City cancels Listo contract for sobering center; RFP reissued and repayment talks continue with supportive‑housing coalition

The city suspended its contract with Listo Health to operate a medical sobering center and has reissued the procurement after staff identified concerns about the vendor’s ability to perform, city officials told the Albuquerque City Council.

Councilor Grout asked staff for specifics about the cancellation. City staff said Listo was the only respondent to the earlier procurement and that, as they worked to implement the agreement, the vendor raised issues about their ability to meet the scope. "As they executed the grama and started to work with them to open up the sobering center, they started to have concerns around a few areas. One was their ability to fulfill the scope of work under the agreement. There was some concerns about cash flow and other things," a city official said. Staff also reported difficulties in obtaining required proof of insurance.

The department said it issued a new RFP on Jan. 17 that keeps the same scope of services but adds additional financial‑stability review criteria. Officials said the earlier stopgap procurement was pursued in part to bridge winter months while a regular procurement was prepared.

Financial details: the department said approximately $2,500,000 remains available under the prior contract allocation and will be available to the successful provider under the new procurement process. Staff said the contract had been recommended in October, executed in November and the sobering center opened on Nov. 25, but the city later moved to cancel after performance concerns.

Separately, the council asked about oversight and repayment from the Supportive Housing Coalition. City staff said the Office of the Inspector General has had preliminary communications with the coalition and that the estimated amount owed to the city changed from about $234,769 to $247,861. Staff said they are negotiating a repayment plan and that no additional contract funds for the coalition’s case‑management and voucher work remain active as of December and January.

Why it matters: the sobering center and supportive‑housing services are part of the city's strategy to respond to substance use and unsheltered homelessness. The procurement cancellation, reissued RFP and repayment negotiations affect service continuity and public‑private provider relationships.

Next steps: the city will run the new RFP under normal procurement rules, track submissions and report back to council. The administration also said it will provide the council the earlier proposal and required procurement documents in response to a records request.