In an unprecedented disciplinary move, the city of Philadelphia on Monday announced the debarment of prison health services subcontractor JHK Inc. and owner Jamie Kovacs for allegedly skirting city laws requiring a certain percentage of contracts go to female and minority-owned firms.
A lengthy investigation by the Office of the Inspector General found the Philadelphia Prison System's prime health care contractor, Corizon Health Services Inc., made it appear that the female-owned JHK Inc. provided pharmaceutical supplies to prisons when in fact, Corizon only paid JHK to use its name and certification as a female-owned business.
The move comes as the first involuntary debarment in city history, according to a release from Mayor Michael Nutter's office.
"This debarment sends a strong and definitive message: The city of Philadelphia will not tolerate businesses that circumvent the city’s antidiscrimination policies," Inspector General Amy Kurland said in a statement.
First Deputy Director of Finance Catherine Paster stated in the debarment notice that JHK, Inc. provided no credible evidence to dispute the facts uncovered during the OIG investigation.
She further noted JHK admitted to the City Debarment Panel that it provided no services to the Prison System other than stamping the company name on city paperwork.
“Our administration will continue to seek qualified minority-, women- and disable-owned businesses to play a significant role in all of its contracts, but we will not stand for companies or individuals trying to cheat the system,” Nutter said in a statement.
Corizon Health Services in July 2012 agreed to settle with the city for $1.85 million in connection with the case and pledged to review all of its subcontracting agreements to ensure compliance with city antidiscrimination policies and to appoint a compliance team member to make sure minority requirements are fully understood by all Corizon personnel.