The nine-month, $8.6 million contract extension that Mayor Brandon Johnson frantically hammered out with ShotSpotter to give the Chicago Police Department time to transition away from the gunshot detection technology just might be illegal, sources have told the Chicago Sun-Times.
That’s because the original contract with ShotSpotter’s parent company, SoundThinking, was never competitively bid or subject to the city’s normal procurement process, which requires what’s called a “request for proposals.”
Because of the way the contract was secured, the city isn’t allowed to extend it at less favorable terms. Instead, the 2018 contract that got the ball rolling on the first of $57.5 million in payments to the company was a “reference” contract, piggybacked onto a similar agreement in Louisville, Kentucky.
Reference contracts can be substituted for contract competition only in limited circumstances.
First, the user department head must submit a memorandum “justifying” the decision and explaining why the “standard process is not feasible or not the best method to procure the goods and services.”
“For example, despite repeated efforts to competitively bid a city specification, no qualified bids were received,” the policy states.
More important, reference contracts can be used only under “pricing or compensation terms equivalent to, or more favorable to the city than those contained in the reference contract.”
“A city contract shall not contain higher pricing than is contained in the reference contract,” the city’s municipal code states.
The problem for Johnson is that the terms he negotiated to prevent the system from being shut down after Feb. 16 were considerably less favorable and more costly for Chicago taxpayers.
The Sun-Times reported last week that Johnson’s decision to terminate the contract before nailing down the transition terms would cost the city $8.6 million for the final nine months. That’s significantly more than the cost for the past year of service — and more than the initial contract apparently allows.
The annual subscription fee in Louisville’s reference contract was $390,000 — 6 square miles of ShotSpotter coverage at $65,000 per square mile. Chicago has 117.5 square miles of coverage, city records show.
Under the initial contract, nine months of ShotSpotter coverage would cost the city roughly $5.7 million. And under the new agreement, the department would have access to ShotSpotter only for seven months, not including a two-month wind-down after the technology is decommissioned.
Nevertheless, the city’s Law Department issued a one-sentence statement dismissing the legal questions.
“The city has the authority under the Municipal Purchasing Act to enter into a contract amendment under a myriad of code provisions,” the statement said.
Ald. Chris Taliaferro (29th), chair of the City Council’s Police Committee and one of ShotSpotter’s biggest champions, said he’s concerned the legal cloud hanging over the extension could force the Chicago Police Department to go cold turkey.
For years, ShotSpotter — which uses sound sensors to alert police to gunshots and pinpoint where they came from — has been embedded in technology hubs at 12 of the city’s 22 police districts, including those chronically experiencing the highest levels of violent crime.
“It would raise concerns because we’re talking public safety. If the contract is declared to be invalid, then the city can’t operate under that agreement and we would not be able to have that technology,” said Taliaferro, a former Chicago police sergeant.
“ I want the technology to be utilized throughout the city to help reduce violence and also to help save lives. So I would be very concerned whether this contract is declared to be invalid.”
Before reaching the new deal, the city had apparently exhausted its options to renew the initial three-year ShotSpotter contract, awarded in August 2018.
The final extension, worth nearly $10.2 million, expired Feb. 16, city records show.
Days earlier, Johnson fulfilled a pivotal campaign promise to his progressive base, announcing his decision to cancel the ShotSpotter contract, but extend it until Sept. 22 to give the police department time to adjust to life after the technology.
That caught the company off guard; ShotSpotter executives said they had agreed to no extension.
To prevent the system from being abruptly shut off, Johnson engaged in frantic negotiations. Just hours before the deadline, the mayor agreed to pay $8.6 million for the extension.
That’s 5% more than the city is set to pay for all of 2023 — a bump that’s only stipulated in the initial contract for two renewals, with the final increase hinging on the negotiation of fees in Louisville.
Political activists who helped Johnson rise from single-digit obscurity into the mayor’s office have had their sights set on terminating the ShotSpotter contract ever since the police shooting of 13-year-old Adam Toledo.
Chicago Police Officer Eric Stillman was responding to a ShotSpotter alert when he chased Adam into an alley in Little Village and shot him in his chest just a split-second after body-cam video showed the teenager dropping a handgun and raising both hands in the air.
In the political furor that followed Adam’s death, two reports publicly questioned the efficacy and crime-fighting value of ShotSpotter’s alerts.
Johnson last week cited those reports — and a third by the office of retiring State’s Attorney Kim Foxx — in justifying his decision to get rid of ShotSpotter.
The mayor argued that the “return on that investment” of roughly $50 million over “five years or so” just “hasn’t yielded the results” that were promised.
“It really came down to, ‘Is it providing a real, true benefit which it promised to do? And unfortunately, report after report here in the city of Chicago has indicated otherwise,” Johnson said. “We have to look very carefully at how the city of Chicago is appropriating dollars and whether or not there’s a benefit there. And I just didn’t see enough evidence that there was a benefit.”
An inspector general’s report on ShotSpotter concluded that the technology rarely leads to investigatory stops or evidence of gun crimes and can change the way officers interact with neighborhoods they patrol.
A little-noticed footnote to that report questioned using a reference contract to get around the normal procurement process.
On Monday, Inspector General Deborah Witzburg voiced similar concerns about the mayor’s decision to use the reference contract as the basis for a more costly extension that he claims does not require City Council approval.
“I look forward to information about this process being made public. This is a conversation that should be had out loud, a decision that should be made in the light of day. As arrangements are made to continue the use of this technology, Chicagoans should have access to information about how that decision is being made. We should be able to ensure that the city is complying with its rules,” Witzburg told the Sun-Times.
“The rules say that the terms cannot be less favorable than the reference contract. We’ve not undertaken to compare the underlying Louisville contract with either the original contract or any new agreements that are in place,” she said.
