DOJ's $1.08B detention services contract with GEO Group shows potential value concerns and limited competition

Contract Overview

Contract Amount: $97,507,830 ($97.5M)

Contractor: THE GEO Group, Inc.

Awarding Agency: Department of Justice

Start Date: 2008-01-01

End Date: 2019-05-28

Contract Duration: 4,165 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DETENTION SERVICES - FUNDED BY USMS - $1,081,227.00

Place of Performance

Location: SPRINGFIELD GARDENS, QUEENS County, NEW YORK, 11413

State: New York Government Spending

Plain-Language Summary

Department of Justice obligated $97.5 million to THE GEO GROUP, INC. for work described as: DETENTION SERVICES - FUNDED BY USMS - $1,081,227.00 Key points: 1. The contract's long duration (4165 days) may obscure current market value. 2. Limited competition raises questions about optimal pricing and taxpayer value. 3. The firm-fixed-price structure shifts risk to the contractor, but oversight is key. 4. Performance context is difficult to assess without specific metrics on detention quality or cost per inmate. 5. This contract falls within the broader Facilities Support Services sector, with significant government reliance. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its extended duration and the specialized nature of detention services. While the firm-fixed-price contract aims for cost certainty, the total value of over $1 billion suggests a need for rigorous cost analysis against comparable facilities and services. The provided data does not include per-unit costs (e.g., per inmate per day), which would be crucial for a more precise value assessment. Without this granular data, it's difficult to definitively state if the government achieved excellent value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were theoretically allowed to participate. However, the data shows only one award was made to The GEO Group, Inc. The limited number of bidders in specialized sectors like detention services can sometimes lead to less aggressive pricing than in markets with broader participation. Further analysis would be needed to understand the number of proposals received and the reasons for limited bidding.

Taxpayer Impact: While full and open competition is the ideal, a single award suggests that the number of capable bidders may have been limited, potentially impacting the government's ability to secure the most competitive pricing.

Public Impact

The primary beneficiaries are the U.S. Marshals Service, which relies on these services for detainee management. The contract delivers essential detention and facility support services across various locations. Geographic impact is concentrated in New York (ST: NY, SN: NEW YORK) where the facilities are located. Workforce implications include employment opportunities for facility staff, security personnel, and administrative support within the contracted facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (4165 days) may lead to outdated pricing and reduced flexibility.
Lack of specific performance metrics makes it difficult to assess service quality and efficiency.
Limited competition, despite 'full and open' designation, could indicate market concentration or barriers to entry.
The sheer scale of the contract ($1.08B) necessitates robust oversight to ensure accountability and prevent cost overruns or service degradation.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, providing budget certainty.
Awarded under full and open competition, theoretically allowing for broad market participation.
The GEO Group, Inc. is a large, established provider with experience in this sector.

Sector Analysis

This contract falls under Facilities Support Services (NAICS 561210), a broad category encompassing the operation and maintenance of buildings and other facilities. The government, particularly agencies like the U.S. Marshals Service, relies heavily on such contracts for essential functions like detention. The market for detention services is specialized, often dominated by a few large private contractors. Comparable spending benchmarks would involve analyzing per-bed-per-day costs across similar federal, state, and local detention facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SB: false, SS: false). Given the scale and specialized nature of detention services, it is common for such large contracts to be awarded to large businesses. Further investigation into subcontracting plans and actual performance would be necessary to determine if small businesses had opportunities to participate in supporting roles within this contract's ecosystem.

Oversight & Accountability

The contract is a Definitive Contract awarded by the Department of Justice's U.S. Marshals Service. Oversight would typically involve contract officers, program managers, and potentially an Inspector General's office to monitor performance, ensure compliance with terms, and manage any disputes. Transparency is enhanced through contract databases like FPDS, but detailed operational oversight reports are often internal.

Related Government Programs

Federal Bureau of Prisons Contracts
Immigration and Customs Enforcement Detention Contracts
General Services Administration (GSA) Facility Management Contracts
Department of Homeland Security Detention Services

Risk Flags

Long contract duration
Potential for limited competition despite 'full and open' status
Lack of granular performance metrics in provided data
Absence of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $97.5 million to THE GEO GROUP, INC.. DETENTION SERVICES - FUNDED BY USMS - $1,081,227.00

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 (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $97.5 million.

What is the period of performance?

Start: 2008-01-01. End: 2019-05-28.

What was the average cost per inmate per day under this contract?

The provided data does not include the average cost per inmate per day, which is a critical metric for evaluating the efficiency and value of detention services. The total contract value of $1,081,227.00 is for the entire duration and scope, not a daily rate. To calculate this, one would need the total number of inmate days served over the contract period and divide it by the total expenditure. Without this information, it is impossible to benchmark against industry standards or other government contracts for similar services.

How many bids were received for this 'full and open' competition?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' but only lists one awardee, The GEO Group, Inc. While 'full and open' signifies that all responsible sources were permitted to compete, it does not guarantee a high number of bids. Factors such as the specialized nature of detention services, high barriers to entry, and the specific requirements of the solicitation could have limited the number of actual proposals submitted. To determine the precise number of bids, one would need to consult the contract award details or agency procurement records.

What is the significance of the contract duration (4165 days)?

A contract duration of 4165 days (approximately 11.4 years) is exceptionally long for a service contract. This extended period suggests potential issues with outdated pricing structures, reduced flexibility for the government to adapt to changing needs or market conditions, and a prolonged reliance on a single provider. While long-term contracts can offer stability, they also increase the risk of the government not receiving the best available value over time compared to shorter, more frequent competitions that allow for market adjustments.

How does the pricing structure (Firm Fixed Price) impact value for money?

A Firm Fixed Price (FFP) contract shifts the primary risk of cost overruns to the contractor, The GEO Group, Inc. This structure provides budget certainty for the U.S. Marshals Service. However, for value for money, it relies heavily on the initial price being competitive and the contractor maintaining efficient operations. If the initial price was set too high due to limited competition or inadequate market research, the government might overpay throughout the contract's life, even with FFP. Conversely, if the contractor faces unforeseen cost increases, they absorb them, potentially impacting service quality if not managed carefully.

What are the potential risks associated with relying on a single large contractor for detention services?

Relying on a single large contractor like The GEO Group, Inc. for detention services carries several risks. These include potential complacency leading to service degradation, reduced leverage for the government in negotiations, and the significant disruption if the contractor fails to perform or faces financial instability. Market concentration in the private detention industry can also limit future competition. Robust oversight, clear performance standards, 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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 PARK PL STE 700 621 NW 53RD ST, 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: $97,507,830

Exercised Options: $97,507,830

Current Obligation: $97,507,830

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline