asylum Seeker Staffing Contract Comparison and Review

Executive Summary

Since the spring of 2022, New York City has welcomed tens of thousands of migrants seeking asylum and shelter. The influx of new migrants led Mayor Eric Adams to declare a state of emergency in October 2022, as the City endeavored to rapidly scale up shelter operations to house them under the City’s longstanding Right-to-Shelter requirements. Since then, New York City has opened more than 210 shelters, respite centers, and Humanitarian Emergency Response and Relief Centers (HERRC) to provide temporary housing for new arrivals.

To meet the demand on the City’s shelter and asylum-seeker support infrastructure, the City turned to outside vendors. These vendors provide meals, medical care, and site staffing. The staff at these sites are contracted to perform a wide range of work, like greeting and welcoming, case management, security, food distribution, referrals to community-based organizations, bus and hotel logistics, shift supervision and management, and more. As of November 2023, the Comptroller’s Office has identified 340 unique asylum-seeker contracts held across 14 different City agencies, representing an estimated contract value of $5.7 billion.^[1] Most were procured on an emergency basis. Emergency procurements enable the City to accelerate the sourcing of vendors by waiving requirements for competitive bidding ― including the requirements to use M/WBE subcontractors ― and certain transparency and accountability procedures to prioritize speed of procurement.^[2]

This report analyzes the use of four emergency asylum-seeker related contracts, each held by a different City agency, to supply staffing at commercial hotels, welcome centers, and HERRCs. Three of these contracts were procured under Emergency Order (EO) 224 and all four engaged for-profit vendors.^[3] All four rely on subcontractors to meet the City’s needs, and in all four instances, the usual requirement to utilize Minority and Women-owned Business Enterprise (M/WBE) subcontractors was waived, despite their status as for-profit vendors. Three of the four were selected without any competitive bidding.⁴

The analysis found that the prices of commensurate services across the four contracts varied wildly for the same services. Vendors are supplying staff to perform comparable functions at wildly different rates from one another and, in addition, at rates that are significantly higher than the rates usually paid to existing New York City shelter vendors and, in most cases, higher than public sector civil servants.

In one particularly egregious instance, SLSCO LP (SLSCO), an emergency contractor procured by New York City Emergency Management (NYCEM), charged hourly rates that were 237% more than a similar contract secured by the Department of Homeless Services (DHS) for the Essey Group, LLC (Essey). The Department of Housing Preservation and Development (HPD)’s contract with Rapid Reliable Testing d/b/a DocGo charged 146% more than DHS’ Essey contract, for the same positions. In another, SLSCO is billing the City $201.06 per hour for off-site managers – almost double what is billed in the Garner Environmental Services, Inc. (Garner) master agreement held by the Department of Citywide Administrative Services (DCAS), and four times more than DocGo for their off-site management positions.

There was little, if any, evidence of coordination or planning between City agencies to evaluate and monitor prices of services or to ensure commensurate pricing across City agencies.  In the case of the services purchased through the DCAS Garner master agreement, three different agencies were charged with some component of oversight, two of which could not furnish the Comptroller’s Office with documentation upon request.  One example of the results of this: NYC Health and Hospitals (H+H), one of the agencies utilizing the Garner master agreement, pays over $117 per hour for Garner security staff while NYCEM, drawing on the same Garner contract, only pays approximately $79 per hour. The difference is simply that one agency chose to negotiate its terms and the other did not.

Except for DHS’s selection of one contractor (Essey), the review found no evidence that the agencies involved in selecting vendors made any attempt to leverage New York City’s buying power to ensure reasonable cost structures and prudent purchasing. It is worth noting that the contract with Essey is the only one of the four reviewed to go through a competitive bidding process.

The City agencies charged with serving asylum seekers entered into these costly, no-bid, contracts at the same time that they are facing budget cuts and hiring freezes. The analysis^[4] 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. The current practice is a recipe for fiscal waste.

Lastly, the analysis also found that the waiver of M/WBE requirements in this cohort of contracts lead to lower utilization of M/WBE contractors and subcontractors, representing a missed opportunity to increase economic opportunities for minority- and woman-owned businesses.

The Agencies and Contracts

The four contracts reviewed in this analysis are held and/or utilized by the Department of Homeless Services (DHS), New York City Emergency Management (NYCEM), the Department of Citywide Administrative Services (DCAS), New York City Health and Hospitals (H+H), and the Department of Housing Preservation and Development (HPD), as shown below in Table I.

Table I: Contracts reviewed in this analysis

*The Garner Environmental Services, Inc. contract is a Master Agreement, which multiple agencies can call upon via “direct orders” to provide different services that fall under the purview of the master agreement. In this report, we review two agencies’ use of the contract via different direct orders.

DHS and Essey Group, LLC

The DHS contract with Essey is the only competitively bid contract in the selected group, although it was still issued as an emergency contract and therefore waived M/WBE requirements. On August 5, 2022, DHS issued an open-ended emergency solicitation for vendors to identify and operate temporary housing units for asylum-seekers. This solicitation was designed to procure up to 5,000 units, such as in commercial hotel rooms, for families with children, adult couples, and/or individual adults, and provide staffing at these hotels.[5]  This contract was awarded to Essey with a term of December 19, 2022 to December 18, 2023, for a total amount not to exceed $69 million. As of January 2024, $66.1 million has been spent. While the original contract expired in January 2024, a modification and extension through December 2024 was registered, increasing the total contract value to $199 million.

NYCEM and SLSCO LP

The NYCEM contract with SLSCO was procured via sole-source emergency procurement[6] to provide staffing and general operational support, administrative and clerical tasks, and other services as requested at asylum seeker sites. NYCEM negotiated directly with SLSCO to provide asylum support services and provide staffing at HERRCs through subcontractors. As rationale for awarding the contract to SLSCO, the agency stated that “SLSCO is [a] uniquely qualified vendor to perform these services because they are currently performing the same type of services for NYCEM under a Covid-19 emergency contract.”

The Comptroller’s Office released an audit report on SLSCO’s COVID-19 emergency contract in November 2022.^[7] It found instances of double billing, calculation errors, and uses of incorrect rates in SLSCO’s invoices, resulting in overpayments totaling $136,468, and an additional $23,861 paid to SLSCO without supporting documentation. The audit also found that NYCEM did not always ensure SLSCO’s compliance with performance standards set forth in its emergency agreement. Specifically, the audit found that NYCEM did not always properly document its monitoring of SLSCO and its subcontractors’ performance.

The asylum-seeker contract term was October 17, 2022 to October 17, 2023, for a total amount not to exceed $135 million.^[8] Of that amount, $83.4 million, had been spent as of January 2024. The contract was not extended.

NYCEM, H+H, DCAS, and Garner Environmental Sciences, Inc.

The Garner contract is an intergovernmental procurement master agreement held by DCAS. Master agreements are parent contracts in which smaller contracts (or, “children”) are created to use allocated funds. For MA1 type agreements, “child” contracts are known as DO1 documents, or Direct Orders, and they lack the traditional documentation and approval available on file for the more common “CT1” or general expense contract.^[9] These Direct Orders can be utilized by multiple different agencies to acquire the services and goods provided for under the master agreement. For the Garner contract, we requested documentation on 70 such DOs — 69 held by NYCEM and 1 held by DCAS.

DCAS has been contracting with Garner for years as a source of goods and services for emergency preparedness and response. Beginning in September 2022, several City agencies started using the Garner contract for asylum-seeker services. In a DCAS Memorandum of Understanding (MOU) dated September 28, 2022, DCAS agreed to issue purchase orders pursuant to the Garner contract for goods and services necessary to operate the HERRCs. Multiple agencies share the responsibilities of administering these purchase orders: Article 1 of the MOU designates H+H as the responsible agency for day-to-day management of the Garner contract; the Mayor’s Office of Housing Recovery Operations (HRO) is responsible for administrative support, invoice review, and documentation; and DCAS is responsible for ensuring Garner receives payment. An amendment to this MOU dated February 2, 2023, makes NYCEM rather than HRO responsible regarding this contract, and adds that H+H will sign all invoices following a full review by NYCEM.

NYCEM provided documentation in response to the Requests for Information (RFI) on the Garner DOs, while H+H and DCAS were unable to provide invoice review or backup documentation. While DOs do not have start and end dates like traditional contracts, the amount of the master contract is for $30 million. The single DCAS DO spent $19.5 million of the $30 million allocated to the master agreement. The other NYCEM DOs reviewed for this report spent $5.1 million. Because the DOs are held by different agencies, for different staffing services, this report treats them separately by agency of oversight. Both the NYCEM DOs and the DCAS DO reviewed are being used to provide staffing at HERRCs.

HPD and DocGo

Finally, HPD’s contract with Rapid Reliable Testing (known more commonly by the name of their subsidiary, DocGo was reviewed.^[10] This contract was also issued as an emergency contract, waiving the competitive bidding process and M/WBE requirements. According to the contract, DocGo was “referred to HPD because of previous inquiries about available temporary housing services,” after which HPD reached out and confirmed that DocGo had the capacity to arrange temporary housing and support services to aid asylum seekers arriving to NYC. These staffing services are provided at hotels, largely in NYC but with some locations upstate as far away as Buffalo.

The DocGo contract is single source, not competitively bid, and with a vendor that has never provided any type of housing services. Past contracts with DocGo provided mobile testing vans during the COVID-19 crisis, a service similar in urgency but completely different in purpose, staffing, execution, and other details. Nonetheless, HPD contracted with DocGo for the enormous sum of $432 million with a contract term running from May 5, 2023 to May 4, 2024. As of January 2024, $74.3 million had been spent. The Comptroller’s office is additionally conducting an audit of the oversight of the operations and invoices of this DocGo contract, due to “serious concerns about the selection of this vendor and its performance of contract duties.”^[11]

Comparable Job Functions Across Contracts

To compare the costs of staffing provided by the four vendors above, comparable roles were identified based on job functions for each contracted role, as well as hourly salary rate ranges, as provided in the contracts and in job descriptions provided in response to Requests for Information. This process is described in more detail in Appendix I. Full job descriptions for each staff function also appear in Appendix II.

Table II shows the results of this analysis. For every role, there is a wide range of hourly rates being charged to the City. Even for General Support Staff positions, the role with the narrowest range, per hour rates charged by the contractors range from $46.11 to $91.41. At the most extreme end, off-site leadership bill rates range from $57.79 to $201.06 depending on the contractor. The next section goes deeper into the analysis to show which contractors are making a significant profit off of City dollars.

Table II: All Comparable Roles* Provided by the Reviewed Contracts

*We reviewed all positions with at least one comparison role performing similar job functions in at least one other reviewed asylum-seeker contract.

Key Takeaways

City Purchasing Staff at Wildly Different Rates

Our analysis of contracted rates by vendor and comparable roles found vast differences in the salaries at which New York City is staffing sites. Staff managing on-site operations are supplied at contracted rates that ranged from approximately $68 to $139 per hour. Case managers are supplied at contracted rates ranging from approximately $51 to $122 per hour. General support staff are provided by only two vendors, one at $46 per hour and the other at a whopping $91 per hour. New York City is paying between $50 and $117 per hour (more than double the base when factoring in prevailing wage requirements) for security services. Off-site management is also provided in a range that is difficult to fathom or justify, with salaries ranging from $58 to $201 per hour. The variability of rates highlights the steep cost of both a lack of contract oversight and coordination between agencies and a clear lack of expertise by the agencies charged with vetting and overseeing the execution of these contracts.

Essey — the only contract entered into after a competitive bidding process — consistently provided staffing at the most competitive rate. Conversely, SLSCO stands out as the most expensive. Information follows for each category of staffing.

City Paying Vendors More than Non-Emergency Contracts and City Employees

In addition to comparing asylum-seeker staffing contracts to each other, the analysis looked at whether the pricing on these contracts is competitive and fiscally prudent when benchmarked against two control groups — one drawn from non-emergency vendor contracts and another drawn from civil service titles and currently advertised salaries for those positions.  The hourly wages for City staff in this analysis are based on a currently advertised DHS position and represent the midpoint of the high and low salary band for the salaried position, including a 46.8% fringe benefit rate used for all City employees in this analysis.

Overall, the review found that staff costs in emergency asylum-seeker contracts were shockingly high compared to competitively bid contracts. For example, for on-site leadership positions, the DHS traditional shelter contracted rate was just $50.99 per hour. For the asylum-seeker contract, SLSCO charged the City $139.22 — over 170% more — for the same role.

It would be slightly more expensive to bring on new City employees than staff under the competitively bid Essey, and sometimes DocGo contracts, but based on this analysis, hiring new full-time civil service staff would always be more cost effective than paying Garner and SLSCO for their contracted-out staff. Again, for on-site leadership, the City position Administrative Director of Social Services M-2 was estimated to pay $77.81 per hour based on a currently advertised position, which is more than Essey’s $68.69, but still more affordable than the other asylum-seeker contracts. This trend is repeated with some variation in every staffing role we reviewed.

The analysis highlights the detrimental consequences of relying on no-bid contracts, unsupported by effective negotiation and centralized oversight. DHS’ contract with Essey was the only contract solicited in a competitive bidding process; given this, it is no surprise that Essey again stands out for its reasonable pricing, which closely aligned with the cost of equivalent staffing in both control groups.

Analysis of a monthly invoice under the City’s DocGo contract to provide shelter and services to asylum seekers indicates that costs were about 1.7 times higher for social work, case management, and security staff at its contracted sites compared to costs at City staffing rates.

On-Site Leadership

On-site leadership positions in the asylum-seeker contract are roles that involve managing staff and ensuring the smooth operation of shelters; these on-site leads function effectively as shift leads in the centers. For these positions, SLSCO and Garner charge over $130 per hour, while DocGo charges $88.33 and Essey charges $68.69 per hour.

Contracts and job descriptions describe these roles variously as Site Leadership, Project Supervisors, Shift Supervisor and Supervisor, but these titles are comparable based on the job descriptions provided. Essey, SLSCO, DocGo, and Garner through their DCAS DO, are responsible for managing scheduling and oversight of the staff providing direct services. They are also responsible for monitoring operations to ensure the delivery of quality and effective service. This report did not look at whether Essey, SLSCO, DocGO and Garner effectively accomplished these mandates. It does however look at the pricing structures these vendors charged to do so. As Table III below shows, despite the similarities of these roles, the City has contracted at vastly different rates.

SLSCO has a full team of site leadership, including site-specific Project Managers, Deputy Project Managers, and a site Lead Logistician during multiple shifts in a day and includes seven full-time employees. At the start of the contract, SLSCO was being paid $10,395 per day for seven FTEs, each performing an eight-hour shift. This equates to $185.63 per hour. The invoices show that this was reduced in July 2023 to $7,796.25 per day for the same FTEs performing the same shift. This equates to an average hourly rate of $139.22 per employee.

Garner’s Project Supervisor has a similar role, at the hourly rate of $133.30.

DocGo’s supervisors are contracted at $2,000 per day, including 24-hour shifts. This comes to an hourly rate of $83.33 for each supervisor. DocGo bills the City on a 24-hour basis, but supervisors are on site 12 hours per day. Per their agreement with the City, DocGo provides one supervisor for every five caseworkers. Based on a review the capacity of the sites being utilized by DocGo, none warrant more than one supervisor per 12-hour shift.

The contract with Essey provides Shift Supervisors at the cost of $68.69 per hour to the City.

Even using the reduced rate which became effective in July 2023 (seven months after the contract start), there is a $70.53 per hour difference between the contracted rates paid to SLSCO and Essey. This shows in the starkest terms how poor government planning and lack of competitive bidding and oversight have led to waste.

Table III: On-Site Leadership Pricing

Chart I: On-Site Leadership Pricing

To assess whether rates paid to SLSCO, Garner, DocGo and Essey were reasonable, the team then compared them to an average hourly rate for on-site leadership provided in cost-reimbursable shelter operator contracts held by DHS. Shelter contracts typically provide for an on-site leadership position to manage staff and operations at the shelter. The team reviewed the budgeted costs of 53 on-site leadership roles in 13 contracts and used them to calculate the average allowable cost per hour. The average allowable cost per hour was then increased by 29.19% to account for allowable fringe rates, which are generally paid for in DHS shelter contracts, to arrive at an average hourly rate of $49.36 per person.

This rate is remarkably low compared to what we see in the uncompetitive emergency asylum seeker contracts, despite comparable contracted services in a comparable environment. The rate is almost $100 less per hour than what SLSCO charges.

DHS also has City employees managing some shelters under the civil service title Administrative Director of Social Services M-2. These staff members’ functions are consistent with the on-site leadership responsibilities for asylum seeker contracts; however, City staff in the same function are paid $77.81 per hour. The hourly wages for City staff are based on currently advertised DHS positions, represent the midpoint of the high and low salary bands for the sampled position, and include a 46.8% fringe benefit rate used for all City employees in our analysis. This rate is higher than both the contracted shelter on-site leadership and the Essey Shift Supervisors but is lower than DocGo’s Supervisors and significantly lower than both Garner’s Project Supervisor — which costs the City $133 per hour — and SLSCO’s Site Leadership Team — which costs the City $139 per hour, as shown below in Table IV.

Table IV: On-Site Leadership Cost Comparison

Chart II: On-Site Leadership Cost Comparison

Case Managers

SLSCO, DocGo, and Essey all provide a light-touch case management to the residents staying at their sites. Light-touch case management is not as intensive as traditional social work assessment; these staff, across the board, have a caseload of asylum-seeking clients they are responsible for tracking, assessing, and connecting to services such as school enrollment or benefits, as well as sometimes reticketing to their next destination. This review did not look into the quality of this work.

Essey charges $51.23 an hour for case managers. In comparison, SLSCO charges 237% more than Essey, and DocGo charges 146% more than Essey for the same position.

Once again, despite the similarity of these staff functions, the prices vary significantly by agency and vendor. A SLSCO specialist is provided to the City at the contracted rate of $122.88 an hour, which is significantly more expensive even than a supervisor role at Essey, as shown in Table IV.

DocGo supplies case workers at a rate of $75 per hour and provides one caseworker for every 30 rooms at a location. As of November 20, 2023, this contract was supporting a total of 3,975 guests across 1,675 rooms in 28 locations, amounting to approximately 55 caseworkers.

Table V: Case Manager Pricing

Chart III: Case Manager Pricing

The team conducted a similar comparison for asylum seeker case managers, working under the titles Community Associate, Specialist, and Social Worker. As the chart shows, they are also significantly more costly than either competitively bid non-profit caseworkers or City employees.

The team reviewed 19 positions corresponding with case management work in the DHS contracted shelter sample. This included both case managers and senior case managers for completeness of comparison.  From those 19 positions, the average cost to the City is $30.43 per hour, this includes an average fringe benefit rate of 26.55%. This competitively bid non-profit rate is more than $20 per hour lower than Esseys $51.23 per hour case manager, the most reasonably priced case manager in the asylum seeker contracts. DocGo’s Case Worker is significantly higher at $75 per hour, and SLSCO’s Specialist is astronomically higher at $121.88 per hour.

At City shelters run by DHS, the civil service title of Caseworker holds similar responsibilities to the Case Management roles at the asylum-seeker contracts. DHS Shelter Caseworkers, as currently advertised, cost on average $38.15 per hour, including a fringe benefit rate of 46.8%. This rate is higher than DHS non-profit shelter rates, but still significantly lower than even the least expensive emergency asylum seeker rate for case management staff, as shown in Table VI.

Table VI: Case Management Cost Comparison

Chart IV: Case Management Cost Ranges

General Support

In addition to case management, SLSCO and Essey also provide “general support” staff (the other contracts do not include these positions). General support positions fulfill numerous secondary support roles at asylum seeker sites.

The job description for the SLSCO Generalist states that they can be trained to support any function other than case management and site management, and gives examples such as greeting and welcoming guests, providing guests with supplies, and providing line management and queueing. The Essey Resident Advisor similarly wears many hats, including registration and intake, referrals to community-based programs, and coordination with interpretation services. These positions are paid at a lower rate than case management and do not require a bachelor’s degree.

SLSCO Generalists are paid $91.41 an hour, more than double the $46.11 per hour that Essey Resident Advisors are paid, as shown in Table VII below.

Table VII: General Support Pricing

Chart V: General Support Pricing

Many of the DHS shelter contracts in our review included positions at a similar qualification level as general support providing direct client services. The positions compared included employment and vocational specialists, housing coordinators, recreation coordinators, computer literacy specialists, and peer specialists. While these roles are more narrowly defined, they are all in the same category of general on-site support not requiring a higher degree or qualification.

The sample of reviewed contracts included 50 general support positions to compare to asylum-seeker general support positions. On average, staff in these positions cost the City $28.17 an hour after fringe. As seen in previous roles, this competitively bid non-profit rate is significantly lower than the prices offered by the emergency for-profit contracts, which cost the City $46.11 an hour at the lowest and $91.41 an hour at the highest.

At City-employee staffed shelters, these general support roles are made up of staff under the Community Associate civil service title. A currently advertised Community Associate costs the City $36.31 including salary and fringe benefits. This follows the trend of being less expensive than both emergency asylum-seeker contracts, with SLSCO costing more than double the cost of a Community Associate and Essey costing about $10 more per hour, as shown in Table VIII below.

Table VIII: General Support Cost Comparison

Chart VI: General Support Cost Ranges

Security

Most contracts provide on-site security staff. These staff provide unarmed security services at locations serving asylum seekers. They are responsible for de-escalating disturbances that may occur and may perform the role of fire guard on site. DHS’s contract with Essey is the only agreement that doesn’t include rates for security staff. Local laws require the payment of prevailing wages and supplements to security guards by certain City service contractors and subcontractors (NYC Admin. Code § 6-109); at City-contracted shelters (NYC Admin. Code § 6-109.1); and at City-leased facilities (NYC Admin. Code § 6-130). As of January 2024, the prevailing wage rate for unarmed security guards was $27.58 per hour.

Despite much lower prevailing rate requirements, at the highest end, H+H pays over $117 per hour for Garner security staff. NYCEM, using the same contract under its own DO pays approximately $79 per hour. It is clear from this review that this discrepancy would not likely exist if there were centralized oversight of the contract and its terms.

When asked to explain this salary difference, NYCEM replied that Garner was initially unable to procure security guards at the $78.99 rate. Because of Garner’s inability to procure security staff, NYCEM was informed that Garner could either procure staff using the “Resource Supervisor” title ($38 more per hour) or not provide security staff. However, as operations expanded, Garner informed NYCEM that they were able to negotiate a more favorable rate and would be able to meet the $78.99 price, hence the difference in price. NYCEM pays SLSCO $100 for the same function. DocGo stands out in this instance as the most competitive, at a rate of $50 per hour.

A breakdown of salary rates for security staff can be found in Table IX below.

Table IX: Security Pricing

Chart VII: Security Pricing

As mentioned above, three of the four contracts reviewed included bill rates for security officers. New York City is billed $90 per hour for security guards provided by SLSCO, $78.99 per hour by Garner (NYCEM DO), and $50 per hour for DocGo security officers. In comparison, the City has an existing master agreement with FJC Security Services to provide unarmed security guards, for which the City is billed at only $24.09 an hour — less than half the cost of the least expensive security contract for asylum seekers. This master agreement can be drawn on to provide staffing for many agencies through a Task Order process. What’s more, FJC is already being used by HPD to provide staff through this Task Order process.

The availability of this resource raises the question of why the City agreed to contract with DocGo to provide security staff for double the cost to the City. Interestingly, NYCEM reported that they contacted DCAS about using alternative staffing contracts but were told that none were available and that the contracts expired or were not renewed. It is unclear why this happened since the DCAS FJC Security Services agreement does not expire until June 30, 2024.

In addition to comparing to the cost of FJC staff, the team also reviewed the salaries of the security staff at contracted shelters. In 2021, the New York City Council passed legislation requiring that the contracted security personnel at contracted shelters be paid prevailing wage.^[12] Contracted shelter security staff are often titled Residential Aides but fulfill the same responsibilities as unarmed security.  The average hourly salary for shelter contracted security staff is $25.07, based on a review of the average of 10 such roles after including fringe benefits.  While this is slightly higher than the FJC Master Agreement cost, it is still significantly lower than any of the asylum seeker emergency contracted security pricing.

Comparing security guard contract pricing to the cost of utilizing City employees also shows that the emergency contracts are radically more expensive than hiring civil servants would be. Peace Officer is the civil service title utilized for the DHS Police, who are charged with protecting designated City-managed shelters. A currently advertised DHS Peace Officers costs the City $29.80 per hour. These rates are 40% more affordable than the least expensive asylum seeker contract providing security.

Table X below compares the asylum seeker contracts to the controls for unarmed security positions.

Table X: Security Cost Comparison

Chart VIII: Security Cost Comparison

Off-Site Management

Finally, SLSCO, DocGo, and the DCAS-held Garner DO each contain contracted pricing for off-site management teams. These teams are responsible for overseeing on-site managers and ensuring the contract is executed smoothly across all sites. These staff teams manage the contract as a whole and as such are compensated at a higher rate. The costs of off-site leadership are the highest of any position in the reviewed contracts. Comparing these roles is complicated by the fact that SLSCO is charging for an entire team of contract managers, in comparison to Garner and DocGo, who are only billing for one oversight position.

Like the other positions, the rates paid for off-site managers vary wildly. At SLSCO, the contracted bill rate for off-site management is $8,042.35 per day. According to NYCEM, this fee covers an average of 35 eight-hour shifts per week. This nets down to an approximate hourly rate of $201.06 per person. In comparison, Garner charges $148.11 per hour, and DocGo charges only $57.79 per hour for their off-site management positions. SLSCO’s hourly rate is over $50 more than Garner’s, and almost four times the price of DocGo’s Program Director, as shown in Table XI below.

Table XI: Off-Site Management Pricing

Chart IX: Off-Site Leadership Pricing

To establish appropriate controls with non-emergency shelter contracts and civil service titles, the team averaged the salaries of the off-site leadership positions included in the 13 DHS shelter contracts sampled. In DHS shelter contracts, off-site leadership teams are often billed as “partial FTEs,” because the team is overseeing several programs in addition to the one contracted. However, their full salaries are provided in the contract, making it possible to review their hourly rates, even when the full cost is split between multiple contracts. Shelter vendors sometimes bill the City for just one off-site leader, such as one Director of Program Operations. Other vendors have an entire team, including a CEO, COO, Accounts Payable Manager, Director of IT, Human Resource Director, Development Director, Quality Assurance, or others. In total, our DHS shelter sample included 38 off-site leadership positions, cost on average $137,254 after including the 29.2% average fringe benefit, or $65.73 per hour.

These contracted control hourly rates are higher than DocGo’s off-site leader (the Program Director position), which is billed at $10,000 a day, or an hourly rate of $57.69. However, they are significantly lower than Garner’s Incident Manager Team Lead, billed at $148.11 per hour, and SLSCO, which is billed at an astonishing $201.06 per hour.

The civil service title of Administrative Director of Social Services M-III was used to compare off-site leadership rates. Staff working in this managerial title are responsible for providing leadership and guidance to maintain a safe and orderly environment, managing program capacity, ensuring the efficient processing of shelter applicants, facilitating alternatives to shelter, and managing assignments into the single adult shelter system. While the title is broad, it best corresponds with the “off-site leadership” role. This managerial role is currently advertised at $95.20 per hour; while this rate is higher than both the DHS contracted control and the DocGo program director, it remains more affordable than the Garner rates and significantly more affordable than the SLSCO rates.

Table XII: Off-Site Leadership Cost Comparison

Chart X: Off-Site Leadership Cost Comparison

Short-Term Budget Cuts Lead to Long-Term Waste

The Comptroller’s Office estimates that certain staffing costs to provide services to asylum seekers at the Row Hotel were approximately 2.5 times higher under an emergency contract with SLSCO LP than if the City had delivered those same services with City employees. This is based on analysis of nine months of invoice data from SLSCO for staffing at the Row Hotel, which provides shelter capacity to about 1,000 asylum seeker families, under the contract that ran from October 2022 to October 2023. Annualized, the savings would total approximately $50 million if certain staffing had been provided by hiring City employees rather than through the emergency contract.

When compared with the other three contracts, those between SLSCO and NYCEM, DocGo and HPD, as well as Garner and DCAS, the rates billed by Essey are reasonable. However, the City’s decision to rely on for-profit companies is costing taxpayers significantly more than a publicly driven solution.

The City would have spent far less had it simply relied on its existing organizational structure, the agencies mandated to provide shelter, and the types of civil service jobs it already relies on. The City administration has begun to acknowledge the waste inherent in the emergency procurements. Documents received from both the agencies and the prime vendors show that the rates were revised for multiple agreements. SLSCO — still the most expensive contract across titles — reduced their rates by 25% for most titles beginning on May 1, 2023.^[13] Garner (NYCEM) reduced the bill rate for the resource supervisor title by 33% at the beginning of Fiscal Year 2024 (July 1, 2023). SLSCO and Garner’s acquiescence is evidence of the glut that resulted from emergency sole-source procurement. Even SLSCO said in March 2023 communications with the City, “it now appears these support efforts will continue into the future and…we have identified options that allow SLSCO to offer a price reduction as the project moves forward into the steady-state phase.”

In December 2022, our office released the report Title Vacant: Addressing Critical Vacancies in NYC Government Agencies. Included were eight recommendations, many specifically aimed at expediting hiring for already approved positions. As of January 2024, DHS still has a 6.88% vacancy rate against the current budgeted headcount. Despite being elevated, this vacancy rate already accounts for previous reductions made in recent Programs to Eliminate the Gap (PEG) reductions announced by the Adams administration.

This analysis lays bare the consequences of the City abandoning its commitment to fill existing vacancies while ceding its leverage to for-profit companies. The current influx of asylum seekers is a public humanitarian crisis that requires a public response. Inflated costs cause expensive secondary effects, like severe budget cuts, that further exacerbate the City services crisis.

Non-M/WBE, Unregistered, and Unapproved Subcontractors

The City’s Minority/Women-Owned Business Enterprises are currently governed by Section 6-129 of the Administrative Code, which codifies Local Laws 174 and 176 enacted by the City Council in 2019, outlining mandated M/WBE participation goals for mayoral agencies. As of this most recently amended guidance, contracting agencies are expected to establish and ensure that M/WBE participation goals are met for all eligible procurements. However, there are some specified exceptions to these M/WBE requirements, which apply to three of the four of the contracts considered in this report.

Essey, DocGo, and SLSCO all are contracted as “AM6” emergency procurements, which exempts them from M/WBE requirements. The Garner master agreement is not an emergency procurement, but an intergovernmental procurement, exempting the Task Orders used both by DCAS and NYCEM from M/WBE requirements.

The analysis shows that contracts with for-profit companies without M/WBE requirements lead to a decreased amount of spending and job creation going to local M/WBE businesses. In the four reviewed contracts, 24 subcontracts provide staffing to asylum seeker efforts. Of the 24, only 7 subcontractors are certified NYC M/WBE organizations; 17 subcontractors are not M/WBE, as shown in Chart XI below. This underutilization of M/WBEs is another missed opportunity to increase investment in traditionally marginalized communities.

Chart XI: Subcontractor M/WBE Utilization

Within this breakdown, however, there are significant differences in how each contract and agency utilizes M/WBE subcontractors.  Out of the reviewed contracts, only Essey is subcontracting with an equal number of M/WBE and non-M/WBE subcontractors. DocGo is only using M/WBE subcontractors for 25% of their total subcontractors, and SLSCO and Garner are not using M/WBE subcontractors at all, as shown in Chart XII below. This is notable because while Essey is an AM6 emergency contract, it was still procured competitively through a Request for Proposal (RFP); their RFP response included M/WBE status of their subcontractors, and their own internal diversity statistics.

Chart XII: Breakdown of M/WBE Subcontracting by Agency

Subcontractor Approval

Prime vendors and agencies are subject to reporting and approval requirements when utilizing subcontractors. Section 4-13 of the Procurement Policy Board (PPB) Rules states that “all subcontractors must be approved by the agency prior to commencing work under the subcontract.” For subcontracts valued at greater than $25,000, the subcontract must be approved by the overseeing agency via Form 65A. For those valued less than $25,000, the subcontracting entity must be active in the City’s Payment Information Portal (PIP), the entity must be registered in PASSPort (the City’s digital procurement platform), and the prime vendor must submit a monthly log of payments to subcontractors for the agency to compare to the recorded payments in PIP.

Essey and SLSCO’s subcontractors are registered in the subcontractor Payment Information Portal (PIP), and the Agency Chief Contracting Officer (ACCO) review status is listed for all of the subcontractors we reviewed on this report. Of Essey’s 10 subcontractors, six have been approved by their ACCO, three are still being reviewed by the ACCO, and one subcontractor (Forum Healthcare Staffing Services) was rejected by the ACCO. All of SLSCO’s listed subcontractors in PIP were approved by their ACCO.

In contrast, DocGo and Garner have not registered any of their subcontractors for their prime contracts, in direct contravention of the requirement that all subcontractors must be registered in PIP. This lack of registration and noncompliance with City procurement rules is a serious concern and represents an opportunity for fraud, waste, and abuse.

Conclusion

Emergency procurement may be necessary to quickly procure services needed to avoid or mitigate unforeseen danger to life, safety, property, or a necessary service[14], but they come with considerable equity and financial risks.  Emergency contracting is often more expensive than competitive procurement methods, and due to the haste of contracting, creates barriers for entry which both reduce M/WBE contracting and limits competition, driving up costs.^[15]

The asylum-seeker contracts show the dangers of this process run amok — wildly high staffing prices with little consistency across agencies, costing much more than traditional procurements or hiring City employees, procured from largely non-M/WBE subcontractors with varying levels of approval or oversight.

The City allowed for-profit companies to take advantage of an emergency in its nascency. These companies charged exorbitant rates for roles that are frequently procured by the City at more reasonable rates. Garner and SLSCO revised their rates only when it became clear this crisis — and their resulting profits — would continue into the foreseeable future.

The current wave of asylum seekers began almost two years ago, in the spring of 2022. There are no significant plans in place to reduce asylum-seeker costs by contracting in sensible and sustainable ways, which take full advantage of New York City’s leverage, buying power, and in-house talent. The City has had ample time to navigate this new status quo of shelter overpopulation and to incorporate the asylum seekers into our time-tested system of procurement and service provision that minimizes risk to the City and keeps costs low.

The City should responsibly martial its resources by using a competitive procurement process, managed by a single agency with experience in providing shelter, and transition to a sustainable contracting model for a new budgetary reality. This would strengthen accountability and find budgetary savings to respond in ways that are both fiscally responsible and compassionate to New Yorkers in need.

Appendix I.  Methodology

The analysis began by reviewing each contract for staff roles and descriptions, as well as the contracted rates the City is paying the prime vendor for each staff.  These are referred to in this report as “contracted rates.” Information was requested from each of the agencies holding the contract or Direct Order to obtain information regarding subcontractors and rates of pay, certain invoices, and other supporting documentation to back those up.  Finally, prime vendors were directly contacted for information that agencies were unable to provide.  Based on the information received, and a comparison of staff functions based on job descriptions provided, comparable roles were identified to make comparisons of rates of cost to New York City based on contracted rates.

After identifying comparable roles and rates of pay provided in the contracts under review, two control groups were identified for cost comparisons. Thirteen non-profit shelter contracts, competitively bid through DHS procurement, were sampled, and their contracted budgets were reviewed for the rates they each charge to the City for each staffing role they provide. Then, job descriptions were reviewed for each role to determine which roles were very similar to the asylum seeker contract roles reviewed in our report. Fringe cost was added in for each role’s salary, as specified in each shelter contract’s budget, as fringe benefits are factored into each asylum seeker contracts’ costs. Each comparable role was aggregated into an average salary, then the OPA Pay Rate calculator was used to translate the salaries after fringe into hourly rates charged to the City. This allowed comparison of how for-profit, emergency asylum-seeker contracts differ from traditionally contracted social services staffing with competitively bid non-profit organizations.

To conduct comparisons to staffing costs for City staff, civil service job descriptions were reviewed for City staff working at DHS shelters to find positions with similar responsibilities and qualifications to the ones contracted for asylum seeker staffing. The hourly wages for City staff are based on currently advertised DHS positions, represent the midpoint of the high and low salary bands for the sampled position, and include a 46.8% fringe benefit rate used for all City employees in the analysis. This is somewhat lower than the FY 24 overall fringe rate due to lower assumed pension costs; it is assumed new hires will be new City staff and therefore qualify for Tier 6, which has a lower City contribution rate.

All businesses that have been certified as M/WBE are available to be publicly researched in the Online Directory of NYC Certified Businesses, maintained by the NYC Department of Small Business Services (SBS).  Searches were run on each subcontractor utilized for staffing services to determine how M/WBEs are being utilized and benefitted from the contracts under review.

Appendix II.  Complete Job Descriptions

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Endnotes

[1] For more information about the total universe of asylum-seeker contracting, a list of these contracts and related information is periodically refreshed on the Comptroller’s Office website.

[2] In December of 2023, this office released the Rethinking Emergency Procurements report which outlines the myriad problems with the use of Emergency Procurement and ways it should be strengthened to ensure accountability and efficiency moving forward.

[3] https://www.nyc.gov/office-of-the-mayor/news/224-003/emergency-executive-order-224

[4] The analysis was based current advertised City DHS shelter pay rates and Tier 6 fringe benefit rates.

[5] https://a856-cityrecord.nyc.gov/RequestDetail/20220805113

[6] Sole-source procurement is used when there is only one source for the required services. In such case, the accepted price and terms and conditions are achieved through negotiation between the agency and the vendor, as there are no competing bids to compare to. See § 3-05 S

ole Source Procurement and § 3-06 Emergency Purchases.

[7] The Comptroller’s Office shared the findings of the audit with NYCEM on September 22, 2022, while NYCEM would have been negotiating a second emergency contract.

[8] Based on documents received from SLSCO we note that SLSCO began providing services on October 11, 2022, and that the contract was inadvertently written as October 17, 2022.

[9] Read more about types of contracts here: https://www.checkbooknyc.com/contracts-application-overview/newwindow

[10] While HPD appears to be using DocGo in multiple staffing contracts designed to provide services for asylum seekers, only one has been registered or presented to this office for registration, and it is not clear whether the remainder have been executed.

[11] https://comptroller.nyc.gov/newsroom/nyc-comptroller-lander-announces-new-real-time-audit-of-432-million-no-bid-docgo-contract-for-work-on-asylum-seeker-emergency/

[12] https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4601863&GUID=3C75D733-B2A1-4E8F-94A7-CE3601707A5D&Options=&Search=

[13] Security bill rates were reduced by 10% and Site Lead Admin Support bill rates were reduced by 15%. All other titles were reduced by 25%.

[14] NYC Charter § 315

[15] https://comptroller.nyc.gov/reports/rethinking-emergency-procurements/