DOJ's $106M correctional facility contract with GEO Group awarded under full and open competition

Contract Overview

Contract Amount: $105,977,839 ($106.0M)

Contractor: THE GEO Group, Inc.

Awarding Agency: Department of Justice

Start Date: 2017-05-25

End Date: 2021-11-30

Contract Duration: 1,650 days

Daily Burn Rate: $64.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF CAR 16 - RFP-PCC-0023 OPERATION AND MANAGEMENT OF A CORRECTIONAL FACILITY.

Place of Performance

Location: BIG SPRING, HOWARD County, TEXAS, 79720

State: Texas Government Spending

Plain-Language Summary

Department of Justice obligated $106.0 million to THE GEO GROUP, INC. for work described as: IGF::CL::IGF CAR 16 - RFP-PCC-0023 OPERATION AND MANAGEMENT OF A CORRECTIONAL FACILITY. Key points: 1. The contract value represents a significant investment in correctional facility operations. 2. Full and open competition suggests a potentially competitive bidding process. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The contract duration of 1650 days (approx. 4.5 years) indicates a long-term service requirement. 5. The contractor, The GEO Group, Inc., has a substantial presence in the corrections sector. 6. The specific NAICS code (561210) points to facilities support services, a core operational area.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific service details and comparable facility operational costs. However, the total value of over $100 million for a 4.5-year period suggests a substantial operational scale. The firm-fixed-price structure is generally favorable for the government in managing cost certainty, but the overall value-for-money depends heavily on the quality and efficiency of the services provided by The GEO Group, Inc. Further analysis would require comparing per-bed costs or service delivery metrics against industry standards and other government contracts for similar facilities.

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 offers. This approach is generally expected to foster a competitive environment, potentially leading to better pricing and service offerings. The presence of 14 bidders (no) suggests a robust level of interest in this contract, which further supports the likelihood of competitive pressure influencing the final award.

Taxpayer Impact: A competitive bidding process for essential services like correctional facility management is beneficial for taxpayers, as it encourages multiple companies to offer their best pricing and service terms, potentially reducing overall government expenditure.

Public Impact

The primary beneficiaries are the Federal Prison System / Bureau of Prisons, which receives operational support for a correctional facility. Services delivered include the day-to-day management and operation of a correctional facility, ensuring security, inmate welfare, and program delivery. The geographic impact is localized to the specific region in Texas (TX) where the facility is located. 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 to prioritize profit over service quality or inmate welfare due to fixed-price nature.
Reliance on a single large contractor for critical public safety functions raises concerns about service continuity and contingency planning.
Past performance and reputation of The GEO Group, Inc. in managing correctional facilities warrant close scrutiny.
The scale of the contract may limit opportunities for smaller, specialized service providers in the future.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent process.
Firm-fixed-price contract type provides cost certainty for the government.
The contract duration indicates a stable, long-term operational requirement being met.
The number of bidders (14) suggests significant market interest and potential for competitive pricing.
The contractor is a well-established entity in the correctional services industry.

Sector Analysis

The correctional services industry is a significant sector within the broader facilities support and private security markets. This contract falls under facilities support services (NAICS 561210), which encompasses a wide range of services for the operation and maintenance of buildings and other facilities. The private operation of correctional facilities is a specialized segment within this industry, often involving government contracts. Comparable spending benchmarks would typically involve per-diem inmate costs or per-facility operational budgets for similar-sized institutions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). The GEO Group, Inc. is a large corporation, suggesting that subcontracting opportunities for small businesses may exist, but are not mandated by a specific set-aside. The impact on the small business ecosystem would depend on the specific subcontracting plans and the nature of the services required, which are not detailed here. Without a small business set-aside, the primary focus is likely on large-scale service providers.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) from the Bureau of Prisons, performance monitoring, and regular reporting requirements. Accountability measures are inherent in the firm-fixed-price contract structure, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is generally facilitated through contract award databases and public reporting, though detailed operational performance data may be less accessible. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Prison System Operations
Private Correctional Facility Management
Facilities Support Services Contracts
Bureau of Prisons Contracts
Department of Justice Contracts

Risk Flags

Contractor Performance Risk
Service Quality Monitoring
Inmate Welfare and Safety
Cost Control vs. Service Quality Balance
Reliance on Single Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $106.0 million to THE GEO GROUP, INC.. IGF::CL::IGF CAR 16 - RFP-PCC-0023 OPERATION AND MANAGEMENT OF A 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 $106.0 million.

What is the period of performance?

Start: 2017-05-25. End: 2021-11-30.

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

The Federal Prison System (FPS), part of the Department of Justice, has a long history of utilizing both government-operated and privately managed correctional facilities. Historical spending patterns reveal a fluctuating reliance on private facilities, often influenced by budget constraints, inmate population surges, and policy shifts. Over the past two decades, there have been periods of significant expansion in private prison contracts, followed by periods of contraction or consolidation. Analyzing specific spending trends requires examining annual appropriations, contract awards, and the number of inmates housed in privately operated institutions. For instance, while overall inmate populations may fluctuate, the cost per inmate can vary significantly between government-run and private facilities, impacting total spending. The trend towards firm-fixed-price contracts, as seen in this example, aims to provide cost predictability for the government, but the total annual expenditure is a function of the number of contracts, their values, and their durations.

How does the per-unit cost of this contract compare to similar correctional facility management contracts?

Determining the precise per-unit cost for this contract is difficult without knowing the exact number of inmates or the specific services included beyond general 'operation and management.' However, we can estimate a potential range. With a contract value of approximately $106 million over roughly 1650 days (4.5 years), the average annual cost is about $23.5 million. If this facility houses, for example, 1,000 inmates, the annual cost per inmate would be around $23,500, or approximately $64 per inmate per day. This figure needs to be compared against industry benchmarks and other government contracts for similar facilities in terms of security level, location, and services provided. Private prison per-diem rates can vary widely, often ranging from $50 to over $100 per inmate per day, depending on these factors. A rate around $64 per day would be within the lower to mid-range of typical private correctional facility contracts, suggesting potentially reasonable value, but a detailed comparison with facilities of identical characteristics is necessary for a definitive assessment.

What are the primary risks associated with contracting out correctional facility operations?

Contracting out correctional facility operations carries several inherent risks. A primary concern is the potential for a conflict of interest between the profit motive of the private contractor and the public interest in safety, security, and humane treatment of inmates. This can lead to cost-cutting measures that compromise staffing levels, training, or essential services, potentially increasing the risk of disturbances, escapes, or violence. Another risk involves ensuring adequate oversight and accountability; government agencies must invest significant resources to monitor contractor performance effectively. Furthermore, reliance on private operators can reduce governmental flexibility in responding to changing needs or policy directives. There's also the risk of contractor failure or bankruptcy, which could disrupt operations and necessitate emergency government intervention. Finally, the quality of services and adherence to constitutional standards for inmate care are critical areas that require constant vigilance and robust performance metrics.

What is The GEO Group, Inc.'s track record in managing federal correctional facilities?

The GEO Group, Inc. is one of the largest private operators of correctional and detention facilities in the United States and internationally. They have a long and extensive history of managing facilities under contract with federal, state, and local government agencies. Their track record includes operating a wide range of facilities, from minimum-security correctional centers to maximum-security prisons and immigration detention centers. Like many large contractors in this sector, The GEO Group has faced scrutiny and criticism regarding operational issues, staffing, inmate conditions, and financial performance in some of its facilities. Conversely, they have also been awarded numerous contracts and have maintained long-term relationships with government entities, suggesting a level of performance that meets contractual requirements. A comprehensive assessment of their track record would involve reviewing specific contract performance evaluations, any significant incidents or violations, and their overall reputation within the corrections industry and among government oversight bodies.

How does the firm-fixed-price contract type influence contractor performance and government oversight?

A firm-fixed-price (FFP) contract is designed to provide the government with cost certainty by obligating the contractor to complete the work for a predetermined, fixed price, regardless of the actual costs incurred. This contract type places the primary risk of cost overruns on the contractor. For performance, the FFP structure incentivizes the contractor to manage costs efficiently and complete the work within budget to maximize profit. However, it can also incentivize cost-cutting measures that might compromise quality or scope if not adequately monitored. For government oversight, the focus shifts from scrutinizing costs to rigorously monitoring performance, quality, and adherence to contract specifications. The government must ensure that the contractor is delivering the required services to the agreed-upon standards, as the contractor has less incentive to exceed basic requirements without additional compensation. Robust performance metrics, inspections, and reporting are crucial to ensure the contractor meets its obligations under the FFP arrangement.

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-0023

Offers Received: 14

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: $1,630,901,070

Exercised Options: $352,059,344

Current Obligation: $105,977,839

Actual Outlays: $4,557,111

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline