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One of the companies that just won a massive new welfare-to-work contract in New York City has recently had major problems providing the same services in Philadelphia, City Limits has learned. In fact, ARBOR, Inc. botched the job so badly that the city of Philadelphia cancelled its $21 million contract earlier this fall.

Last year Philadelphia switched to a soup-to-nuts welfare-to-work system, where one company handles everything from initial skill evaluations to job placement and long-term job retention. Driven by federal welfare and job training reform, the contracts push a “work first” agenda, meaning that getting people into any job right away–even a low-paying or unstable one–is the priority.

It requires daunting managerial work and case management: ARBOR's contract was to put 1,125 ex-welfare recipients in jobs and keep them there for a year. But Philadelphia's employment experts say ARBOR had trouble keeping track of clients, and ultimately couldn't handle the job.

“Our decision not to continue the contract was based on the fact that they fell below 50 percent of [job] placement goals,” said Linda Blanchette, director of Greater Philadelphia Works, the city's welfare-to-work program. “They fell well below our expectations.”

But ARBOR is now being awarded a similar contract in New York City. This for-profit company is one of 13 that will share the responsibility for the city's entire system to put welfare recipients and poor unemployed people to work. Most of the firms must do initial testing and assessment, teach “job readiness” skills like interviewing and basic computer literacy, direct job placement, give referrals to training, and handle tracking and case management for at least 6 months after the person on welfare gets a job. The payment, according to the contract, will be up to $2,250 for each person placed, with a potential $250 bonus at the end of the 6 months. In ARBOR's case, the arrangement is slightly different: it will be expected to do only job assessment and placement.

Paperwork and case tracking will be intense, especially because the clients include both welfare recipients and other types of unemployed people. “It's terrifically complicated,” said one of the other new contract winners. “We're trying to figure out how this will work.”

In Philadelphia, two of the five contractors awarded mega-contracts failed to hit the 50 percent mark. Only one did better than expected. “It's a very tough thing to do,” admitted Blanchette. “It will take a substantial change for contractors to respond to the work-first environment, and it's not an easy change to make.”

ARBOR (Associates for Research in Behavior) is a 36-year-old firm that consults for corporations on everything from image and new product development to job and welfare-to-work training. The company did not return calls for comment.

Some of the New York City contractors are supposed to take over the job beginning this week. But the contracts have not yet been finalized; a hearing is scheduled for today at the City Council at 2:30.