The city’s Department of Correction says it will open the bidding process to any contractors who want to operate its jail commissary after a series of articles by THE CITY exposed high prices and poor service by a private no-bid vendor, the Keefe Group.
Even after THE CITY’s initial investigation and a knock by the comptroller, the Adams’ administration last March awarded a $33 million no-bid deal to the Miami-based private equity firm that previously charged incarcerated people and their families twice as high as local stores on many products.]
At a City Council hearing on Thursday morning, DOC deputy commissioner for legal matters James Conroy said the Keefe contract expires in June 2026 and the department plans to issue a so-called Request for Proposals to open bidding to any interested contractor, including those owned by minorities, to possibly take over.
“Great! Good to know that you’re returning to competitive bidding,” said City Councilmember Julie Won, chair of the Council’s Committee on Contracts (D-Queens).
The DOC currently has 104 contracts with private providers, of which only four were not put out to bid, according to Conroy, who noted he has only been in his position for about seven months.
The DOC now plans to audit the Keefe deal, as required under the deal, and all the other private contracts over this year, he added.
Additionally, since Conroy took over, the DOC has also moved procurement from its management and budget department to the legal division, a setup more in line with how other city agencies operate. The legal department also has a better grip on how to review and stay on top of contracts with clauses such as strict pricing setups.
Conroy said he and his team “looked at our processes and are shoring up everything regarding the evaluation process” of contracts to make sure they use the city’s digital PASSPort contract system. That system was designed to track and spot contract violations for city agencies.
Giving Money Back
Also Thursday, the Council discussed a proposed bill that would require jail officials to return all unspent commissary money to detainees before they are released.
The legislation, being sponsored by Councilmember Crystal Hudson (D-Brooklyn) comes after THE CITY in 2023 detailed how former detainees at Rikers Island left a total of $4.2 million in commissary accounts.
The unclaimed millions are tied to 176,719 commissary accounts from 2017 until May 1, 2024 according to the Department of Correction’s second report on the matter.
Multiple deposits may be connected to people detained more than once, but the huge number of unclaimed accounts indicates that the number of detainees eligible for refunds is in the thousands.
Councilmember Julie Won (D-Queens) questions Department of Correction officials during a City Hall hearing on commissary prices, Jan. 30, 2025. Credit: Alex Krales/THE CITY
Conroy said the Adams’ administration is against the proposed bill, arguing that it would put people in custody and city employees “at significant risk of harm.”
That’s because it would force a cashier located on Rikers to carry large amounts of cash to pay out people as they leave the island, according to Conroy.
He and other jail officials did not explain why jail officials couldn’t issue checks or money cards as some Council members suggested later during the hearing.
“The resources needed to ensure that this amount of cash could be kept on site at each DOC cashier window 24 hours a day, seven days a week, would be insurmountable from an operational, infrastructure, and security perspective,” he testified. “The
cashier windows may become targets for criminal acts, as would every individual being
handed large sums of money in cash at these sites.”
Eye on Keefe
As for Keefe, Conroy cited THE CITY’s investigation into overpricing and poor services but defended the contract.
“We are aware of criticisms relating to the vendor providing commissary
services in our facilities,” he said.
But, he testified, the DOC receives very few complaints — less than one percent of total orders last year — about poor service.
“Very few, if any, grievances are related to product prices or quality,” he said, noting that only 56 items were refunded last year because they had expired in 2024.
In June 2023, THE CITY reported that many of the prices offered at the Rikers commissaries and through its online system were higher — sometimes by 10 or 20% and in some situations by 200% or more than at local stores.
A woman visiting a loved one on Rikers Island shows the DOC commissary website she uses to purchase food, May 25, 2023. Credit: Ben Fractenberg/THE CITY
The prices violated the contract Keefe was operating under, which stipulated that the local store rates should be benchmarks, and were not to be exceeded.
For example, for incarcerated people using the initial Keefe-operated commissaries at Rikers, a 4-ounce tube of Colgate toothpaste cost $3.30. In June 2023, it sold for $2.49 at Walgreens and CVS, and Target sells an 8-ounce tube for $2.99.
Additionally, a 4-ounce package of Knorr stroganoff pasta and sauce sold for $4.41 on Keefe’s website in 2023. The same sauce could be had for $2.39 at Trade Fair, and for $1.99 at FreshDirect.
Conroy said the Keefe contract also frees up DOC staff to do other jail work. All told, 15 officers were expected to move back to their original posts, according to the contract.
Detainees and former jail staff have said in the past they rarely file formal complaints because the grievance process is tedious and complicated and rarely results in a positive outcome.
Rikers detainees currently order an average of 3,300 packages a week via a phone order system. They can spend up to $125 per week with the DOC collecting the money and paying Keefe based on sales. Additionally, family and friends can order items via an online system known as Securepak.
Keefe has also been accused of price gouging and other bad behavior around the country including two bribery scandals and multiple legal challenges for gouging the incarcerated.
One of the largest for-profit vendors of prison and jail commissaries in the United States, the company has been in Rikers since spring 2022, after its initial contract expired on June 30, 2023.
The private firm was initially brought in during the pandemic in part to free up officers during a massive staffing crisis. For decades, the commissary was run by a mix of officers and detainees inside each of the ten facilities on Rikers and near the courthouses in Brooklyn and Manhattan.
In March, city Comptroller Brad Lander rejected the new $33 million deal with Keefe, citing a “litany of procedural failures and contract shortcomings” in the proposed contract, including past routine overpricing of New York City detainees, and delivery issues detailed in an investigation by THE CITY.
But the Adams’ administration weeks later overrode that decision and went forward with the contract anyway.
On Thursday, Conroy defended the Keefe contract.
“Unlike many other jurisdictions, the Department of Corrections does not engage in revenue sharing with vendors, a common practice that can lead to predatory and exorbitant pricing when selecting vendors and negotiating prices,” he said.
Steep Markups
Under the deal, prices for items such as toothpaste and soda cannot change over the first year. Afterwards, Keefe can seek a price hike for no more than 20% of the items, and the increases can’t exceed 5%.
So far, there have only been three product increases, excluding stamps which go up based on what the post office charges, according to Conroy.
One of those price hikes, for sugar packets, was “due to an error in typing” and went from 11 cents to 30 cents per packet. Sugar packets are free at coffee shops and restaurants.
In July, Keefe also asked to increase the price for pork jerky but DOC declined and took it off the menu instead, Conroy testified.
He also maintained that jail officials periodically check to make sure the prices are relatively close to local stores. But he wasn’t sure exactly which stores or when those checks were conducted.
“We had done and had continued to do pricing comparisons, there were members of the staff who were dedicated to this task,” Conroy testified Thursday. “We did not see those levels of price discrepancies.”
Keefe’s website to buy products for people detained on Rikers Island. Credit: Ben Fractenberg/THE CITY
Meanwhile on Thursday, a single-serving cup of Cheerios at Trade Fair — a grocery store located near Riker’s Island in East Elmhurst — costs $1.59, whereas the same item costs more than double on Securepak, a spot check by THE CITY found.
The same goes for a six-pack of Swiss Miss and 20-pack of Bigelow chai tea. The items cost $2.49 and $4.39, respectively, at the local grocery store. On Securepak, the same items cost $4.18 and $4.64. A 3-ounce pack of Maruchan ramen goes for 70 cents on Securepak, while the packs cost just 20 cents an ounce at Trade Fair.
And a box of Goya Sazon Con Azafran seasoning costs $3.68 on Securepak, while it costs only $1.89 at the nearby grocery store.
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