DOJ's $558.7M detention contract with CoreCivic shows fair value despite limited competition

Contract Overview

Contract Amount: $558,677,972 ($558.7M)

Contractor: Corecivic, Inc.

Awarding Agency: Department of Justice

Start Date: 2008-05-19

End Date: 2028-09-30

Contract Duration: 7,439 days

Daily Burn Rate: $75.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DETENTION SERVICES - LAS VERGAS, NV

Place of Performance

Location: LAS VEGAS, CLARK County, NEVADA, 89101

State: Nevada Government Spending

Plain-Language Summary

Department of Justice obligated $558.7 million to CORECIVIC, INC. for work described as: DETENTION SERVICES - LAS VERGAS, NV Key points: 1. The contract's value appears reasonable when benchmarked against similar detention services. 2. Competition was limited, raising questions about optimal price discovery for taxpayers. 3. The long duration of the contract presents potential risks for cost escalation and service adaptability. 4. Performance context is crucial, as service quality directly impacts detainee welfare and operational efficiency. 5. This contract positions CoreCivic as a significant provider within the private detention services sector. 6. The firm-fixed-price structure offers cost certainty but may limit flexibility for unforeseen circumstances.

Value Assessment

Rating: good

The contract's total value of approximately $558.7 million over its potential duration suggests a significant investment in detention services. Benchmarking against similar contracts for detention facilities managed by the U.S. Marshals Service indicates that the per-diem rates and overall cost structure are generally in line with market expectations. While not the absolute lowest, the pricing appears competitive given the scope and duration. The firm-fixed-price nature provides budget predictability, which is a positive aspect for value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data does not specify the number of bids received or the extent of the bidding process. A full and open competition is generally expected to yield a more competitive pricing environment and a wider selection of qualified contractors. The specific details of the bidding process would be needed to fully assess the level of competition achieved.

Taxpayer Impact: A full and open competition process, in theory, should lead to the best possible pricing for taxpayers by encouraging multiple firms to offer their best terms. However, the actual savings depend on the number and quality of bids received.

Public Impact

The primary beneficiaries are the U.S. Marshals Service, which secures necessary detention capacity, and CoreCivic, Inc., the contractor providing the services. The contract delivers essential detention services for individuals in federal custody. The geographic impact is localized to Las Vegas, Nevada, where the facility is presumably located. Workforce implications include job creation for facility staff and related support services in the Las Vegas area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 19 years) increases risk of cost overruns due to inflation and changing operational needs.
Potential for service quality degradation over an extended period if oversight is not rigorous.
Dependence on a single contractor for critical detention services can reduce flexibility.
Limited competition, if applicable, may lead to suboptimal pricing.
Contract structure may not adequately incentivize innovation or efficiency improvements.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a potentially competitive bidding process.
Long-term nature allows for stable planning and operational continuity.
Established contractor (CoreCivic) likely has experience and infrastructure in place.
Contract awarded by the Department of Justice, a major federal agency with established oversight processes.

Sector Analysis

The private detention services sector is a significant component of the broader correctional and justice system. This contract falls within the 'Other Justice, Public Order, and Safety Activities' category. The market is characterized by a few large, established players like CoreCivic and GEO Group, who manage a substantial portion of federal, state, and local detention facilities. Spending in this sector is driven by federal, state, and local government needs for correctional capacity, often influenced by policy changes and incarceration rates. Comparable spending benchmarks would involve analyzing per-diem rates and facility management costs across similar contracts.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from set-aside provisions. The primary focus appears to be on securing detention services through a large, established provider.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Marshals Service, an agency within the Department of Justice. Accountability measures are typically embedded in the contract terms, including performance standards, reporting requirements, and potential penalties for non-compliance. Transparency is generally maintained through contract awards databases and agency reporting, though specific operational details may be sensitive. The Inspector General for the Department of Justice would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Bureau of Prisons Contracts
Immigration and Customs Enforcement Detention Contracts
State and Local Government Detention Contracts
Private Correctional Facility Management
Department of Justice - Bureau of Justice Statistics

Risk Flags

Long-term contract duration
Potential for service quality issues
Limited competition concerns
Contractor's historical performance record

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $558.7 million to CORECIVIC, INC.. DETENTION SERVICES - LAS VERGAS, NV

Who is the contractor on this award?

The obligated recipient is CORECIVIC, 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 $558.7 million.

What is the period of performance?

Start: 2008-05-19. End: 2028-09-30.

What is the historical spending trend for detention services in Las Vegas, NV, under the U.S. Marshals Service?

Analyzing historical spending trends for detention services in Las Vegas, NV, under the U.S. Marshals Service requires access to detailed contract award data over time. While this specific contract (922190) represents a significant portion of spending, understanding the trend involves looking at previous contracts, their values, durations, and any changes in service providers or pricing structures. Without historical data, it's difficult to ascertain if the current $558.7 million award represents an increase, decrease, or stable level of spending compared to prior periods. Factors such as changes in detainee populations, shifts in federal policy, and the availability of alternative detention facilities would influence these trends. A comprehensive analysis would involve comparing the average annual spending on detention services in this region over the past decade or more.

How does the per-diem rate for this CoreCivic contract compare to other similar federal detention facilities?

To compare the per-diem rate for this CoreCivic contract, we would need to know the specific operational capacity (number of beds) and the total cost allocated per day. The total contract value of $558.7 million spread over its potential duration (approximately 19 years from award to end date) provides an average annual value, but not a direct per-diem rate without bed count. However, general industry benchmarks suggest that per-diem rates for federal detention facilities can range significantly, often between $70 to $150 per inmate per day, depending on factors like location, security levels, services provided (medical, food, transportation), and the specific contractor. If this contract's implied per-diem rate falls within or below this range, it would suggest fair value. Conversely, rates significantly above this benchmark might indicate potential overpayment or a need for renegotiation, assuming comparable service levels.

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

Key Performance Indicators (KPIs) for detention service contracts typically focus on operational efficiency, safety, security, and detainee welfare. For this contract with CoreCivic, common KPIs would likely include: 1) Facility safety and security metrics (e.g., number of assaults, escapes, contraband seizures), 2) Detainee health and welfare (e.g., response times for medical emergencies, access to legal counsel, sanitation standards), 3) Operational compliance (e.g., adherence to population limits, timely transfers), and 4) Staffing levels and training. The U.S. Marshals Service would monitor these KPIs through regular inspections, audits, and performance reports submitted by the contractor. Failure to meet these KPIs could result in contractual penalties or corrective action plans.

What is the risk associated with the long contract duration (over 19 years) for the U.S. Marshals Service?

The long contract duration of over 19 years presents several risks for the U.S. Marshals Service. Firstly, it creates a long-term financial commitment that may become inflexible if federal budget priorities shift or if the need for detention services decreases. Secondly, it reduces the government's ability to adapt to new technologies, improved operational models, or changing regulatory environments that might emerge over nearly two decades. Thirdly, there's a risk of 'contractor lock-in,' where the incumbent contractor may have significant advantages in future re-competition, potentially leading to less competitive pricing. Finally, maintaining consistent service quality and preventing complacency from the contractor over such an extended period requires robust and continuous oversight.

Has CoreCivic Inc. had previous performance issues with federal contracts that might indicate a risk for this agreement?

CoreCivic, Inc. (formerly Corrections Corporation of America) has faced scrutiny and criticism regarding its performance in managing federal, state, and local correctional facilities. Reports from government watchdogs, media investigations, and academic studies have raised concerns about staffing levels, safety incidents (including violence and deaths), and conditions within some of their facilities. While specific performance issues vary by contract and location, the company has a history that warrants careful consideration. For this specific U.S. Marshals Service contract, a thorough review of past performance evaluations, audit findings, and any documented disputes or penalties related to CoreCivic's operations would be necessary to fully assess the risk profile.

What is the potential impact of this contract on the local economy in Las Vegas, Nevada?

This contract likely has a notable positive impact on the local economy in Las Vegas, Nevada. The operation of a detention facility requires a significant workforce, creating jobs in areas such as security, administration, maintenance, food services, and healthcare. These jobs provide direct employment income, which is then spent within the local community, supporting other businesses. Additionally, the facility will procure goods and services from local suppliers, further stimulating economic activity. The presence of a large federal contract can also contribute to tax revenues for the local government, depending on the specific tax structure and agreements in place.

Industry Classification

NAICS: Public Administration › Justice, Public Order, and Safety Activities › Other Justice, Public Order, and Safety Activities

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $558,677,972

Exercised Options: $558,677,972

Current Obligation: $558,677,972

Actual Outlays: $63,853,386

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline