The city’s former top watchdog said Mayor Brandon Johnson’s controversial agreement extending the ShotSpotter contract is potentially invalid and should be subject to a City Council vote — a step some alderpersons said they’re eager to take.
Johnson apparently agreed to pay ShotSpotter’s parent company millions more than city rules allow when he hammered out a last-minute deal to renew the no-bid gunshot detection contract one last time, even though all extensions had been exhausted.
Former Inspector General Joseph Ferguson, now president of the Civic Federation, told the Sun-Times the details of the new deal indicate the Chicago City Council “probably should be vetting and approving this thing” and not “just sort of play along with the mayor.”
Given the public interest in ShotSpotter, “ we could reasonably expect there would be some close scrutiny of all of this, including whether or not it complies with the municipal code and procurement procedures.”
Bringing the agreement before the council would give pro-ShotSpotter alderpersons the leverage to demand a hearing and an exhaustive data analysis, he said.
The city is paying more than $8.6 million to keep ShotSpotter through Sept. 22, plus a two-month wind-down period after that, according to documents made public by the city on Tuesday. Technically, the city must pay $73,500 for each of the 117.5 square miles blanketed by ShotSpotter sensors installed in 12 of 22 Chicago police districts.
That’s far more than the $65,000-per-square-mile cost in the overarching ShotSpotter contract awarded in August 2018, when the city agreed to the same terms as a previous deal struck by officials in Louisville, Kentucky.
That approach, known as a “reference contract,” allowed Chicago officials to sidestep a competitive bidding process — but also requires that Chicago’s contract contain “pricing or compensation terms equivalent to, or more favorable to the City than, those contained in the Reference Contract,” according to Chicago’s municipal code. “A City Contract shall not contain higher pricing than is contained in the Reference Contract.”
‘A new contract’?
Had the Louisville formula been applied, a nine-month ShotSpotter extension in Chicago should cost about $5.7 million — not the $8.6 million the city agreed to pay.
Ferguson warned the new agreement seems “not to comply with the boundaries of a reference contract” and instead appears to be a new contract.
A spokesperson for the Department of Procurement Services told the Chicago Sun-Times city officials have “authority pursuant to State law to award contracts that are not adaptive to competitive bidding.”
“The City’s new agreement with SoundThinking was awarded pursuant to that authority and is therefore not subject to the same limitations as those placed on reference contracts,” spokesperson Ryan Gage said. “… City Council approval is not required for contracts based on statutory authority granted to the City.”
Gage said the new agreement is considered an amendment to the original contract. “Authority for contract amendments can be derived from the underlying contract or from statutory authority,” he said.
A spokesperson for ShotSpotter said city officials haven’t reached out about the potential legal issues, and they weren’t discussed during the contract negotiations.
Johnson fulfilled a key campaign promise when he announced his intention to nix the ShotSpotter deal earlier this month — just three days before the last extension was set to expire. The move surprised ShotSpotter executives, who had spent months pushing for a larger deal stretching as long as an additional year.
Following frantic negotiations, both sides confirmed a new deal had been hammered out on Feb. 16, hours before the ShotSpotter system could’ve been cut off at day’s end.
The Sun-Times previously reported the new payment structure amounts to a 5% increase from the cost of the previous year’s service — a bump memorialized in the initial contract for previous extensions.
The documents posted Tuesday by the Department of Procurement Services include two contract modifications increasing the overall value of the ShotSpotter contract from $48.9 million to $53.1 million. The city has so far paid nearly $36.4 million.
‘The whole thing is null and void’
Ald. Anthony Beale (9th), one of the mayor’s most outspoken critics, said the council should “step up and do the job that we were elected to do” by demanding “emergency hearings on this illegal contract.”
“We had no knowledge that this was a new contract,” Beale said. “A new contract should be [bid out], put out for [a request for proposals], then brought before the City Council for approval. ... The whole thing is null and void.”
Johnson painted himself into a corner by announcing his decision to terminate the ShotSpotter contract before he had nailed down the terms of the extension needed to get the city through the traditionally violent summer months and the Democratic National Convention in Chicago, Beale said.
“They just don’t know what they’re doing and won’t listen to people who know what they’re doing,” he said. “When you operate in this manner, you’re gonna constantly have problems like this until the aldermen stand up and finally do their jobs.”
Ald. Brian Hopkins (2nd), chair of the City Council’s Public Safety Committee, said he asked the departments of Law and Procurement Services to explain the legal rationale for using the reference contract as the basis for a no-bid extension.
Hopkins said he would “push for City Council action to ratify this contract and cure any procedural defects that might be present in the procurement process and also get more of an explanation of the additional cost.”
He insisted the whole controversy could’ve been avoided had Johnson not waited to negotiate an extension until the contract was about to expire.
“There’s a lot about this process that simply can’t be defended. ... Had it been handled more diligently in a more timely manner, a lot of this could have been avoided,” Hopkins said.
ShotSpotter repesentatives told him “they started sounding the alarm back in late 2023 with city procurement officials,” Hopkins added. “They were sending communications, documents, proposed contract extensions. And they were met with silence. ”
Ald. Bill Conway (34th) said Johnson’s mishandling of the contract extension with ShotSpotter has become “part of an unfortunate pattern.”
“Executing contracts is a basic function of government that we need to get right. And we have a disturbing pattern across NASCAR, the interaction [with] ShotSpotter up to this point, the FOP contract, not to mention the lack of collaboration with regard to GardaWorld or Favorite Staffing contracts” tied to the migrant crisis, Conway said.
“If hearings are necessary, then that’s something that we have to do. But I hope before some of these major contracts come up that there’s more collaboration with the City Council in the future.”
Conway said he doesn’t know enough about the “competitive landscape” to know whether the reference contract that served as Johnson’s vehicle for the extension is illegal. But the Law Department should be compelled to answer those questions, he said.
“It’s clear in a broad context that we in City Council need to be exercising more oversight in a variety of areas. This clearly being one of them,” said Conway, who has a pending ordinance that would require prior City Council approval of any spending exceeding $1 million from federal COVID-19 relief funds.
