DHS awards $37.4M detention services contract to CoreCivic, Inc. amid sole-source procurement

Contract Overview

Contract Amount: $37,431,750 ($37.4M)

Contractor: Corecivic, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2019-03-18

End Date: 2020-03-17

Contract Duration: 365 days

Daily Burn Rate: $102.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF DETENTION SERVICES AT HOUSTON CDF

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77032

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37.4 million to CORECIVIC, INC. for work described as: IGF::CT::IGF DETENTION SERVICES AT HOUSTON CDF Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition and potential value. 2. Significant spending on security guard services highlights the ongoing need for detention facility operations. 3. The fixed-price contract structure aims to control costs, but the lack of competition limits benchmarking. 4. Performance duration of one year suggests a need for ongoing, potentially recurring, service requirements. 5. Geographic focus on Texas indicates a specific operational need within the U.S. Immigration and Customs Enforcement's domain. 6. The absence of small business set-aside flags potential missed opportunities for smaller service providers.

Value Assessment

Rating: questionable

The contract's value of $37.4 million for one year of detention services requires careful benchmarking against similar sole-source or limited-competition contracts. Without competitive bids, it is difficult to definitively assess if the pricing represents fair market value. The fixed-price nature provides some cost certainty, but the lack of competitive pressure could lead to inflated costs compared to a more open procurement process. Further analysis would involve comparing per-unit costs for services rendered (e.g., per detainee per day) against industry standards and other government contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that U.S. Immigration and Customs Enforcement (ICE) did not solicit bids from multiple potential contractors. This approach is typically used when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition means there were no other bidders to compare against, and it limits the government's ability to leverage market forces to achieve the best possible price and terms. This procurement method bypasses the standard competitive process designed to ensure optimal value for taxpayer dollars.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. This limits the government's leverage in negotiating favorable terms and pricing.

Public Impact

The primary beneficiaries are CoreCivic, Inc., which receives substantial revenue, and U.S. Immigration and Customs Enforcement (ICE), which secures essential detention services. The services delivered include security guard and patrol functions crucial for maintaining order and safety within detention facilities. The contract's geographic impact is focused on Texas, indicating the specific operational needs of ICE in that region. Workforce implications include job creation for security personnel employed by CoreCivic in the specified Texas locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and competitive pricing.
Lack of small business participation may exclude smaller, specialized providers.
High contract value warrants scrutiny for cost-effectiveness and necessity.
Fixed-price contract may not fully account for fluctuating operational needs without adjustments.
Dependence on a single contractor for critical detention services poses a risk if performance issues arise.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Contract duration of one year allows for periodic review and potential re-competition.
Specific geographic focus ensures services are delivered where needed by ICE.
CoreCivic, Inc. is an established provider in the detention services sector.

Sector Analysis

The detention services sector is a critical component of the U.S. immigration system, involving the management and operation of facilities to hold individuals awaiting immigration proceedings. This market is largely driven by government contracts, with a few large private companies dominating the landscape. Spending in this sector is influenced by immigration policies, enforcement priorities, and judicial backlogs. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of the services and the varying contract structures, but significant federal outlays are consistently directed towards detention and related services.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large, established corporation like CoreCivic, Inc. suggests that the primary focus was on securing capacity and operational expertise rather than promoting small business participation. This could represent a missed opportunity to foster growth within the small business ecosystem that provides specialized support services in the security and facility management sectors.

Oversight & Accountability

Oversight for this contract would primarily fall under U.S. Immigration and Customs Enforcement (ICE) contracting officers and program managers. The contract's fixed-price nature provides a degree of accountability for the services delivered. Transparency is limited due to the sole-source nature of the award. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the Department of Homeland Security's Office of Inspector General generally oversees agency spending and contract performance for potential waste, fraud, and abuse.

Related Government Programs

Immigration Detention Services
Correctional Facility Management
Security Guard Services
Federal Law Enforcement Support

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37.4 million to CORECIVIC, INC.. IGF::CT::IGF DETENTION SERVICES AT HOUSTON CDF

Who is the contractor on this award?

The obligated recipient is CORECIVIC, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $37.4 million.

What is the period of performance?

Start: 2019-03-18. End: 2020-03-17.

What is the track record of CoreCivic, Inc. in providing detention services to federal agencies, and have there been any significant performance issues or controversies?

CoreCivic, Inc. is a major private operator of correctional and detention facilities in the United States, with a long history of contracting with federal, state, and local governments. The company manages numerous facilities, including those for U.S. Immigration and Customs Enforcement (ICE). Historically, CoreCivic and its predecessor, Corrections Corporation of America (CCA), have faced scrutiny and criticism regarding conditions within their facilities, staffing levels, and cost-effectiveness. Reports from government watchdogs, news investigations, and advocacy groups have sometimes highlighted concerns about inmate safety, healthcare, and management practices. However, the company maintains that it operates in compliance with contractual obligations and industry standards. Specific performance issues or controversies would need to be examined on a contract-by-contract basis, but the company's overall profile includes both extensive experience and documented areas of concern that warrant careful oversight.

How does the per-unit cost of this contract compare to similar detention services contracts awarded by ICE or other federal agencies, particularly those that were competitively procured?

Benchmarking the per-unit cost of this $37.4 million contract for detention services is challenging without specific details on the number of detainees served, the duration of their stays, and the exact services provided per detainee. However, given that this was a sole-source award, it is highly probable that the per-unit cost is higher than what might be achieved through a competitive bidding process. Competitively procured contracts typically drive down prices as companies vie for the business. Sole-source awards, by their nature, lack this price discovery mechanism. To perform a true comparison, one would need to analyze data from similar ICE contracts (e.g., per diem rates per detainee) that were awarded competitively, factoring in differences in service levels, facility standards, and geographic location. Without such comparative data, assessing the value-for-money of this specific sole-source award remains difficult.

What are the primary risks associated with awarding a significant detention services contract on a sole-source basis, and how are these risks mitigated?

The primary risks associated with awarding a significant detention services contract on a sole-source basis include potential overpayment due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may bear a higher cost than necessary. Mitigation strategies typically involve rigorous justification for the sole-source award, detailed negotiation of contract terms and pricing, and robust performance monitoring by the contracting agency. For this contract, ICE would be responsible for ensuring that CoreCivic, Inc. meets all performance standards and that the pricing, while not competitively determined, is justifiable. Regular performance reviews, audits, and clear contract deliverables are crucial to managing these risks and ensuring accountability, even in the absence of a competitive bidding environment.

What is the historical spending pattern for detention services by U.S. Immigration and Customs Enforcement (ICE) in Texas, and how does this contract fit into that pattern?

U.S. Immigration and Customs Enforcement (ICE) has a consistent and substantial history of spending on detention services across various regions, including Texas, which is a key area for immigration enforcement and processing. Spending patterns are influenced by fluctuating numbers of border encounters, asylum claims, and enforcement priorities. Contracts for detention services, whether operated by ICE directly or through private contractors like CoreCivic, Inc., represent a significant portion of ICE's operational budget. This $37.4 million contract for security guard services in Houston, Texas, fits within this established pattern of federal expenditure on detention infrastructure and operations. The duration and value suggest it addresses a specific, ongoing need for facility security and management within the state, aligning with ICE's broader mission to detain and process individuals within the immigration system.

What are the implications of this contract for the overall effectiveness and efficiency of ICE's detention operations in Texas?

The effectiveness and efficiency of ICE's detention operations in Texas are directly impacted by the services provided under this contract. CoreCivic, Inc.'s role in providing security guards and patrol services is fundamental to maintaining the safety, security, and order within detention facilities. A well-executed security contract contributes to the smooth operation of these facilities, ensuring the well-being of detainees and staff, and facilitating the processing of immigration cases. Conversely, any deficiencies in security services could lead to operational disruptions, safety incidents, or increased costs associated with managing facility issues. The sole-source nature of this award means that ICE is relying on a single provider, making the contractor's performance critical to the overall effectiveness of its detention strategy in the region. Continuous monitoring and performance management are key to ensuring operational goals are met.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10 BURTON HILLS BLVD, NASHVILLE, TN, 37215

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

Financial Breakdown

Contract Ceiling: $47,133,114

Exercised Options: $47,133,114

Current Obligation: $37,431,750

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70CDCR19D00000005

IDV Type: IDC

Timeline