In July, Corizon agreed to pay the city $1.85 million after an investigation found that the company was using a sham female-owned subcontractor to say it met city requirements for participation by firms owned by minorities, women or disabled people.
Corizon declined to comment.
Mayor Nutter's spokesman, Mark McDonald, said that the company has reformed its practices for minority participation in Philadelphia and elsewhere. He added that the prison health facilities have maintained national accreditation under Corizon.
Councilman Jim Kenney on Tuesday asked the city to delay signing the contract so that Council can hold a public hearing on the issue. By using a renewable one-year agreement, and not a longer-term deal, he said, the administration avoided having the contract reviewed by Council.
"This is a way to get around City Council," Kenney said. "It's all being done behind the door."
McDonald, however, said that renewable contracts are standard and allow the city to better manage the vendor.
The new contract originally was to begin last September, but was pushed back six months so that the city could evaluate Corizon after resolving the settlement, McDonald said.
Correctional Medical Care, a Corizon rival owned by a woman, said that it placed a bid that would have cost the city $3.5 million less per year and couldn't have started on the original date. Its lawyers now are asking the city why it went out of its way for Corizon when CMC was ready to go.
McDonald said that CMC's offer, although cheaper, was "deemed not to be up to the standard of care of the prison system."
The Philadelphia Prison System, which has about 9,000 inmates, did not return requests for comment.
Corizon donated $1,000 to Mayor Nutter's campaign committee in April, according to city records. Prison Health Services, which merged with another company to form Corizon in 2011, had donated $5,000 to Nutter in 2008. PHS also had given Kenney $1,000 in 2010 and $500 in 2007.
Corizon has run into serious issues in recent years, including a class-action lawsuit on behalf of Idaho inmates that alleged extreme cases of negligent care over 30 years. The Tennessee-based company also has been probed in Vermont and other states.
On Twitter: @SeanWalshDN