Gov. Maura Healey’s administration permitted “improper and unlawful” no-bid contracts for meals and transportation companies as a part of the state-run emergency shelter system housing migrants and native households, in line with a report launched Tuesday by the State Auditor’s Workplace.
The scathing audit from Auditor Diana DiZoglio hammered the Healey administration for a collection of choices it made round procurement and contracting within the early phases of a surge of migrant arrivals to Massachusetts that strained the taxpayer-funded household shelter system.
However the report centered on some incidents which have already confronted waves of scrutiny within the media and public criticism, together with two no-bid contracts Healey inked with East Boston’s Spinelli’s Ravioli and Mercedes Cab Firm in North Truro.
DiZoglio mentioned she hopes the Healey administration adopts the reforms her workplace beneficial within the audit and strikes “away from its defensive posture.”
“This is an opportunity for the administration to reevaluate how it can and must be a more responsible steward of its significant authorities during states of emergency. The audit shines a light on where efficiencies and improvements should be implemented to help save taxpayer dollars and increase public trust,” the auditor mentioned in a press release.
Housing Secretary Ed Augustus shot again at DiZoglio, arguing her audit “misses the urgent need for reform to the flawed system we inherited, the scale of the crisis that was thrust upon Massachusetts during this time, and the magnitude of the turnaround that has occurred.”
“The SAO’s suggestion that its own performance auditors could have predicted a once-in-a-lifetime surge in shelter demand — when shelter system operators throughout the country did not — is surprising to say the least,” Augustus mentioned in a letter to DiZoglio. “EOHLC strongly rejects the suggestion that it should have foreseen what was, in fact, a historically unprecedented increase in demand for EA shelter services driven by international and national forces far beyond EOHLC’s control.”
The report additionally drew criticism from some shelter suppliers like Heading House CEO Danielle Ferrier, who knocked the investigation as a “desk audit.”
“The team conducting this audit did not speak with any providers. The methodology appears flawed. The report contains factually incorrect assertions about the process that lead to inaccurate conclusions,” Ferrier mentioned in a press release to the Herald.
The variety of households in state-run shelters began to extend in January 2023 however spiked towards the tip of the 12 months, in line with historic state knowledge. Caseloads largely plateaued throughout 2024 earlier than they began to say no in the beginning of this 12 months.
Healey declared a state of emergency in August 2023, a transfer that allowed her administration to make use of no-bid or “emergency contracts” to rapidly discover companies whereas aggressive procurement processes performed out within the background.
DiZoglio’s workplace accused Healey’s housing deputies of failing to “adequately assess and act upon the increased demand for service, resulting in improper and unlawful emergency procurements for food and transportation.”
The report contends that the emergency shelter system had already surpassed “baseline capacity” of three,600 items by January 2023, and the state of affairs continued to worsen all through the rest of the 12 months.
“We believe that EOHLC could have better foreseen the increased demand for food and transportation services based upon data it was tracking and made use of the normal procurement process instead,” the audit mentioned.
DiZoglio’s workplace mentioned although shelter caseloads had been climbing for the reason that begin of 2023, the Healey administration went forward and entered into 4 no-bid contracts, together with the $10 million settlement with Spinell’s and a $2.8 million cope with Mercedes Cab Firm.
The housing company “provided us no valid justification for the no-bid emergency contracts,” the audit mentioned.
“The situation was not unexpected, and the need for food and transportation services had been predictable well before the emergency procurement was initiated,” the report mentioned, which additionally criticized the no-bid offers as “inordinately long and inconsistent with best practices.”
Augustus mentioned the no-bid contracts the administration agreed to addressed “critical unmet needs for food and transportation for families and children.”
For a restricted time period, he mentioned, the state positioned households in inns with out rapid shelter service suppliers to serve meals or present transportation to shelter residents.
The Healey administration seemed to Spinelli’s for meals partially as a result of it was an current Massachusetts Emergency Administration Company contractor that offered companies through the COVID-19 pandemic below former Gov. Charlie Baker’s administration, Augustus mentioned.
“EOHLC executed the contract with Spinelli’s on an emergency basis because allowing hundreds of families and children sheltered in hotels to go without access to food was rightly determined to be an unacceptable alternative,” Augustus mentioned.
The previous Worcester metropolis supervisor mentioned the state turned to Mercedes Cab Firm, now often called Pilgrim Transit, as a result of it wanted “specialized transportation services.”
“The cost that EOHLC paid was proportionate to the difficulty of the required work. EOHLC required statewide, on-demand transportation services by a vendor able to scale. Transportation services had to be guaranteed to be available between 8 am and 6 pm, Monday to Saturday,” Augustus mentioned.
After an unrelated occasion Tuesday, Healey mentioned she didn’t suppose her administration would make adjustments to their procedures primarily based on the report from DiZoglio’s workplace.
“This has been territory pretty well covered. We, as a team, spent a lot of time on it the last two years. I instituted a number of reforms along the way. I then worked with the Legislature on important reforms, and that’s why you see things today where numbers are way down, costs are going way down, hotels are shutting down,” Healey mentioned.
However Healey nonetheless took flak from two potential Republican rivals in subsequent 12 months’s 2026 gubernatorial election through which she plans to run for a second time period.
Mike Kennealy, a former cupboard secretary below Baker, mentioned DiZoglio’s report “confirmed what we already knew.”
“Maura Healey completely mismanaged the migrant crisis, wasting hundreds of millions of taxpayer’s hard earned dollars on bloated no-bid contracts while refusing to act early and responsibly,” he mentioned. “Massachusetts needs a governor who can manage a crisis and respects taxpayers enough to protect their dollars from misappropriation.”
Brian Shortsleeve, a enterprise capitalist and former MBTA official, known as on Healey to fireside Augustus, arguing the audit confirmed a “systemic problem of carelessness with our tax dollars.”
“Where do we go to get our money back from these pricey no-bid contracts?” Shortsleeve mentioned. “Healey’s team blew millions on shady, no-bid contracts, handed out sweetheart deals, and got taken for a ride, literally, with $150 cab fares and bloated food bills.”
