ACF Contract for Unaccompanied Alien Children Services Noncompliant

HHS OIG Reports & Publications

Filed February 10th, 2026

Detected February 12th, 2026

Summary

The HHS OIG found that the Administration for Children and Families (ACF) awarded a $529 million sole source contract for unaccompanied alien children services in a noncompliant manner. The contract was double the cost estimate and lacked required pre-award documentation.

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What changed

The HHS Office of Inspector General (OIG) has issued a report detailing significant compliance failures in the Administration for Children and Families' (ACF) award of a $529 million sole source contract to Family Endeavors, Inc. The OIG found that ACF did not follow federal requirements when awarding the contract, which was intended to provide services for unaccompanied alien children. Specifically, ACF failed to adequately plan for increased needs, awarded the contract based on an unsolicited proposal just three days after receiving it, and could not provide documentation of a price analysis to justify the $529 million cost, which was more than double ACF's own estimated cost of $245 million. Furthermore, ACF did not evaluate whether Family Endeavors was a responsible contractor prior to the award.

This report highlights critical deficiencies in ACF's contracting processes and serves as a warning to government agencies regarding proper contract planning, cost analysis, and contractor responsibility evaluations, especially during periods of increased demand. While the report does not impose new direct obligations on regulated entities, it underscores the importance of adherence to federal acquisition regulations. The OIG recommends that ACF use this report's findings to improve future contract planning and resource utilization to ensure sufficient capacity for serving vulnerable populations. ACF has concurred with this recommendation, with an update expected by August 9, 2026.

What to do next

Review internal contract award procedures for compliance with federal requirements, including pre-award documentation and price analysis.
Ensure adequate planning for potential surges in service needs to avoid sole-source awards based on unsolicited proposals.
Verify contractor responsibility assessments are completed prior to contract award.

Source document (simplified)

ACF’s $529 Million Sole Source Contract Award for Unaccompanied Alien Children Services Was Based on an Unsolicited Proposal, Double the Cost Estimate, and Noncompliant With Pre-Award Requirements

Issued on

02/10/2026

| Posted on

02/12/2026

| Report number: A-03-22-00353

Report Materials

Why OIG Did This Audit

In 2021, with an unprecedented number of unaccompanied alien children arriving at the U.S. southern border, the Administration for Children and Families (ACF) awarded a $529 million sole source contract to Family Endeavors, Inc. (Endeavors), to operate an emergency intake site.
Congress and the media raised concerns about ACF’s sole source contract awarded to Endeavors. We previously identified issues related to ACF sole source contracting.
This audit, one in a series focused on contracting related to unaccompanied alien children, specifically addressed the sole source contract awarded to Endeavors.

What OIG Found

ACF did not award the Endeavors 2021 sole source contract in accordance with Federal requirements. Other, more qualified contractors may have been available to perform the duties of the contract at a lower cost to the Government.

For several months, ACF anticipated the need for additional shelter beds but failed to adequately plan to address the need. Instead, when ACF needed beds, it indicated that there was insufficient time to award a competitive contract and awarded the sole source contract 3 days after receiving an unsolicited proposal from Endeavors.
ACF could not provide documentation that it conducted a price analysis before awarding the contract to show that Endeavors’ price was fair and reasonable. ACF’s price analysis, completed 3 months after ACF awarded the Endeavors contract, showed that the $529 million contract ACF awarded to Endeavors was for more than double ACF’s total estimated cost of $245 million.
ACF did not evaluate whether Endeavors was a responsible contractor before awarding the contract.

What OIG Recommends

ACF’s awarding of the Endeavors contract was characterized by serious deficiencies that raise significant concerns. We recommend that ACF use the information in this report to promote better contract planning and efficient use of resources to ensure sufficient capacity during periods of increased need.

ACF concurred with our recommendation.

Recommendation Details (1)

26-A-03-037.01 to ACF - Open Unimplemented Update expected on
08/09/2026 We recommend that the Administration for Children and Families use the information in this report to promote better contract planning and efficient use of resources to ensure sufficient capacity to serve the UAC population during periods of increased need.
View in Recommendation Tracker Report Type Audit HHS Agencies Administration for Children and Families Issue Areas Contracts Emergency Preparedness and Response Target Groups Children and Families Financial Groups Other Funding