DOJ's $395M contract with CoreCivic for correctional services shows long-term commitment, raising value-for-money questions

Contract Overview

Contract Amount: $395,387,618 ($395.4M)

Contractor: Corecivic, Inc.

Awarding Agency: Department of Justice

Start Date: 2002-05-15

End Date: 2013-04-02

Contract Duration: 3,975 days

Daily Burn Rate: $99.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 151060

Place of Performance

Location: MC RAE, TELFAIR County, GEORGIA, 31055

State: Georgia Government Spending

Plain-Language Summary

Department of Justice obligated $395.4 million to CORECIVIC, INC. for work described as: 151060 Key points: 1. The contract's duration and significant value suggest a substantial, long-term need for correctional services. 2. With a fixed-price structure, the government aims to control costs, but the overall value depends on service quality and efficiency. 3. The presence of multiple bidders indicates a competitive market, potentially leading to better pricing. 4. Performance context is crucial; the effectiveness of these correctional services directly impacts public safety and rehabilitation outcomes. 5. This contract positions the Federal Prison System within the broader private correctional services sector. 6. The absence of small business set-asides warrants scrutiny regarding opportunities for smaller providers.

Value Assessment

Rating: fair

This contract, valued at over $395 million, represents a significant investment in private correctional services. Benchmarking its value requires comparing per-diem rates and service outcomes against similar federal and state contracts. The firm-fixed-price nature provides cost certainty, but the long duration (over 11 years) means the government is locked into these rates, potentially missing out on savings if market conditions change or if alternative solutions become more cost-effective. Without detailed performance metrics and cost breakdowns, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six bidders participating. This level of competition is generally positive, suggesting that multiple providers were capable and interested in fulfilling the requirement. A competitive process typically drives down prices and encourages innovation as contractors vie for the award. The fact that six entities bid indicates a healthy market for these services.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by securing services at market-competitive rates, preventing potential overcharges that could arise from a less contested procurement.

Public Impact

The primary beneficiaries are federal inmates requiring correctional housing and services. Services delivered include housing, security, food, healthcare, and rehabilitation programs for inmates. The contract's geographic impact is centered in Georgia, where the correctional facility is located. Workforce implications include employment opportunities for correctional officers, healthcare professionals, and support staff within the facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term commitment of over 11 years may reduce flexibility to adapt to changing correctional needs or policies.
Fixed-price contracts can sometimes incentivize cost-cutting that may impact service quality if not rigorously monitored.
Reliance on a single contractor for a significant duration raises concerns about potential vendor lock-in and reduced leverage in future negotiations.

Positive Signals

Full and open competition suggests a robust market and potentially competitive pricing.
The firm-fixed-price contract provides cost certainty for the government over the contract period.
The award to CoreCivic, a known entity in the corrections sector, suggests a degree of confidence in their ability to perform.

Sector Analysis

The private correctional services industry plays a significant role in supplementing government capacity for inmate management. This sector is characterized by large, established players and is subject to regulatory oversight and public scrutiny. The market size is substantial, driven by federal, state, and local government needs. This contract fits within the broader trend of governments outsourcing correctional functions, with spending benchmarks varying widely based on service scope, location, and inmate population characteristics.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside requirement. This suggests that the primary focus was on securing the most capable and cost-effective provider through full and open competition. There may be opportunities for small businesses to participate as subcontractors to CoreCivic, but this is not explicitly detailed in the provided data. The absence of set-asides means that the direct impact on the small business ecosystem for this specific contract is likely limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the Federal Bureau of Prisons (BOP), a division of the Department of Justice. Mechanisms likely include regular performance reviews, site inspections, audits, and adherence to contractual performance standards. Accountability is enforced through contract clauses, potential penalties for non-performance, and the possibility of contract termination. Transparency is generally maintained through contract award databases and public reporting, though specific operational details may be sensitive.

Related Government Programs

Federal Bureau of Prisons Operations
Private Correctional Facility Management
Inmate Services Contracts
Department of Justice Procurement

Risk Flags

Long contract duration may limit flexibility
Potential for service quality decline if oversight is lax
Reliance on private sector for core government function

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $395.4 million to CORECIVIC, INC.. 151060

Who is the contractor on this award?

The obligated recipient is CORECIVIC, 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 $395.4 million.

What is the period of performance?

Start: 2002-05-15. End: 2013-04-02.

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

The Federal Prison System (FPS) has a history of utilizing private correctional facilities to manage its inmate population, particularly when capacity within federal prisons is strained. Spending in this area has fluctuated over the years, influenced by sentencing policies, inmate population trends, and the availability of federal bed space. Contracts for private facilities are often long-term and can represent significant portions of the FPS budget. Analyzing historical spending reveals a consistent reliance on private sector partners, with contract values often in the tens or hundreds of millions of dollars, depending on the scale and duration of the services required. This specific contract, awarded in 2002 and ending in 2013 for over $395 million, is indicative of the substantial financial commitments involved in outsourcing correctional services.

How does the per-diem cost of this contract compare to other federal or state correctional facilities?

Determining the exact per-diem cost for this specific contract requires access to detailed financial data and operational reports that are not publicly available. However, the overall contract value of $395 million over approximately 11 years suggests an average annual expenditure of roughly $36 million. To benchmark this, one would need to compare the per-diem rates charged by CoreCivic to those of other federal Bureau of Prisons (BOP) facilities and state-run correctional institutions. Historically, private facilities have sometimes offered lower per-diem rates than government-run facilities, but this is not always the case and depends heavily on the specific services included (e.g., healthcare, programming) and the geographic location. A comprehensive comparison would involve analyzing the scope of services, inmate security levels, and operational efficiencies across various contracts.

What are the key performance indicators (KPIs) used to evaluate CoreCivic's performance under this contract?

While specific KPIs for this contract are not detailed in the provided data, federal correctional contracts typically include rigorous performance standards. These often encompass inmate safety and security (e.g., incident rates, escapes), healthcare provision (e.g., access to medical care, response times), facility maintenance and cleanliness, food services quality, and adherence to rehabilitation program requirements. Performance is usually monitored through regular audits, site visits by government officials, and reporting by the contractor. Failure to meet these KPIs can result in financial penalties, corrective action plans, or even contract termination. The long duration and significant value of this contract imply that robust oversight and performance evaluation mechanisms were likely in place.

What is the track record of CoreCivic in managing federal correctional contracts?

CoreCivic (formerly Corrections Corporation of America) is one of the largest private prison operators in the United States and has a long history of contracting with federal, state, and local governments. The company has managed numerous federal contracts, including those with the Federal Bureau of Prisons (BOP) and U.S. Immigration and Customs Enforcement (ICE). Its track record is mixed, with periods of successful contract fulfillment alongside controversies related to safety, staffing levels, and cost-effectiveness. Reports from government watchdogs and media investigations have sometimes raised concerns about conditions and management practices in facilities operated by CoreCivic. However, the company continues to be a major player, indicating that it has met the minimum requirements for many government contracts, including this one awarded by the Department of Justice.

What are the potential risks associated with a long-term, sole-source or limited-competition contract for correctional services?

This contract was awarded under 'full and open competition,' not sole-source or limited competition, which mitigates some of the typical risks associated with non-competitive awards. However, the long duration (over 11 years) of any contract can introduce risks. These include potential price escalation if market conditions change unfavorably, reduced flexibility for the government to adopt new correctional policies or technologies, and the risk of vendor lock-in, where switching providers becomes prohibitively expensive or complex. For correctional services, long-term reliance on a single provider could also lead to complacency or a decline in service quality if oversight is not consistently rigorous. The government must actively manage the contract to ensure ongoing value and adherence to standards throughout its extended term.

Industry Classification

NAICS: Public Administration › Justice, Public Order, and Safety Activities › Correctional Institutions

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 10 BURTON HILLS BLVD, NASHVILLE, TN, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $397,839,279

Exercised Options: $395,387,618

Current Obligation: $395,387,618

Contract Characteristics

Cost or Pricing Data: NO

Timeline