Illinois cancels disputed deal with company that stocks prison commissaries

Stateville prison
View from outside Stateville Correctional Center in Joliet Illinois on April 3, 2020. The Illinois Department of Corrections this week abruptly canceled a contract with a company that provides food, drinks, personal hygiene products and other items to commissaries at prisons across the state. Manuel Martinez / WBEZ
Stateville prison
View from outside Stateville Correctional Center in Joliet Illinois on April 3, 2020. The Illinois Department of Corrections this week abruptly canceled a contract with a company that provides food, drinks, personal hygiene products and other items to commissaries at prisons across the state. Manuel Martinez / WBEZ

Illinois cancels disputed deal with company that stocks prison commissaries

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After defending the deal for months, the Illinois Department of Corrections this week abruptly canceled a contract with a company that provides food, drinks, personal hygiene products and other items to commissaries at prisons across the state.

Prisons officials revealed they had canceled the commissaries contract with the Keefe Group on Tuesday – just one day before the state’s chief procurement officer issued a 25-page ruling declaring that the award of the contract to Keefe earlier this year was “clearly erroneous.”

“Those in custody rely on their facilities’ commissaries to make their lives better and easier, so I will presume the procurement has a significant degree of urgency,” Ellen Daley wrote. “On the other hand, it is in the State’s (and its inmates’) best interest for the DOC to enter into a commissary contract that is free from serious errors and secures the best possible prices.”

Another losing bidder had complained about the process, saying the winning bid wasn’t properly calculated, but state officials long insisted they had done the right thing before they suddenly canceled the deal with Keefe.

The shift in the contracting dispute came as advocates for inmates said commissaries across the state continued to lack items that are crucial to people serving sentences behind bars.

The John Howard Association, a prison watchdog group, said earlier this month that widespread shortages continued to plague commissaries.

The group relayed a statement from an inmate at Graham Correctional Center, who wrote that he and others at that prison “have not been provided or sold the things that are much needed” for several months, including laundry detergent, socks, boxers and shirts.

“We are not treated as human but as livestock,” the inmate wrote. “Something has got to be done. Cause the way we are living is not safe or sanitary.”

The inmate added, “We only want what is needed. Nothing more nothing less. I need your help spreading this word so we can come up with a solution.”

The spokeswoman for the Illinois Department of Corrections did not reply to messages seeking comment on the contract’s cancellation.

Prisons officials had solicited bids for the contract in March. The deal was to last at least five years, with an option to renew for another five years. The winning bidder was to provide “food, beverages, personal hygiene items, stationery, clothing and other commissary items.”

The bids were opened on June 1, and officials said Keefe was the winner. But one of the two losing bidders, Union Supply Group, quickly filed a protest and sued the state in July, arguing the winning bid wasn’t calculated properly.

State officials replied initially that it “is not the fault” of the Department of Corrections that Union Supply did not reply to the bid in the correct manner. Officials added that they “fairly reviewed the bid” and they said, “We believe we have awarded this correctly,” records show.

But in her ruling this week, Daley sided with Union Supply’s lawyers, saying it was Keefe that had replied to the bid in the wrong fashion. The companies replied to the bid using different ways to calculate how much they would charge.

“I find [Union Supply] has demonstrated the award to Keefe was clearly erroneous and a serious procurement deficiency that warrants canceling the Solicitation,” Daley wrote.

Michael Layden, a lawyer for Union Supply, told WBEZ on Friday that Daley’s decision “is good for Illinois taxpayers and ultimately will be good for incarcerated persons in Illinois.”

He added, “it is our contention that the canceled solicitation would have resulted in inflated prices for the State and the incarcerated persons who seek to purchase goods from the commissaries.”

In a letter to Daley in September, lawyers for Union Supply alleged that the deal with Keefe would cost the state close to $208 million over 10 years, compared to about $187 million if the prison system did business with Union Supply instead.

An executive for Keefe did not return messages Friday.

In her ruling, Daley said the Department of Corrections had apparently made it too complicated for even experienced companies to understand the rules of the bid process.

“This is not how State procurement is supposed to work,” Daley wrote. “The procurement deficiency is serious – an award was made based on a non-responsive bid … Three sophisticated bidders with commissary industry experience came to three different conclusions about how to handle pricing.”

Noting that officials had already canceled the deal with Keefe right before her ruling, Daley still offered advice for a do-over of the bidding process for the commissaries deal. The next time, she said, the Department of Corrections “must be unmistakably clear about how it wants bidders to provide prices.”

Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team. Follow him on Twitter @dmihalopoulos.