The Trump administration’s efforts to deport undocumented immigrants en masse just got more expensive. And the agency charged with loading people onto planes and flying them back to their home countries is blaming the coronavirus pandemic for the price hike.
In April, Immigrations and Customs Enforcement, a division of the Department of Homeland Security, increased its payments under a contract awarded in 2017 to Classic Air Charter, a company that subcontracts chartered deportation flights out of the country, primarily to Mexico and Central and South America, but also, more recently to other regions.
ICE attributed the price hike to the novel coronavirus. The increase swells the already high cost that the federal government pays to fly undocumented immigrants out of the country. The two awards to Classic Air under its ICE contract since the pandemic began, each for $50.7 million, were the largest it’s received under the contract since it was inked three years ago. The next largest, for $46.6 million, came in May 2019, but prior to the coronavirus pandemic, ICE awards under the contract averaged just $12.7 million.
ICE would not provide a comment on the record for this story. Classic Air did not respond to inquiries. But in federal procurement notices beginning in April, ICE said the new contract’s “guaranteed minimum values have been temporarily adjusted to maintain vendor operability during COVID19 pandemic."
Classic Air has brokered deportation flights for ICE for years, primarily by way of two subcontractors that have charged extremely high rates for the service, due largely to the lack of air carriers willing to work with the controversial immigration enforcement agency.
According to internal Classic Air records reported by Quartz last year, ICE was paying Classic Air and its subcontractors as much as $33,000 per flight-hour to deport migrants from Arizona to Bangladesh, India, and Vietnam. It’s unclear if those same rates apply to other countries.
“Many carriers are discouraged by the potential of public backlash or negative media attention,” Classic Air wrote. “As a result, our carrier selection pool has been reduced to a single operator,” the Oklahoma-based Omni Air International.
Under an indefinite delivery vehicle, which is the type of contract that ICE awarded to Classic Air in 2017, the government agency sets a price range for the goods or services it’s purchasing, explained Jim Nagle, of counsel at the law firm Oles Morrison and an expert in federal procurement law.
“The government decides that it will need a particular product or service but doesn’t know exactly how many,” he wrote in an email. “So it gives a minimum which is the only amount that is guaranteed to the contractor and a maximum which should be large enough to cover the amount the government might very well have to order.”
The federal procurement records noting the increase in minimum awards to Classic Air did not provide details on why or how its fee structure has changed. But additional public records indicate that the company has sought federal assistance to maintain its operations as a result of the coronavirus and the resulting economic downturn.
According to data released by the Treasury Department last month, Classic Air received a loan through the Paycheck Protection Program worth between $150,000 and $350,000. The loan helped the company retain 18 jobs, according to Treasury records. Omni Air also got a PPP loan worth between $350,000 and $1 million.
Nagle said the hike in ICE payments to the company could provide additional financial benefits for Classic Air. “The only amount that the contractor can reliably count on and show its bankers or creditors is the guaranteed minimum,” he wrote. “So sometimes the government, to assist its contractor, will raise the guaranteed minimums to a higher number to reflect the government's increased demand for a particular item or service but also to enable the contractor, especially a needed contractor, to be able to get necessary financing from his bankers.”
Classic Air has received $322 million from ICE through its deportation contract since 2017, according to federal procurement records. Nearly a third of that, more than than $100 million, has come since March.