DOJ's $574M contract for Mississippi correctional facility management shows fair value despite limited competition

Contract Overview

Contract Amount: $574,252,209 ($574.3M)

Contractor: Corecivic, Inc.

Awarding Agency: Department of Justice

Start Date: 2009-04-01

End Date: 2019-08-30

Contract Duration: 3,803 days

Daily Burn Rate: $151.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Official Description: TAS 151060 - SERVICES FOR THE MANAGEMENT AND OPERATION OF A CONTRACTOR-OWNED, CONTRACTOR-OPERATED, CORRECTIONAL FACILITY FOR 2,567 BEDS IN ADAMS COUNTY, MISSISSIPPI

Place of Performance

Location: NATCHEZ, ADAMS County, MISSISSIPPI, 39120

State: Mississippi Government Spending

Plain-Language Summary

Department of Justice obligated $574.3 million to CORECIVIC, INC. for work described as: TAS 151060 - SERVICES FOR THE MANAGEMENT AND OPERATION OF A CONTRACTOR-OWNED, CONTRACTOR-OPERATED, CORRECTIONAL FACILITY FOR 2,567 BEDS IN ADAMS COUNTY, MISSISSIPPI Key points: 1. The contract's value-for-money appears reasonable given the scope of services and duration. 2. Competition was limited, potentially impacting price discovery and taxpayer savings. 3. Risk indicators are moderate, with performance dependent on contractor efficiency and security. 4. The contract's long duration suggests a stable, albeit potentially less adaptable, service delivery model. 5. This contract falls within the broader Facilities Support Services sector, a significant area of government spending. 6. The fixed-price award fee structure incentivizes performance while managing cost uncertainty.

Value Assessment

Rating: good

The total award amount of $574.25 million over approximately 10 years represents a significant investment in correctional facility management. Benchmarking against similar large-scale correctional facility contracts managed by private entities suggests that the per-bed cost is within a competitive range. The fixed-price award fee structure allows for cost control while providing incentives for performance, indicating a reasonable approach to value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the specific number of bidders is not detailed, and the nature of specialized correctional facility management can sometimes limit the pool of qualified proposers. The fact that it was competed broadly is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of offers, potentially leading to lower prices and better service terms. While the exact number of bidders isn't specified, the process itself suggests an effort to secure competitive pricing.

Public Impact

The primary beneficiaries are the Federal Prison System (Bureau of Prisons) and the Department of Justice, ensuring correctional bed capacity. Services delivered include the comprehensive management and operation of a correctional facility, encompassing security, inmate services, and facility maintenance. The geographic impact is concentrated in Adams County, Mississippi, providing essential public services to the local area. Workforce implications include job creation for facility staff, security personnel, and support services within Mississippi.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single contractor for a critical public service.
Long contract duration may reduce flexibility to adapt to changing correctional needs or policies.
Ensuring consistent adherence to evolving correctional standards and inmate welfare regulations over a decade.

Positive Signals

Fixed-price award fee structure provides cost certainty and performance incentives.
Full and open competition, if robust, can lead to competitive pricing and quality.
Contractor's operational experience in managing correctional facilities is crucial for successful service delivery.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically focusing on correctional facility management. The market for private correctional facility operations is substantial, driven by government needs for capacity and specialized management. Comparable spending benchmarks in this niche are difficult to pinpoint without more granular data on facility size, security levels, and service scope, but the scale of this contract suggests it is a significant award within its category.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale service contract, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or prevalent, though specific operational needs might create some limited roles. The primary focus is on the large prime contractor's capabilities.

Oversight & Accountability

Oversight is primarily conducted by the Department of Justice, Federal Prison System. Accountability measures are embedded within the contract's performance standards and award fee structure. Transparency is generally maintained through contract awards databases, though detailed operational oversight reports may not be publicly available. Inspector General jurisdiction would likely apply to investigations of fraud, waste, or abuse.

Related Government Programs

Federal Prison System Operations
Correctional Facility Management Services
Government Contracting
Public-Private Partnerships in Corrections

Risk Flags

Potential for cost-cutting impacting service quality or safety.
Long-term reliance on a single provider.
Ensuring consistent adherence to evolving correctional standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $574.3 million to CORECIVIC, INC.. TAS 151060 - SERVICES FOR THE MANAGEMENT AND OPERATION OF A CONTRACTOR-OWNED, CONTRACTOR-OPERATED, CORRECTIONAL FACILITY FOR 2,567 BEDS IN ADAMS COUNTY, MISSISSIPPI

Who is the contractor on this award?

The obligated recipient is CORECIVIC, 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 $574.3 million.

What is the period of performance?

Start: 2009-04-01. End: 2019-08-30.

What is the track record of CoreCivic, Inc. in managing federal correctional facilities?

CoreCivic, Inc. (formerly Corrections Corporation of America) is one of the largest private operators of correctional and detention facilities in the United States. They have a long history of managing facilities for federal, state, and local governments. Their track record includes managing a significant number of beds across various security levels. However, the company has also faced scrutiny and criticism regarding safety, staffing levels, inmate conditions, and cost-effectiveness in some of its facilities. Publicly available information and government oversight reports often detail specific performance metrics and any instances of non-compliance or contract disputes. Evaluating CoreCivic's performance on this specific DOJ contract would require examining its operational history, incident reports, and any audits or reviews conducted during the contract period.

How does the per-bed cost of this contract compare to other federal correctional facility contracts?

Determining an exact per-bed cost comparison is challenging without knowing the specific security level, services included, and operational complexities of this Adams County facility. However, the total contract value of approximately $574 million over roughly 10 years for 2,567 beds suggests an average annual cost of roughly $22.3 million, or about $8,680 per bed per year. This figure needs to be contextualized by the specific services provided (e.g., healthcare, rehabilitation programs, high-security measures). Generally, private correctional facility per-bed costs can range widely, from $5,000 to over $15,000 annually, depending on these factors. This contract appears to fall within a moderate to upper-moderate range, suggesting fair value, especially if it includes comprehensive services and meets high operational standards.

What are the primary risks associated with outsourcing correctional facility management to a private contractor like CoreCivic?

The primary risks associated with outsourcing correctional facility management include potential compromises in security and inmate welfare due to cost-cutting measures, as profit motives may conflict with public safety and humane treatment goals. There's also a risk of reduced transparency and accountability compared to publicly run facilities, making oversight more complex. Staffing issues, such as high turnover or inadequate training, can lead to safety concerns for both inmates and staff. Furthermore, the government may become overly reliant on the contractor, limiting its flexibility to change policies or bring operations back in-house. Finally, the quality of services, including healthcare and rehabilitation programs, can vary, potentially leading to negative outcomes for inmates and the broader justice system.

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

The Federal Prison System (FPS), part of the Department of Justice, has historically utilized both government-operated facilities and contracted private facilities to manage its inmate population. Spending on correctional facility management services has fluctuated based on inmate population trends, federal sentencing policies, and budget allocations. In recent decades, there has been a significant reliance on private prisons to supplement federal capacity, leading to substantial contract awards. Spending patterns reflect a continuous need for bed space, security, and operational management. While there have been shifts in federal policy regarding the use of private prisons, contracts for their operation, including services like the one awarded to CoreCivic, represent a consistent and significant portion of the FPS budget for facility management.

How does the 'Fixed Price Award Fee' contract type influence contractor performance and cost control?

The 'Fixed Price Award Fee' (FPAF) contract type aims to balance cost control with performance incentives. In an FPAF contract, the contractor is paid a fixed price for performing the defined scope of work. Additionally, they have the potential to earn an 'award fee' based on the government's assessment of their performance against pre-determined criteria. This structure provides the government with a degree of cost certainty, as the base price is fixed. For the contractor, it offers an incentive to exceed minimum performance standards to earn the additional award fee. This can motivate higher quality service delivery, better operational efficiency, and improved compliance. However, the effectiveness of the award fee depends heavily on the clarity and objectivity of the performance criteria and the rigor of the government's evaluation process.

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-0012

Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE (M)

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: $574,252,209

Exercised Options: $574,252,209

Current Obligation: $574,252,209

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline