Welcome to NYC Mayor Eric Adams’ Shadow Workforce and Bloomberg 2.0
The profit-driven company Mayor Eric Adams’ administration gave a $432 million no-bid contact to handle the city immigration challenges is currently under investigation for human rights violations. Photo by Joe Maniscalco
By Bob Hennelly
New York City Mayor Eric Adam’s awarding of a $432 million dollar no-bid contract to handle the city’s influx of undocumented migrants last spring to DocGo, a for-profit medical services company, is just the latest example of municipal government outsourcing its response to a crisis — even as it cuts or leaves vacant tens thousands of civil service jobs.
This week, the Times Union reported New York State Attorney General Letitia James' office informed DocGo “that it is investigating the for-profit company’s running of shelters for migrants upstate and warned the company to cease any activities limiting the free movement and speech of the migrants in its care.”
According to the newspaper, the attorney general’s Civil Rights Bureau sent a letter to DocGo’s attorneys detailing “serious concerns” it has regarding potential violations of state and federal laws in its handling of the job of finding shelter for thousands of migrants, and ensuring they are receiving proper health care and processing.
The New York Times had previously reported “that many migrants” handled by DocGo “said they were treated like prisoners in a halfway house and provided with deceptive work and residency papers while in the contractor’s care.”
In a statement to the newspaper, DocGo said it had worked with government partners “to ensure we are delivering excellent, compassionate care to asylum seekers. We’ve always cooperated in a fully transparent manner. We look forward to working with the AG’s office in the same manner and providing the requested information expeditiously.”
NOTHING NEW
Longtime observers say that New York City’s increasing reliance on non-profit or for-profit service providers, instead of its municipal workforce, goes back decades — but really accelerated during the 12 years of Mayor Mike Bloomberg’s tenure and continued under Mayor Bill de Blasio during the COVID pandemic.
“It was going on in 1965,” recalled Bob Croghan, president of the Organization of Staff Analysts, which represents over 5,000 staff analysts across multiple city agencies. “It’s a shortcut with a profit motive or a pollical advantage to use a vendor agency….they should not let the civil service deteriorate. It’s more honest and reliable because the people in it have a career they don’t want to throw away.”
New York City’s penchant for outsourcing has been used to such an extent to deal with its perennial shelter crisis that it now hands over hundreds of millions of dollars annually to homeless service providers who, in turn, employ 125,000 non-civil service workers — more than a third of the size of New York City’s municipal workforce.
“It’s a form of racial capitalism structurally blocking predominately people of color and women from taking civil service jobs with unions benefits — it’s a two-tier employment system.”
This outsourced social service workforce, while providing the backbone of the city’s response to its homeless crisis, “are some of the lowest-paid workers in New York City, despite the importance of their services during the COVID-19 pandemic and the ongoing migrant crisis,” according to the Human Services Council (HSC), which represents the non-profit social service contractors. “Eight-in-ten human services workers in New York City are people of color, and 60-percent of them qualify for at least one form of government assistance.”
HSC estimated close to two-thirds of their workforce lives near poverty.
“It’s a form of semi-privatization on the cheap, said Joe Wilson, labor historian and educator. “It’s a form of racial capitalism structurally blocking predominately people of color and women from taking civil service jobs with unions benefits — it’s a two-tier employment system.”
Council Member Gale Brewer (D-Manhattan), chair of the City Council’s Oversight and Investigations Committee, told Work-Bites about the proliferation of outsourcing contracts coming at the same time the Adams administration has left open or eliminated thousands of civil service positions.
Brewer told Work-Bites she is also concerned about the emergence of this shadow workforce under contract with the city “where they don’t have fair wages.”
“They don’t have a real cost of living allowance, they don’t have the benefits city workers have — and sometimes, they work side-by-side with each other,” the council member said.
FALL HEARINGS
“We are going to do a hearing in the fall into all these contracts,” Brewer added. “Not only does this outsourcing cost more, but you have much less accountability; and we should have more. With these contractors you don’t know where the employees are coming from. You want to have local civil service workers doing this work because it keeps their grocery dollars [and] their back-to-school dollars here.”
Brewer is also concerned about succession planning in the civil service to make sure New York City retains the knowledge base “developed by municipal case workers through their experience of helping constituents signing up for things like SNAP [food stamps] and other benefits,” as well as “the understanding of all the nuances of what’s available for children.”
Brewer continued, “Even immigration, not as a lawyer, but as a case worker. None of this is in a book.”
Council Member Charles Barron (D-Brooklyn) told Work-Bites there’s no question New York City needs a stronger civil service.
“A lot of folks think this stuff could be done in-house and shouldn’t be privatized — contracted out of house,” the Brooklyn legislator said. “A lot of that is happening under this wave of capitalism because they [capitalists] are really suffering, and they are in a crisis, and they want to maximize profits. That’s why they put someone in [office] like Eric Adams, Bloomberg — and even de Blasio who was supposed to be so progressive — because they want to move the city more towards outsourcing.”
Barron also noted “a lot of unions capitulate to this outsourcing” and that even “preachers are now trying to get [municipal] contracts themselves.”
“At best, the economic reality is New York City is a limited sanctuary city when it comes to immigration,” said Nelson Flores, retired Teamster Local 237 shop steward who runs CivilServantWatchdog.com. “But when the crisis got difficult, their automatic reaction was to contract it out to a non-profit or for-profit organization to try and handle it. Meanwhile, the city is broke and it is simultaneously maintaining municipal agencies that should be capable of handling this crisis, but they have so badly undermined the civil service all these years that the agencies are not up to the task now.”
While Mayor Bloomberg touted outsourcing as being more efficient on his watch, hundreds of millions of dollars in cost overruns for an outsourced time keeping project called CityTime caught the eye of U.S. Department of Justice that documented a massive municipal contract fraud.
$4 MASKS AND CITYTIME
“Originally budgeted to cost the city $63 million, the project skyrocketed in cost to $700 million by 2011, a federal indictment charged,” the New York Times reported at the time. “Almost all of the more than $600 million that the city paid to its prime contractor, Science Applications International Corporation, ‘was tainted, directly or indirectly, by fraud,’ the indictment said.”
At the sentencing of three of the defendants in the case the newspaper reported that federal District Court Judge George Daniels called it “the largest city corruption scandal in decades” that was “unparalleled in its amounts, duration, and sophistication. It is a classic tale of greed and corruption.”
Preet Baharara, the U.S. Attorney for the Southern District of New York, did not sugarcoat his description of the CityTime scandal when describing it after he got an indictment in the case.
"The crimes alleged in today's superseding indictment are truly jaw dropping," Baharara said. "They reveal one of the most elaborate and massive schemes to defraud the city ever charged."
The irony was rich. "The massive scheme" started as an outsourced city contract to design a payroll system that would precisely track the hours worked by city employees. After a couple of false starts with other vendors, defense contractor Scientific Applications International Corporation was awarded the job in a no-bid contract by former Mayor Rudolph Giuliani’s Administration and continued on Bloomberg’s watch.
CityTime was by no means a one-off.
In 2011, hundreds of millions of dollars in outside contractor costs related to a Bloomberg era redesign of the city’s 911 call system prompted then-New York City Comptroller John Liu to flag poor project management, blown deadlines and cost overruns, with one phase ballooning from $380 million to $666 million dollars.
That same year, the New York City Council under the leadership of Speaker Christine Quinn, passed the "Outsourcing Accountability Act," which called for the city to perform a cost-benefit analysis to document if outsourcing actually saves the city money.
"It's not a good bill for the city and it should not have passed," then-Mayor Bloomberg said.
Scroll forward to the COVID pandemic and Mayor de Blasio’s signing of Executive Order 100 in March of 2020, which cited the public health emergency as grounds for suspending the city’s “laws and rules” that covered procuring goods and services.
“City Hall’s frantic hunt for protective masks and medical equipment to combat coronavirus led officials to sign emergency contracts totaling nearly $119 million with a firm run by a major donor to Mayor Bill de Blasio’s failed presidential campaign,” reported the City newspaper.
According to the news outlet, the firm “sold two million N95 masks to the city for $8 million — or $4 per mask” while “a day earlier, a different vendor…sold the city the same quantity of masks for $1.7 million, or 88 cents per mask.”