DHS to Award $338.8 Million Sole-Source Trailer Contract, OMB Flags $94 Million in Duplicate Billing

The Sole-Source Award

The Department of Homeland Security is preparing to award a $338.8 million sole-source contract for 1,400 migrant housing trailers to Nuevo Sol Mobility Solutions of Tucson, Arizona, according to two congressional appropriators familiar with the plan. The award, scheduled to be announced on Jan. 22, will direct the Federal Emergency Management Agency to transport the trailers from a FEMA Region VI warehouse in Denton, Texas, to staging areas in San Diego, California, and Yuma, Arizona, the appropriators said. A sole-source justification memo signed on Jan. 19 by a senior DHS procurement official cites an urgent operational need at the southwest border and names Nuevo Sol as the only vendor capable of delivering climate-controlled units within 45 days, the sources said.

The contract would pay roughly $242,000 per trailer, a price that one of the appropriators called sharply above the $119,000 per unit that FEMA paid for similar trailers under a competitive award in 2023. The trailers are intended to house single adult migrants at two processing sectors that have reported daily arrivals above 4,200 people during the first two weeks of January, the sources said. The award does not require full-and-open competition because the memo invokes a 13 C.F.R. emergency exception, according to a copy of the justification reviewed by The Alamo Post.

The same firm received a $22 million FEMA logistics contract in late 2024 to provide portable restrooms, showers, and generators to shelters in New Mexico, according to federal spending records reviewed by The Alamo Post. That contract was also awarded on a sole-source basis, the records show. A former FEMA regional administrator who reviewed the new proposal said the pricing appears inconsistent with standard cost schedules used in competitive procurements.

Duplicate Billing Flagged

A budget analyst at the Office of Management and Budget told The Alamo Post that the proposal includes $94 million in duplicate billing that was flagged during a routine review on Jan. 17. The analyst, who was not authorized to speak publicly, said the overlap appears in line items for transportation, site preparation, and wastewater hookups that were already covered under a separate $87 million FEMA facilities contract awarded in October. OMB staff raised the issue during a 2 p.m. interagency call on Jan. 18 and asked DHS to revise the package before submission, the analyst said. DHS did not remove the contested items, according to the analyst.

One of the congressional appropriators said the duplicate charges include $41 million for flatbed trucking that FEMA already paid a Texas hauler to perform under the October facilities deal. Another $28 million covers electrical connections that were part of the earlier contract, and the remaining $25 million appears to repeat wastewater permits issued by local governments, the appropriator said. The appropriator added that the House Homeland Security Appropriations Subcommittee learned of the planned award during a closed briefing on Jan. 16 and that staff have requested the full justification memo and pricing worksheets.

A senior investigator at the Government Accountability Office said the watchdog expects to open a formal review of the award on Jan. 23, one day after the planned announcement. The investigator, who has seen preliminary briefing materials, said GAO attorneys are reviewing whether the emergency exception was applied correctly and whether the contract should have been competed. The review could lead to a bid protest recommendation by early February, the investigator said.

What Happens Next

If the award proceeds on Jan. 22, FEMA would begin issuing delivery orders within 72 hours, with the first 300 trailers expected to arrive in San Diego by Jan. 29, the sources said. Nuevo Sol would also provide on-site maintenance crews under a separate $11.4 million task order, according to the contract documents. The full $338.8 million would be drawn from the DHS Shelter and Services Program, which had $920 million remaining at the start of the fiscal year, the appropriators said. A second source at OMB said the account could be depleted by late April if additional sole-source awards follow.

The contract has also drawn scrutiny from the DHS Office of Inspector General, which is scheduled to begin an audit of FEMA trailer procurement on Feb. 3, according to an internal planning document obtained by The Alamo Post. The audit will examine whether sole-source justifications since 2023 complied with federal acquisition regulations. Senate Homeland Security and Governmental Affairs Committee staff have scheduled a meeting for Jan. 23 to review the award file, one of the appropriators said. Committee aides expect to question FEMA Administrator Deanne Criswell at a hearing set for Jan. 27.

The Alamo Post obtained a draft schedule showing that DHS officials plan to brief congressional staff again at 10 a.m. on Jan. 21, less than 24 hours before the award announcement. The GAO investigator said the watchdog is likely to issue a public letter by Jan. 24 warning that the emergency exception may not withstand review. A DHS spokesperson did not respond to requests for comment.