NYC Will Let Controversial $432 Million Migrant Housing Contract Expire

New York City will not renew a $432 million contract with DocGo, a mobile health services company tasked to care for illegal immigrants and asylum-seekers, amid growing questions over the costly deal.

“We are constantly working to find new ways to better serve those in our care and manage this crisis in a financially responsible way,” Camille Joseph Varlack, Mayor Eric Adams’ chief of staff, said in a statement on Tuesday.

“As part of our work to reduce spending, we will not be renewing the full DocGo emergency contract that currently serves approximately 3,600 migrants at this time and will instead be issuing a competitive RFP [request for proposal] to take over this work moving forward.”

After the DocGo contract expires on May 5, the city will pursue a competitive bid contract with a different vendor for the service. “This will ultimately allow the city to save more money,” Ms. Varlack said.

Expertise Under Question

Formerly known as Rapid Reliable Testing NY, DocGo had worked with the city to deliver mobile COVID-19 testing during the pandemic.

In March 2022, DocGo was awarded an emergency no-bid contract by Mayor Eric Adams’ administration to bus illegal immigrants and asylum-seekers to upstate hotels as the city struggled to find space in its already crowded shelter system. The for-profit company was also tasked to provide them with services including food, medicine, transportation, security, and asylum case management.

Since then, DocGo has come under much scrutiny over its expertise, including from the offices of City Comptroller Brad Lander and Gov. Kathy Hochul.

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“Emergency procurement is one important ability that city agencies have,” Mr. Lander, who reviews all city contracts, said last September. “But it cannot be a blank check to enter into a no-bid, $432 million contract with a medical services firm that doesn’t have experience providing shelter and services to asylum-seekers, without the adequate due diligence and integrity that is required.”

The controversy surrounding DocGo continued when complaints from local Albany officials and state lawmakers reached the governor’s desk, accusing the company of failing to meet basic needs of those it served.

“It’s a concern to me. They are being paid a lot of money from the city, and we want to work with the city to ensure that all requirements are being met,” Ms. Hochul said as she announced a review to make sure that DocGo was meeting all of their contractual obligations.

According to the NY Times, DocGo billed the city up to $33 per day to provide three meals for each of the migrants it served. A significant number of those meals, however, ended up in the trash—with more than 70,000 being thrown away in the span of just 20 days, a waste of $776,000 in taxpayers’ money.

City Finance Chief ‘Relieved’

Following Tuesday’s announcement, Mr. Lander said he feels “relieved,” noting that a real-time audit by his office found little proof that DocGo is suited for the work.

“I’m relieved that the administration finally came to its senses,” Mr. Lander said.

“My office repeatedly sounded the alarm on how ill prepared DocGo was to provide adequate services to asylum seekers,” he continued. “Our contract review found little basis for why DocGo was the best contractor for this job, how the dollar amount for this contract was achieved, and who they planned to subcontract out to for security, hotel, and other services.”

With that said, Mr. Lander still takes issue with the costly deals the city is using to buy services for illegal immigrants. Last December, he revoked Mr. Adams of his power to sign emergency contracts with companies providing migrant services, saying the city has picked too many unqualified vendors and failed to keep track on how the dollars were spent.

“Our recent review of these contracts found the replacement contractor, Garner, to be extremely expensive,” he warned.

“Our office will watch closely to ensure that asylum seekers do not see a lapse in services and urges the City to issue an open-ended transition to non-profit organizations to avoid paying for-profit companies millions more than necessary.”