Past is no barrier to state contracts

Published May 3, 2007

TALLAHASSEE - Three months after Gov. Charlie Crist ordered an investigation of some $4.5-million in overpayments to two companies that operate private prisons for the state, those same companies will be the only ones permitted to bid on expanding and building another facility.

The state's budget calls for 384 new beds to be housed in a medium security private prison, estimated to cost between $15-million and $20-million, and has limited the bidding for those beds to the two companies that currently contract with the state.

Those companies are GEO Group of Boca Raton and Corrections Corp. of America of Nashville. Two state audits have indicated the state had paid GEO Group and CCA more than $4.5-million for vacant jobs and other questionable expenses. The Florida Department of Law Enforcement is now investigating.

Sen. Victor Crist, R-Tampa, a member of the Senate committee that funds jails and prisons, and who first called for the investigation into GEO and CCA, said that a tight budget year meant that the state had to change the way it thought about providing more beds.

"It would be nice to have options for new vendors that may not be in the process, because that provides for better competition, " Crist said. "But toward the end of the budgeting process, when money was very tight, we decided to go ahead and just award new beds to existing sites because it's cheaper."

Sen. Crist said he's confident that Gov. Charlie Crist and Corrections Secretary Jim McDonough will keep a close eye on the projects.

"We have a new governor and he has an interest in this subject area, " Crist said.

The budget is an up or down vote on the entire $72-billion document. Gov. Charlie Crist does have the ability to veto certain line items, but to veto the language limiting the bids would mean vetoing an $84-million pot of money for all private prison operations.

Both Gov. Crist and Chief Financial Officer Alex Sink have criticized the handling of contracts with GEO and CCA. The Department of Management Services, which inherited the contracts from the now defunct Correctional Privatization Commission, recently reached a $402, 501 settlement with GEO but is still negotiating with CCA. Heather Smith, a spokeswoman for the Florida Department of Law Enforcement, said the investigation is ongoing.

"They've got issues with these vendors and concerns with some of the things done in the past, and yet they're giving them more beds, " said Ken Kopczynski, lobbyist for the Florida Police Benevolent Association, which represents public corrections officers.

CCA marketing director Steve Owen said that the investigation concentrates on events before 2005 and that CCA has since shown the state an ability to meet its needs.

"We do think we have a good record for bringing beds online quickly, " Owen said.

The budget also says that private prison contractors, including those under investigation, can compete to build three additional "work camp" prisons, each with 432 beds - a total of 1, 296 beds. These facilities would each cost about $9-million to build, according to Department of Corrections estimates.

The work camps are a new idea that Secretary McDonough recently pitched to help reduce recidivism. The work camps are for those sentenced to fewer than 12 months in prison who would spend much of their time digging ditches and doing other types of manual labor. Some would also get drug treatment.

While the work camps will be competitively bid, several in the prison industry acknowledged that existing private prisons will have a competitive advantage in winning such contracts. That's because they can offer to put them next to existing jails or prisons facilities, which, again, is cheaper than building them from the ground up.

McDonough, who was at the state Capitol on Wednesday, said he is concerned about the GEO and CCA contracts, but he plans to keep an eye on these prisons and the money to build them, no matter who is running them.

"I'm always keeping an eye on the inmates, because I see them as my inmates, by law, " McDonough said.

A CCA lobbyist pointed out that operation of some of the existing private prisons, including CCA's Bay Correctional Facility in Panama City, is about to be rebid as a result of the controversy. CCA plans to bid on the prison, but if it loses out to a new private prison firm, that new vendor could have a shot at the new prison bed money.

Jennifer Liberto can be reached at jliberto@sptimes.com or 850224-7263.