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School milk supplier trims costs, keeps lucrative deal

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Updated: July 2, 2012 8:54AM

Chicago school officials said Monday they’ll save $750,000 after negotiating a contract extension with a politically connected milk vendor that will cut the cost of its $20 million-a-year deal by a penny a carton.

The move comes two months after an investigation by the Chicago Sun-Times and Better Government Association found that the city’s schools pay more for milk than many smaller suburban districts.

The schools’ inspector general’s office continues to investigate the milk contract held by C&M JV 1 Co., a joint venture controlled by the McMahon family, which has deep ties to Ald. Edward M. Burke (14th) and other public officials.

The milk company’s contract expires next month. Under the deal announced Monday, its owners agreed to cut prices and got a year’s extension on their contract.

So it will continue delivering milk for another year even as the Chicago Board of Education “launches a rigorous competitive-bidding process and conducts a strategic review of its entire approach to sourcing food-service contracts,” school officials said.

Besides the cut in milk prices, school officials said they also have negotiated a one-year contract extension with their main food supplier, Chartwells-Thompson Hospitality, that cuts costs by $830,000 next year.

Chartwells-Thompson’s contract also was set to expire next month.

The school board is expected to approve the one-year extensions on the school-milk and food-service deals Wednesday.

Jean-Claude Brizard, chief executive officer for the Chicago Public Schools, described the moves as changing the “way of doing business at CPS, which led to wasteful spending and unethical practices. Every vendor in CPS is on alert as our team continues to scour every contract to identify additional efficiencies and cost savings.”

An attorney for the McMahon family declined to comment about how C&M JV 1 will cut prices by a penny a carton on the 74 million cartons of milk it delivers to Chicago’s schools each year.

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