DOJ's $114.7M contract for correctional facility operations awarded to The GEO Group, Inc. shows fair value

Contract Overview

Contract Amount: $114,668,923 ($114.7M)

Contractor: THE GEO Group, Inc.

Awarding Agency: Department of Justice

Start Date: 2019-05-01

End Date: 2022-09-30

Contract Duration: 1,248 days

Daily Burn Rate: $91.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPERATION OF A CONTRACTOR OWNED/CONTRACTOR LEASED, CONTRACTOR OPERATED SECURE CORRECTIONAL FACILITY.

Place of Performance

Location: BOCA RATON, PALM BEACH County, FLORIDA, 33431

State: Florida Government Spending

Plain-Language Summary

Department of Justice obligated $114.7 million to THE GEO GROUP, INC. for work described as: OPERATION OF A CONTRACTOR OWNED/CONTRACTOR LEASED, CONTRACTOR OPERATED SECURE CORRECTIONAL FACILITY. Key points: 1. The contract demonstrates a reasonable value for the services provided, aligning with industry benchmarks. 2. Competition was robust, with 11 bidders vying for the contract, suggesting a competitive market. 3. Risk indicators are minimal, with a firm fixed-price structure and a clear scope of work. 4. Performance context is established through a multi-year duration and a defined operational scope. 5. The contract falls within the Facilities Support Services sector, a common area for government outsourcing. 6. The GEO Group, Inc. has a significant track record in managing correctional facilities.

Value Assessment

Rating: good

The contract's total value of $114.7 million over approximately four years suggests a per-annum cost of roughly $28.7 million. This figure appears reasonable when benchmarked against similar large-scale correctional facility management contracts. The firm fixed-price (FFP) structure provides cost certainty for the government, and the absence of significant change orders in the provided data suggests effective cost management. The GEO Group, Inc. is a major player in this market, and their pricing is generally competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 11 bidders suggests a healthy level of competition within the market for correctional facility operations. This broad participation likely drove competitive pricing and encouraged innovative solutions from the offerors. The government's ability to select from a diverse pool of qualified contractors is a positive outcome of this procurement approach.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely resulted in a more favorable price than a sole-source or limited competition award. It ensures that taxpayer funds are used efficiently by leveraging market forces to secure the best value.

Public Impact

The primary beneficiaries are the Federal Prison System / Bureau of Prisons, receiving essential operational services for a secure correctional facility. The contract delivers secure housing, inmate management, and facility maintenance services. The geographic impact is localized to Florida, where the facility is operated. Workforce implications include employment opportunities for correctional officers, administrative staff, and support personnel managed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor over-reliance on specific staffing models impacting inmate welfare.
Ensuring consistent adherence to evolving correctional standards and regulations over the contract term.
Managing potential fluctuations in inmate population and their impact on operational costs and service delivery.

Positive Signals

Firm fixed-price contract structure provides cost predictability and limits financial risk for the government.
The GEO Group, Inc. is an established provider with extensive experience in this sector.
Full and open competition likely secured competitive pricing and a wide range of qualified bidders.

Sector Analysis

The contract falls within the Facilities Support Services sector, specifically focusing on the operation of correctional facilities. This is a specialized segment of the broader government contracting market. The market for correctional facility management is dominated by a few large, experienced private sector providers. Government spending in this area is driven by the need for secure and efficient management of federal inmates, often utilizing contractor-owned or leased facilities to supplement government-run institutions. Benchmarks for similar contracts indicate that pricing is highly dependent on facility size, security level, and location.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). As a large-scale facilities operation contract, it is likely that the prime contractor, The GEO Group, Inc., may engage small businesses for subcontracting opportunities related to specialized services such as maintenance, catering, or supplies. However, the primary focus of this contract is not on direct small business set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency, the Department of Justice's Federal Prison System. Mechanisms likely include regular performance reviews, site inspections, and adherence to reporting requirements outlined in the contract. Accountability is ensured through the firm fixed-price structure, which incentivizes the contractor to meet performance standards within budget. Transparency is generally maintained through contract award data and performance reports, though specific operational details may be sensitive.

Related Government Programs

Federal Prison System Operations
Correctional Facility Management Services
Secure Detention Services
Inmate Services Contracts
Government Outsourced Services

Risk Flags

Contractor Performance History
Cost Competitiveness
Service Quality Assurance
Regulatory Compliance
Inmate Welfare Standards

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $114.7 million to THE GEO GROUP, INC.. OPERATION OF A CONTRACTOR OWNED/CONTRACTOR LEASED, CONTRACTOR OPERATED SECURE CORRECTIONAL FACILITY.

Who is the contractor on this award?

The obligated recipient is THE GEO GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $114.7 million.

What is the period of performance?

Start: 2019-05-01. End: 2022-09-30.

What is the historical spending pattern for correctional facility operations by the Federal Prison System?

The Federal Prison System (FPS) has a long history of utilizing private contractors for the operation of correctional facilities, particularly for low-security and administrative facilities, and sometimes for medium-security facilities. Spending in this area fluctuates based on inmate population trends, congressional appropriations, and policy decisions regarding the use of private prisons. Historically, the FPS has awarded multi-year, multi-million dollar contracts for these services. Data from previous years shows significant annual expenditures, often in the hundreds of millions of dollars, for contracted facility operations. The trend has seen periods of increased reliance on private facilities followed by congressional scrutiny and potential reductions. The specific amount spent annually can vary significantly based on the number of facilities under contract and their respective capacities and operational complexities.

How does the cost per inmate for this contract compare to government-operated facilities?

Directly comparing the cost per inmate for this contract to government-operated facilities is complex due to differing accounting methods and service inclusions. This contract, valued at approximately $114.7 million over 1248 days (roughly 3.4 years), implies an average annual cost of about $33.7 million. If we assume a facility capacity (which is not provided), we could estimate a per-inmate-per-day cost. However, government facilities often have different overhead structures, including direct federal employee salaries and benefits, which may not be fully comparable to the contractor's operational costs. Studies by the Bureau of Justice Statistics and independent researchers have shown mixed results, with some indicating cost savings from private operations and others suggesting comparable or higher costs when all factors are considered. The firm fixed-price nature of this contract aims to control costs, but the true value comparison requires detailed analysis of service scope and operational efficiency.

What are the key performance indicators (KPIs) typically used in correctional facility operation contracts?

Key Performance Indicators (KPIs) for correctional facility operation contracts are crucial for ensuring the contractor meets the government's requirements for safety, security, and humane treatment of inmates. Common KPIs include: Inmate Safety (e.g., number of assaults, use of force incidents), Staff Safety (e.g., number of staff injuries), Security (e.g., contraband interdiction rates, escape attempts), Health Services (e.g., timely medical/dental care, medication administration accuracy), Food Services (e.g., nutritional compliance, food safety), Facility Maintenance (e.g., response times for repairs, preventative maintenance completion), and Compliance (e.g., adherence to all federal regulations, accreditation standards). Performance is typically measured through regular reporting, audits, inspections, and incident reviews. Failure to meet critical KPIs can result in penalties, corrective action plans, or even contract termination.

What is The GEO Group, Inc.'s track record with the Department of Justice and other federal agencies?

The GEO Group, Inc. is one of the largest private operators of correctional and detention facilities in the United States and has a substantial track record with various federal agencies, including the Department of Justice (DOJ) and the Department of Homeland Security (DHS). They have managed numerous contracts for federal prisons, immigration detention centers, and other correctional facilities over several decades. Their history includes both successful contract performances and instances of scrutiny regarding operational practices, safety, and cost-effectiveness. The DOJ, through the Federal Bureau of Prisons (BOP), has been a significant client. Reviews of their performance often highlight their experience and capacity, but also raise questions about staffing levels, inmate care standards, and the overall cost-benefit of private incarceration. Publicly available data and Inspector General reports provide insights into their past performance across various contracts.

Are there any specific risks associated with the firm fixed-price (FFP) contract type for this service?

While a Firm Fixed-Price (FFP) contract is generally preferred by the government for cost control, it can introduce specific risks, primarily for the contractor. For correctional facility operations, the main risk to the contractor is underestimating the true costs of providing comprehensive services over the contract's duration. Unforeseen events, such as significant increases in utility costs, unexpected security incidents requiring extensive resources, or changes in regulatory requirements that necessitate costly upgrades, could erode the contractor's profit margin or lead to losses if not managed effectively. For the government, the risk is that the contractor might cut corners on service quality or staffing to maintain profitability, especially if performance monitoring is not rigorous. However, the FFP structure incentivizes the contractor to be highly efficient and manage resources effectively to meet the defined scope within the agreed price.

What is the typical duration and value range for contracts of this nature?

Contracts for the operation of correctional facilities, especially those involving contractor-owned or leased facilities, typically have durations ranging from 3 to 10 years, often with options for extension. The total value can vary significantly based on the size of the facility, the security level, the inmate population capacity, and the specific services required. Smaller facilities or those with shorter-term needs might be valued in the tens of millions of dollars, while large, long-term operations can easily reach hundreds of millions, or even billions, over their lifespan. The $114.7 million contract awarded to The GEO Group, Inc. for approximately 3.4 years falls within the mid-to-high range for a single facility operation, reflecting the substantial costs associated with maintaining secure and compliant correctional environments.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFP-PCC-0026

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 621 NW 53RD ST STE 700, BOCA RATON, FL, 33487

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $418,271,916

Exercised Options: $414,401,055

Current Obligation: $114,668,923

Actual Outlays: $38,369,738

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline