Mayor Brandon Johnson Made the Silver Bullet for Chicago’s Fiscal Mess Into a Broken Taser

Chicago could save $500MM annually through better procurement if it cared about bringing back the professionals and giving them a cost-reduction mandate; instead, Mayor Johnson fired a competent Chief Procurement Officer (CPO) and replaced her with a supplier diversity rubber stamper

By now, you’ve probably read the news that Chicago is in a new fiscal mess. It’s a situation that makes former Mayor Richard M. Daley’s selling of the parking meters and Skyway seem like finding loose change between the couch cushions.

With less than four months to go in 2024, Chicago now faces a last-minute (right?) $223 million shortfall in this year’s budget, with an even bigger new $1 billion abyss looming in 2025.

So what are we doing about it? 

Cue the predictable reactive measures: Hiring freezes (including police and fire), travel restrictions, and our personal favorite, plugging holes with bureaucracy's version of duct tape — more red tape that is increasing, not decreasing, mandated spending with preferred unions such as the CTU.

Nevertheless, instead of harping on the usual suspects — such as the now nearly $30K per student spent in Chicago Public Schools or the infinite open bar tab for sanctuary city policies — a new perspective should be added. One that could save the city hundreds of millions annually: Better procurement.

Yes, procurement. It's been said before on these virtual pages. 

Procurement is “akin to the circulatory system in a human body: Unseen, often underappreciated, yet increasingly vital to keep the patient not just living but thriving.” The patient here is Chicago, with a historic spending habit that makes a Kardarisian shopping spree look like fiscal prudence. 

The city’s $18 billion budget is on the line, with an estimated $5.4 billion of that going to external suppliers and contractors.

Now, here’s where it gets fun: a 10 percent savings in procurement — standard fare for any private sector organization worth its salt which is in cost reduction mode — could net Chicago a cool $540 million. That’s $540 million in savings just waiting to be picked off like low-hanging fruit. But instead of focusing on common-sense tactics like renegotiating contracts, eliminating extraneous requirements, managing demand, auditing contracts, tracking supplier performance (including SLA violations), and managing vendors more efficiently, we’ve opted for political theater.

Take, for example, the firing of Chief Procurement Officer Aileen Velazquez. Her unforgivable sin? Not stamping "approved" fast enough on contracts from Mayor Brandon Johnson's preferred vendors. After all, competition and market due diligence have no place in a city that sees procurement as nothing more than a tool for patronage. 

You seriously can’t make this up. That’s why she was fired according to the city! 

This isn’t strategic procurement; it’s procurement roulette, and the taxpayers are holding the Colt .357 Magnum. As this author wrote in an earlier piece: “Procurement isn’t just about getting the best price, but also about securing the best terms, relationships, and risk mitigation in contracts.”

Funny how that part is being left out.

Velazquez’s replacement? Sharla Roberts, who, according to her LinkedIn bio, seems more experienced in the art of checking off supplier diversity boxes than managing multi-billion-dollar procurement operations. 

Don’t get me wrong. Supplier diversity demographic procurement gerrymandering is part of government contracting by law, even if you disagree with it (in contrast to the private sector, where it is often illegal, though common).

However, when it’s used to altogether bypass competition as Johnson is pursuing, it starts to smell like an Italian beef sandwich that’s been left out overnight. To paraphrase: Supplier diversity in government procurement should be a means to an end, never the primary focus of external spending — especially when the stakes involve billions in taxpayer money.

And speaking of stakes, let’s talk about what happens when procurement goes wrong. Spoiler alert: It's not pretty. As a colleague once told me: “Procurement fraud, by its nature, is stealthy — it often goes unnoticed until it reaches critical mass, and by then, the damage is done.”

Chicago is treading dangerously close to this reality in the best case. In a city already known for creative accounting, mismanaged procurement is like pouring gasoline on a fire that’s already burning down your house. 

The grift is real, folks. Johnson’s administration is laying down a roadmap for procurement fraud by prioritizing favoritism over competition and firing the only person standing between him and those who helped put him in office waiting for an, ahem, contract with the city. City procurement is ripe for abuse, and the bill will inevitably come due — not for Johnson, but for the taxpayers who will be left holding the bag.

But what you should really be angry about is that Chicago has an opportunity to save $500 million a year by simply getting its procurement house in order. 

Today.

It’s not rocket science, and it's certainly not political genius — it’s just common sense. 

As we’ve seen, that requires putting the city's interests ahead of political favors. And let’s be honest: Betting on that happening in Chicago under Mayor Brandon Johnson is like betting on social media spontaneously becoming a bastion of civil discourse — possible, but not exactly likely.

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In addition to writing for Chicago Contrarian, J.D. Busch is a technology researcher, entrepreneur and investor focused on procurement and supply chain technology and efficiency.