Security guards at city migrant shelters are being paid upwards of $117 an hour — more than four times the prevailing wage — under rushed, no-bid contracts being doled out by Mayor Eric Adams’ administration to deal with the crisis, a new audit shows.
The deals, inked under the city’s emergency contracting system, have allowed various for-profit companies to charge “exorbitant rates” for migrant shelter staffing with very little oversight and vetting – leading to taxpayers being fleeced out of millions of dollars, according to the report.
“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,” said City Comptroller Brad Lander of his office’s audit.
“The result is that City agencies likely spent millions of dollars more than necessary for the same services.”
The comptroller’s review of the city’s four highest-cost deals found that supervisors and security staff at various asylum seeker shelters were being paid “wildly different rates” — despite delivering the exact same services.
The hourly rate the city is paying private security guards ranged from $50 to $117 across the four contracts — significantly higher than the prevailing wage base requirement of $27.58 per hour, according to the report.
A comparison of similar job descriptions showed that under contracts inked by companies Garner, SLSCO and DocGo, security staffers were being paid roughly $117, $90 and $50 per hour, respectively.
In one “particularly egregious instance,” SLSCO, was charging hourly rates that were 237% more than Essey for a similar contract role, while DocGo charged 146% more than Essey, the audit found.
The no-bid deals pushed through by the Adams administration were also “radically more expensive” than just hiring new city employees to provide staffing at the shelters, according to the report.
“Annualized, the savings would total approximately $50 million if certain staffing had been provided by hiring city employees rather than through the emergency contract,” the report said.
“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 than if the city had delivered those same services with city employees,” it added.
For a shelter supervisor job, SLSCO, a Texas-based disaster firm, was found to be shelling out nearly $1,500 per eight-hour shift for that role at the start of its contract, while DocGo — a COVID testing-turned-migrant shelter firm — was paying site managers $2,000 per day, the report states.
In comparison, Essey paid supervisors just under $550 per day.
Three of the four contracts were dished out without any competitive bidding under emergency powers the comptroller granted the mayor in November 2022 to deal with the relentless influx of migrants, per the audit.
Essey was the only contract out of the four analyzed that went through the competitive bidding process.
“The city allowed for-profit companies to take advantage of an emergency in its nascency,” the report said.
The audit comes as the Adams administration is set to roll out a controversial no-bid $53 million contract with a New Jersey-based company to provide migrants with prepaid credit cards.
That one-year deal with tech finance company Mobility Capital Finance (MoCaFi) has raised eyebrows with some members of the City Council pointing out the contract didn’t undergo the usual competitive bidding process, skirting scrutiny.
“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,” the comptroller’s report states.
“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.”
Lander said Tuesday that 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.”
“The result is that city agencies likely spent millions of dollars more than necessary for the same services.
“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.”
