After pushing Chicago contractors to voluntarily reduce their prices, Mayor Brandon Johnson defended the request Tuesday as “standard procedure.”
Johnson’s remarks came after Chief Procurement Officer Sharla Roberts sent emails to prime contractors doing business with the city last Wednesday asking for “a price reduction of minimally 3% off all invoices sent to the city for the next twelve months off any contracts you currently hold.”
In her note, Roberts asked contractors to respond within five business days “even if you are not able to accommodate the request at this time.” The request should have come as no surprise after being baked into the city’s 2025 budget passed in December, Johnson argued at a Tuesday news conference.
“This has always, long been a part of our conversation,” he said.
Thanks to a last-minute agreement that helped the City Council and Johnson pass a budget without layoffs or property tax hikes, City Hall is counting on $8.6 million from a “contract savings initiative” this year. The amount is a sliver of the $286.3 million in overall “operational efficiencies” the city is counting on to balance its books after facing a nearly $1 billion gap.
Some ratings agencies have expressed skepticism about the city’s assumptions for revenue and efficiencies. Roberts said the administration has “seen great responses” to the request. “But we intend most of our responses will be coming by the end of this week,” she added.
The move is not without precedent: Mayor Richard M. Daley worked to negotiate voluntary price reductions from existing contractors, with “modest” success, the Tribune previously reported. Mayor Rahm Emanuel tried again amid his own budget troubles, hiring the firm Accenture to find efficiencies in existing contracts and dangling the threat of terminating contracts for convenience if vendors didn’t play ball.
Budget Director Annette Guzman pointed to Emanuel’s decision to budget similar efficiencies, describing Johnson’s request as a “regular occurrence.” When asked if Emanuel’s government actually realized the savings it assumed it would get in its budget, she said she would respond to the question later.
“But I will say, we don’t give lip service to what we put in our budget,” Guzman said. “The City Council is expecting us to be able to meet our budget targets. We’re going to implement and be held accountable for the initiatives that we put in our budget.”
Council committees and ward budgets also took a 3% cut and Johnson’s budget team also requested departments cut 3% from their corporate fund expenses, though not all did. It was a figure small enough to avoid layoffs, but big enough to earn the ire of Ald. Raymond Lopez, 15th, who first publicized Roberts’ letter. A frequent mayoral antagonist, Lopez asked in a social media post, “The question now: Who is getting the 3% whack next week?”
Even Ald. Daniel La Spata, 1st, largely a mayoral ally, warned vendors against taking the bait. He called the ask “indelicate” and a “bad idea” in a video posted to social media Friday.
“You signed a contract with the city… you’re under no obligation to reduce your rates, particularly to our valued partners in the (Minority-owned Business Enterprise), (Women-owned Business Enterprise) spaces,” he said. “Keep your contracts, keep them.”
