As of October of this year, the Cook County Health and Hospitals System had spent around $165 million on contracts to purchase things like medical supplies and equipment, according to data provided by the county’s Office of Contract Compliance.
Most of those contracts, 80 percent, went to companies ostensibly owned by white males while 20 percent went to companies that are certified minority- or women-owned. African American-owned companies were awarded just 2 percent, or roughly $3.5 million, of those contracts — and all of them were subcontractors.
“This is shameful,” said Cook County Commissioner Richard Boykin (1st), whose district covers a large part of the West Side, during a phone interview on Dec. 15. Boykin said he brought the issue to the attention of his board colleagues after discovering the disparity a few weeks ago. The commissioner emphasized that the $165 million total doesn’t include construction-related spending.
Boykin weighed in on the issue during a Dec. 11 press conference held at the county’s administration building in Chicago and also during a Dec. 13 finance committee meeting.
“President Preckwinkle and the entire county board should be ashamed that these businesses have been essentially shut out of doing business with the Health and Hospitals System,” Boykin said.
“African Americans make up 26 percent of Cook County’s population and 76 percent of patients at CCHHS. Yet they’re earning two percent of the system’s procurement contracts,” he added, calling the problem both a “moral issue and a jobs issue.”
“This is stunning and shocking,” said Cook County Commissioner Luis Arroyo, Jr. (8th) during the Dec. 13 meeting, where Doug Elwell, the deputy CEO for finance and strategy for the Health and Hospitals System, addressed the commissioners’ concerns.
“We are trying to do better, but we have not done enough,” Elwell said, adding that there are only around 37 African American companies on the approved certified list that “do health-related stuff.”
According to Lisa Alexander, the county’s deputy director for contract compliance, currently CCHHS knows two minority-certified companies that can deliver medical supplies, but they’re Asian-owned.
Elwell said that the CCHHS officials were working on hiring a diversity company located in Cook County to help the system “get more people certified and develop contracts” with minority- and women-owned businesses.
But that effort was rebuffed by several commissioners who felt that hiring an outside company was an unnecessary step toward solving a problem whose solutions, commissioner said, are already well known.
“We don’t need a diversity company to tell us that we need to hire people in the county to do work,” said Commissioner Deborah Sims (5th). “You just have to have the willingness to give them the technical assistance, so they know what you’re asking for.”
Sims recounted the experience of a black-owned company in Chicago that “has jumped through every hoop you’ve asked them to jump through, done all the technical assistance,” but still wasn’t awarded a contract.
“In my previous life, I was a certified minority business and I understand the struggles,” said Commissioner Dennis Deer (2nd). “Many individuals don’t become certified because they have to jump through 1,000 hoops and they still don’t get selected.”
Deer said that he had met with Health and Hospital System officials earlier this year about contract compliance and had proposed a follow-up meeting, which he said never happened.
“We’re talking about a new firm and we haven’t even had our second meeting,” Deer said, before recommending that Elwell hold off on hiring the diversity company before the board holds another public meeting on the matter of contract compliance. That meeting is scheduled for some time in January.
Another possible disincentive to applying for certification, some commissioners pointed out, could be the Health and Hospital System’s recent practice of paying contractors late.
“I’ve had several minority firms that do business with CCHHS contact me about the system being far behind in terms of paying them,” said Boykin. “In some instances, almost a year behind. Is that normal operating procedure?”
“That is not normal,” said Elwell, explaining that the Health and Hospital System has struggled this year installing a new payment system. Elwell attributed the delayed payments, which he said are rare, primarily to processing errors. He added that, considering their limited cash flow, small businesses typically get priority over larger ones during the payment process.
Elwell said that there’s something of a division of labor when it comes to awarding contracts to minority- and women-owned companies. The different components of that process, however, don’t seem to communicate across their own silos, some officials indicated.
Although CCHHS has its own board of directors that is independent of the Cook County Board of Commissioners, the county’s Office of Contract Compliance also plays a large part in the process of bringing minority- and women-owned companies into the fold.
Commissioner Stanley Moore (4th), the chairman of the Contract Compliance Committee — the five-member body that monitors the hiring of minority-and women-owned companies and facilities the certification process — seemed stunned, however, when Alexander told him that her office didn’t have access to a critical document called the GPO catalog.
A GPO, or group purchasing organization, is an entity that helps healthcare providers negotiate lower prices with vendors. Moore said that he’s spoken with a lot of minority firms that have struggled to be included in the GPO catalog.
“If you can’t get into the GPO catalog, then you can’t be chosen,” Moore said, before asking Elwell how many black and Hispanic firms are included in the catalog. Elwell said that he didn’t know.
Alexander said that her office has access to a directory of minority- and women-certified companies that is maintained by the county, but it doesn’t have access to the GPO catalog.
“That’s why this GPO catalog is so important,” Moore said. “How can you work to help with [minority- and women-owned business participation] if you don’t have access to the catalog they pull from?”
Larry Ivory, the founder, president and CEO of the Peoria-based Illinois Black Chamber of Commerce, said that “the numbers don’t lie and they’re abysmal.”
“We have to be intentional about making sure that African Americans and other minorities get a chance to participate,” Ivory said during a Dec. 15 phone interview. Ivory was also in attendance at Boykin’s Dec. 11 press conference.
“Surely, the hospitals are benefactors of black people’s insurance, Medicaid and everything else,” he said, before recommending that CCHHS officials meet with the chamber, commissioners and Cook County Board President Toni Preckwinkle to discuss possible solutions.