Mayor Rahm Emanuel is starting his second term the same way he began the first, by cutting spending, tightening the bureaucratic belt and reforming the way government contracts are awarded.
Emanuel has asked Inspector General Joe Ferguson and Chief Procurement Officer Jamie Rhee to run a new task force charged with recommending ways to make procurement and contract management at City Hall and other agencies or local government more uniform, efficient and cost-effective.
During the campaign, now-vanquished mayoral challenger Jesus “Chuy” Garcia vowed to order “performance audits” of every city department and predicted he could save $500 million through tax-increment financing reform and by sharing costs with other units of local government.
Emanuel isn’t making any predictions as he embarks on a cost-saving exercise he hopes will make a dent in the combined $30 billion pension crisis at the city and public schools that has dropped the bond rating of the city, Chicago Public Schools and the Chicago Park District to junk status.
But he knows that every dollar saved means a dollar less in higher taxes.
“While we have taken important steps forward to reform procurement processes over the past four years, there’s always more that can be done,” Emanuel was quoted as saying in a news release.
“Though we have made improvements, this is an opportunity to create a world-class procurement program for all of city government that is a model of efficiency, transparency, and support for our communities.”
Procurement reform was a frequent target during Emanuel’s first term as mayor. But City Hall acknowledged Monday that spending “processes, rules and oversight” still vary greatly at the agencies of local government under the mayor’s control.
By putting everything from purchasing and data systems to contract oversight and minority business compliance under the microscope, the task force hopes to finally create a “greater level of uniformity.”
Mayoral spokesman Adam Collins was asked to explain the difference between the old and new purchasing reforms.
“Accenture focused specifically on cost reductions, and only at the city, not at sister agencies,” he wrote in an email.
“The task force is much broader in focus, and will identify opportunities for the city and sister agencies to implement uniform best practices around the award, management, and oversight of contracts in an effort to make procurement processes more uniform, efficient and cost effective, while increasing accountability.”
The panel will also study information sharing about contractors and debarred vendors.
“Variations in procurement, compliance, contract management and enforcement standards and systems across the city and sister agencies result in barriers to entry for small businesses, add needless complexity and costs for even the most sophisticated contractors and vendors, and create opportunities for bad actors, all to the detriment of the taxpayer,” Ferguson was quoted as saying in a news release.
“I welcome the mayor’s charge . . . to explore avenues for uniformity in standards and processes grounded in best practices, which will create efficiencies and economies that benefit city taxpayers and business partners alike.”
The task force will include the chief executive officer, executive director or chancellor of five participating government agencies. Final recommendations are due in October before City Council budget hearings.
Four years ago, Emanuel hired a private consulting firm to consolidate and overhaul city contracts and wring at least $25 million in savings out of $500 million in purchases.
The savings generated by Accenture were expected to come from renegotiating some contracts, rebidding others and combining purchases by individual city departments to get a bulk price.
The contract called for the company to review $500 million in contracts and get 10 percent of the first $70 million in savings, with a smaller percentage after that.
Emanuel sold the contract with a claim that Accenture’s technology and procurement expertise had saved $140 million for the state of Pennsylvania, $30 million for the state of Ohio and $86 million for New York City’s Department of Education.
The new task force comes at a time when CPS is on the brink of bankruptcy with a $9.5 billion pension crisis, a $1.1 billion budget deficit and a federal investigation of a $20.5 million no-bid principal-training contract with a company that once employed Schools CEO Barbara Byrd-Bennett. The investigation forced Byrd-Bennett to take a paid leave of absence.
In an interview with the Chicago Sun-Times last week, Emanuel vowed to save every penny he could in his quest to solve the pension crisis without a post-election property tax increase.
“We’re gonna continue zero-based budgeting operationally. No vacancies get filled outside of public safety. You have to justify filling that vacancy. And we’re gonna start making changes, both in the operating budget and in other places to continue to wring out inefficiencies. You’re gonna have to come in and justify a program . . . If you want to continue or expand something, show me what you’re willing to change,” he said.