The Geo Family of Websites

FAQs

 

Eight Most Frequently Asked Questions about Public-Private Partnership Corrections

 

The following are the most frequently asked questions about Public-Private Partnership Corrections:

 

1.   What is prison privatization?

2.   Why can't the public sector adopt private sector methods and save even more, since the public sector doesn't need to make a profit?

3.   Won't a company's focus on the 'bottom line' result in a lower quality of safety, security and service to the staff, offenders and government?

4.   How do we know that a company will do all that it promised to do when it signed a contract?

5.   Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government is dependent upon the contract?

6.   Since a company gets paid a fee for each offender it keeps, won't it try to increase the amount of time offenders serve in prison for crimes they commit?

7.   Isn't it wrong for the government to contract out a core governmental responsibility?

8.   Isn't it wrong for a company to make a profit from the suffering of others?

 

1.   What is prison privatization?

     Strictly speaking, the term 'privatization' is something of a misnomer since it correctly and narrowly applies to private sector financing and ownership of infrastructure traditionally financed and owned by the public sector.  In common usage, however, prison privatization has come to include not only the transfer of infrastructure from the public to the private sector, but the fast-track design and construction, as well as the contracted management and/or operation, of a facility, by the private sector.  The term “contracting out” may better describe the nature of the public-private corrections partnership.

 

2.   Why can't the public sector adopt private sector methods and save even more since the public sector doesn't need to make a profit?

      Very few of us have ever attended a government budget meeting where a department representative reported a failure to spend last year’s entire allocated budget and sought a reduced budget for the next year. 

      To be sure, many public sector agencies operate efficiently.  But public sector efficiencies are generally absorbed in growth – growth in staff, growth in procurements, and growth in bureaucracy.

      Despite the best efforts of governments around the world to emulate private sector methods, more than marginal savings are generally unobtainable or unsustainable due to the lack of a profit-based structure.  In short, no one has yet devised a better pencil sharpener than the private sector in open competition.

 

3.   Won't a private company's focus on the 'bottom line' result in a lower quality of safety, security and service to the staff, prisoners and government? 

Within this question are a host of closely associated suspicions, such as:

Won't a company cut costs by:

•     paying its employees below-market wages?

•     serving prisoners small portions and worse quality food?

•     providing fewer prisoner programs?

      These questions betray a fundamental misunderstanding of the nature of a service company and its relationship to its customers, as well as a flawed concept of how a service company makes money.

      Paying employees in a labor-intensive service industry less than competitive wages and benefits inevitably results in a dissatisfied workforce and a high rate of attrition. Each correctional officer represents a significant investment of time and money by his or her employer; a high rate of staff turnover means substantial operating losses, as well as operational inefficiencies associated with lack of employee continuity and loss of experience-linked productivity.

      Similarly, the delivery of low quality food would prove disastrous in a correctional setting, where the maintenance of order is often dependent upon the quality and portions of daily meals. No prison operator, public or private, ever saved money two days in a row by cutting down on the quality or portion size of prison meals.

      The quality of prisoner rehabilitation programs is frequently the means by which the private operator distinguishes its service from that of the public sector. Professional and effective prisoner programs result in a safe, secure and ordered routine, the foundation of cost-effectiveness in any prison.

      Quite significant savings of approximately 15%-30% are achieved by the private sector in the design and construction of a prison. The traditional governmental method of linear and time-consuming contracts for the design and then the construction of a facility is thrown out in favor of a fast-track, design-build approach backed by a fully guaranteed, firm, fixed-fee contract. Successive layers of low-bid, inexperienced tradesmen are replaced by partnering arrangements with experienced, competitively priced companies who place real value upon a continuing relationship with the developer and general contractor.

      In operations, the private sector is able to save money – generally estimated as equal to at least 10% of the public sector's cost for operating a similar facility – by the development of an efficient, operator-driven design, and through the application of private sector management methods primarily focused on employee productivity and performance, and efficient procurement of goods and supplies.

      By designing out staffing redundancies, a private company is able to save significant costs over the long term. The operating costs of a prison are primarily related to the wages and benefit costs of its personnel; any reduction of redundant staffing positions will obviously generate huge efficiencies and savings over time. A single 24/7 position can cost an operator $250,000 a year in wages and benefits. A prison designed by its private sector operator is the best guarantee of a prison designed to maximize safety, security and cost-efficiency.

      Equally important is the daily management and elimination of employee sick time and overtime abuses, as well as the introduction of private sector procurement methods that reduce 'red tape' and bureaucratic inefficiencies.

 

4.   How do we know that a company will do all that it promised to do when it signed a contract?

      This is really a question directed to the critical issue of accountability. In a very real sense, private operators are more accountable to the government than their public sector counterparts. At least six factors contribute to this enhanced level of accountability:

1.   The terms of the contract

2.   A facility-based monitor

3.   In-house corporate auditing

4.   Accreditation systems

5.   Competition among private operators

6.   Media scrutiny

(1)     Contract Terms

         The terms of every private operational contract require the operator to meet, and in some cases exceed, all performance standards, laws, regulations and rules applicable to the public sector. Breach of these standards can result in contract sanctions, including termination.

(2)     Government Monitor

         Most contracts call for the provision of an on-site public sector monitor who has complete and unrestricted access, at all times, to all facility employees, prisoners, records and information, for the purpose of determining and reporting any and all operator non-compliance with contract requirements. This is almost never true of a public facility.

(3)     In-House Audits

         Private companies employ in-house corporate personnel to monitor and audit all aspects of operational performance, including such matters as security incident reports, health services, overtime and sick-time, and facility purchases on a daily, weekly and monthly basis.

(4)     Accreditation

         In addition to government and in-house monitors and auditors, most contracts call for accreditation of operations within one or two years of opening by such third-party accreditation agencies as the American Correctional Association and the National Commission of Correctional Health Care. These accreditation systems serve as an outside and objective Quality Assurance program.

(5)     Competition

         There is a healthy competition among the handful of serious private correctional service providers that results in the need for each to maintain a standard of performance consistent with a marketable reputation and something as fundamental and perhaps quaint as the notion of "pride". Each company is aware that its performance is always under scrutiny and that a capable competitor is standing by ready to step in and improve substandard performance whenever it occurs.

(6)     Media Scrutiny

         We are all familiar with most of our public institutions - we have all spent time in schools, libraries, and hospitals. But for most of us, our prisons remain hidden behind a shroud of movie images and sensational news stories, and we are naturally curious about an institution that is financed by all but seen by few. Add to this natural curiosity the fact that the operation of a prison by a private company is still a relatively novel idea and you readily appreciate the media's heightened focus on privately operated prisons. Private operators have come to understand and to expect that an otherwise uneventful incident in a publicly operated prison will generate significant media interest and coverage when occurring in a privately operated facility.  A healthy respect for a vigilant media is a powerful guarantee of private operator accountability.

 

5.   Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government is dependent upon the contract?

      Prison operating contracts generally call for an initial term of at least three to five years. Few company executives can offer their shareholders “loss leaders” for very long without reaching into the old back drawer and dusting off their resumes.

      As already discussed, competition among private operators remains keen. Any operator who believes that today's losses can be made up at tomorrow's negotiating table forgets that the competition is eager to take a seat at that table.

      It should also be noted that there have been a few instances when a government agency has “taken back” its operation from a private contractor.  In each instance that this has occurred, the transition has been smooth and uneventful.

 

6.   Since a company gets paid a fee for each prisoner it keeps, won't it try to increase the amount of time prisoners serve in prison for crimes they commit?

      It is inconceivable that anyone could pick up a newspaper or watch a television today and believe that private prison operators need to work at increasing demand for their services. It is an unfortunate fact that the number of incarcerated persons continues to develop and grow despite all best efforts to address the causes and symptoms of crime.

      Private prison operators neither legislate, consider, nor impose the sentences served by prisoners. We are contractually obligated to see that prisoners remain in our prisons for their allotted time, not a day more or less. Public sector employees and the unions who represent their interests may also be seen to benefit from harsher sentencing legislation, yet they are not presumed to lobby in favor of such laws.  It is simply wrong to conclude that those organizations who are assumed to “benefit” from longer prison terms, whether they be private or public, are actively engaged in efforts to lengthen prison sentences.  Private sector operators know that the future growth of their service contracts depends upon delivering effective programs that improve the quality of time spent in our nation’s prisons and serve to reduce recidivism.

 

7.   Isn't it wrong for the government to contract out a core governmental responsibility?

      It is important to remember that the government is not contracting away its responsibility for the safe, secure and humane incarceration of prisoners; that responsibility always remains with the government.  Rather, it is contracting out to a private sector provider the performance of the tasks that comprise that responsibility. Many of the individual tasks within a prison have long been contracted out to the private sector – health services, food services, maintenance, to name a few. Contracting out the “complete package” is a difference of degree, not of kind.

      For many years, the United States contracted out the operation of its incoming missile defense system, NORAD, to the private sector. It is hard to conceive of a more critical “core governmental responsibility” than the alerting of our country’s citizens to the imminent and calamitous attack of a hostile foreign government.

 

8.   Isn't it wrong for a company to make a profit from the suffering of others?

      The “suffering of others” is hardly how corrections professionals would characterize the care and custody of inmates.  Inmates are incarcerated as punishment, not for punishment.  Nevertheless, if some insist in seeing imprisonment for the commission of crime as “suffering,” it is hard to understand how the simple lack of profit by those who carry the keys somehow ennobles the enterprise.

      As mentioned earlier, the public sector does indeed “profit” through its efforts. The expenditure of those “profits” upon increased bureaucracy, line staff and supplies, while less visible than shareholder dividends, is nevertheless real, capable of measure, and worthy of note.

      Furthermore, all public-sector corrections employees, provided they live within their means, expect or at least hope to “profit” from their employment, i.e., make more than they spend.  Is their work any less worthy if they are at least in part motivated by their desire to “get ahead” financially?  Do critics of for-profit companies believe that our jails and prisons should be run by volunteers?

      The privatization of prisons is a public-private partnership, and this relationship is no less true in the area of profit sharing. Every dollar of taxpayer funds saved through correctional privatization can be spent on otherwise neglected competing public services such as schools, hospitals, roads, airports and waste management facilities.

      Of these competing public needs, perhaps none is as important as the financing of our schools.  Every dollar denied our schools equates to at least five dollars required by our jails and prisons.  By saving money and improving quality in our jails and prisons through privatization, we free up much-needed public dollars that can be spent in the best crime-prevention system we have ever developed – our schools.

The GEO Group, Inc. © 1997 - 2014 . All Rights Reserved. EOE AA M/F/Vet/Disability