DOJ's $794M contract for inmate services awarded to Cornell Companies, Inc. over 10 years

Contract Overview

Contract Amount: $794,491,589 ($794.5M)

Contractor: Cornell Companies, Inc.

Awarding Agency: Department of Justice

Start Date: 2007-01-17

End Date: 2017-09-30

Contract Duration: 3,909 days

Daily Burn Rate: $203.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Official Description: CONTRACTOR OWNED AND OPERATED EXISTING CORRECTIONAL FACILITY FOR APPROXIMATELY 3,500 LOW SECURITY MALE INMATES.

Place of Performance

Location: BIG SPRING, HOWARD County, TEXAS, 79720

State: Texas Government Spending

Plain-Language Summary

Department of Justice obligated $794.5 million to CORNELL COMPANIES, INC. for work described as: CONTRACTOR OWNED AND OPERATED EXISTING CORRECTIONAL FACILITY FOR APPROXIMATELY 3,500 LOW SECURITY MALE INMATES. Key points: 1. Contract value represents significant long-term investment in correctional facility operations. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed Price Award Fee structure aims to incentivize performance while managing costs. 4. Contract duration of over 10 years indicates a stable, long-term service requirement. 5. Geographic concentration in Texas for inmate services. 6. The scale of the facility (3,500 low-security male inmates) is substantial.

Value Assessment

Rating: fair

The contract's total value of approximately $794 million over nearly 11 years averages to about $72 million annually. Benchmarking this against similar large-scale correctional facility management contracts is challenging without more specific service details. However, the fixed-price award fee structure suggests an attempt to control costs while allowing for performance-based adjustments. The sheer scale and duration imply a significant financial commitment, and the value-for-money assessment would depend heavily on the quality of services delivered and inmate outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 5 bids received, the competition level appears moderate. This suggests that while multiple companies vied for the contract, the number of bidders might not have been extensive enough to guarantee the most aggressive pricing. The award fee component could also influence how competitive the initial bids were.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings. The moderate number of bidders in this case suggests a reasonable, though not necessarily optimal, level of price discovery.

Public Impact

Inmates housed in the facility benefit from services provided under this contract. The contract ensures the operational continuity of a correctional facility for approximately 3,500 low-security male inmates. The primary geographic impact is in Texas, where the facility is located. The contract supports jobs related to correctional facility management and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration could lead to complacency if not actively managed.
Reliance on a single contractor for a large inmate population presents significant operational risk.
Award fee structure complexity might lead to disputes or administrative overhead.
Potential for cost overruns if award fee criteria are not tightly defined and monitored.

Positive Signals

Full and open competition suggests a structured procurement process.
Fixed Price Award Fee structure provides a framework for performance incentives.
Contract duration offers stability for service provision and planning.
The contractor has a significant track record in operating correctional facilities.

Sector Analysis

The correctional services industry is a significant sector within government contracting, often involving long-term, high-value agreements. This contract falls under facilities support services, a broad category that includes the management and operation of institutional facilities. The market for correctional services is characterized by specialized knowledge and regulatory compliance requirements. Comparable spending benchmarks would typically be assessed on a per-inmate-per-day basis, factoring in security levels and service scope.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses and the contractor, Cornell Companies, Inc., is a large entity. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities were mandated and fulfilled.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of Prisons (BOP) contracting officers and program managers. Accountability measures are embedded in the Fixed Price Award Fee structure, which links a portion of the payment to performance. Transparency is generally maintained through contract awards databases, though detailed performance metrics and reviews may not always be publicly accessible. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Federal Prison System Contracts
Correctional Facility Management Services
Inmate Services Contracts
Bureau of Prisons Operations

Risk Flags

Long-term contract duration
Large inmate population management
Sole reliance on one contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $794.5 million to CORNELL COMPANIES, INC.. CONTRACTOR OWNED AND OPERATED EXISTING CORRECTIONAL FACILITY FOR APPROXIMATELY 3,500 LOW SECURITY MALE INMATES.

Who is the contractor on this award?

The obligated recipient is CORNELL COMPANIES, 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 $794.5 million.

What is the period of performance?

Start: 2007-01-17. End: 2017-09-30.

What is the historical spending trend for this specific contract and similar correctional facility contracts awarded by the Bureau of Prisons?

The provided data shows a single definitive contract awarded to Cornell Companies, Inc. for $794,491,589.25, spanning from January 17, 2007, to September 30, 2017. This represents a significant, long-term commitment. To analyze historical spending trends, one would need to examine annual expenditures against the total contract value and compare this to other similar contracts awarded by the Bureau of Prisons (BOP) during the same period. Factors such as inmate population fluctuations, changes in service requirements, and inflation would influence year-over-year spending. A deeper analysis would involve comparing the average annual cost per inmate under this contract against the BOP's average cost per inmate across its facilities to assess efficiency and value.

How does the per-inmate cost of this contract compare to industry benchmarks for managing low-security male correctional facilities?

The total contract value is $794,491,589.25 over approximately 10.7 years (3909 days) for 3,500 inmates. This equates to an average annual cost of roughly $74.2 million ($794.5M / 10.7 years) or approximately $21,214 per inmate per year ($74.2M / 3,500 inmates). Benchmarking this requires comparing it to the average cost per inmate per day/year for similar facilities. Industry reports and government data (like from the Bureau of Justice Statistics or GAO) often provide such benchmarks. If the average cost per inmate per day for comparable low-security facilities is significantly lower, this contract might be considered expensive. Conversely, if it includes a broader scope of services or higher security standards than typical benchmarks, the cost could be justified. Without specific service scope details and precise benchmark data, a definitive comparison is difficult.

What performance metrics were used in the 'Award Fee' component, and how did Cornell Companies, Inc. perform against them?

The provided data indicates the contract type is 'FIXED PRICE AWARD FEE' (pt: "FIXED PRICE AWARD FEE"), but it does not specify the performance metrics used for the award fee. Typically, award fees are tied to objective and subjective performance criteria related to operational efficiency, inmate safety and security, program delivery, facility maintenance, and compliance with regulations. To assess performance, one would need access to the contract's Performance Work Statement (PWS) and any associated award fee determination documentation. This documentation would detail the metrics, scoring system, and the resulting fee amounts paid. Without this information, it's impossible to evaluate how well Cornell Companies, Inc. met performance expectations or how the award fee influenced the final cost.

What is Cornell Companies, Inc.'s track record with the Bureau of Prisons and other government agencies regarding correctional facility management?

Cornell Companies, Inc. has a history of operating correctional facilities for various government entities, including the Bureau of Prisons (BOP) and state/local agencies. Their track record would need to be assessed by reviewing past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any documented instances of contract disputes, litigation, or significant compliance issues. A positive track record would involve consistent performance meeting contractual requirements, successful management of inmate populations, and adherence to safety and security standards. Conversely, negative indicators could include repeated failures to meet performance standards, security breaches, or significant cost overruns on previous contracts. This specific contract's duration suggests a level of trust and satisfactory performance over a decade.

What are the potential risks associated with a single contractor managing such a large inmate population for an extended period?

Managing a large inmate population (3,500) for over a decade presents several risks. Firstly, there's the risk of contractor complacency or a decline in service quality over time due to the long-term nature of the contract and potentially limited competition for renewals. Secondly, operational risks are amplified; any significant security lapse, health crisis, or management failure could have severe consequences. Thirdly, dependence on a single provider can reduce leverage for the government in negotiating future terms or addressing issues promptly. Finally, the contractor's financial stability and adherence to evolving regulatory standards are critical; a downturn in the contractor's performance or financial health could jeopardize facility operations. Robust government oversight and contingency planning are essential to mitigate these risks.

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-0010

Offers Received: 5

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE GEO Group, Inc. (UEI: 612706465)

Address: 1700 WEST LOOP S STE 1500, HOUSTON, TX, 77027

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,101,453,414

Exercised Options: $798,343,513

Current Obligation: $794,491,589

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline