Biden admin skirted rules to deliver massive contract to nonprofit run by ex-official, IG report reveals

EXCLUSIVE: A new Inspector General’s report released Thursday morning accuses the former Biden administration of bypassing federal rules when issuing a more than half-a-billion dollar “sole source contract” to a nonprofit led by a former Biden official to deal with the unaccompanied minor crisis in 2021.

The Administration of Children and Families (ACF), which is under HHS and manages unaccompanied minors, awarded $529 million for a 1-year contract in March 2021 to a nonprofit called Family Endeavors, Inc. to help establish and manage a new emergency intake site in Texas (EIS) with 2,000 extra beds. However, according to the OIG’s new report, Biden’s ACF failed to follow federal procurement requirements that require full and open competition due to their own “insufficient planning,” rather than the COVID induced emergency the Biden administration cited. 

Furthermore, the inspector general’s report found that the contract price was more than double the agency’s own cost estimate of $244 million, and indicated that the agency “subsequently modified” the award 15 times, extending the period until May 2022 and increasing the value to more than three times the original estimate from ACF.

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“ACF knew well in advance of March 2021 that it was projected to need more shelter beds than existing sites could provide and should have begun contract planning at that time,” the report states. “ACF failed to reasonably conduct the necessary advanced planning to execute a contract for procurement of those beds and related services using full and open competition.”

The report says ACF made only a limited attempt to do the necessary research for the contract, and did not even follow the findings it came up with.

“On March 5, 2021, Endeavors emailed ORR offering emergency assistance for the care of unaccompanied alien children. On March 13, 2021, Endeavors emailed ORR again with an unsolicited proposal, which included a statement of capabilities and concept of operations for an emergency shelter to serve unaccompanied alien children. Three days later, on March 16, 2021, ACF awarded a firm-fixed-price sole source contract to Endeavors to provide and operate an EIS facility in Pecos, Texas,” the report states.

The contract beginning March 2021 was “by far the largest ever” for Endeavors Family, Inc., and came months after the company hired Andrew Lorenzen-Strait, who served as an adviser to the Biden-Harris transition team. The contract was also the second largest ever awarded by the agency, according to Axios.

“Despite multiple requests, ACF could not provide support for its review of the Endeavors quote, the price analysis techniques used to analyze the quote, or an [independent Government cost estimate] for an EIS dated before the contract was awarded,” the new inspector general’s report states. “When we asked for documentation, ACF told us that it was under significant time constraints to award contracts.”

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Family Endeavors Inc. told Axios that its work on the border was a “continuation of services” that it has conducted for the migrant population since 2012. By April 2021, a month after the contract began, federal procurement records showed ACF had already paid $255 million of the no-bid contract to the nonprofit, which had already dwarfed the nonprofit’s total $43 million budget in 2018.

Family Endeavors, Inc. did not immediately respond to an after-hours email from Fox News seeking comment.

In September 2023, then-Chairman of the House Homeland Security Committee, former Rep. Mark Green, R-Tenn., and then-Chairman of the House Subcommittee On Oversight, Investigations and Accountability, former-Rep. Dan Bishop, R-N.C., sent a letter to Lorenzen-Strait about his ties to both the Biden administration and Endeavors. The letter requested him to both reach out to the committee for an interview and mandated he preserve records on his communications with leaders involved in granting other “sole source” contracts.

“On January 20, 2021, Family Endeavors, Inc. (Endeavors) named you the Senior Director for Migrant Services and Federal Affairs. Immediately preceding your position with Endeavors, you served on the Biden-Harris transition team, and previously was an Immigration and Customs Enforcement (ICE) official,” the letter said. “In March 2021, just two months after you joined Endeavors, ICE awarded an $86.9 million sole source contract to Endeavors to provide beds and services in hotels for migrants who illegally crossed the Southwest border.”

The letter cites an undercover video recording from Project Veritas of Lorenzen-Strait “boasting” about his participation in government contracts related to migrant services.

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“Specifically, you refer to the Endeavors contract as a ‘corrupt bargain.’ You further discuss ‘brokering’ a deal that won Cherokee Federal, a team of tribally owned federal contracting companies, a nearly $2 billion contract with the Department of Health and Human Services (HHS) to provide services to unaccompanied alien children,” the letter continues with its claims. “In the video, you admit that Cherokee Federal is not equipped to handle the contract. You also admit that while you are publicly involved with the company Deep Water Point & Associates, you hid participation in government contracts through the entities, VerdinPoint and The Tanager Group.” 

A HHS spokesperson said that under President Donald Trump the ACF is implementing stricter accountability measures and strengthening oversight.   

“The previous administration wasted more than $1.8 billion dollars on a facility intended to house illegal aliens that was not even used in the last year of the previous administration, and that kind of fiscal mismanagement is exactly what Secretary Kennedy is working to correct,” the spokesperson said. “In fact, this contract was cancelled 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.”

Edmund DeMarche contributed to this report.