DHS's $52M detention services contract with CoreCivic saw a significant price difference from its benchmark

Contract Overview

Contract Amount: $52,078,418 ($52.1M)

Contractor: Corecivic, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2016-07-01

End Date: 2017-06-30

Contract Duration: 364 days

Daily Burn Rate: $143.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF DETENTION SERVICES

Place of Performance

Location: SAN YSIDRO, SAN DIEGO County, CALIFORNIA, 92143

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $52.1 million to CORECIVIC, INC. for work described as: IGF::CL::IGF DETENTION SERVICES Key points: 1. The contract's price was notably higher than the government estimate, indicating potential value-for-money concerns. 2. While competed, the exclusion of sources in the initial phase warrants scrutiny regarding the breadth of competition. 3. The contract's performance period was relatively short, limiting long-term trend analysis. 4. This contract falls within the 'Other Services to Buildings and Dwellings' category, a broad classification. 5. The firm-fixed-price structure aims to control costs, but the initial bid deviation is a key risk indicator.

Value Assessment

Rating: questionable

The awarded amount of $52,078,417.56 significantly exceeded the government estimate of $14,307,300. This represents a substantial deviation of over 260%, raising serious questions about the accuracy of the initial estimate or the competitiveness of the final pricing. Without further data on the scope of services and market rates for similar detention facilities, it is difficult to definitively assess value, but the large discrepancy is a significant red flag.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, certain sources were excluded at some stage. The specific reasons for this exclusion are not detailed, but it suggests that the pool of potential bidders may have been narrowed, potentially impacting the level of competition and price discovery.

Taxpayer Impact: The exclusion of sources, even if justified, could mean that taxpayers did not benefit from the lowest possible price that a fully open competition might have yielded.

Public Impact

This contract directly supports the operations of U.S. Immigration and Customs Enforcement (ICE) in providing detention services. The services delivered are critical for managing individuals in federal custody during immigration proceedings. The contract's geographic impact is focused on California, where the services were rendered. The contract likely has implications for the workforce employed at the detention facility, including security, administrative, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant overage compared to government estimate suggests potential pricing issues or flawed estimation.
The 'exclusion of sources' clause raises concerns about the true level of competition achieved.
Lack of detailed performance metrics makes it hard to assess the effectiveness of the services provided.
The broad 'Other Services to Buildings and Dwellings' category lacks specificity regarding the exact nature of detention services.

Positive Signals

The contract utilized a firm-fixed-price structure, which generally provides cost certainty for the government.
The award was made to a single contractor, implying a clear point of accountability for service delivery.
The contract was awarded by a major federal agency (DHS), suggesting adherence to established procurement processes.

Sector Analysis

This contract falls under the broader category of government services, specifically related to facility management and operational support for detention centers. The market for such services is often characterized by specialized providers catering to government needs. Benchmarking this contract's value is challenging without more granular data on per-bed costs or service level agreements, but the significant difference between the award and estimate suggests potential market inefficiencies or unique service requirements.

Small Business Impact

There is no indication that this contract included small business set-asides. The primary contractor, CoreCivic, Inc., is a large corporation. Subcontracting opportunities for small businesses are not explicitly detailed in the provided data, but typically, large service contracts may involve some level of subcontracting for specialized support services.

Oversight & Accountability

Oversight for this contract would fall under U.S. Immigration and Customs Enforcement (ICE), a component of the Department of Homeland Security. Accountability measures would be tied to the terms of the firm-fixed-price contract, including service delivery standards and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed operational performance data may be less accessible to the public.

Related Government Programs

Federal Detention Services
Immigration and Customs Enforcement Contracts
Correctional Facility Management
Government Services Contracts
Department of Homeland Security Spending

Risk Flags

Significant Cost Variance
Limited Competition Indicated
Potential Overpayment Risk
Lack of Detailed Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $52.1 million to CORECIVIC, INC.. IGF::CL::IGF DETENTION SERVICES

Who is the contractor on this award?

The obligated recipient is CORECIVIC, 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 $52.1 million.

What is the period of performance?

Start: 2016-07-01. End: 2017-06-30.

What specific factors contributed to the significant difference between the government estimate and the final award price for this detention services contract?

The substantial difference between the government estimate ($14.3M) and the final award ($52.1M) for IGF DETENTION SERVICES suggests several potential contributing factors. Firstly, the initial estimate may have been based on outdated market data, a simplified scope of work, or underestimated the true costs associated with providing secure detention facilities, including staffing, security, healthcare, and operational overhead. Secondly, the 'exclusion of sources' in the competition process might have limited the number of competitive bids received, potentially allowing the winning bidder to offer a higher price. Thirdly, unforeseen requirements or changes in service delivery expectations between the estimation phase and the award could have increased the overall cost. Without access to the detailed solicitation documents, cost breakdowns, and the rationale for excluding certain sources, pinpointing the exact cause remains speculative, but the magnitude of the difference warrants further investigation into the estimation and bidding processes.

How does the pricing of this contract compare to other similar federal detention service contracts awarded around the same period?

Comparing the pricing of this contract requires access to a database of similar federal detention service contracts awarded by ICE or other agencies during the 2016-2017 period. Key metrics for comparison would include the cost per detainee per day, the total contract value relative to the number of beds or bed-days provided, and the geographic location, as costs can vary significantly by region. Given that this contract's award price was over 260% higher than the government estimate, it suggests that either the estimate was significantly flawed, or the contract price was unusually high compared to market expectations. A thorough benchmark analysis would involve identifying comparable contracts and adjusting for differences in service scope, facility size, location, and contract duration to determine if CoreCivic's pricing was indeed an outlier.

What are the potential risks associated with a contract where the awarded price is more than double the government's initial estimate?

A contract awarded at more than double the government's initial estimate presents several significant risks. Primarily, it raises concerns about potential overpayment and poor value for taxpayer money. This discrepancy could indicate flawed initial cost estimations, potentially leading to budget overruns or misallocation of resources. It may also suggest a lack of robust competition, allowing contractors to bid higher prices than might be achievable in a more competitive environment. Furthermore, such a large variance could signal a misunderstanding of the contract requirements or market conditions by the government during the estimation phase, increasing the risk of scope creep or disputes later in the contract lifecycle. Finally, it can erode public trust and lead to scrutiny from oversight bodies and Congress regarding procurement efficiency.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method imply for accountability and cost control?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method implies a nuanced approach to competition. While the intent is to leverage open competition, the explicit exclusion of certain sources suggests that the government identified specific requirements or limitations that narrowed the field of potential bidders. This could be due to specialized capabilities, past performance issues with certain contractors, or specific security requirements. For accountability, it means the government selected from a pool it deemed capable, but the exclusion might limit the breadth of oversight if the excluded sources possessed unique insights or competitive pressures. In terms of cost control, while competition generally drives down prices, the exclusion could potentially reduce competitive pressure, leading to higher-than-expected costs, as seen in the significant difference between the estimate and award price in this case. The justification for excluding sources is critical for understanding the impact on cost control.

What is CoreCivic, Inc.'s track record with federal detention services contracts, and how does it influence the assessment of this specific contract?

CoreCivic, Inc. (formerly Corrections Corporation of America) is a major private operator of correctional and detention facilities in the United States. They have a long history of contracting with federal agencies, including ICE and the Bureau of Prisons, to manage detention centers. Assessing this specific contract requires examining CoreCivic's broader performance history. Factors to consider include their record on meeting contract requirements, adherence to safety and humane treatment standards, cost-effectiveness in previous contracts, and any history of litigation, fines, or negative oversight reports. A strong track record might lend some confidence in their ability to deliver services, but it does not negate the concerns raised by the significant price variance in this particular award. Conversely, a history of issues could amplify concerns about the value and oversight of this contract.

How has federal spending on detention services evolved over time, and where does this contract fit into that trend?

Federal spending on detention services, particularly for immigration detention, has seen significant fluctuations over the past two decades, often influenced by shifts in immigration policy, enforcement priorities, and political administrations. Spending generally increased leading up to and during the period this contract was active (FY2016-2017), reflecting heightened border security measures and increased apprehensions. This $52 million contract represents a component of that larger federal expenditure. Analyzing historical spending trends allows for context on whether this contract's value was typical for its time, or if it represented an escalation in costs. Understanding these trends helps in evaluating the long-term fiscal implications and the efficiency of federal detention service procurement strategies.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Services to Buildings and Dwellings › Other Services to Buildings and Dwellings

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10 BURTON HILLS BLVD, NASHVILLE, TN, 37215

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $52,078,418

Exercised Options: $52,078,418

Current Obligation: $52,078,418

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HSODT5C0003

IDV Type: IDC

Timeline