Biden administration paid millions in a sweetheart deal to care for migrant children

The Biden administration awarded a bloated half-billion-dollar contract to take care of migrant children to a politically connected nonprofit that had no experience handling that large an operation, a new inspector general report says.

Health and Human Services knew it was about to get hit with a wave of migrant kids and didn’t have the space to house them, but it delayed taking action, the department’s auditors said.

Left in the lurch, the department’s Administration for Children and Families — the division charged with caring for migrant kids — quickly approved an unsolicited, no-bid contract to pay $529 million to Family Endeavors Inc., paying more than double what it should have without even knowing if the nonprofit could actually deliver the services, the inspector general said.

The contract was approved just three days after the unsolicited bid arrived.

“ACF paid more than double the price it estimated would be reasonable for the services being provided. Other, more qualified contractors may have been available to perform the duties of the contract at a lower cost to the government,” the audit concluded.

The contract was for creating an emergency intake site in Pecos, Texas, where unaccompanied alien children, or UACs in government-speak, could be held in custody before being sent to more established shelters and, eventually, placed with sponsor families.

Endeavors won the HHS contract, and another one with U.S. Immigration and Customs Enforcement, just months after hiring Andrew Lorenzen-Strait, who had worked for ICE and then worked on the Biden transition team.

Before that, the only contract Endeavors had secured with ACF was $4 million for home studies and post-release services for UACs.

UACs were the canary in the coal mine for the Biden administration, surging across the border in early 2021 and the new team relaxed pandemic-era rules from the first Trump administration that had made it easy to block them at the U.S.-Mexico boundary.

The new administration had called those rules cruel and said children had to be allowed to enter and to be quickly released from immigration custody.

The number of UACs quickly went from about 5,000 a month in late 2020, under President Trump, to nearly 19,000 in March of 2021.

The Endeavors contract was awarded on March 16 of that year.

The audit said ACF knew even during the last months of the Trump administration that it would need thousands more beds. But no action was taken.

The result was a pileup of migrant kids crowded into Border Patrol facilities for weeks — even though, under a court order, they were supposed to be transferred to ACF within three days.

Endeavors’ bid cost the government $831 per child per day.

When ACF did its own estimate, three months after it had already awarded the contract, it calculated it should have only paid $335 per child per day.

Auditors said ACF also failed to do due diligence on Endeavors itself and didn’t know if it had the qualifications or experience to deliver the services promised.

“ACF noted in its own internal review that the contract file did not contain any documentation that it determined that Endeavors was a responsible contractor before awarding the contract,” investigators said.

The awarded contract included 2,000 beds, direct care and supervision services, facility management services and the facility, but was “subsequently modified” 15 times, extending it to May 2022 and increasing the value to $795.4 million.

Republicans at the time in 2021 had questioned the contract and Mr. Lorenzen-Strait’s involvement. Endeavors hired him on the day President Biden was inaugurated.

He had worked for ICE from 2008 to 2019. By the end of that tenure, he was a senior part of ICE’s detention operations. He then went to work for the Lutheran Immigration and Refugee Service.

In September 2023, senior Republicans on the House Homeland Security Committee said they’d obtained undercover video of Mr. Lorenzen-Strait “boasting” about his participation in government contracts related to migrant services and referring to the Endeavors contract as a “corrupt bargain.”

A HHS spokesperson said the audit highlighted the “fiscal mismanagement” of the Biden years.

“In fact, this contract was canceled in the early months of the Trump administration as soon as this mismanagement was discovered. HHS and ORR remain fully committed to protecting children, restoring accountability at every level of the system, and putting Americans first,” the spokesperson said.

The number of UACs has also tumbled, eliminating the need for the kind of emergency services envisioned in the Endeavors contract. Fewer than 600 UACs were nabbed at the southern border in December.