The  Cook County Health and Hospital System's chief procurement officer was formerly a high-ranking executive at a company that's under consideration for a $500 million contract with the system, the Daily News has learned. 

The procurement officer, Lesie Duffy, was formerly director of client development at VHA, Inc.

The health system is currently weighing whether to shift most of its dollars to so-called group purchasing organizations. VHA subsidiary Novation, Inc., operates a group purchasing organization that is one of three competing for a three-year contract.

Duffy did not respond to requests for comment.

Hospital system interim CEO David Small says Duffy's ties to VHA don't represent a conflict of interest.

Proposals from group purchasing organizations were evaluated by a committee of about a dozen people, he says.

“She is in no way a decision authority. She did not have a vote," Small says. "So there's no conflict."

Cook County Commissioner Peter Silvestri is considering an inquiry into the group purchasing plan, including questions raised about Duffy's connection to VHA.

Silvestri says the proposal needs to be vetted to ensure it is in the best interests of the county.

“We live in a society today and a state today that has been ravaged by conflicts of interest, and we need to check it out,” he says.

Silvestri says he had not previously been notified of Duffy's work at VHA.

"If it's a conflict of interest, it's supposed to be reported to the whole board," he says. "If it was my cousin or my brother, it would certainly make the press."

The health system's conflict of interest policy requires employees to disclose whether they have a financial interest in a company involved in a transaction. The policy does not appear to address situations like Duffy's.

Duffy left VHA in June 2008, according to information provided to the Daily News by the company's human resources office. She joined the county health system soon after. From 2000 to 2004, she worked at Novation in sales and as an analyst.  She then joined the parent company.

The health system's group purchasing plan would shift procurement to an umbrella organization consisting of a pre-qualified list of vendors.

Members would have to pay to join.

Local small business owners say the move would eliminate their ability to do business with the county, and have threatened to file a class-action lawsuit.

At a meeting with Silvestri Monday, the group raised questions about Duffy’s role.

The group said her ties with VHA called into question her impartiality as the system weighs a move to a group purchasing organization. They also noted that Novation has been the county’s pharmaceutical provider since 2006.

Watchdog organizations say that while it does not appear any ethics laws have been violated, Duffy’s ties to Novation raise questions.

"I think it raises an eyebrow,” says Terry Pastika, president of the government watchdog group Citizens Advocacy Center.

Small says his office will offer the final recommendation on a GPO to the hospital board.

The hospital system issued a request for proposal to three GPOs in February. It is unclear when it will vote on the measure.