How City Hall frittered away $41M on no-bid migrant shelter deal with dodgy DocGo
The city's Housing Preservation & Development agency signed a no-bid, one-year $432 million contract with DocGo for "asylee housing" and other migrant services last spring. Robert Miller
Mayor Adams is still half-heartedly trying to wring money from Washington for President Biden’s migrant influx, which will cost local and state taxpayers $3.6 billion this year.
But it’s easy to see why the White House remains reluctant: City Hall won’t honestly account for how and why it spends money on migrants.
The latest example: The Adams administration has misled the public into thinking the city is cutting ties with DocGo, a troubled “emergency” no-bid contractor — even as it has quietly signed at least one new agreement with the firm.
Last spring, the city’s Housing Preservation & Development agency signed a no-bid, one-year $432 million contract with DocGo for “asylee housing” and other migrant services, then extended the contract until the end of this year.
The city picked DocGo despite the fact that it has no expertise in housing large numbers of people: It’s a medical-transport and mobile medical-services company that landed big health-care contracts during the COVID-19 era, when New York was just setting money on fire.
And never mind that New York already has many for-profit and non-profit companies with long histories providing homeless shelters, meaning the city should have been able to cobble together a decent bidding pool, even in a hurry, and tried to get lower prices through competition.
Earlier this year — after multiple reports of DocGo’s poor services, including hiring unprofessional security guards who bullied migrants and serving bad food that was thrown away uneaten — the city said it wouldn’t renew DocGo’s contract.
“This will ultimately allow the city to save more money,” a top Adams aide said in April.
The public understandably took this to mean the city was done with DocGo.
Not exactly.
As The Post reported last week, the Adams administration has begun a new contract with DocGo, this one a $41 million, one-year deal to manage a 1,092-bed Long Island City migrant shelter, beginning last September.
Where to start?
First of all, HPD didn’t even officially sign this agreement with DocGo until this year, on March 24th, more than six months after work began.
This delay is highly irregular: DocGo has thus been doing work under a gentlemen’s agreement that it will be paid someday.
That might be fine for a tiny contract, but tens of millions of dollars?
Second, the scope of work laid out in the new contract offers no indication that DocGo is uniquely and solely capable of performing the work, doing it better and more cheaply than any other potential contractor.
The $41 million is paying mainly for staff — 142 employees performing generic social-services work — with the city providing the shelter site itself.
And they’re billing the taxpayers mind-blowing amounts for those staffers’ paychecks.
DocGo bills the city $1,140 each day for a social worker. For a five-day week, including vacation and benefits, that’s $270,000 a year, which no social worker earns.
Similarly, DocGo bills taxpayers $1,040 per day per person for six daily supervisors, and $1,000 a day for a program director.
DocGo bills us $520 each day for each of 84 security guards, 28 guards per shift — $65 an hour for a job that typically pays half that.
The lowest-paid staffers, 40 administrative workers, are billed for $400 a day, or $50 an hour.
And there’s questionable padding, too: Does every single shelter resident really need a monthly COVID-19 test, at a cost of $12,012 — $11 apiece?
Walmart sells them retail for $8.
Altogether, from security to laundry to three square meals, each migrant in this bare-bones shelter costs the city $103 per day — not including the actual shelter.
Why didn’t the city bid this contract out, to see if other homeless-services providers can do this work more efficiently?
Last September was well more than a year into the city’s migrant “crisis,” when it was no longer an acute, unexpected emergency.
Why did City Hall conceal DocGo’s role until the last possible minute?
In the independent city comptroller’s system, the contract is listed as “received” only this May 23. And the city listed it in its PassPort contract-information system only on June 6.
City Hall avoided providing any information about this deal until it had no choice: Presumably, DocGo is getting antsy to collect its cash.
One thing’s for sure: DocGo as a whole is doing well.
As stock analysts at GuruFocus put it, the company has recently enjoyed “soaring” income, particularly from “high-revenue migrant projects.”
But a big risk of these projects, the number-crunchers warn, is “political” uncertainty — that is, the uproar that ensues when the rest of us find out.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.