Cook County gave $38 million jail deal despite contractor’s false claim

Cook County gave $38 million jail deal despite contractor’s false claim

BY ANDREW SCHROEDTER of THE BETTER GOVERNMENT ASSOCIATION

Last Modified: Mar 31, 2013 12:21PM

A politically connected business venture won a three-year, $38.4 million county contract to supply meals to the Cook County Jail after one of its partners wrongly claimed disadvantaged minority status, giving it a leg up on the only other company that sought the lucrative deal.

Cook County officials awarded the contract to CBM Premier Management LLC even though its pricetag was $2.1 million higher than the losing proposal, submitted by Philadelphia-based Aramark Correctional Services LLC, which had been supplying meals to the jail since 2000.

CBM is a joint venture that includes Airport Restaurant Management Inc., or ARMI, whose president and majority owner is Timothy Rand, a black Chicago businessman who has been a big campaign contributor to Cook County Board President Toni Preckwinkle and other politicians.

CBM listed ARMI as the only “minority-owned business enterprise” that would be involved in the jail deal.

But ARMI doesn’t have “MBE” certification — a designation meant to help ensure that companies owned by minorities get their fair share of government contracts.

And it didn’t have it last July, when Preckwinkle and the rest of the Cook County Board gave it the contract despite the higher price. Its Cook County MBE certification had expired four months earlier, and the company didn’t apply to renew it.

It wouldn’t have qualified, Rand admitted in court papers when Aramark filed a federal lawsuit against the county last year in an effort to hold onto the jail contract.

To qualify as a minority business eligible for special consideration under Cook County’s rules, a business owner’s personal net worth can’t exceed $2 million. In the Aramark court case, Rand submitted a sworn statement last August in which he said, “My personal net worth . . . exceeds $2,000,000.00.”

The CBM contract was recommended by Cook County Sheriff Tom Dart, approved by the Cook County Board and signed by Preckwinkle last summer. Under the three-year deal, which took effect in September, the company provides 30,000 meals a day for inmates at the 26th and California county jail complex.

Preckwinkle spokesman Owen Kilmer says CBM didn’t receive special treatment. The county wasn’t required to accept the lower bid, Kilmer says. Officials are allowed to take a number of factors into account, not just price.

“This contract went through a valid and competitive procurement process,” Kilmer says.

Dart’s office recommended CBM because of its local ties and its plans to add specialty food items, says Alexis Herrera, the sheriff’s chief financial officer.

In addition to ARMI, the CBM group, which is based in Chicago, includes: CBM Managed Services, a Sioux Falls, S.D., food-services company; and Buona Cos., a Berwyn catering and restaurant chain known for its Italian beef sandwiches.

County officials say they didn’t realize until after giving CBM the three-year contract that it hadn’t met a county requirement that the winning bidder direct at least 25 percent of its revenues to contractors certified as being financially disadvantaged and owned and operated by someone who is black, Latino or Asian. But they say bidders that don’t meet the 25 percent threshold aren’t automatically disqualified.

The county gave CBM a second chance to meet the MBE goals and agreed that it’s done so now by hiring at least two new minority-owned subcontractors.

At 17 percent, Aramark’s proposal also fell short of the 25 percent threshold. It was seeking a county waiver from the rest of that requirement, records show.

Last August, it sued the county in federal court, saying county officials “acted improperly” in awarding the contract to CBM in part because the venture wrongly claimed ARMI was an MBE. Aramark later dropped the suit.

An Aramark spokesman didn’t return messages seeking comment.

CBM spokesman Grayson Mitchell says neither Rand nor the company deliberately misled anyone and that Rand “is not trying to cut any corners.”

Rand didn’t return messages seeking comment.

He is part-owner of a Downstate casino and has business interests with his twin brother Everett Rand that include food companies and a liquor wholesaler. One business venture involving the Rands has a city contract that gives it control of 17,000 square feet of concession space at Midway Airport.

The Rands and their companies have been big political contributors over the years, giving more than $730,000 to government officials’ election campaigns, including more than $21,000 to Preckwinkle.

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