The Biden administration circumvented federal procurement rules to award a $529 million sole-source contract to a nonprofit with direct ties to a former transition team advisor — and then modified the deal 15 times, ballooning costs far beyond even its own internal estimates. That's the finding of a new inspector general report released Thursday morning.
Fox News reported that the contract went to Family Endeavors Inc., a Texas-based nonprofit tasked with establishing and operating an emergency intake site for unaccompanied minors in Pecos, Texas.
The Administration for Children and Families, operating under HHS, handed Endeavors the deal on March 16, 2021 — just eleven days after the nonprofit first emailed the Office of Refugee Resettlement offering its services.
Eleven days. From cold email to half-billion-dollar contract.
The OIG report lays out a sequence of events that reads less like federal procurement and more like a prearranged transaction:
"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 inspector general found that ACF knew long before March 2021 that it would need more shelter capacity than existing sites could provide. The agency had time to plan. It had time to open the process to competitive bidding. It chose not to.
"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. 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."
This wasn't an agency caught off guard by a crisis. It was an agency that let a foreseeable problem fester until "emergency" became the excuse for skipping the rules.
The numbers get worse the deeper you look. ACF's own internal cost estimate for the contract was $244 million. The awarded contract came in at $529 million — more than double what the agency itself projected the work should cost. And when ACF was asked to show its homework, it couldn't.
"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. When we asked for documentation, ACF told us that it was under significant time constraints to award contracts."
"Time constraints" — the universal bureaucratic alibi for accountability failures. ACF couldn't produce documentation because, by all appearances, the documentation never existed.
After the initial award, ACF modified the contract 15 separate times, extending it through May 2022 and pushing the total value to more than three times the agency's original estimate.
By April 2021 — one month into the contract — federal procurement records showed ACF had already paid Endeavors $255 million. Nearly half a billion dollars out the door before the ink was dry on the first quarterly review.
For context, Family Endeavors Inc. had a total organizational budget of $43 million in 2018. Three years later, it landed a single government contract worth more than twelve times that figure.
The contract alone would be a procurement scandal. The personnel connections make it something else entirely.
Andrew Lorenzen-Strait served as an advisor on the Biden-Harris transition team, having previously worked as an ICE official. On January 20, 2021 — Inauguration Day — Family Endeavors Inc. named him Senior Director for Migrant Services and Federal Affairs. Two months later, the sole-source contracts started flowing.
In addition to the $529 million HHS contract, ICE awarded Endeavors a separate $86.9 million sole-source contract in March 2021 to provide beds and services in hotels for illegal immigrants who crossed the Southwest border.
Two sole-source contracts from two different federal agencies, both landing at the same nonprofit, both in the same month, both connected to a man who had just left the incoming administration's transition operation.
In September 2023, Rep. Mark Green (R-Tenn.), then chairman of the House Homeland Security Committee, and Rep. Dan Bishop (R-N.C.), then chairman of the Subcommittee on Oversight, Investigations and Accountability, sent Lorenzen-Strait a letter requesting an interview and mandating preservation of records.
The letter cited a Project Veritas undercover video in which Lorenzen-Strait allegedly made extraordinary admissions:
"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. 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 "corrupt bargain." His words — not the inspector general's, not a Republican congressman's. The man at the center of the arrangement allegedly described it exactly as it appears.
This is what the hollowing out of federal procurement looks like in practice. An administration manufactures urgency by failing to plan. It uses the resulting "emergency" to bypass competitive bidding. It routes the resulting no-bid contract to a connected organization. And when investigators come asking for the paperwork, the paperwork doesn't exist.
Every guardrail in the federal procurement system exists for a reason — to prevent exactly this kind of arrangement. Full and open competition isn't bureaucratic red tape. It's the mechanism that stops half-billion-dollar contracts from landing on the desks of organizations whose primary qualification is knowing the right people on the transition team.
The Biden administration treated those guardrails as suggestions.
The Trump administration moved to cancel the contract, and an HHS spokesperson framed the broader waste in stark terms:
"The previous administration wasted more than $1.8 billion 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. 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."
ACF is now implementing stricter accountability measures and strengthening oversight — the kind of basic institutional hygiene that shouldn't require a change in administration to enforce, but apparently did.
The inspector general's findings confirm what congressional investigators began uncovering years ago: the border crisis of 2021 wasn't just a policy failure.
It was a spending bonanza for the right people. Federal money flowed at scale to organizations that hadn't been vetted through competitive processes, at prices the government's own analysts couldn't justify, through channels that conveniently lacked documentation.
Family Endeavors went from a $43 million nonprofit to a federal contractor pulling in hundreds of millions in a matter of weeks. The man who connected the dots between the transition team and the nonprofit allegedly called it a corrupt bargain on camera. The agency that wrote the checks couldn't produce a single document showing it had checked the price.
The system worked exactly as designed — just not for the taxpayer.
