DHS's $46.8M detention facility contract with GEO Group shows potential value concerns and limited competition

Contract Overview

Contract Amount: $46,787,684 ($46.8M)

Contractor: THE GEO Group, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2008-06-19

End Date: 2009-09-30

Contract Duration: 468 days

Daily Burn Rate: $100.0K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESTIMATED COST OF CONTRACT DETENTION FACILITY FOR "GUARANTEED AND OVERAGES" FOR DETAINEES FOR THE PERIOD OF 10/01/08-09/30/09. INQUIRIES TO AFOD MARCOS REYNA, 210-967-7002.

Place of Performance

Location: PEARSALL, FRIO County, TEXAS, 78061

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $46.8 million to THE GEO GROUP, INC. for work described as: ESTIMATED COST OF CONTRACT DETENTION FACILITY FOR "GUARANTEED AND OVERAGES" FOR DETAINEES FOR THE PERIOD OF 10/01/08-09/30/09. INQUIRIES TO AFOD MARCOS REYNA, 210-967-7002. Key points: 1. The contract's estimated cost of $46.8 million for a single year of operation raises questions about value for money. 2. Limited competition for this contract could lead to less favorable pricing for the government. 3. The fixed-price nature of the contract may shift some financial risk to the contractor, but oversight is crucial. 4. This contract represents a significant expenditure within the broader context of immigration enforcement and detention services. 5. The GEO Group, a major private prison operator, is the sole awardee, highlighting market concentration. 6. The contract's duration of over a year suggests a need for sustained service delivery.

Value Assessment

Rating: fair

The estimated cost of $46.8 million for a detention facility for one year appears substantial. Benchmarking against similar facilities operated by other agencies or private entities would be necessary to determine if this represents a fair price. The contract type (firm fixed price) suggests that the contractor bears the risk of cost overruns, which can be a positive indicator of value if managed effectively. However, without comparative data on per-detainee costs or operational efficiency, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded as a competitive delivery order, but the details provided do not specify the number of bidders or the extent of the competition. If only a few entities were able to bid, or if the solicitation had restrictive requirements, the competition may have been limited. Limited competition can result in higher prices and reduced innovation as the government may not receive the most cost-effective offers.

Taxpayer Impact: Limited competition means taxpayers may not be getting the best possible price for detention services, potentially leading to higher overall spending on immigration enforcement.

Public Impact

The primary beneficiaries are U.S. Immigration and Customs Enforcement (ICE) and the Department of Homeland Security (DHS), receiving detention services. The contract provides essential services for the housing and care of detainees. The geographic impact is concentrated in Texas, where the facility is located. The contract supports jobs within the private corrections industry, including security, administrative, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if "guaranteed and overages" clauses are broadly interpreted.
Risk of service quality issues if contractor prioritizes profit over detainee welfare.
Dependence on a single contractor for critical detention services.
Limited transparency in the competitive bidding process for this delivery order.

Positive Signals

Firm fixed-price contract structure can provide cost certainty.
Contract is for a defined period, allowing for re-evaluation of needs.
Awarded to a known entity in the detention services sector.

Sector Analysis

This contract falls within the private corrections and detention services sector, a segment of the broader security and government services industry. This market is characterized by a few large, established players, including The GEO Group and CoreCivic. Government contracts for detention facilities are a significant source of revenue for these companies. Benchmarking spending in this sector often involves comparing per-diem rates and operational costs across different facilities and jurisdictions.

Small Business Impact

The provided data indicates that small business participation was not a stated requirement or outcome for this contract (sb: false). As a large contract awarded to a major corporation, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specifically mandated. The focus is on a large-scale service provider, not on fostering the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of U.S. Immigration and Customs Enforcement (ICE) officials within the Department of Homeland Security. Accountability measures would include performance standards, reporting requirements, and site inspections. Transparency is often limited in specific delivery orders, but overall program spending and contract awards are generally subject to public reporting. The Inspector General for DHS would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Immigration and Customs Enforcement (ICE) Operations
Department of Homeland Security (DHS) Facilities Management
Private Detention Center Contracts
Federal Law Enforcement Support Services

Risk Flags

Potential for cost overruns
Limited competition
Contractor performance risk
Oversight challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $46.8 million to THE GEO GROUP, INC.. ESTIMATED COST OF CONTRACT DETENTION FACILITY FOR "GUARANTEED AND OVERAGES" FOR DETAINEES FOR THE PERIOD OF 10/01/08-09/30/09. INQUIRIES TO AFOD MARCOS REYNA, 210-967-7002.

Who is the contractor on this award?

The obligated recipient is THE GEO GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $46.8 million.

What is the period of performance?

Start: 2008-06-19. End: 2009-09-30.

What is the historical spending trend for detention facility contracts by ICE?

Historical spending on detention facility contracts by ICE has shown a consistent and significant upward trend over the past two decades, driven by evolving immigration policies and enforcement priorities. While specific figures fluctuate annually based on appropriation levels and operational needs, the overall reliance on private detention centers has been a hallmark of ICE's operational model. For instance, in fiscal year 2023, ICE's budget included substantial allocations for detention and removal operations, a significant portion of which is directed towards contracts with private companies like The GEO Group for facility management and detainee housing. Analyzing year-over-year spending reveals shifts in contract values, the number of facilities under contract, and the average daily population housed, often correlating with changes in border apprehension rates and administration policies. This trend underscores the substantial and ongoing financial commitment the federal government makes to outsourced detention services.

How does the per-unit cost of this contract compare to other ICE detention facilities?

Determining the precise per-unit cost for this specific contract is challenging without knowing the average daily population (ADP) it was designed to accommodate. However, the total estimated cost of $46.8 million for a period of approximately 14 months (October 1, 2008 - September 30, 2009) suggests a significant daily operational expense. Industry benchmarks for private detention facilities can range widely, often from $100 to over $200 per detainee per day, depending on the level of security, services provided (medical, legal access, etc.), and geographic location. If this facility housed an average of, for example, 1,000 detainees, the daily cost would be approximately $125,000, or about $125 per detainee per day. This falls within the typical range, but a more precise comparison would require access to the contract's performance metrics, including the guaranteed minimums and actual occupancy rates, as well as detailed service level agreements.

What are the key performance indicators (KPIs) for detention facility contracts, and how is performance monitored?

Key performance indicators (KPIs) for detention facility contracts typically revolve around detainee safety, security, health, and welfare, alongside operational efficiency and compliance. Common KPIs include incident rates (fights, assaults, self-harm), use-of-force incidents, medical care response times, sanitation standards, food service quality, and timely transportation. Performance is monitored through a combination of methods: regular site inspections by government officials (often CORs - Contracting Officer's Representatives), review of contractor-submitted performance reports, detainee grievance system analysis, and unannounced audits. ICE contract managers are responsible for ensuring the contractor meets all contractual obligations and performance standards. Failure to meet KPIs can result in contractual remedies, including financial penalties or termination.

What is The GEO Group's track record with federal detention contracts?

The GEO Group, Inc. has a long and extensive track record of operating detention facilities under contract with federal agencies, primarily U.S. Immigration and Customs Enforcement (ICE) and previously the U.S. Marshals Service. They are one of the largest private operators of correctional and detention facilities in the United States. Their history includes numerous contracts similar to the one described, providing housing and services for detainees. However, the company has also faced significant scrutiny and criticism regarding conditions within its facilities, including allegations of understaffing, inadequate medical care, and safety concerns. Numerous reports from government oversight bodies, advocacy groups, and media outlets have documented these issues. Despite these criticisms, GEO Group remains a primary contractor for federal detention services, indicating a continued, albeit sometimes contentious, relationship with the government.

What are the risks associated with relying on private contractors for detention services?

Relying on private contractors for detention services presents several inherent risks. A primary concern is the potential conflict between the profit motive of the contractor and the government's responsibility for humane and safe detainee care. This can lead to cost-cutting measures that compromise safety, staffing levels, or service quality. Oversight can be challenging, requiring robust government monitoring to ensure compliance with contractual terms and constitutional standards. There's also a risk of 'revolving door' issues, where former government officials move into high-paying positions with private contractors, potentially influencing contract awards. Furthermore, the privatization of detention can reduce transparency and public accountability compared to government-run facilities. Finally, contractor performance failures, such as security breaches or inadequate care, can lead to significant legal liabilities and reputational damage for the government.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

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

Financial Breakdown

Contract Ceiling: $46,787,684

Exercised Options: $46,787,684

Current Obligation: $46,787,684

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSACD4C0001

IDV Type: IDC

Timeline