DHS awarded $37.8M for detainee housing in Texas, raising questions about value and competition

Contract Overview

Contract Amount: $37,855,605 ($37.9M)

Contractor: THE GEO Group, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2007-10-01

End Date: 2009-06-25

Contract Duration: 633 days

Daily Burn Rate: $59.8K/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 ADULT GUARANTEED HOUSING OF DETAINEES FOR THE PREIOD OF 10/01/07-11/16/07. REQUISITION INQURIES TO AFODM, MARCOS REYNA AT 210-967-7002

Place of Performance

Location: PEARSALL, FRIO County, TEXAS, 78061

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37.9 million to THE GEO GROUP, INC. for work described as: ESTIMATED COST OF CONTRACT DETENTION FACILITY FOR ADULT GUARANTEED HOUSING OF DETAINEES FOR THE PREIOD OF 10/01/07-11/16/07. REQUISITION INQURIES TO AFODM, MARCOS REYNA AT 210-967-7002 Key points: 1. The contract's cost per day for detainee housing appears high when benchmarked against similar facilities. 2. Limited competition for this delivery order may have impacted price discovery and taxpayer value. 3. The short duration of the initial period raises concerns about long-term planning and potential for follow-on contracts. 4. The contract falls within the security services sector, a common area for federal spending. 5. Geographic concentration in Texas for detainee operations is noted. 6. The firm-fixed-price structure aims to control costs but requires careful monitoring of service delivery.

Value Assessment

Rating: questionable

The estimated cost of $37.8 million for a 20-month period (October 2007 - June 2009) for detainee housing services equates to approximately $60,000 per day. Benchmarking against publicly available data for similar detention facilities suggests this daily rate may be on the higher end, potentially indicating less than optimal value for money. Without detailed service level agreements and operational costs, a precise value assessment is challenging, but the initial figures warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was awarded as a 'Competitive Delivery Order,' suggesting that multiple vendors were considered. However, the specific number of bidders and the details of the competitive process are not fully disclosed in the provided data. A competitive delivery order typically implies a broader solicitation than a sole-source award, but the extent of competition can vary significantly. Further information on the solicitation process would be needed to fully assess its effectiveness in driving competitive pricing.

Taxpayer Impact: The level of competition directly impacts taxpayer costs. If the competition was robust, it likely led to a more favorable price. If competition was limited, taxpayers may have paid a premium for the services rendered.

Public Impact

The primary beneficiaries are U.S. Immigration and Customs Enforcement (ICE) and the Department of Homeland Security (DHS), receiving essential services for detainee management. The services delivered include the provision of a detention facility for adult guaranteed housing of detainees. The geographic impact is concentrated in Texas, where the facility is located. Workforce implications include the creation of jobs related to facility management, security, and detainee support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if not managed tightly under the firm-fixed-price structure.
Concerns about the quality of services and detainee welfare given the high per-day cost.
Limited transparency on the competitive process raises questions about best value.
Short contract duration could indicate a lack of long-term strategic planning for detainee housing needs.

Positive Signals

The use of a competitive delivery order suggests an attempt to leverage market forces for pricing.
The firm-fixed-price contract type provides cost certainty for the government.
The contract is awarded to a known entity, The GEO Group, Inc., which may have established operational capabilities.

Sector Analysis

This contract falls within the government's broader spending on correctional and detention services, a significant sector supporting law enforcement and immigration agencies. The market for private detention facilities is substantial, with several key players competing for government contracts. Spending in this area is often influenced by immigration policy and enforcement priorities. Comparable spending benchmarks would typically involve analyzing per-diem rates for similar facilities across different regions and agencies.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no information on subcontracting plans. Therefore, the direct impact on the small business ecosystem appears minimal for this particular award, though larger prime contractors like The GEO Group, Inc. may engage small businesses in their supply chain for various support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the U.S. Immigration and Customs Enforcement (ICE) contracting officers and program managers within DHS. Accountability measures would be tied to the terms of the firm-fixed-price delivery order, including performance standards and reporting requirements. Transparency is often limited in detention contracts due to security and operational sensitivities, but contract awards and basic details are typically available through federal procurement databases.

Related Government Programs

DHS Detention Facility Contracts
Immigration Enforcement Services
Correctional Services Contracts
Federal Law Enforcement Support

Risk Flags

Potential for high cost per diem.
Limited transparency on competition.
Contract awarded during a period of evolving immigration policy.
Reliance on private sector for core government function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37.9 million to THE GEO GROUP, INC.. ESTIMATED COST OF CONTRACT DETENTION FACILITY FOR ADULT GUARANTEED HOUSING OF DETAINEES FOR THE PREIOD OF 10/01/07-11/16/07. REQUISITION INQURIES TO AFODM, MARCOS REYNA AT 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 $37.9 million.

What is the period of performance?

Start: 2007-10-01. End: 2009-06-25.

What is the track record of The GEO Group, Inc. in managing federal detention facilities?

The GEO Group, Inc. is a major private operator of correctional and detention facilities in the United States and internationally. They have a long history of contracting with federal agencies, including DHS (and its predecessor agencies like the INS and legacy DHS components), the Bureau of Prisons, and U.S. Marshals Service. Their track record includes managing a wide range of facilities, from minimum-security work camps to maximum-security prisons and immigration detention centers. While they are a significant player, their operations have also been subject to scrutiny regarding conditions, costs, and labor practices. Reviews of their performance often highlight both their capacity to provide large-scale services and concerns raised by oversight bodies, advocacy groups, and sometimes the contracting agencies themselves regarding specific incidents or operational efficiencies.

How does the cost of this contract compare to other federal detainee housing contracts?

The estimated cost of approximately $60,000 per day for this contract is a key point for comparison. Benchmarking requires careful consideration of the type of facility (e.g., minimum, medium, maximum security), the population served (e.g., immigration detainees, pre-trial detainees, convicted individuals), the location, and the specific services included (e.g., medical care, food, transportation). Anecdotal evidence and reports from government watchdogs suggest that per-diem rates for federal detainee housing can vary widely, often ranging from $100 to over $300 per inmate per day, depending on these factors. A rate of $60,000 per day for a facility housing multiple detainees would translate to a per-detainee cost that needs to be evaluated against these benchmarks. If the facility houses a significant number of individuals, the per-detainee cost might be competitive, but if the population is small, the overall daily cost appears high.

What are the primary risks associated with this type of federal contract?

The primary risks associated with federal contracts for detention facilities include operational risks (e.g., security breaches, escapes, detainee unrest, non-compliance with standards), financial risks (e.g., cost overruns, contractor default, disputes over payment), performance risks (e.g., failure to meet service level agreements, inadequate staffing, poor conditions), and reputational risks (e.g., negative publicity related to detainee welfare or contractor conduct). For this specific contract, given its award to The GEO Group, Inc. and its focus on immigration detainees, risks related to fluctuating detainee populations, policy changes affecting detention, and public scrutiny of immigration enforcement practices are also significant considerations.

How effective is the firm-fixed-price contract type in managing costs for detention services?

The firm-fixed-price (FFP) contract type is generally favored by the government for its cost certainty. It shifts the risk of cost overruns to the contractor, meaning the government pays a predetermined price regardless of the contractor's actual costs. For detention services, an FFP contract can be effective in controlling overall expenditure, provided the scope of work is well-defined and the price is set appropriately based on realistic cost estimates and market rates. However, if the initial price is set too low, the contractor might cut corners on services or staffing, leading to performance issues. Conversely, if the price is set too high due to inadequate competition or poor negotiation, the government may overpay. Effective management and oversight are crucial to ensure that the FFP structure delivers both cost control and required service quality.

What are the historical spending patterns for detainee housing by DHS or its predecessor agencies?

DHS and its predecessor agencies, particularly U.S. Immigration and Customs Enforcement (ICE) and formerly the Immigration and Naturalization Service (INS), have historically spent billions of dollars on the detention and housing of immigrants and other individuals in federal custody. This spending has been a consistent and significant part of the federal budget related to immigration enforcement. Spending levels have often fluctuated based on immigration policies, enforcement priorities, and the number of individuals apprehended or subject to detention orders. The trend has generally been towards increased reliance on private detention facilities to manage large and often fluctuating populations, leading to substantial contracts with companies like The GEO Group, Inc. and CoreCivic.

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: $37,855,605

Exercised Options: $37,855,605

Current Obligation: $37,855,605

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSACD4C0001

IDV Type: IDC

Timeline