Cost of Prisons
Bureau of Prisons Needs Better Data to Assess Alternatives for Acquiring Low and Minimum Security Facilities Gao ID: GAO-08-6 October 5, 2007Over the last 10 years, the cost to confine federal Bureau of Prison (BOP) inmates in non-BOP facilities has nearly tripled from about $250 million in fiscal year 1996 to about $700 million in fiscal year 2006. Proponents of using contractors to operate prisons claim it can save money; others question whether contracting is a cost-effective alternative. In response to Conference Report 109-272, accompanying Pub. L. No. 109-108 (2005), this report discusses the feasibility and implications of comparing the costs for confining federal inmates in low and minimum security BOP facilities with those managed by private firms for BOP. GAO reviewed available data on a selection of 34 low and minimum security facilities; related laws, regulations, and documents; and interviewed BOP and contract officials.
A methodologically sound cost comparison analysis of BOP and private low and minimum security facilities is not currently feasible because BOP does not gather data from private facilities that are comparable to the data collected on BOP facilities. GAO's past work has shown that generally accepted evaluation criteria for comparing private and public prisons calls for the comparison to be based on a variety of factors, including selection of facilities with similar characteristics (i.e., staffing levels and educational programs offered) and quality of service (i.e., levels of safety and security for staff, inmates, and the general public). However, according to BOP officials, BOP and private facilities differ in characteristics and quality of service, and BOP does not collect or maintain sufficient data on private facilities to account or adjust for these differences in a cost comparison. According to private contractors, some characteristics data are maintained for their own purposes, but at present the data are not in a format that would enable a methodologically sound cost comparison. BOP officials stated that there are two reasons why they do not require such data of contractors. First, federal regulations do not require these data as a means for selecting among competing contractors. Second, BOP believes collecting comparable data from contractors could increase the cost of the contracts, but BOP officials did not provide support to substantiate these concerns. Without comparable data, BOP is not able to evaluate and justify whether confining inmates in private facilities is more cost-effective than other confinement alternatives such as building new BOP facilities. The Office of Management and Budget (OMB) requires agencies to consider and weigh various alternatives using analyses that help determine the benefits and costs of making decisions about the acquisition of assets, such as prisons. According to OMB requirements, selecting alternatives to meet capacity needs without adequate analysis by federal agencies has resulted in higher costs than expected. OMB provides guidance to help federal agencies analyze and weigh the costs and benefits of alternatives, which is important for BOP because BOP officials stated that the population for low and minimum security facilities continues to grow. OMB staff also added that they need more and better cost comparison information on the various alternatives for BOP's low and minimum security facilities to help them better understand the long-term costs and benefits of owning versus the short-term costs and benefits of privatization. Without analyses consistent with OMB requirements, it is difficult to know whether BOP is deciding on the most cost-effective alternative for acquiring low and minimum security facilities to confine inmates, including whether to contract, build, or expand.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-6, Cost of Prisons: Bureau of Prisons Needs Better Data to Assess Alternatives for Acquiring Low and Minimum Security Facilities
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Report to the Subcommittees on Commerce, Justice, and Science, Senate
and House Appropriations Committees:
United States Government Accountability Office:
GAO:
October 2007:
Cost Of Prisons:
Bureau of Prisons Needs Better Data to Assess Alternatives for
Acquiring Low and Minimum Security Facilities:
Cost of Prisons:
GAO-08-6:
GAO Highlights:
Highlights of GAO-08-6, a report to congressional committees
Why GAO Did This Study:
Over the last 10 years, the cost to confine federal Bureau of Prison
(BOP) inmates in non-BOP facilities has nearly tripled from about $250
million in fiscal year 1996 to about $700 million in fiscal year 2006.
Proponents of using contractors to operate prisons claim it can save
money; others question whether contracting is a cost-effective
alternative. In response to Conference Report 109-272, accompanying
Pub. L. No. 109-108 (2005), this report discusses the feasibility and
implications of comparing the costs for confining federal inmates in
low and minimum security BOP facilities with those managed by private
firms for BOP. GAO reviewed available data on a selection of 34 low and
minimum security facilities; related laws, regulations, and documents;
and interviewed BOP and contract officials.
What GAO Found:
A methodologically sound cost comparison analysis of BOP and private
low and minimum security facilities is not currently feasible because
BOP does not gather data from private facilities that are comparable to
the data collected on BOP facilities. GAO‘s past work has shown that
generally accepted evaluation criteria for comparing private and public
prisons calls for the comparison to be based on a variety of factors,
including selection of facilities with similar characteristics (i.e.,
staffing levels and educational programs offered) and quality of
service (i.e., levels of safety and security for staff, inmates, and
the general public). However, according to BOP officials, BOP and
private facilities differ in characteristics and quality of service,
and BOP does not collect or maintain sufficient data on private
facilities to account or adjust for these differences in a cost
comparison. According to private contractors, some characteristics data
are maintained for their own purposes, but at present the data are not
in a format that would enable a methodologically sound cost comparison.
BOP officials stated that there are two reasons why they do not require
such data of contractors. First, federal regulations do not require
these data as a means for selecting among competing contractors.
Second, BOP believes collecting comparable data from contractors could
increase the cost of the contracts, but BOP officials did not provide
support to substantiate these concerns.
Without comparable data, BOP is not able to evaluate and justify
whether confining inmates in private facilities is more cost-effective
than other confinement alternatives such as building new BOP
facilities. The Office of Management and Budget (OMB) requires agencies
to consider and weigh various alternatives using analyses that help
determine the benefits and costs of making decisions about the
acquisition of assets, such as prisons. According to OMB requirements,
selecting alternatives to meet capacity needs without adequate analysis
by federal agencies has resulted in higher costs than expected. OMB
provides guidance to help federal agencies analyze and weigh the costs
and benefits of alternatives, which is important for BOP because BOP
officials stated that the population for low and minimum security
facilities continues to grow. OMB staff also added that they need more
and better cost comparison information on the various alternatives for
BOP‘s low and minimum security facilities to help them better
understand the long-term costs and benefits of owning versus the short-
term costs and benefits of privatization. Without analyses consistent
with OMB requirements, it is difficult to know whether BOP is deciding
on the most cost-effective alternative for acquiring low and minimum
security facilities to confine inmates, including whether to contract,
build, or expand.
What GAO Recommends:
GAO recommends that BOP develop a cost-effective way to collect
comparable data across low and minimum security facilities and conduct
analyses that compare the cost of confining federal inmates in these
facilities, consistent with OMB requirements. BOP disagreed with GAO‘s
recommendation and said it did not see the value of developing a
methodology to compare facilities. GAO believes this comparison puts
BOP in the best position to weigh alternatives for confining inmates to
help ensure it is using the most cost-effective alternative. OMB did
not comment on this report.
To view the full product, including the scope and methodology, click on
GAO-08-6. For more information, contact Eileen Larence at (202) 512-
6510 or larencee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
BOP Lacks Data Needed to Perform a Methodologically Sound Cost
Comparison and Is Not Positioned to Evaluate Alternatives for Confining
Inmates in Low and Minimum Security Facilities:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Federal Bureau of Prisons:
Appendix III: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: List of Low and Minimum Security Facilities within our Scope:
Figures:
Figure 1: BOP Inmate Population at the End of Fiscal Year 2006:
Abbreviations:
BOP: Federal Bureau of Prisons:
FAR: Federal Acquisition Regulation:
IGA: intergovernmental agreement:
NIJ: National Institute of Justice:
OMB: Office of Management and Budget:
United States Government Accountability Office:
Washington, DC 20548:
October 5, 2007:
The Honorable Barbara A. Mikulski:
Chair:
The Honorable Richard C. Shelby:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Alan B. Mollohan:
Chairman:
The Honorable Rodney Frelinghuysen:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
House of Representatives:
At the end of fiscal year 2006, approximately 83,000 federal, adult
male inmates within the Department of Justice's Federal Bureau of
Prisons (BOP) were housed or confined in low or minimum security
facilities, and in recent years BOP has relied on means other than
building and operating its own facilities to confine many of these
inmates, such as contracts with private sector firms. BOP's operating
budget nearly doubled over the last decade from approximately $2.6
billion in fiscal year 1996 to just under $5 billion in fiscal year
2006. In fiscal year 1996, BOP received approximately $250 million of
its $2.6 billion for contract confinement, including confining inmates
in facilities owned and operated by private contractors and by state
and local governments under intergovernmental agreements (IGA) with
BOP.[Footnote 1] By fiscal year 2006, the amount for contract
confinement, including the cost of confining about 19,000 inmates
housed in private and IGA facilities, had nearly tripled to $700
million of BOP's $5 billion operating budget.
There has been an ongoing debate over the privatization of prisons,
that is, contracting for the management of prisons by private firms,
whether the prisons are owned by the private sector or by the
government. In particular, proponents of privatization claim it can
save money without reducing the levels or quality of service such as
safety and security (i.e., levels of safety and security for staff,
inmates, and the general public), whereas others have questioned
whether privatization is a cost-effective alternative to publicly run
facilities. Federal guidance from the Office of Management and Budget
(OMB) requires that economic and cost comparison analyses be conducted
to demonstrate the benefits of privatization, including how it would
reduce the government's long-term costs. BOP's use of contracting to
meet inmate bed space needs at low and minimum security facilities, in
particular, has generated significant interest in the comparative costs
of confining federal inmates in BOP, private, and IGA facilities.
Conference Report 109-272, accompanying the Science, State, Justice,
Commerce, and Related Agencies Appropriations Act of 2006,[Footnote 2]
directed GAO to compare the costs of confining federal inmates in BOP,
private, and IGA low and minimum security facilities.
Regarding IGA facilities, BOP has used IGAs for a number of years to
confine low and minimum security inmates on a short term basis--less
than 45 days--for the purposes of transferring them between facilities
or as halfway houses when inmates are released from prison. These IGAs
are in hundreds of locations throughout the country. However, according
to BOP officials, over time four of the IGAs--located in western Texas,
in the cities of Big Spring and Eden, Texas, and Garza County and
Reeves County, Texas--evolved into facilities confining inmates on a
long-term basis, similar to BOP-owned and -operated low and minimum
security facilities. BOP officials told us that these four facilities
confined approximately 83 percent of BOP's total IGA inmate population.
During the course of our review, BOP did not renew the four Texas IGAs.
Instead, BOP awarded five contracts to confine inmates in facilities
with approximately 10,000 beds, which are about 3,000 more beds than
the capacity provided under the four IGAs.[Footnote 3] According to BOP
officials, BOP chose to compete the bed space associated with these
former agreements partly because the four Texas facilities outgrew
their original purpose of confining small populations for short periods
of time. BOP officials also stated that acquiring bed space via
contracts rather than IGAs enhances their ability to oversee operations
at the facilities. Because BOP no longer plans to use IGAs to confine
inmates on a long-term basis, we shifted the focus of our review to BOP
and private facilities only. Also, we did not include the five new
contracts in the scope of our review because no federal inmates were
housed under the new contract arrangements during fiscal years 2002
through 2006, the period covered by our review.
This report discusses the feasibility of comparing the cost of
confining inmates in low and minimum security facilities owned and
operated by BOP with the cost of confining these inmates in private
facilities and the implications this has for making decisions on low
and minimum security confinement.
To address this objective, we reviewed applicable laws, regulations,
and studies on BOP programs, prison management, and contracting
requirements.[Footnote 4] We also examined available BOP and private
facility documents on the management of low and minimum security
facilities. In addition, we met with BOP officials and worked with them
to identify potential BOP and private facilities that could be compared
considering basic criteria, including inmate gender (male or female
inmates, assuming that costs for programs and services might be
different depending on gender) and whether cost data might be available
on the individual facility level for a 5-year period covering fiscal
years 2002 through 2006.[Footnote 5] Our discussions with BOP officials
resulted in the selection of 34 low and minimum security facilities
managed by BOP and private operators that confined federally sentenced
male inmates on a long-term basis over the 5-year period. Specifically,
we focused on (1) 27 BOP-owned and -operated low and minimum security
facilities that are not on the same campus as medium and high security
prisons (BOP does not isolate the costs of operating individual low and
minimum security facilities located on the same campus with high and
medium security facilities), and (2) 7 facilities operated by private
firms under contract to BOP.
Once we selected facilities, we interviewed BOP officials in
Washington, D.C. and private contractors at their corporate
headquarters to determine what data on prison costs and characteristics
would be available. Where possible, we gathered and analyzed available
data on the facilities and examined whether the data would lend
themselves to a comparison based, in part, on key factors--such as
similar facility characteristics and levels of service--needed to do a
methodologically sound comparison as outlined in our 1996 report that
provides lessons learned for comparisons of private and public
correctional facilities.[Footnote 6] In addition, we examined BOP
efforts within the context of OMB requirements for capital planning and
space acquisition. We also met with OMB staff responsible for BOP
budget review and preparation to discuss BOP's efforts to acquire space
to confine inmates in low and minimum security facilities in order to
determine what information BOP provides OMB on capital investments, how
this information is used to inform decisions, and what additional
information OMB needs to make informed decisions. In addition, we met
with officials from the Department of Justice's National Institute of
Justice (NIJ) to discuss NIJ's current and past work on prison
privatization and we met with experts from Florida State University
College of Criminology and Criminal Justice and from the JFA Institute-
-a nonprofit agency conducting justice and corrections research for
effective policy making--to further our understanding about prisons and
the complexities of comparing the cost of operating private and public
prisons. Appendix I contains more detailed information on our scope and
methodology.
We conducted our work from May 2006 through August 2007 in accordance
with generally accepted government auditing standards.
Results in Brief:
It is not currently feasible to conduct a methodologically sound cost
comparison of BOP and private low and minimum security facilities
because these facilities differ in several characteristics and BOP does
not collect comparable data to determine the impact of these
differences on cost. Our past work has shown that generally accepted
evaluation criteria for any comparative study of private and public
prisons call for the comparison to be based not just on operational
costs, but on a variety of factors including selection of facilities
with similar characteristics (i.e., staffing levels and programs
offered) and quality of service. This is to ensure that cost comparison
analyses either compare similar facilities or can account for
differences in order to address whether facilities operating at lower
costs can provide the same or better levels of service as those
operating at higher costs. However, according to BOP officials and
private contractors, facilities differed in characteristics and in
quality of service. Although BOP collects and maintains characteristic
data on its own low and minimum security facilities, BOP does not
gather data on private contract facilities that would enable us or them
to account or adjust for any differences. While private contractors
told us that they maintain some data for their records, these officials
said that the data are not readily available or in a format that would
enable a methodologically sound cost comparison at this time. According
to BOP officials and private contractors,
* In terms of facility characteristics, BOP facilities generally
confine U.S. citizens, and programs are designed to teach inmates
skills that they can use when they are released so as to avoid
returning to prison. By contrast, private facilities primarily confine
criminal aliens--non-U.S. citizens or foreign nationals who are serving
time for a U.S. federal conviction. Programs that focus on preventing
returns to prison are not required of private facilities because
criminal aliens are released for removal from the country and are not
expected to return to U.S. communities or BOP custody.
* BOP does not require private facility data comparable to what it
maintains for its own facilities with regard to safety and security
issues and, consequently, a facility's quality of service. These
include data on the number of inmates attended to by health care
professionals due to misconduct, staff turnover rates, and the
experience level of the staff.
BOP does not collect comparable data on private facilities needed to
conduct a methodologically sound cost comparison with BOP low and
minimum security facilities because (1) federal regulations do not
require BOP to do so when selecting among competing contractors, and
(2) according to BOP officials, collecting additional facility
characteristic and quality of service data could add costs to
contracts. Regarding the latter, BOP's Senior Deputy Assistant Director
stated that private contractors might charge higher contract prices as
a result of having to collect and provide this information but that BOP
has not determined what these additional costs would be. BOP officials
told us they are committed to contracting to confine inmates in low and
minimum security facilities. They said that their construction priority
is medium and high security facilities because inmates in medium and
high security facilities are at higher risk in terms of their behavior
(i.e., rates of misconduct, assaults, and history of violence) and
private contractors have yet to demonstrate the ability to handle these
higher security populations. According to BOP officials, because of its
commitment to contracting, BOP has not recently considered, nor does it
plan to evaluate contracting in relation to other alternatives for
inmates confined in low and minimum security facilities. These
alternatives can include constructing new BOP low and minimum security
facilities, acquiring and using excess military properties, or
expanding or renovating existing BOP facilities.
While BOP does not need to collect comparable data for selecting among
contractors, the purpose of analyzing these data is to evaluate and
justify whether confining inmates in private facilities is more cost-
effective than these other confinement alternatives. In fact, OMB
requires agencies to consider and weigh various alternatives using
analyses, such as benefit-cost or cost-effectiveness analyses, when
making decisions about the acquisition of capital assets, such as
office buildings, hospitals, schools, and prisons.[Footnote 7]
According to OMB, selecting alternatives to meet space requirements
without adequate analysis by federal agencies has resulted in higher
costs than anticipated. Additionally, OMB staff stated that they need
more and better cost comparison information on the various alternatives
for BOP's low and minimum security facilities to help better understand
the long-term costs and benefits of owning versus the short-term costs
and benefits of privatization. These analyses are especially important
because BOP officials stated that the population for these facilities
continues to grow. Without such analyses, it is difficult to know
whether BOP is deciding on the most cost-effective alternative for
acquiring low and minimum security facilities to confine inmates,
including whether to contract, build, or expand.
Recognizing that there is a cost associated with gathering and
analyzing additional data needed to compare costs across BOP and
private facilities, we are making one recommendation designed to help
BOP evaluate alternatives for confining inmates in low and minimum
security facilities. We are recommending that the Attorney General
direct the Director of BOP to develop a cost-effective way to collect
comparable data across BOP and private low and minimum security
facilities confining inmates under BOP's custody, and design and
conduct methodologically sound analyses that compare the cost of
confining inmates in these facilities in order to consider contracting
among other alternatives for low and minimum security confinement,
consistent with OMB requirements.
BOP disagreed with our recommendation and stated that it does not own
or operate facilities to house solely criminal aliens. BOP also said it
does not expect to receive funding to construct such low security
facilities. Therefore, BOP does not believe there is value in
developing data collection methods to compare costs of confining these
inmates in private facilities with other alternatives for confining
inmates. BOP further commented that, through open competition, it has
been able to determine a fair and reasonable price for its existing
contracts and said that requiring contractors to provide specific
comparable data would have the potential to increase current contract
costs at a time when BOP is facing budget constraints. BOP also noted
that it believes a 2005 study conducted for BOP by a private contractor
has already met the intent of our recommendation because the study
compares the cost of operating a government-owned, contractor-operated
facility in Taft, California, with other low security BOP
facilities.[Footnote 8]
We agree that full and open competition can establish fair and
reasonable costs for services provided by contractors. However, our
recommendation is about selecting the most cost-effective alternative
for confining inmates, not about selecting among contractors as the
only alternative. We believe that developing data collection methods to
determine the costs of confining inmates in low and minimum security
facilities--regardless of whether those facilities are owned and
operated by BOP or a contractor and regardless of whether the facility
confines criminal aliens, U.S. citizens, or both--is critical to BOP's
ability to evaluate the cost-effectiveness of contracting compared to
other alternatives for confining inmates, such as constructing a new
facility or modifying existing facilities. Absent this evaluation, key
decision makers, including BOP managers, OMB, and Congress, are not
positioned to have the information needed to make the most cost-
effective investment decisions. We agree that requiring contractors to
provide data so that BOP can conduct a comparison has the potential of
increasing contract costs, but BOP has not assessed what the costs of
collecting the data would be or whether the costs would outweigh the
benefit of being able to determine the most cost-effective alternative
for confining inmates in low and minimum security facilities. Finally,
we disagree that BOP has met the intent of our recommendation via the
study referenced by BOP because it does not compare the costs of
various alternatives for confining inmates in low and minimum security
facilities, as we recommended.
Background:
BOP was established in 1930 to provide progressive and humane care for
federal inmates in the 11 federal prisons in operation at the time.
Since then, BOP's mission has evolved into protecting society by
controlling offenders in the controlled environments of prisons and
community-based facilities that are safe, humane, cost-efficient, and
appropriately secure and that provide work and other self-improvement
opportunities to assist offenders in becoming law-abiding citizens.
At the end of fiscal year 2006, there were over 114 federal prison
facilities located throughout the country at four primary security
levels--minimum, low, medium, and high. BOP facilities are given a
security designation based on the level of security and staff
supervision the facility is able to provide. According to BOP, minimum
security facilities, also known as Federal Prison Camps, have dormitory
housing and limited or no perimeter fencing; low security Federal
Correctional Institutions have double-fenced perimeters and mostly
dormitory or cubicle housing; medium security Federal Correctional
Institutions have strengthened perimeters (often double fences with
electronic detection systems) where inmates are mostly confined to
prison cells; and high security institutions, also known as United
States Penitentiaries, have highly secured perimeters (featuring walls
or reinforced fences) and multiple-and single-occupant cell housing.
BOP also maintains administrative facilities, which are institutions
with special missions, such as the detention of pretrial
offenders;[Footnote 9] the treatment of inmates with serious or chronic
medical problems; or the containment of extremely dangerous, violent,
or escape-prone inmates. Administrative facilities are capable of
holding inmates at all security levels.
According to BOP population data, at the end of fiscal year 2006, BOP's
total inmate population was approximately 193,000 inmates, of which
about 43 percent, or 83,000, were long-term, adult male inmates
confined in BOP, private, or IGA low and minimum security facilities.
About 52,000 (27 percent) of the total inmates were confined in medium
security facilities, and approximately 18,000 (about 9 percent) were in
high security facilities. Additionally, approximately 21 percent of the
193,000 total inmates, or 40,000 inmates, were females, juveniles,
inmates in halfway houses, inmates in home confinement, or inmates
confined in BOP's administrative facilities. See figure 1 for a
breakout of these populations.
Figure 1: BOP Inmate Population at the End of Fiscal Year 2006:
[See PDF for image]
Source: GAO analysis of BOP population data.
[A] BOP other includes females, juveniles, inmates in halfway houses,
inmates in home confinement, or inmates confined in BOP's
administrative facilities (i.e., medical facilities or detention
facilities).
[End of figure]
BOP Lacks Data Needed to Perform a Methodologically Sound Cost
Comparison and Is Not Positioned to Evaluate Alternatives for Confining
Inmates in Low and Minimum Security Facilities:
A methodologically sound cost comparison analysis of BOP and private
low and minimum security facilities is not currently feasible because
BOP does not gather data from private facilities that are comparable to
the data collected on BOP facilities. BOP is not required under federal
contracting regulations to gather data that would enable a comparison,
and although BOP has not evaluated the cost of collecting additional
information, BOP officials maintain that it could increase the price
contractors charge BOP for contract services. However, without
comparable data, BOP is not able to analyze and justify whether
confining inmates in private facilities would be more cost-effective
than other confinement alternatives such as constructing new BOP
facilities or renovating existing BOP facilities. Such an analysis
would be consistent with OMB requirements, which call for agencies to
identify and evaluate various alternatives when making decisions about
the acquisition of capital assets (e.g., office buildings, hospitals,
schools, and prisons).
A Cost Comparison Is Not Currently Feasible because BOP Lacks Data
Needed to Perform a Methodologically Sound Comparison:
We determined that it is not currently feasible to compare the cost of
confining male federal inmates in low and minimum security BOP and
private facilities because data needed for a methodologically sound
comparison are not currently available. Our review of BOP documentation
showed that BOP collects basic cost data on a per inmate basis across
BOP and private facilities. For BOP-owned and -operated facilities, BOP
maintains per inmate costs that include salaries, employee benefits,
equipment, and utilities. For private facilities, BOP maintains the
negotiated per inmate contract price, award fees, and deductions made
as a result of the performance-based contract terms. However, these
cost data are not sufficient for doing a methodologically sound cost
comparison. As we reported in 1996, any comparative study of private
and public prisons should not only be based on operational costs but
also on an analysis of similar facilities--including the design,
capacity, security level, and types of inmates and quality of service-
-and on sufficient statistical controls to measure and account for any
differences among facilities.[Footnote 10] Otherwise, any comparative
analysis of operational costs could be skewed. For example, one study
we reviewed as part of our 1996 report did not assess quality of
service as part of the cost comparison between private and public
facilities and, as a result, could not conclude whether the levels of
service affected the differences in costs.
According to BOP officials and private contractors, BOP and private
facilities have different characteristics and provide different levels
of service. Thus, statistical methods would need to be used to account
for these differences once cost data were collected to determine the
impact they have on the operating cost of the facilities. Using
guidelines established in our previous work, we sought to compare
facilities with similar characteristics to ensure results of a
comparison would not be skewed. However, we were unable to do so
because the data needed to do the comparison were not available. BOP
and private contracting officials reported that there are numerous
differences among BOP and private facilities, including inmate
population, program requirements, and economic differences within the
different geographic locations of the facilities. According to BOP
officials, private contractor facilities have fewer contractual
requirements for programming, such as vocational training and release
preparation courses, than BOP facilities, in part, because of the
different types of inmates confined in the facilities. In general, BOP
facilities confine U.S. citizens and programs are designed to teach
inmates skills that they can use when they are released, such as job
training skills, so as to help avoid their return to prison. By
contrast, private facilities primarily confine criminal aliens--non-
U.S. citizens or foreign nationals, who are serving time for a U.S.
federal conviction. Programs that focus on preventing returns to prison
are not required of private facilities because criminal aliens are
released for removal from the country and are not expected to return to
U.S. communities or BOP custody.
Given the differences with regard to facility characteristics,
statistical techniques such as analyzing the extent to which
characteristics--including program differences--vary among facilities,
would have to be applied to strengthen conclusions of a cost comparison
analysis. For example, if BOP facilities provide more programs for
inmates than contractors do, then comparable data on the number and
types of programs across all facilities would be needed to adjust for
this difference in order to conclude how the difference in programs
affect operating costs. BOP maintains data on its own low and minimum
security facilities and collects some similar facility data on private
facilities, including the age of the facility, the citizenship status
of inmates, and inmate population. However, BOP does not maintain
comparable data on various aspects of private facilities, such as
inmate-to-staff ratios, size of the facility, specific programs
available to inmates, and whether inmates in private facilities are
completing those programs. Because BOP does not maintain comparable
data for private facilities on the differing facility characteristics
that could affect costs, we could not determine the extent to which
these facilities differed nor use statistical methods to determine the
impact of these differences on costs. Since we could not control or
adjust for such differences, the results of a cost comparison analysis
conducted at this time would be skewed.
With regard to quality of service, BOP also lacks sufficient data on
measurements of safety and security for inmates, staff, and the general
public for a methodologically sound cost comparison of BOP and private
facilities. As we reported in 1996, a cost comparison analysis should
include not just operational costs but also an assessment of quality to
ensure that if a contractor is operating at lower costs than BOP, it is
providing the same or a better level of service. We attempted to review
numerous quality of service data--such as data that measure safety and
security--so that differences could be accounted for by comparing data
on what is achieved by these services. However, according to officials
in BOP's Office of Research and Evaluation, BOP does not maintain data
on private facilities that we could use to compare quality of service
across the different facilities. This includes the number of grievances
submitted by inmates, the number of inmates attended to by health care
professionals due to misconduct,[Footnote 11] staff turnover rates, and
the experience level of the staff. As a result, we could not assess the
trade-offs between the levels of services being offered and the costs
of operating the facilities.
While the contract requirements for the private facilities direct
contractors to maintain some data on inmates in BOP's central database
system called SENTRY,[Footnote 12] according to BOP officials, the data
private contractors enter are not necessarily consistent with those
data collected on BOP facilities, and BOP officials stated that they
cannot attest to the reliability or validity of the private contractor
data. For example, BOP officials and private contractors we spoke with
stated that although private contractors are required to report
incidences of misconduct to BOP, neither could confirm if the private
contractor system for categorizing or tracking incidences of misconduct
is consistent with BOP's misconduct categories.[Footnote 13] BOP
further reported that program data were not comparable. For example,
according to BOP officials, private contractors reported that inmates
completed the U.S. General Educational Development program, when the
program actually completed by the inmates was a Mexican equivalent of
the program. Additionally, private contractors we spoke with told us
that they maintain some facility characteristic and quality of service
data, but the data are not maintained in the same format as BOP
facility data and are not readily available because they are only
maintained in hard copies at some of the facilities contractors manage.
BOP officials provided two reasons why they do not collect or require
contractors to collect comparable data that would facilitate a
comparison of the cost of confining inmates in low and minimum security
BOP and private facilities: (1) federal regulations do not require such
data as a means for selecting among competing contractors, and (2) BOP
believes collecting comparable data from contractors could add costs.
However, BOP officials had not evaluated the probable amount of added
costs.
When choosing among private contractors, federal regulations do not
require BOP to collect comparable facility characteristic or quality of
service information from private facilities. According to BOP
officials, all BOP private contracts in our review are firm-fixed price
and, under federal regulations for competing contracts, BOP does not
need this information for technical evaluations of the
proposals.[Footnote 14] BOP officials added that during the acquisition
process, BOP maintains data needed to evaluate proposed contract
prices, such as the price to manage and operate each facility and the
government's estimate of the price, in accordance with the Federal
Acquisition Regulation (FAR). The FAR requires the contracting official
to determine if proposed prices are fair and reasonable and further
states that the performance of a cost analysis is not needed if there
is adequate price competition.[Footnote 15] In general, adequate price
competition is established when two or more responsible parties
independently submit prices for the solicitation that meet the
government's requirements. The award is made to the party whose
proposal represents the best value and there is no finding that the
price of the other parties is unreasonable. In addition to price, the
FAR recommends agencies evaluate one or more nonprice criteria, such as
past performance and prior experience. However, agencies have broad
discretion in the selection criteria and in determining the relative
importance of each criterion. Consequently, the regulation does not
require BOP to collect comparable data on various facility
characteristics and quality of service measures needed to conduct a
methodologically sound cost comparison.
Additionally, while BOP is concerned that the cost of contracts could
increase if it were to require comparable data from private contractors
because it would be beyond the scope of existing contract requirements,
it has not evaluated the costs or benefits of acquiring the additional
data. BOP's Senior Deputy Assistant Director and other BOP officials
said they suspect that it is likely that private contractors would
charge BOP a higher contract price if it required private contractors
to meet additional requirements, such as providing data similar to
those collected by BOP for its facilities. However, because BOP has not
requested such data during the contract process or estimated the
incremental costs and benefits of requiring comparable data from
private facilities, BOP officials could not speak to the extent of the
potential cost increase.
Although in the Department of Justice Fiscal Year 2003-2008 Strategic
Plan BOP identified several alternatives for space acquisition, such as
expanding or renovating existing facilities, acquiring military
properties for prison use, contracting with private companies, and
constructing new facilities, BOP officials stated that they do not
consider all of these alternatives for confining inmates in low and
minimum security facilities because they are committed to contracting
with nonfederal entities for low and minimum security bed space.
Our past work has shown that over the long term, it is usually more
cost-effective for an agency to own a facility than to lease
one.[Footnote 16] For example, we previously reported that for nine
major operating lease acquisitions proposed by the General Services
Administration--the central leasing agent for most federal agencies--
construction would have been the least expensive option in eight cases
and would have saved an estimated $126 million compared to two leasing
options that spread payments out over time.[Footnote 17] However, when
funds for ownership are not available, leases become a more attractive
option from the agency's budget perspective because they add much less
to a single year's appropriation total than other alternatives.
According to BOP officials, they consider alternatives for space
acquisition only for medium and high security facilities, because
medium and high security facilities are BOP's priority based on
capacity needs. In addition to capacity needs, from BOP's perspective,
inmates in medium and high security facilities are at higher risk in
terms of their behavior (i.e., rates of misconduct, assaults, and
history of violence) and private contractors have yet to demonstrate
the ability to handle these higher security populations, so BOP has
chosen to continue to confine the higher security inmates in BOP-owned
and -operated facilities. As a result, BOP officials stated that they
have not considered nor do they plan to consider alternatives besides
contracting for low and minimum security facilities.
BOP Cannot Evaluate whether Privately Contracted Facilities Provide
Better or Worse Value than Other Low and Minimum Security Confinement
Alternatives:
Because BOP is not able to compare the cost of BOP and private
facilities in a methodologically sound manner, it cannot determine if
confining inmates in private facilities is more or less cost-effective
than other confinement alternatives such as constructing and operating
new BOP facilities, acquiring and using excess properties (i.e., former
military bases), or expanding or renovating existing BOP facilities.
OMB requires agencies to follow capital planning principles set forth
in its Capital Programming Guide.[Footnote 18] OMB's guide identifies
the need for effective planning and management of investments. Among
other things, this guide articulates key principles agencies should
follow when making decisions about the acquisition of capital assets
such as prisons. The Capital Programming Guide requires that agencies
consider as many alternatives as possible because, according to the
guide, whenever the government lacks viable alternatives, it may lack a
realistic basis to manage contract costs. Once a list of alternatives
is established, the guide requires that agencies then compare those
alternatives based on a systematic analysis of expected benefits and
costs. The fundamental method for formal economic analysis is a benefit-
cost analysis. OMB guidance on benefit-cost analyses can be found in
OMB Circular A-94--a circular that helps agencies conduct a study on
the benefits and costs of whether to acquire a new capital asset,
undertake a major modification to an existing asset, or use some other
method such as contracting for services.[Footnote 19] More
specifically, the goal of the circular is to promote efficient resource
allocation through well-informed decision making by the federal
government. The circular provides general guidance for conducting
benefit-cost and cost-effectiveness analyses, and serves as a checklist
of whether an agency has considered and properly dealt with all
elements of a sound analysis.
OMB's Capital Programming Guide reports that credible cost and benefit
analyses, such as those described in OMB Circular No. A-94, are the
basis of sound management decision making, enabling agencies to
determine the best investment option for meeting their goals and making
them better equipped to evaluate alternatives. OMB's guide states that
data are the most important piece of such analyses, including various
procurement or contract data. Consequently, to do the analyses
described in OMB Circular No. A-94, BOP would have to first collect and
maintain comparable BOP and private facility data. BOP senior officials
acknowledged that they have not done any such analyses to assess
alternatives for confining inmates in low and minimum security
facilities, and they were unable to explain why such analyses have not
been done. Nonetheless, according to the OMB guide, selecting
alternatives to meet space requirements without adequate analysis by
federal agencies has resulted in higher costs than anticipated.
Consequently, without such an analysis, it is difficult to know whether
BOP is deciding on the most cost-effective alternative for acquiring
low and minimum security facilities to confine inmates, including
whether to contract, build, or expand.
The results of any analysis conducted by BOP consistent with OMB
requirements would be important because BOP officials expect inmate
populations in low and minimum security facilities to rise. Inmates in
low and minimum security facilities made up approximately 43 percent of
BOP's total population in fiscal year 2006, and according to BOP
officials, this population will continue to grow. As a result, there
would be an increase of inmates requiring confinement in low and
minimum security facilities. BOP also projects about a one-third
increase in its long-term criminal alien population,[Footnote 20] or
approximately 5,700 more criminal alien inmates between fiscal years
2005 and 2008, which could further strain BOP resources as these
inmates are confined primarily in low security facilities. While the
private sector has additional capacity to accommodate at least some of
this expected growth in inmate populations, BOP cannot determine
whether private contracting is or would be the most cost-effective
alternative because of the data limitations discussed above.
While there are costs associated with gathering data needed to compare
costs across BOP and private facilities, without the data to conduct
benefit-cost or cost-effectiveness analyses, BOP is not able to compare
alternatives for confining inmates in a methodologically sound manner.
Additionally, the absence of data also has potential long-term costs
because BOP managers, OMB staff, and congressional decision makers do
not have the information needed to weigh alternatives and make the best
investment decisions. Although OMB staff told us that BOP provides
several documents in accordance with the Capital Programming Guide,
such as information about facilities in BOP's inventory and weekly
reports about inmate population, OMB staff stated that it would be
useful to have more and better comparison information on the cost of
confining inmates in BOP and private low and minimum security
facilities. They said that without such data, it is difficult to
understand how BOP is making decisions on the most cost-effective way
to manage and confine future inmates sentenced to low and minimum
security facilities. OMB staff added that they consider contracting a
viable option because it gives BOP the flexibility to immediately deal
with population changes. However, according to OMB staff, they would
not expect contracting to always be cheaper because owning a facility
may be more cost-effective in the long run. As a result, comparative
analyses would be beneficial to help them better understand the long-
term costs and benefits of owning versus the short-term costs and
benefits of privatization.
Conclusions:
Because of projections of future growth of inmate populations, BOP will
need to continue to acquire additional capacity. However, deciding what
to do in response to this need will be difficult because BOP does not
have the data necessary to do a methodologically sound cost comparison
of its various alternatives for confining inmates in low and minimum
security facilities. Because contracting regulations do not require BOP
to collect private facility data comparable to BOP facility data, BOP
has not gathered or maintained data needed to conduct a
methodologically sound cost comparison. Additionally, BOP is concerned
with increased contract costs. However, BOP has not assessed the cost
of collecting the data or whether the estimated costs would outweigh
the benefits of having it. As a result, BOP is not in a position to
meet OMB's capital planning requirements and evaluate whether
contracting is more cost-effective than other alternatives, such as
building new low and minimum security facilities, buying existing
facilities that may be available, or expanding facilities already
operated by BOP. Without such data, BOP cannot determine whether
procuring prison confinement and services from private firms costs the
government more or less than other confinement alternatives, as
required by OMB.
Recommendation for Executive Action:
To help BOP evaluate alternatives for confining inmates in low and
minimum security facilities, and recognizing that there is a cost
associated with gathering and analyzing data needed to compare costs
across BOP and private facilities, we recommend that the Attorney
General direct the Director of BOP to develop a cost-effective way to
collect comparative data on low and minimum security facilities
confining inmates under BOP's custody and design and conduct
methodologically sound analyses that compare the costs of confining
inmates in these facilities in order to consider contracting among
other alternatives for low and minimum security confinement, consistent
with OMB requirements.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Director of
the Office of Management and Budget and from the Attorney General.
While OMB did not provide comments, in a September 17, 2007, letter,
BOP provided written comments, which are summarized below and included
in their entirety in appendix II.
BOP disagreed with our recommendation and stated that it does not own
or operate facilities to house solely criminal aliens. BOP also said it
does not expect to receive funding to construct such low security
facilities. Therefore, BOP does not believe there is value in
developing data collection methods to compare costs of confining these
inmates in private facilities versus other alternatives for confining
inmates. BOP stated that, through open competition, it has been able to
determine a fair and reasonable price for its contracts. In a related
comment, BOP stated that our report does not reference that Congress
has provided funds to contract out for inmate bed space but has not
provided funding for new construction of low and minimum security
facilities. BOP also noted that it does not currently have the capacity
to confine low security criminal aliens and is dependent on private
contractors to fill the gap, and, if construction funds were available
for low and minimum security facilities, it would take several years
before the bed space would become available. In addition, BOP noted
that it is committed to contracting, in part, because OMB has directed
BOP to take greater advantage of state and local governments and the
private sector to meet its space requirements to confine inmates in low
and minimum security facilities. With regard to the recommendation, BOP
also stated that gathering data from contractors to aid in a cost
comparison would have the potential to increase current contract costs
at a time when BOP is facing budget constraints. Finally, BOP pointed
out that an independent review conducted in 2005 which compared the
operational cost of a BOP-owned, contractor-operated facility in Taft,
California, with other low security BOP facilities meets the intent of
our recommendation.[Footnote 21]
We agree that full and open competition can establish fair and
reasonable costs for services provided by contractors. However, our
recommendation is about selecting the most cost-effective alternative
for confining inmates, not about selecting among contractors as the
only alternative. We believe that developing data collection methods to
determine the costs of confining inmates in low and minimum security
facilities--regardless of whether those facilities are owned and
operated by BOP or a contractor and regardless of whether the facility
confines criminal aliens, U.S. citizens, or both--is critical to BOP's
ability to evaluate the cost-effectiveness of contracting compared to
other alternatives for confining inmates, such as constructing a new
facility, modifying an existing facility, or acquiring military
properties for prison use. OMB's Capital Programming Guide requires
agencies to undertake the kind of comparison we are recommending in
order to consider alternatives when making decisions about the
acquisition of capital assets, such as prisons. Adhering to OMB
requirements better ensures that key decision makers, including OMB and
Congress, have the information needed to make the most cost-effective
investment decisions.
We recognize that BOP has not received funding to construct new low and
minimum security facilities, but this does not mean that funds will not
be appropriated in the future, especially if data demonstrate that this
option is more cost-effective. Without these data, BOP is not in a
position to justify funding for new construction or other alternatives
because BOP cannot do a methodologically sound comparison among low and
minimum security facilities. With regard to BOP's comment that it
currently does not have the capacity to confine criminal aliens and
must rely on contracting to address capacity issues, our report noted
that, according to OMB staff, contracting may be a viable option
because it provides BOP the flexibility to immediately deal with
population changes. Nonetheless, OMB staff also said that they need
more and better cost comparison information to help them understand the
long-term costs and benefits of owning versus the short-term costs and
benefits of privatization. OMB staff also stated that they would not
always expect contracting to be cheaper because owning a facility may
be more cost-effective over the long run, which is consistent with our
past work.[Footnote 22]
With regard to BOP's concern that requiring comparable data from
contractors could raise the cost of current contracts, our report
recognized that there is a cost associated with gathering and analyzing
additional data needed to compare costs across BOP and private
facilities. However, BOP has not determined the cost of collecting the
data or whether the estimated costs would outweigh the benefits of
knowing the most cost-effective alternative for confining inmates.
Without a cost-effective way to collect comparable data, BOP cannot
conduct a methodologically sound cost comparison analysis that takes
into account factors, such as facility characteristics and quality of
service, which can differ from facility to facility. Collecting and
analyzing these data would provide key decision makers the information
needed to make the most cost-effective investment decisions.
We disagree with BOP's assertion that it has met the intent of our
recommendation via the 2005 study by the Center for Naval Analysis. In
citing this study, BOP failed to recognize that this study does not
compare the costs of various alternatives for confining inmates in low
and minimum security facilities. Rather, it compares BOP-owned and -
operated facilities with one BOP-owned and contractor-operated facility
in Taft, California.
In addition, BOP stated it had provided detailed cost information and
that it believed we would obtain comparable data from the private
sector in order to conduct a methodologically sound cost comparison. As
discussed throughout our report, the cost data BOP provided were not
sufficient to conduct a methodologically sound cost comparison. As our
report states, any comparative study of private and public prisons
should not only be based on operational costs, but should also account
for facility characteristics and the quality of services provided. We
requested this information from the private sector. As our report
notes, private contractors do not maintain similar data, because BOP
does not require them to report or collect the data it requires of its
own facilities.
BOP also provided technical comments, which we considered, and we have
amended our report to incorporate these clarifications, where
appropriate.
We are sending copies of this report to the Attorney General and the
Director of OMB. Copies will also be made available to others on
request. In addition, the report will be available at no charge on
GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-6510 or larencee@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Key contributors are listed in
appendix III.
Signed by:
Eileen Regen Larence:
Director, Homeland Security and Justice Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our work focused on the comparative cost of confining federal inmates
in low and minimum security facilities owned by the Federal Bureau of
Prisons (BOP) and privately managed facilities under contract to BOP.
Specifically, our objective was to assess the feasibility of comparing
the costs for confining inmates in low and minimum security facilities
owned and operated by BOP with the cost to confine these inmates in
private facilities and the implications this has for making decisions
on low and minimum security confinement. Our work was initially
designed to address Conference Report 109-272, accompanying the
Science, State, Justice, Commerce, and Related Agencies Appropriations
Act of 2006,[Footnote 23] which directed GAO to compare the costs of
confining federal inmates in low and minimum security facilities owned
by BOP, privately managed facilities under contract to BOP, and local
facilities or jails via intergovernmental agreements (IGA) with
BOP.[Footnote 24] However, during the course of our review, BOP did not
renew IGAs for four facilities in Western Texas--in the cities of Big
Spring and Eden, Texas, and Garza County and Reeves County, Texas--that
confined 83 percent of federal inmates in IGA facilities. Although BOP
has, over time, used hundreds of IGAs across the country to confine
inmates on a short term basis--45 days or less--the four Texas
facilities had evolved into facilities confining inmates on a long-term
basis, similar to BOP-owned and -operated low and minimum security
facilities. In January 2007, BOP awarded five contracts to confine
inmates in facilities with approximately 10,000 beds, which are about
3,000 more beds than the capacity provided under the four
IGAs.[Footnote 25] According to BOP officials, BOP chose to compete the
bed space associated with these agreements partly because the four
Texas facilities outgrew their original purpose of confining small
populations for short periods of time. BOP officials also stated that
acquiring bed space via contracts rather than IGAs enhances their
ability to oversee operations at the facilities. Because BOP no longer
plans to use IGAs to confine inmates on a long-term basis, we shifted
the focus of our review to BOP and private facilities only.
We did our work at BOP headquarters and the Office of Management and
Budget (OMB) in Washington, D.C. We reviewed applicable laws,
regulations, and studies on BOP programs, prison management, and
contracting requirements.[Footnote 26] We also examined available BOP
and private contractor documents on the management of low and minimum
security facilities. In addition, we met with BOP officials and worked
with them to identify potential BOP and private facilities that could
be compared considering basic criteria including inmate gender (male or
female inmates, assuming that costs for programs and services might be
different depending on gender) and whether cost data might be available
on the individual facility level for a 5-year period covering fiscal
years 2002 through 2006. In selecting low and minimum security
facilities, we met with BOP officials to identify potential BOP and
private facilities that could be compared over a 5-year period covering
fiscal years 2002 through 2006. Our discussions with BOP officials
resulted in the identification of 34 low and minimum security
facilities operated by BOP and private contractors that confined
federally sentenced male inmates over the 5-year period. Specifically,
we focused on (1) 27 BOP-owned and -operated low and minimum security
facilities, and (2) 7 facilities operated by private firms under
contract to BOP. Table 1 lists the 34 facilities we selected.
Table 1: List of Low and Minimum Security Facilities within our Scope:
BOP low and minimum security facilities[A]: Allenwood;
Location: Pennsylvania;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Ashland;
Location: Kentucky;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Bastrop;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Beaumont;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Big Spring;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Butner;
Location: North Carolina;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Coleman;
Location: Florida;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Elkton;
Location: Ohio;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Forrest City;
Location: Arkansas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Fort Dix;
Location: New Jersey;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Fort Worth;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: La Tuna;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Lompoc;
Location: California;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Loretto;
Location: Pennsylvania;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Milan;
Location: Michigan;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Petersburg;
Location: Virginia;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Safford;
Location: Arizona;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Sandstone;
Location: Minnesota;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Seagoville;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Texarkana;
Location: Texas;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Waseca;
Location: Minnesota;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Yazoo City;
Location: Mississippi;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
BOP low and minimum security facilities[A]: Duluth;
Location: Minnesota;
Security level: Minimum;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Montgomery;
Location: Alabama;
Security level: Minimum;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Morgantown;
Location: West Virginia;
Security level: Minimum;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Pensacola;
Location: Florida;
Security level: Minimum;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Yankton;
Location: South Dakota;
Security level: Minimum;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Private contract
facilities;
Location: Location;
Security level: Security level;
Security level of adjacent facility (if applicable): Security level of
adjacent facility (if applicable).
BOP low and minimum security facilities[A]: California City;
Location: California;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Cibola;
Location: Arizona;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Northeast Ohio;
Location: Ohio;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: McRae;
Location: Georgia;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Moshannon Valley;
Location: Pennsylvania;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Rivers;
Location: North Carolina;
Security level: Low;
Security level of adjacent facility (if applicable): [Empty].
BOP low and minimum security facilities[A]: Taft;
Location: California;
Security level: Low;
Security level of adjacent facility (if applicable): Minimum.
Source: BOP.
Note: The facilities included in this table confined federal inmates
for fiscal years 2002 through 2006.
[A] During the early stages of our work, BOP identified the 27 BOP low
and minimum security facilities listed above as those that had
individual facility costs for fiscal years 2002 through 2006. However,
in the later stages of our work, BOP officials clarified that 8 of the
27 facilities--Allenwood, Beaumont, Butner, Coleman, Forrest City,
Lompoc, Petersburg, and Yazoo City--were part of complexes which
included medium or high security facilities during some or all of this
time period. Therefore, the individual costs for the low and minimum
security facilities within these 8 complexes could not be isolated for
fiscal years 2002 through 2006.
[End of table]
Several facilities were excluded from our scope because of issues with
the availability of cost data for fiscal years 2002 through 2006. We
excluded from our analysis those BOP low and minimum security
facilities that are co-located with other facilities in a prison
complex, since BOP does not isolate the costs of operating individual
low and minimum security facilities located on the same campus with
high and medium security facilities. Additionally, the Federal
Correctional Institutions Miami, Oakdale, and Terminal Island are
excluded from the list, as between November 2004 and June 2005 they
were converted from medium to low security facilities so they do not
have a comparable low security cost history. We did not include the
competitive, private contract Reeves County Detention Center III in our
study because the facility did not begin receiving federal inmates
until 2007 and consequently did not have cost data associated with
confining federal inmates. We also excluded the privately operated
facility in Eloy, Arizona, as BOP chose to not exercise its option to
continue contracting with the private operator at this facility in
February 2006 and it became an Immigration and Customs Enforcement
detention facility exclusively. In addition, because the private
facilities do not confine female inmates or juveniles, we excluded all
female and juvenile BOP facilities from our analysis, assuming that
costs might be different depending on these inmate characteristics.
Once we selected facilities, we interviewed BOP procurement officials;
budget officials; and officials from the Office of Research and
Evaluation, Office of Policy Development and Planning, and Office of
Design and Construction. We interviewed accounting, contracting, and
operations officials as well as general counsel representing the seven
individual prisons of the private firms. Over the course of our review,
we used numerous studies as well as data from the Bureau of Justice
Statistics to put together a list of variables that might affect a cost
comparison analysis. We coordinated with BOP officials from the Office
of Research and Evaluation to generate a list of comparable variables
for BOP and private facilities. Later, we were told by BOP officials
that data for many variables needed for a cost comparison analysis are
not collected or maintained for private facilities. Given the current
status, we focused our efforts on whether a methodologically sound cost
comparison was feasible. Where possible, we gathered and reviewed
available data on the facilities and examined whether the data would be
suitable for a comparison based, in part, on key factors--such as
similar facility characteristics and levels of service--needed to do a
methodologically sound comparison as outlined in our 1996 report and
Office of Management and Budget (OMB) Circular No. A-76: Performance of
Commercial Activities.[Footnote 27] Some studies in our 1996 report,
for instance, used a variety of quality measures or outcomes such as
safety, incident data, and the extent of programs available to
inmates.[Footnote 28]
In order to determine if the selected BOP and private facilities were
sufficiently similar to allow a methodologically sound comparison, we
attempted to analyze facility characteristics data. In addition, we
analyzed the historical costs to the government including direct (i.e.,
salaries, supplies, and cost of services) and indirect costs, such as
support costs and operating and maintenance costs for buildings,
equipment, and utilities and cost-related data between fiscal years
2002 and 2006 associated with operating low and minimum security BOP
and private facilities. Additionally, we met with prison experts from
Florida State University College of Criminology and Criminal Justice
and from the JFA Institute--a nonprofit agency conducting justice and
corrections research for effective policy making--to further our
understanding about prisons and the complexities of comparing the costs
of operating private and public prisons. We reviewed documentation on
how BOP evaluates and assesses contract proposals to determine what
data are used to make contracting decisions. In addition, we reviewed
the Federal Acquisition Regulation to determine what requirements were
applicable to BOP with respect to cost data and cost comparisons.
Finally, we examined studies done to compare the cost of operating one
BOP facility in Taft, California, that is owned by BOP but operated by
a private contractor, as well as a study conducted by the National
Academy for Public Administration on the feasibility of using low and
minimum security BOP facilities to confine federal medium and high
security inmates.
To assess the implications a cost comparison has for making decisions
on low and minimum security facilities, we met with BOP officials and
reviewed BOP population data, population projection data, and data on
short-term and long-term facility planning. We also examined BOP
documents within the context of OMB requirements on capital planning
and space acquisition.[Footnote 29] In addition, we met with OMB staff
responsible for BOP budget review and preparation to discuss BOP
efforts to acquire space to confine inmates in low and minimum security
facilities in order to determine the information BOP provides OMB on
capital investments and how this information is used to inform
decisions. We also met with officials from the National Institute of
Justice (NIJ) to discuss NIJ's current and past work on prison
privatization and NIJ's role within the Department of Justice.
We conducted our work from May 2006 through August 2007 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Federal Bureau of Prisons:
U.S. Department of Justice:
Federal Bureau of Prisons:
Office of the Director:
Washington, DC 20534:
September 17, 2007:
Eileen Regan Larence, Director:
Homeland Security and Justice Issues:
Government Accountability Office:
Washington, DC 20548:
Dear Ms. Larence:
The Bureau of Prisons (Bureau) appreciates the opportunity to formally
respond to the Government Accountability Office's (GAO's) draft report
entitled "Bureau of Prisons Needs Better Data to Assess Alternatives
for Acquiring Low and Minimum Security Facilities."
The purpose of the report was for the GAO to compare the costs incurred
by the Bureau in operating stand-alone minimum and low security
institutions to what it costs to operate private facilities or
intergovernmental agreement facilities for the same type of operation.
Over the course of this review, the Bureau provided GAO with
considerable amounts of detailed cost comparison data for Fiscal Years
2002-2006. If the GAO staff believed that more detailed information
from the private sector was needed, it was our understanding they would
obtain the cost data and its basis from the private sector companies
involved.
The current contracts the Bureau has in place were awarded after full
and open competitions were conducted. Given the market, we believe the
agency is paying a fair and reasonable cost for the services provided
by the contractors.
In addition to the above general comments, we have the following
specific comments:
* Page 2, paragraph 2, line 12 - Change the following wording from:
"Instead, BOP awarded 5 contracts to confine." to "Instead, the BOP
conducted a full and open competition which resulted in 5 contract
awards to confine inmates."
* Page 5, paragraph 1 - The Bureau does maintain and collect sufficient
data on real property owned by the Bureau. However, data is not
collected on private contract facilities because the contracts are
service contracts with a firm fixed rate for the care of inmates.
* Page 5, paragraph 4 - The Bureau does not collect facility data from
private providers because, as stated above, the private providers have
service contracts with a firm fixed rate. When private providers submit
proposals, the rate includes all the costs to operate a facility. The
report does not acknowledge the type of contracts involved (i.e., firm
fixed price) and instead infers the Bureau does not collect this data
only because it is not required.
* Page 5, paragraph 4 - The Bureau is committed to contracting out the
confinement of inmates in low and minimum security facilities, as
mandated by Office of Management and Budget (OMB). OMB has repeated the
following direction regarding BOP ".take greater advantage of state and
local and private sector bedspace to meet its space requirements." in
the FY 2006 and FY 2007 PART updates to the FY 2003 PART Improvement
Plan. These updates are based on OMB's PART assessment of BOP's S&E
budget. OMB has directed contracting out despite the cost evidence we
have provided.
* Page 7, paragraph 1 - The Bureau's mission statement referenced
should be reflected as follows: The BOP's mission has evolved into
protecting society by controlling offenders in the controlled
environments of prisons and community-based facilities that are safe,
humane, cost-efficient, and appropriately secure and that provide work
and other self improvement opportunities to assist offenders in
becoming law-abiding citizens.
* There is no reference in the draft report indicating congressional
appropriators have been committed to having the Bureau contract out (to
the greatest extent possible) for bed space for minimum and low
security inmates. This commitment is evidenced by the increases
provided in enacted budgets for Contract Confinement, while no funding
has been provided for New Prison Construction (for low and minimum
security inmates) for over 14 years. Due to the continued increases in
the inmate population and lack of bed space, crowding in Bureau
facilities remains at high levels. The Bureau has become more and more
dependent on the use of private contractors to house certain low and
minimum security inmates (criminal aliens in particular).
* The Bureau does not currently have the capacity to house this
particular group of inmates (low security criminal aliens) in any
Bureau facility, or in the near future (2 to 5 years out). We are
clearly dependent on private contractors. If funding were received to
construct a low or minimum security facility, it would take at least 3
years before the bed space would become available. Meanwhile, private
contractors anticipate the growing inmate populations (federal, state,
local) and are continually prepared to expand their operations.
In addition to the above concerns, our response to the recommendation
is as follows:
Recommendation: BOP develop a cost-effective way to collect comparative
data on low and minimum security facilities confining inmates under
Bureau custody and design and conduct methodologically sound analyses
that compare the cost of confining inmates in these facilities in order
to consider contracting among other alternatives for low and minimum
security confinement, consistent with the OMB requirements.
Response: We disagree with this recommendation. The Bureau does not own
or operate facilities to house solely criminal aliens and will not be
receiving funding to construct such low security facilities.
Accordingly, there is no value in developing data collection methods in
an attempt to determine the costs of housing this particular group of
inmates in a Bureau facility.
The Bureau has been able to determine what it actually costs to
contract out this particular population to private contractors via open
competition. In addition, we are able to determine what is fair and
reasonable with regard to pricing through the use of firm fixed price
contracts.
We do not see the value of requiring existing private contractors to
provide specific comparable data to aid in a cost comparison. This
requirement would have the potential to increase current contract costs
at a time when the Bureau is facing serious budget constraints.
We believe the independent review by the Center for Naval Analysis,
which compared the operational cost of the contractor- operated
facility in Taft, California, with other low security BOP facilities,
meets the intent of the recommendation.
If you have any questions regarding this response, please contact
VaNessa P. Adams, Senior Deputy Assistant Director, Program Review
Division, at (202) 616-2099.
Sincerely,
Signed by:
Harley G. Lappin:
Director:
cc: Richard Theis, Assistant Director:
Audit Liaison Group, JMD:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Eileen Larence, Director, Homeland Security and Justice Issues (202)
512-6510:
Acknowledgments:
In addition to the contact named above, John Mortin, Assistant
Director; David Alexander; Ben Bolitzer; Billy Commons; Katherine
Davis; Maria Edelstein; Erin Henderson; Carol Henn; Jeff Isaacs;
Charles Johnson; Dawn Locke; Michele Mackin; Jan Montgomery; Don Neff;
Bill Sabol; David Sausville; John Stambaugh; Stephanie Toby; Lacy Vong;
and Michelle Zeidman made key contributions to this report.
[End of section]
Related GAO Products:
Federal Capital: Three Entities' Implementation of Capital Planning
Principles Is Mixed, GAO-07-274. Washington, D.C.: February 23, 2007.
Federal Real Property: Reliance on Costly Leasing to Meet New Space
Needs Is an Ongoing Problem, GAO-06-136T. Washington, D.C.: October 6,
2005.
Federal Real Property: Further Actions Needed to Address Long-standing
and Complex Problems, GAO-05-848T. Washington, D.C.: June 22, 2005.
Courthouse Construction: Overview of Previous and Ongoing Work, GAO-05-
838T. Washington, D.C.: June 21, 2005.
Budget Issues: Agency Implementation of Capital Planning Principles Is
Mixed, GAO-04-138. Washington, D.C.: January 16, 2004.
Federal Drug Offenses: Departures from Sentencing Guidelines and
Mandatory Minimum Sentences, Fiscal Years 1999-2001. GAO-04-105.
Washington, D.C.: October 24, 2003.
Justice Impact Evaluations: One Byrne Evaluation Was Rigorous; All
Reviewed Violence against Women Office Evaluations Were Problematic.
GAO-02-309. Washington, D.C.: March 7, 2002.
Standards for Internal Control in the Federal Government. GAO/AIMD-00-
21.3.1. Washington, D.C.: November 1999.
Executive Guide: Leading Practices in Capital Decision-Making. GAO/
AIMD-99-32. Washington, D.C.: December 1998.
Courthouse Construction: Improved 5 Year Plan Could Promote More
Informed Decisionmaking. GAO/GGD-97-27. Washington, D.C.:December 31,
1996.
Private and Public Prisons: Studies Comparing Operational Costs and/or
Quality of Service. GAO/GGD-96-158. Washington, D.C.: August 16, 1996.
Federal Courthouse Construction: More Disciplined Approach Would Reduce
Costs and Provide for Better Decisionmaking. GAO/T-GGD-96-19.
Washington, D.C.: November 8, 1995.
State and Federal Prisons: Factors That Affect Construction and
Operations Costs. GAO/GGD-92-73. Washington, D.C.: May 19, 1992.
Designing Evaluations. GAO/PEMD-10.1.4. Washington, D.C.: March 1991.
Private Prisons: Cost Savings and BOP's Statutory Authority Need to Be
Resolved. GAO/GGD-91-21. Washington, D.C.: Feb. 7, 1991.
Footnotes:
[1] IGAs are agreements between BOP and state and local governments to
confine BOP inmates in state and local prison facilities.
[2] Pub. L. No. 109-108, 119 Stat. 2290 (2005).
[3] BOP awarded these five contracts on January 17, 2007.
[4] According to BOP, prison programs include services and classes that
provide productive use-of-time activities and facilitate the successful
reintegration of inmates into society, consistent with community
expectations and standards.
[5] Because the private facilities we selected for our review do not
confine female inmates or juveniles, we excluded all female and
juvenile BOP facilities from our analysis.
[6] GAO, Private and Public Prisons: Studies Comparing Operational
Costs and/or Quality of Service, GAO/GGD-96-158 (Washington, D.C.: Aug.
16, 1996).
[7] Office of Management and Budget, Executive Office of the President,
OMB Circular No. A-11, Part 7, Capital Programming Guide (2006). A
benefit-cost analysis is a systematic quantitative method of weighing
the costs associated with implementing or operating an alternative
against any benefits expected from the alternative. A cost-
effectiveness analysis is a systematic quantitative method for
comparing the cost of alternatives when such alternatives achieve the
same benefits. According to OMB, it is a less comprehensive technique
than a benefit-cost analysis, but can be appropriate for ranking
alternatives when the benefits of competing alternatives are the same.
An alternative is considered cost-effective when it is determined to
have the lowest cost for a given amount of benefit.
[8] Nelson, Julianne, Competition in Corrections: Comparing Public and
Private Sector Operations, the Center for Naval Analysis Corporation
(Virginia: December 2005).
[9] According to BOP, a pretrial inmate is a person who is legally
detained but for whom BOP has not received notification of conviction.
Thus, pretrial inmates include persons awaiting trial, being tried, or
awaiting a verdict.
[10] GAO/GGD-96-158. While exploring how we would conduct a comparison
for this report, we took into account factors outlined in our 1996
report on studies that compared the cost of private and public prisons
to ensure that our comparison would be methodologically sound and
generalizeable to federal low and minimum security facilities
nationwide regardless of the operator. In addition to the factors
mentioned above, our 1996 report stated that a variety of other factors
could affect a cost comparison of prison facilities such as cost-of-
living and economic differences among the nation's geographic regions.
[11] Studies we reviewed identified misconduct incidences as inmate-on-
inmate assaults, staff-on-inmate assaults, inmate-on-staff assaults,
drug and contraband violations, sexual assaults, homicides, suicides,
and escapes from the facility.
[12] SENTRY is BOP's online, real-time database system, used primarily
for maintaining information about federal inmates including sentencing,
work assignments, admission/release status, and other special
assignments for monitoring inmate status. According to contracting
requirements, each private contractor is required to provide and
maintain hardware and software to access SENTRY.
[13] Although we reviewed the available data maintained by BOP, for the
purposes of this report, we did not assess the contractor's compliance
with BOP's data entry requirements to confirm whether the private
sector data were consistent with BOP's misconduct categories because
BOP's monitoring and oversight of its contracts was beyond the scope of
our review.
[14] Firm-fixed price contracts provide for a price that is not subject
to any adjustment on the basis of the contractor's cost experience in
performing the contract. This contract type places upon the contractor
maximum risk and full responsibility for all costs and resulting profit
or loss.
[15] Federal Acquisition Regulation, 48 C.F.R. §§ 15.305(a)(1), 15.403-
1(c) (2006).
[16] GAO, Federal Real Property: Reliance on Costly Leasing to Meet New
Space Needs Is an Ongoing Problem, GAO-06-136T (Washington, D.C.: Oct.
6, 2005), 5-8.
[17] The cost of construction was compared to the options of (1) lease-
purchases in which payments are spread out over time and ownership of
the asset is eventually transferred to the government, and (2)
operating leases in which periodic lease payments are made over the
specified length of the lease.
[18] Office of Management and Budget, Executive Office of the
President, OMB Circular No. A-11, Part 7, Capital Programming Guide
(2006).
[19] Office of Management and Budget, Executive Office of the
President, OMB Circular No. A-94, Guidelines and Discount Rates for
Benefit-Cost Analysis of Federal Programs (1992).
[20] According to BOP, long-term criminal aliens are those criminal
aliens confined in low and minimum security facilities for more than 45
days.
[21] Nelson (2005).
[22] GAO-06-136T.
[23] Pub. L. No. 109-108, 119 Stat. 2290 (2005).
[24] IGAs are agreements between BOP and state and local governments to
confine BOP inmates in state and local prison facilities.
[25] Three of the five contracts were awarded to the private firms that
operated the former IGA facilities for the local governments. The
fourth contract was awarded directly to the local government that owns
the facility, Reeves County. BOP also awarded a fifth contract to a new
contractor in Pine Prairie, Louisiana.
[26] According to BOP, prison programs include services and classes
that provide productive use-of-time activities and facilitate the
successful reintegration of inmates into society, consistent with
community expectations and standards.
[27] GAO/GGD-96-158 and Office of Management and Budget, Executive
Office of the President, OMB Circular No. A-76, Performance of
Commercial Activities (2003).
[28] While we attempted to collect data to compare the level of service
provided, we did not attempt to assess BOP's monitoring and oversight
of its contracts as they relate to the contractor's performance and
quality of service because doing so was beyond the scope of our review.
[29] Office of Management and Budget, Executive Office of the
President, OMB Circular No. A-11, Part 7, Capital Programming Guide
(2006).
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