Pointing to THE CITY’s investigation of routine overpricing at Rikers Island’s commissary, City Comptroller Brad Lander is pressing for details of a proposed $33-million no-bid contract renewal between the Department of Correction and the commissary’s oft-criticized operator.
In a letter to newly appointed Correction Commissioner Lynelle Maginley-Liddiee, Lander, the city’s top fiscal watchdog requested information about the company’s prices and the proposed renewal, even though the contract has yet to be presented to him nearly a half year after it was announced.
When the DOC unveiled the agreement, it touted provisions department officials said would control prices and address persistent complaints of service glitches.
Instead, a published list of items family and friends can purchase to ship to incarcerated people indicates that the overpricing continues as the company — Keefe Group, one of the largest for-profit vendors of prison and jail commissaries nationwide — has operated under an expired contract since June 30.
“THE CITY reported that every commissary items’ sale prices were listed higher than the prices stipulated in the contract that the department negotiated with the company,” Lander wrote in a Dec. 12 letter to Maginley-Liddiee “The Department is obligated to ensure that Keefe Group LLC comply with the terms of the contract and should take action to prevent price gouging of people in custody and their loved ones who send necessary and modest comfort items.”
DOC spokesperson Annais Morales said the department is “processing the contract” and said it will be submitted as soon as that process is completed.
“We are waiting for the vendor to upload certain routine documents,” she added.
Putting Up Walls
In June, THE CITY was able to view a four-page version of the proposed renewal contract. It included restrictions on how much the company can raise prices, ordered the collection and digitization of records to ensure that orders of food and other basic items are fulfilled, and created a hotline and help desk to tackle delivery issues and other complaints that incarcerated people and their families say frequently have gone unaddressed.
In response to a Freedom of Information Law request for the new contract and asking if those new alleged stipulations were set in place, the department’s Assistant General Counsel Stephanie Plantin, denied access to records because it “would impair present or imminent contract awards or collective bargaining negotiations.”
Last Thursday, a correction officer also told a reporter she could not speak to a line of visitors waiting to see detainees — something the reporter routinely did in the past — until she consulted with the department’s press office.
The original $13.7 million no-bid contract was signed at the height of the COVID crisis in April 2022 as the hard-pressed department sought to transfer uniformed personnel from the commissary to cell blocks.
The contract introduced a phone commissary service called SecurePak that allows Rikers detainees to call in their orders through telephones placed in their housing units. They can order up to $125 in purchases per week, with the correction department collecting the money and paying Keefe based on sales. In the summer, a DOC spokesperson, Patrick Rocchio, told THE CITY that detainees order an average of 3,300 packages a week.
The contract also included the SecurePak service which allows family and friends to ship $25 a month worth of provisions to detainees from a list of 125 items. As of today, the published list for SecurePak shows the same prices that THE CITY investigation called into question
The new agreement, according to the department, will freeze prices for items such as toothpaste and soda for a year. Afterward, Keefe can seek a price hike for no more than 20% of the items, and the increases can’t exceed 5%, according to the proposed deal.
But those price restrictions may be illusory if the unannounced base prices for the items are substantially higher than the current ones or those offered by local stores or online retailers.
Price Jacking
Keefe, which has faced a variety of criticisms in several localities across the country, has remained in place since its initial contract expired on June 30, but won’t be paid until the proposed new three-year deal is formally approved by a host of city agencies and registered by the city Comptroller’s office.
THE CITY’s investigation found that many of the SecurePak prices and those at Rikers’ commissary were more than twice as high as those at local stores, whose prices the contract says should be benchmarks, not to be exceeded.
For instance, Keefe’s SecurePak website lists a 7.2-ounce bag of Starburst Fruit Chews candy at $5.73. According to the contract, the item should be sold for $3.75.
A 1.3-ounce cup of Cheerios cereal sells for t $3.62 on SecurePak. The price listed in the contract is $3.12. It sells for far less at the Trade Fair supermarket and deli – a typical neighborhood store a short walk from the Queens bus stop nearest Rikers — where it costs $2.19, and you can get it delivered through FreshDirect for $1.49.
For incarcerated people at Rikers also covered by the contract, a 4-ounce tube of Colgate toothpaste costs $3.30 at the commissary. It sells for $2.49 at CVS, and an 8-ounce tube goes for $2.99 at Target.
Friends and family members have also filed multiple complaints about botched deliveries and a lack of refunds issued.
In his letter, Lander asked Maginley-Liddie to stipulate when she expects the contract to be submitted to his office for formal registration as required by law.
Lander’s office is required to ensure there are funds in the budget to cover the agreement and that there was no obvious fraud in the deal.
Lander also asked Maginley-Liddie to list all the commissary items and their current prices — and what the new prices would be under the proposed deal. Additionally, Lander requested “any correspondence between the Department and Keefe Group LLC regarding the prices for commissary items.”
In June, THE CITY asked for similar correspondence via a Freedom of Information Law request. The DOC’s legal team rejected the request, arguing that it was “vague and overly broad.”
Scott Stringer, the former city comptroller, said letters to agencies seeking additional information are used to scrutinize contracts that even before their formal submission have raised questions.
“Scrutiny in any of these contracts is essential to protect taxpayers from any fraud and financial abuses,” he told THE CITY.
While Lander’s office can analyze and question proposed city contracts, even if he chooses not to register an agreement, the mayor can overrule him and do it himself.
Friends and family are only allowed to send food to incarcerated individuals through Keefe’s SecurePak service, by contrast, the state prison system allows people to send boxes of items through any third-party vendor.
Complaints about Keefe’s service are still evident.
“They never send all the items I order,” said one woman visiting her husband at Rikers last Thursday. “They ship them later in the next order or I get a refund.”