HHS awards $1.3B contract for influx care facility in Texas, raising questions on competition and value

Contract Overview

Contract Amount: $1,298,999,990 ($1.3B)

Contractor: Family Endeavors, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-05-16

End Date: 2023-11-15

Contract Duration: 548 days

Daily Burn Rate: $2.4M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INFLUX CARE FACILITY (ICF) SITE IN PECOS, TX FOR THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF), OFFICE OF REFUGEE RESETTLEMENT (ORR)

Place of Performance

Location: PECOS, REEVES County, TEXAS, 79772

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.30 billion to FAMILY ENDEAVORS, INC. for work described as: INFLUX CARE FACILITY (ICF) SITE IN PECOS, TX FOR THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF), OFFICE OF REFUGEE RESETTLEMENT (ORR) Key points: 1. The contract's significant value warrants scrutiny regarding cost-effectiveness and potential for better pricing through competition. 2. A sole-source award limits market exploration and may forgo opportunities for innovative solutions or cost savings. 3. The duration and scope suggest a substantial commitment, requiring robust performance monitoring to ensure service quality. 4. The fixed-price nature of the contract shifts some risk to the contractor but necessitates clear performance standards. 5. This award represents a major investment in addressing refugee resettlement needs, impacting vulnerable populations. 6. The absence of a competitive process raises concerns about price discovery and potential overpayment.

Value Assessment

Rating: questionable

This $1.3 billion contract for an influx care facility is a substantial award. Without a competitive bidding process, it is difficult to benchmark its value against market rates or similar contracts. The fixed-price nature provides some cost certainty, but the lack of competition means potential savings from a more robust bidding environment may have been missed. The per-unit cost for services rendered will be a critical metric to monitor for value realization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Family Endeavors, Inc. was the only bidder considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple vendors. While sole-source awards can be justified in specific circumstances (e.g., urgent needs, unique capabilities), they limit price discovery and can reduce the incentive for contractors to offer their best pricing.

Taxpayer Impact: Taxpayers may not be receiving the best possible price for these essential services due to the lack of competition. The absence of multiple bids means there was no market pressure to drive down costs.

Public Impact

The primary beneficiaries are unaccompanied children and youth requiring shelter and care services. The contract delivers essential services including shelter, food, medical care, and case management. The geographic impact is concentrated in Pecos, Texas, providing critical infrastructure for refugee resettlement. This contract has significant workforce implications, creating jobs in the service and support sectors in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Sole-source award raises concerns about transparency and fairness in procurement.
Performance monitoring is crucial to ensure quality of care for vulnerable populations.
Potential for contractor lock-in due to the scale and duration of the contract.

Positive Signals

Addresses a critical and urgent need for refugee resettlement services.
The fixed-price contract provides cost certainty for the government.
The contractor, Family Endeavors, Inc., has experience in providing similar services.

Sector Analysis

This contract falls within the social services sector, specifically focusing on child and youth services and refugee resettlement. The market for such services can be specialized, often involving non-profit organizations and government contractors with specific expertise. The scale of this award ($1.3 billion) is substantial and likely represents a significant portion of the federal spending in this niche area for the contract period. Comparable spending benchmarks are difficult to establish without more detailed service breakdowns and competitive data.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides or subcontracting requirements. This means that opportunities for small businesses to participate in delivering these services, either as prime contractors or subcontractors, are likely limited under this specific award. The absence of a competitive process also means that the government did not actively seek to leverage small business capabilities through set-aside goals.

Oversight & Accountability

Oversight will primarily fall under the Administration for Children and Families (ACF) within HHS. Given the contract's sole-source nature and significant value, robust oversight mechanisms are essential. This includes regular performance reviews, site visits, and financial audits to ensure compliance with contract terms and quality of care standards. Transparency regarding performance metrics and any incurred costs will be key to accountability.

Related Government Programs

Office of Refugee Resettlement Programs
Unaccompanied Alien Children Program
Child Welfare Services
Emergency Refugee and Entrant Assistance

Risk Flags

Sole-source award lacks transparency.
Potential for cost overruns due to lack of competition.
Ensuring quality of care for vulnerable children is paramount.
Contract duration and scale require robust performance management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.30 billion to FAMILY ENDEAVORS, INC.. INFLUX CARE FACILITY (ICF) SITE IN PECOS, TX FOR THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF), OFFICE OF REFUGEE RESETTLEMENT (ORR)

Who is the contractor on this award?

The obligated recipient is FAMILY ENDEAVORS, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Administration for Children and Families).

What is the total obligated amount?

The obligated amount is $1.30 billion.

What is the period of performance?

Start: 2022-05-16. End: 2023-11-15.

What is the track record of Family Endeavors, Inc. in managing large-scale government contracts, particularly for refugee or child welfare services?

Family Endeavors, Inc. has a history of working with federal agencies, including HHS, on programs related to refugee resettlement and child welfare. They have managed contracts for services such as shelter operations, case management, and reunification support. However, the scale and duration of this $1.3 billion contract represent a significant undertaking. A thorough review of their past performance on similar, large-value contracts, including any documented successes, challenges, or audit findings, would be necessary to fully assess their capacity and reliability for this specific award. Information on their financial stability and management expertise in handling such extensive operations is also critical.

How does the cost per child per day under this contract compare to similar facilities or programs serving unaccompanied minors?

Benchmarking the cost per child per day is crucial for assessing value, but challenging without detailed breakdowns of services included in the contract and comparable data. Given the sole-source nature, direct comparisons to competitively bid contracts are difficult. However, industry averages for similar services (shelter, care, case management) can provide a reference point. If the per-unit cost significantly exceeds established benchmarks or historical averages for similar government-funded programs, it would indicate potential overpayment or inefficiencies. Detailed financial reporting and performance metrics from Family Endeavors, Inc. will be essential for this analysis.

What specific risks were identified that necessitated a sole-source award instead of a competitive procurement?

The justification for a sole-source award typically involves specific circumstances such as urgent and compelling needs where only one responsible source can provide the required services, or when a unique capability is required that only one contractor possesses. For this contract, the justification likely centered on the immediate and substantial need for influx care capacity for unaccompanied children, potentially coupled with the perceived ability of Family Endeavors, Inc. to rapidly scale operations. However, without the detailed justification document, the precise risks that precluded competition remain unclear. These could include time constraints, specialized facility requirements, or existing infrastructure dependencies.

What are the key performance indicators (KPIs) being used to measure the success and effectiveness of the services provided under this contract?

Effective oversight of this contract hinges on clearly defined Key Performance Indicators (KPIs) that measure the quality and timeliness of services delivered. For an influx care facility, critical KPIs would likely include: average length of stay for children, rate of successful reunification or placement with sponsors, provision of timely medical and mental health services, adherence to safety and sanitation standards, and educational support provided. The contract should specify targets for these KPIs and outline remedies or corrective actions if performance falls short. Regular reporting on these metrics by Family Endeavors, Inc. and independent verification by HHS are essential.

What is the historical spending trend for similar influx care or refugee resettlement services by HHS/ACF, and how does this award compare?

Historical spending data for HHS/ACF on influx care and refugee resettlement services provides context for the magnitude of this $1.3 billion award. While specific figures for 'influx care facilities' might fluctuate based on geopolitical events and migration patterns, overall spending in this area has seen significant increases in recent years due to heightened needs. This contract represents a substantial, concentrated investment compared to potentially smaller, more dispersed contracts in prior years. Analyzing trends in funding for unaccompanied children's services and emergency shelter operations over the past 5-10 years would reveal whether this award is an anomaly or part of a broader strategic shift in resource allocation.

Industry Classification

NAICS: Health Care and Social Assistance › Individual and Family Services › Child and Youth Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75ACF122R00017

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6363 DE ZAVALA RD STE 200, SAN ANTONIO, TX, 78249

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,981,749,937

Exercised Options: $1,298,999,990

Current Obligation: $1,298,999,990

Actual Outlays: $1,298,999,990

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline