JPS Health used a race-based scoring system to evaluate bids
The public hospital system for Tarrant County, Texas, was hit with a federal civil rights complaint on Tuesday alleging that it discriminates in its procurement process for medical supplies. The complaint comes after the Washington Free Beacon reported last year that the hospital system, JPS Health, used a race-based scoring system to evaluate bids, in some cases giving more weight to “diversity and inclusion” than to the reputation of the vendor’s services.
At the time, JPS denied using race as a basis for awarding contracts. But the hospital system has continued to include race-based criteria in its procurement process, requiring vendors to make a “good-faith” effort to use minority subcontractors.
A contractor will automatically satisfy that requirement if it is “a Historically Underutilized, Small, Minority, Woman, or Veteran owned business.” Otherwise, it will need to certify that some of its subcontractors are minority-owned.
The complaint argues that this system, outlined in an August request for proposals document, “discriminates against whites and white-owned businesses” because they must jump through additional hoops. The complaint was filed with the Department of Health and Human Services (HHS) by Do No Harm, a group that opposes identity politics in medicine.
“By racially and sexually discriminating against potential vendors, the health system is rejecting excellence and merit and embracing divisive identity politics,” said Do No Harm chairman Stanley Goldfarb, who is also the father of Free Beacon chairman Michael Goldfarb. “JPS should prioritize consultants who enhance the network’s ability to provide high-quality care for patients, rather than vendors that merely fit an ideological checklist.”
Minority contracting is typically associated with fields like construction and sanitization, where it has been linked to fraud, delays, and cost overruns. In recent years, the practice has also found a home in medicine.
The University of Virginia Medical Center gave preference to minority-owned businesses when sourcing stem cell products. At Inova Health, race received more weight than “cost-effectiveness” in the application process for a competitive grant program.
Such schemes often violate civil rights law, which bans racial discrimination in contracting and by federally funded health centers, and can generate major inefficiencies. Under the scoring system adopted by JPS Health, for example, a vendor could charge 60 percent less than a minority-owned firm and still lose the contract.
“The minority and other contracting preferences given by these hospitals tend to drive up prices and reduce the quality of goods and services,” Judge Glock, the director of research at the Manhattan Institute, told the Free Beacon last year. “The funds lost by the hospital could be used to treat needy people, as opposed to supporting less efficient but still successful businesses.”
Do No Harm’s complaint asks HHS to investigate JPS for violations of three civil rights laws, including section 1557 of the Affordable Care Act. It also suggests “referring the matter to the Department of Justice for further or concurrent action.”
“This kind of blatant race discrimination is illegal,” the complaint reads. “Simple justice requires that public funds, to which all taxpayers of all races contribute, not be spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination.”
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