Kenney Questions Prison Contract to Firm

In a letter to the city prisons commissioner today, Councilman James F. Kenney questioned why a firm that recently paid a $1.85 million settlement for circumventing the city’s minority-contracting requirements was awarded a new deal to provide health care services in the jails.

Kenney asked Commissioner Louis Giorla not to sign the new $42 million contract with Corizon Health, Inc. “until such time as City Council needs to thoroughly investigate.”

Corizon, a Tennessee-based company known until recently as Prison Health Services (PHS), has held contracts to provide dental, hospital, laboratory and other services in the jails since 1995.

The company agreed last summer to pay $1.85 million - believed to be the largest amount ever in such a case - for passing work meant for a minority firm to a group owned by the PHS parent company.

The work was supposedly subcontracted to a female-owned first-aid supplier that did not even have the proper certification with the city.

That company merely served as a front so Corizon could get the contract, city Inspector General Amy Kurland said at the time.

Corizon officials said two jail employees had given the company permission to handle the subcontracting in that manner.

Kurland acknowledged that jail employees were aware of the situation and that Corizon cooperated in the investigation and immediately made corrections.

But she also said that “executive-level people” signed “false documents to the city.”

Kenney said he was “deeply disturbed” that Corizon would be selected again.

“I am equally troubled by the non-selection of a legitimate minority-owned business to provide … services to the city,” he said in his letter.

Mark McDonald, a spokesman for the Nutter administration, said Corizon was “the lowest responsible bidder” for the contract.

There was one bid lower, he said, but a committee examining the bids decided Corizon was the most qualified.

Corizon also has implemented a number of changes, including a new corporate compliance program and an anti-discrimination policy, McDonald said.

“The cause for concern, we believe, has been resolved,” he said.

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