DOJ's $569M contract for correctional facility management awarded to Cornell Companies, Inc. for 3,775 days

Contract Overview

Contract Amount: $568,888,546 ($568.9M)

Contractor: Cornell Companies, Inc.

Awarding Agency: Department of Justice

Start Date: 2010-10-01

End Date: 2021-01-31

Contract Duration: 3,775 days

Daily Burn Rate: $150.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Official Description: PROVIDE SERVICES FOR THE MANAGEMENT AND OPERATION OF A CORRECTIONAL FACILITY IN ACCORDANCE WITH RFP-PCC-0014

Place of Performance

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

State: Florida Government Spending

Plain-Language Summary

Department of Justice obligated $568.9 million to CORNELL COMPANIES, INC. for work described as: PROVIDE SERVICES FOR THE MANAGEMENT AND OPERATION OF A CORRECTIONAL FACILITY IN ACCORDANCE WITH RFP-PCC-0014 Key points: 1. The contract's value of $569 million over nearly 10.5 years suggests a significant investment in correctional facility operations. 2. Awarded under full and open competition, the contract indicates a market where multiple vendors could potentially bid. 3. The fixed-price award fee structure aims to incentivize performance while managing costs. 4. The duration of the contract (3,775 days) points to a long-term need for these services. 5. The North American Industry Classification System (NAICS) code 561210 for Facilities Support Services places this contract within a broad service sector. 6. The contract's geographic location in Florida (ST: FL) highlights a specific regional operational focus.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable facility management contracts. The total award amount of $568,888,545.55 over approximately 10.5 years averages to roughly $54 million annually. This figure needs to be compared against the operational costs of similar-sized federal or state correctional facilities to assess value for money. The fixed-price award fee structure suggests an attempt to control costs while allowing for performance-based incentives, but the effectiveness of this depends heavily on the defined award fee criteria and the contractor's ability to meet them.

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. The presence of 5 bidders (no: 5) suggests a reasonably competitive environment for this type of service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. However, the specific details of the bidding process, including the evaluation criteria and the number of proposals received, would provide a clearer picture of the actual competitive intensity.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The fact that five companies bid suggests that the government received multiple options, increasing the likelihood of securing a cost-effective solution.

Public Impact

The primary beneficiaries are the Federal Prison System / Bureau of Prisons, which receives essential operational support for a correctional facility. The services delivered include the management and operation of the correctional facility, ensuring security, housing, and related services for inmates. The geographic impact is concentrated in Florida, where the facility is located. Workforce implications include the creation and maintenance of jobs related to facility management, security, and support services, both directly by the contractor and indirectly through its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration may reduce flexibility for the agency to adapt to changing needs or adopt new technologies.
Reliance on a single contractor for core facility operations could create dependency and potential risks if the contractor underperforms or faces financial difficulties.
The fixed-price award fee structure, while incentivizing performance, can sometimes lead to disputes over award fee determinations if not clearly defined.
The specific performance metrics and award fee criteria are not detailed, making it difficult to assess the effectiveness of the incentive mechanism.
The scale of the contract ($569M) represents a significant financial commitment, requiring robust oversight to ensure continued value.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a reasonable price.
The fixed-price award fee structure is designed to ensure performance standards are met while managing costs.
The contract duration indicates a stable, long-term operational requirement being met.
The contractor, Cornell Companies, Inc., has experience in correctional facility management, implying a level of expertise.
The contract specifies services for management and operation, covering essential functions for a correctional facility.

Sector Analysis

The Facilities Support Services sector (NAICS 561210) is a broad category encompassing a wide range of services necessary for the operation and maintenance of buildings and infrastructure. This contract falls within the government services segment of this sector, specifically focusing on correctional facility management. The market for correctional facility management is influenced by government spending priorities, inmate populations, and security requirements. Comparable spending benchmarks would typically involve analyzing the per-diem costs or per-inmate operational expenses for similar federal, state, or private correctional facilities, adjusted for size, location, and service scope.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions (ss: false) or subcontracting goals (sb: false) for this contract. This suggests that the primary competition was not geared towards small businesses, and there may not be explicit requirements for the prime contractor to engage small businesses in subcontracting roles. Consequently, the direct impact on the small business ecosystem from this specific contract appears limited, although indirect opportunities might arise through the contractor's supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice, specifically the Federal Prison System / Bureau of Prisons. Accountability measures would be embedded within the contract's terms, including performance standards, reporting requirements, and the fixed-price award fee structure. Transparency is generally facilitated through contract award databases and public reporting, though detailed operational performance data may be less accessible. The Inspector General for the Department of Justice would likely have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Bureau of Prisons Operations
Correctional Facility Management Services
Government Contracting for Services
Facilities Support Services
Department of Justice Contracts

Risk Flags

Contract Duration
Performance Incentives
Competition Level

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $568.9 million to CORNELL COMPANIES, INC.. PROVIDE SERVICES FOR THE MANAGEMENT AND OPERATION OF A CORRECTIONAL FACILITY IN ACCORDANCE WITH RFP-PCC-0014

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 $568.9 million.

What is the period of performance?

Start: 2010-10-01. End: 2021-01-31.

What was the historical spending trend for correctional facility management services by the Bureau of Prisons prior to this contract?

Analyzing historical spending trends for correctional facility management by the Bureau of Prisons (BOP) prior to this contract (awarded Oct 2010) would require accessing historical budget data and contract databases. Generally, BOP spending on facility operations and management has been substantial, driven by inmate population levels and the need to maintain secure and compliant facilities. Trends often reflect shifts in incarceration policies, federal sentencing guidelines, and the agency's capacity to manage its own facilities versus contracting out services. Without specific historical data for the period preceding 2010, it's difficult to provide precise figures, but the overall trend has been towards significant, consistent investment in correctional infrastructure and operations.

How does the per-day cost of operating this facility compare to other federal correctional facilities of similar size and security level?

To compare the per-day cost of operating this facility, we would need to know the average daily inmate population and the total operational costs derived from the contract's value ($568,888,545.55 over 3,775 days). The average daily cost is approximately $150,699 (br: 150699). Dividing this by the average daily inmate population would yield the per-day cost per inmate. This figure would then be benchmarked against publicly available data for similar BOP facilities or state-run prisons. Factors like security level (minimum, medium, maximum), geographic location (affecting labor and utility costs), and the specific services included in the contract (healthcare, education, etc.) are crucial for a fair comparison. Without the inmate population data, a precise per-inmate cost cannot be calculated for this specific contract.

What are the key performance indicators (KPIs) and award fee criteria used to evaluate Cornell Companies, Inc.'s performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or the detailed award fee criteria used to evaluate Cornell Companies, Inc.'s performance. Typically, for correctional facility management contracts, KPIs would include metrics related to security (e.g., incident rates, contraband seizures), inmate welfare (e.g., healthcare access, disciplinary actions), facility maintenance (e.g., response times for repairs, preventative maintenance schedules), staff performance, and compliance with regulations. The award fee criteria would be directly linked to these KPIs, outlining the thresholds and standards the contractor must meet to earn performance-based incentive fees. The effectiveness of the 'award fee' component hinges on the clarity, measurability, and relevance of these criteria.

What is Cornell Companies, Inc.'s track record in managing federal correctional facilities, and have they had past performance issues?

Cornell Companies, Inc. has a history of managing correctional facilities, including federal contracts. As of the contract award date (October 2010), the company had experience in this sector. Assessing their specific track record and any past performance issues would require a review of their contract history with the Federal Bureau of Prisons (BOP) and other government agencies, including any documented performance deficiencies, disputes, or corrective actions. Information on past performance is often considered during the source selection process for new contracts. Without access to detailed past performance evaluations or official records of issues, a definitive statement on their track record and any problems cannot be made solely based on the provided contract data.

What is the total amount the Bureau of Prisons has spent on correctional facility management services over the last five years?

The provided data pertains to a single contract awarded in 2010. To determine the Bureau of Prisons' (BOP) total spending on correctional facility management services over the last five years (relative to the current date), one would need to aggregate data from multiple contract awards and modifications across various facilities and service providers. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for relevant NAICS codes (e.g., 561210 for Facilities Support Services, potentially others related to security or facility operation) and filtering by the awarding agency (Department of Justice/BOP). Such an analysis would reveal the overall budget allocation and spending patterns for outsourced correctional facility management.

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

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

Financial Breakdown

Contract Ceiling: $568,888,546

Exercised Options: $568,888,546

Current Obligation: $568,888,546

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline