When Erlanger Hospital executives and its ever-compliant board members decided to outsource the jobs of their highly lauded, veteran internal security team to a private contractor in March, the executives pledged two things: That current officers would get first consideration for their jobs under a new business model, and that the business would go to the lowest and best bidder. Instead, Erlanger executives failed to honor either promise. And now, the rationale for the shift -- which added nearly $1 million a year to the hospital's security costs-- has also fallen apart.
Contrary to assertions by Erlanger's Doug Fisher, vice president of government and corporate affairs, Erlanger would have had no trouble continuing to have its security officers commissioned by the city, Chattanooga city attorney Mike McMahan confirmed to a reporter for this newspaper. Indeed, the city adopted a resolution on Oct. 6, 2009, that gave 25 Erlanger police officers commissions valid until 2050, reporter Chris Carroll wrote in front-page story for this newspaper on Sunday. Securing commissions was not a problem.
Erlanger officers curiously failed to relay that information to Erlanger board members before they voted to award Walden Security, the second highest of five bidders, a five-year contract to provide security for the hospital. That contract was for $11.9 million, or a yearly average of $2.38 million.
Board member James Worthington told Carroll, "If I had been told that the city or county would have commissioned other officers so that we had a sufficient amount, I would have voted against Walden. ... I'll stand on the fact that I was not told that."
That apparently wasn't the only piece of important information omitted by Erlanger executives about their plan to outsource the security work to a private, for-profit company. They also apparently failed to provide the board in a timely way the findings of consultant they hired to examine their existing security operations, nor did they note that Walden Security's officers would not be commissioned officers.
The consultant, North Carolina-based Security Assessments International, Inc., lauded the hospital's police force as "knowledgeable, experienced and dedicated police and security personnel." The study said the hospital's security unit was disciplined and maintained order well "despite budgetary and manpower constraints." It recommended expanding the in-house team and advised against hiring a private contractor for the work to avoid high turnover and inexperience.
It's not clear when, or if, Erlanger officials provided their board members Security Assessments' report. But Andrew Stinnett, the attorney for the displaced Erlanger force, told Carroll that he had hand-delivered a letter to each member asking them to study the report before they voted on the contract with Walden, and that none responded to him.
Erlanger's chief operating officer Charlesetta Woodard-Thompson had also justified outsourcing Erlanger's security work on the grounds that Erlanger would have trouble filling security jobs. Erlanger has produced no evidence for that assumption. And in fact, it, too, seems dubious.
Security firms apparently have no trouble finding employees, nor are Walden Security's employees at Erlanger commissioned officers. The firm has to contract with the Hamilton County Sheriff's office to station off-duty patrolmen with authority to arrest and detain people in areas of the hospital where such authority is occasionally useful.
In any case, it seems clear that Walden was destined to get the contract. Erlanger installed a Walden employee to work alongside Erlanger's security officers in April last year, and then quickly put the employee, Ben Allen, in charge of security. Six months later, it gave Allen "the right to write, change and enforce policy in the security department." Three weeks later, a call for bids for outsourcing the security work was mailed to potential contractors. The three lowest bids were from $1.5 million a year to $1.7 million; the five-year costs for these lower bids was $7.6 million to $8.7 million -- all far lower costs than those bid by Walden.
Given the various pieces of the hospital's change -- the additional cost for Walden Security, its higher cost relative to other bidders, the recommendations by the hospital's own security consultant, and business logic for the financially strapped hospital -- the decision by Erlanger's executives and its board appears to make no sense.
That at least raises the question of political or other business ties. Fisher is a former staff member for former Rep. Zach Wamp, and Walden Security's owner, Mike Walden, is an active local Republican.
The cost questions are equally pertinent. Why would Erlanger upset a security system that was operating well for a change to a less well-trained and uncommissioned employees at a cost $1 million higher each year? The board would do well to find the answer.