A bombshell inspector general’s report released Thursday is raising serious questions about how the Biden administration handled a massive government contract at the height of the 2021 unaccompanied minor crisis. According to the report, the Administration for Children and Families (ACF), an agency under the Department of Health and Human Services, bypassed standard federal procurement requirements when it awarded a $529 million sole source contract to Family Endeavors Inc., a nonprofit that had recently hired a former Biden transition official.
The contract, issued in March 2021, was intended to establish and operate a 2,000-bed emergency intake site in Pecos, Texas, to house unaccompanied migrant children crossing the southern border. At the time, the Biden administration cited COVID-19 emergency conditions as justification for skipping full and open competition in the bidding process.
But the inspector general’s report challenges that explanation.
“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. Investigators concluded that the lack of competition stemmed from “insufficient planning,” not an unforeseen emergency.
The financial details are equally striking. The watchdog found the $529 million contract price was more than double ACF’s own internal cost estimate of $244 million. The agreement was later modified 15 times, extended through May 2022, and ultimately increased to more than three times the agency’s original projection.
The speed of the award has also drawn scrutiny. On March 5, 2021, Family Endeavors emailed the Office of Refugee Resettlement offering emergency assistance. Eight days later, the nonprofit submitted an unsolicited proposal. Just three days after that, ACF awarded the sole source contract.
Investigators said ACF could not provide documentation showing how it evaluated the nonprofit’s pricing or justify its cost analysis before issuing the award. When pressed, agency officials cited “significant time constraints.”
The deal marked the largest contract in the nonprofit’s history and the second-largest ever awarded by the agency. Federal records show that by April 2021 — just one month into the agreement — ACF had already paid $255 million to the organization. That figure alone far exceeded the nonprofit’s reported $43 million annual budget in 2018.
The timing has fueled political scrutiny. Family Endeavors hired Andrew Lorenzen-Strait in January 2021 as Senior Director for Migrant Services and Federal Affairs. Lorenzen-Strait had served on the Biden-Harris transition team and previously worked as an ICE official.
In 2023, House Republicans launched inquiries into Lorenzen-Strait’s ties to both the administration and the nonprofit. Lawmakers cited undercover video footage in which he allegedly referred to one contract as a “corrupt bargain” and discussed brokering other large federal agreements. Those claims remain politically charged and contested.
Family Endeavors has said its migrant services work dates back to 2012 and characterized the border contract as a continuation of existing efforts. The nonprofit did not immediately respond to requests for comment following release of the inspector general’s findings.
A spokesperson for HHS, now under the Trump administration, said stronger accountability measures are being implemented and noted that the contract was canceled early in Trump’s current term. The spokesperson also criticized what was described as $1.8 billion in spending on facilities that were later underutilized.
The inspector general’s findings are likely to intensify scrutiny over federal spending during the 2021 border surge — and renew debate over transparency, oversight, and political connections in emergency government contracting.
