BILL ANALYSIS                                                                                                                                                                                                    






          SENATE SUBCOMMITTEE ON PRISON CONSTRUCTION
                         AND OPERATIONS
                    Senator Daniel E. Boatwright, Chair         
S    
                       1995-96 Regular Session                  
B

                                                                
2
                                                                
1
SB 2156 (Lewis)                                                 
5
As amended April 8, 1996                                        
                            6
Hearing date:  April 9, 1996
Penal Code
SAH:js

      the California Correctional Facilities Privatization
                      Commission Act of 1996

                            HISTORY

Source:  Author  

Prior Legislation:  SCA 7 (Campbell) - currently in Senate  
Committee on Constitutional                                     
                                    Amendments

Support:  Alternative Programs, Inc.; Cornell Corrections,  
      Inc.; Corrections Corporation of America; Management and  
      Training Corporation; Maranatha Production Company, LLC;  
      Wakenhut Corporation; Cal-Tax 

 Opposition:  American Civil Liberties Union; California  
         Correctional Peace Officers Association; California  
         State Employeeso Association; California Independent  
         Public Employees Legislative Council, Inc.;  
         California Probation, Parole, and Correctional  
         Association; Union of American Physicians and  




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         Dentists



                                    KEY ISSUE

SHOULD THE California Correctional Privatization Commission BE CREATED to  
enter into contracts with contractors for the Procurement of land and the  
design, financing, acquisition, leasing, construction, and operation of  
private correctional facilities IN CALIFORNIA, AS SPECIFIED?


                            PURPOSE

 Under existing law, the California Department of Corrections  
and the Director of Corrections are responsible for  
administering the state prison system.  The Department is  
authorized to contract for supplies, utilities, and other  
necessary goods and services needed to operate the prison  
system.  (Penal Code Sections 2051 et seq.)

The Department may generally plan for new construction of  
state prisons but any proposed new prison sites, the authority  
to build, and the financing of new prisons is generally the  
subject of legislative measures which require the Governoros  
signature.

Existing law allows the supervision of inmates in restitution  
centers by contract with private nonprofit or profit  
corporations, or by peace officer personnel of the Department  
of Corrections on a 24-hour basis.  If  the supervision is by  
a private entity, the per inmate cost of operating these  
facilitates under contract shall be less than the per inmate  
cost of maintaining custody of inmates by the Department.   
(Penal Code Section 6225)

Existing law also allows the California Departments of  
Corrections and the Youth Authority to enter into long-term  
contracts with local governments to house adult and juvenile  
parole violators and offenders with short prison terms (less  




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than eight months), in city or county facilities specially  
designed for their incarceration.  (Penal Code Section 6250)

Under current law the Department may enter into contractual  
agreements with private enterprises to incarcerate short term  
state prison felons.  Under this authority the Department may  
purchase additional bed capacity through community  
correctional programs.  (Penal Code Section 6250 et seq.)

Existing law provides for state agencies to use personal  
services contracts when specific standards are met; procedures  
are followed; and organizations representing state employees  
are notified for comment.  (Government Code Sections 19130,  
19131, and 19132) 

The California Constitution provides for a civil service  
system for officers and employees of the state, with a  
merit/competitive examination process established for  
permanent appointment and promotion.  (Calif. Const. Art. VII,  
Section 1 [a] and [b])

 This bill proposes the creation of a new California  
Correctional Privatization Commission composed of five members  
appointed by the Governor and subject to Senate confirmation  
and the Governor shall appoint the chair and vice chair.  The  
bill specifies that none of the members shall be an employee  
of the Department of Corrections; one member shall be a  
minority as defined in the Government Code; four members shall  
be employed in the private sector; terms are for four years;  
conflict of interest prohibitions are included; members shall  
serve without compensation but are to be entitled to per diem  
and expenses.  The Commission may employ an executive director  
and staff and may lease necessary office space.

The Commission would continue in existence until January 1,  
2002, unless either:

       (1)  The Governor issues an Executive Order during 2001  
          to extend the commission an additional five years,  
          or;




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       (2)  The Legislature adopts a concurrent resolution  
          during 2001 to extend the commission an additional  
          five years.

In either case, the Commission would remain in effect only  
until January 1, 2007, unless continued by statute.

The Commission would be authorized to construct for up to five  
facilities until January 1, 2002, as follows:

       (1)  One combination minimum and minimum/medium  
          security prison with a design capacity of 1,000 to  
          2,000 inmates.

       (2)  Two large combination medium and maximum security  
          prisons with a design capacity of 2,500 to 3,000  
          inmates each.

       (3)  Two small combination medium and maximum security  
          prisons with a design capacity of 500 to 1,000  
          inmates each.

At least one each of the small and large combination prisons  
shall be ready for occupancy by January 1, 1999.

If the Commission is extended during 2001 by an Executive  
Order or by a Legislative Concurrent Resolution, the  
Commission may contract for an additional five prisons without  
any other legislative authorization.

The Commission would be authorized to enter into a contract  
with one contractor per facility for the design, acquisition,  
financing, leasing, construction, and operation of a  
correctional facility, along with the procurement of land.   
The Commission shall be exempt from the existing Government  
Code provisions related to state acquisition of property by  
the Public Works Board.

The Commission shall be limited to contracts with a total cost  




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per cell not exceeding $75,000.  That cost per cell shall  
include the total construction costs, including land  
acquisition, utility connections, all preconstruction  
activities, including studies, architectural and engineering  
work, and actual construction expenditures.

The Commission shall encourage innovation and shall not  
require any prototype designs used by or created for the  
Department of Corrections.  

Before finalizing any contract, the Commission shall first  
provide the California Department of Corrections a copy of the  
contract for review for five days.  The Department shall sign  
off on any contract that has been finalized.  That sign off  
shall constitute awareness of the Department of the terms and  
conditions of the contract and agreement by the Department to  
abide by the contract.

The Commission shall report to the Speaker, President pro  
Tempore, and the Chair of the Joint Legislative Committee on  
Prison Construction and Operations, the Governor, and the  
Department of Corrections, by December 1 of each year the  
status of the program authorized by this bill.  That report  
shall include comparisons with inmates housed by the  
Department of Corrections, including the recidivism rates,  
staff to inmate ratios, and staff injury claims.

This bill sets forth detailed requirements for contracting,  
including compliance with applicable state and federal laws as  
well as accreditation by the American Correctional  
Association.  Specified inmate programs at least at the level  
of those provided by the Department of Corrections would be  
required.

Contracts shall include authorization for tax-exempt financing  
using bonds, certificates of participation, lease-purchase  
agreements, or other tax-exempt financing methods.

Contracts shall require substantial employment by minorities  
unless a good faith effort fails to achieve that status.




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Each contract shall contain penalties and incentives to ensure  
compliance by the contractor with the contract.

The Commission shall appoint a full-time contract monitor for  
each contract with cost reimbursed by the facility contractor.  
 

If the Commission is not extended during 2001 or if it is not  
extended beyond 2007, the bill provides for successful  
contractors to continue operation after those dates,  
supervised by the Department of Corrections.

This bill provides that once the debt service obligation has  
been paid in full by the state, the title to the facility  
shall revert to the state.  If a contract is terminated or not  
extended, the state shall be able to acquire the title by  
paying off the remaining principle due on the contract.

This bill provides for specific use of any excess revenues  
generated by sales to inmates.

 The purpose of this bill is to allow California to utilize  
privatized prison space for inmates in an effort to provide a  
cost-effective alternative to state prison operations.


                           COMMENTS


1.   Billos Legislative Findings and Declarations:

      a.  Public safety is a primary function and  
       consideration of government.  As evidenced by the  
       overwhelming support for Proposition 184, the oThree  
       Strikes Initiativeo on the November 8, 1994 ballot, the  
       people of California are demanding that violent,  
       serious, and repeat felons be incarcerated with longer  
       sentences.





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      b.  As a result of the passage of Proposition 184 and  
       other laws recently enacted, the inmate population of  
       the state prison system is projected to increase by  
       unprecedented numbers.  Upon the completion of current  
       authorized new prison construction and with current  
       inmate housing capacity, the state will reach its  
       capacity to house inmates by mid-1998. 

      c.  The Legislative Analyst estimates that the state  
       will need to construct 24 new prisons over the next  
       several years, each housing 5,300 inmates, in order to  
       house an inmate population of 306,000, which is  
       projected for mid-2005.  The construction cost for  
       these 24 new prisons would be about $7 billion plus  
       additional debt service costs.  The total operating  
       cost for these 24 prisons would be an additional $1.8  
       to $2 billion annually.
       
      d.  The Legislative Analyst further estimates that since  
       the Legislature did not authorize the construction of  
       any new state prisons by January 1996, the state will  
       not have the capacity to incarcerate about 9,000 new  
       inmates before the end of 1998.  The state must  
       therefore develop a strategy now to deal with the need  
       for more prison beds.

      e.  Controlling the rapid growth of Corrections  
       construction and operations costs is one of the  
       greatest challenges facing the state.  The proposed  
       budget for the Department of Corrections for the  
       1996-97 fiscal year is about $3.8 billion.

      f.  In order to maintain public safety, avoid unwanted  
       court intervention, address the unprecedented inmate  
       population growth, and maintain a sense of fiscal  
       responsibility to the people of California, it is  
       critical that the state establish a commission to  
       expedite the construction and operation of new state  
       prisons with the use of private sector support and  
       innovations.




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2.   Recent Legislative Analystos Office Report on Prison Bed  
Space.

In a recent report released by the Legislative Analystos  
Office (LAO), oAccommodating the Stateos Inmate Population  
Growth,o December 28, 1995, the LAO reported that even if the  
Legislature should authorize any additional new prisons for  
construction by January 1996, the additional prison bed space  
provided would not be available in time to house all inmates  
by mid-1998.

The report noted it generally takes the Department of  
Corrections about 40 months to complete environmental and  
planning documents and construct a prison after it is  
authorized by the Legislature.  However, the Department has  
three proposed prisons in which the environmental impact  
reports have already been completed.  The LAO estimates that  
these three prisons could actually be completed in 34 months  
once authorized by the Legislature. 

The most critical point made in the Analystos report, however,  
is that by mid-1998 othe state will be faced with  
accommodating about 9,000 inmates through at least most of  
1998 in a manner other than construction of new prisonso under  
the current construction process.

COULD PRIVATE CORRECTIONAL FIRMS CONSTRUCT PRISON FACILITIES  
FASTER THAN THE DEPARTMENT OF CORRECTIONS?  COULD THEY PROVIDE  
THE SAME LEVEL OF SECURITY AS A STATE FACILITY?  COULD THEY DO  
SO IN A COST-EFFECTIVE MANNER? 

3.   Administrationos Proposal for Handling Inmate Population  
Growth.

The Governor noted in his Budget Summary for 1996-97 that he  
is proposing a o$1.865 billion General Obligation bond for a  
multi-year prison construction and renovation program for the  
1996 ballot.  These funds will allow planning and construction  
of six new prisons with a design bed capacity of approximately  




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15,000 beds (capable of housing approximately 27,000 inmates)  
by 2000-01.o  In addition, the bond measure will provide  
funding for major and minor capital outlay projects for the  
Department.

The Governoros bond measure is currently proposed in Assembly  
Bill 3116 (Brulte) but has not been heard yet in the Assembly  
Public Safety Committee.  An additional Assembly Bill, AB 3461  
(Brulte), would authorize the issuance of lease-purchase bonds  
or notes to finance the construction of nine additional new  
prisons to be determined by the Department of Corrections.

ASSUMING THE CALIFORNIA VOTERS APPROVE THIS BOND MEASURE ON  
THE NOVEMBER 1996 BALLOT, COULD THE DEPARTMENT PROVIDE THE  
NECESSARY BED SPACE BY MID-1998?

WHAT WOULD BE THE ADMINISTRATIONoS PLANS SHOULD THE VOTERS  
REJECT THE NOVEMBER 1996 PRISON BOND MEASURE?

WOULD THE FINANCIAL MARKET CONTINUE TO APPROVE CALIFORNIAoS  
RELIANCE ON BONDS FOR 24 ADDITIONAL PRISONS?  SINCE THE STATE  
WOULD NOT HAVE TO ISSUE ANY BONDS UNDER A PRIVATIZATION  
CONTRACT,  WOULDNoT THIS IMPROVE THE STATEoS OVERALL BOND  
RATING?

The Governoros Budget Summary also notes that the California  
Department of the Youth Authority will grow by six percent by  
the year 2000.  The CYA facilities are currently operating at  
about 150 percent of design capacity.

In order to reduce overcrowding and provide additional space  
for future growth, the Governor is proposing $204.5 million in  
additional funds for CYA construction needs:  $150 million in  
new bond funds in multi-year projects for 1,450 additional  
beds; $51 million in bond funds for major and minor capital  
outlay; and $3.5 million in General Funds for minor capital  
outlay projects.

Of the proposed projects noted, the CYAos 1996-97 budget  
includes $27.7 million in bond funds and $3.5 million in  




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General Funds.

SHOULD THE COMMISSION ESTABLISHED UNDER THE PROVISIONS OF THIS  
BILL ALSO BE RESPONSIBLE FOR OBTAINING ADDITIONAL WARD SPACE  
FOR THE CALIFORNIA DEPARTMENT OF THE YOUTH AUTHORITY?

4.   Efficiency in State Government Operations.

According to the Department of Finance (DOF) in the Governoros  
Budget Summary, 1996-97, a guiding principal of the current  
Administration has been oimproving the quality of state  
programs and services, while containing the cost of delivering  
them.o  It notes that taxpayers want government to be  
effective, accountable, and to deliver quality services at no  
higher cost than necessary, and that most taxpayers want  
limited growth in government.

The Budget Summary reports that the state oleads the nation in  
the fewest number of state employees per population with 8.3  
state employees per 1,000 citizens.o  It also states that  
while the number of employees involved in public safety work  
has increased by 37 percent since 1990-91, the Governor has  
reduced the balance of the state workforce personnel below the  
1990-91 level.

In order to ensure that Californiaos government is efficient,  
innovative, and properly focused on basic state services and  
functions, the Governor has ordered all state agencies to  
conduct a top-to-bottom review of their operations to  
oidentify their highest priority functions and opportunities  
for out-sourcing, consolidating and divesting duties where  
appropriate.  Departments and agencies are required to submit  
plans for divestiture of programs where feasible, and for the  
re-engineering of remaining, priority functions to deliver  
higher-quality services at lower costs.o

Although the Governoros proposed 1996-97 budget did not  
include any specific major privatization proposals, the  
Governor has stated in his January State of the State address  
that he would do so by mid-April. 




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HAS THE ADMINISTRATION IDENTIFIED THE OPPORTUNITIES FOR  
OUT-SOURCING, CONSOLIDATING AND DIVESTING DUTIES WITHIN THE  
CALIFORNIA DEPARTMENT OF CORRECTIONS?

WOULD THE ADOPTION OF THIS BILL ASSIST THE ADMINISTRATION IS  
FULFILLING THAT MISSION?

5.   Privatization in General.

In oThe 1996-97 Budget:  Perspectives and Issueso report, the  
Legislative Analystos Office provides some valuable background  
information on the different types and forms of privatization,  
current forms of privatization in state government, and a  
number of issues related to the privatization of government  
functions (see page 173).

More importantly, the report provides the Legislature with a  
framework for evaluating privatization proposals.  In  
considering privatization proposals, the LAO recommends that  
the Legislature ask the following four basic questions:

      a.   What are the goals and objections of privatizing?   
       The objective of privatization should be to improve the  
       effectiveness and efficiency of services provided.  In  
       order to achieve this goal, the state should clearly  
       identify the level of quality and accountability.

      b.   What is the appropriate type and form of  
       privatization?  The LAO notes that there are four basic  
       elements to providing any service:  Policymaking  
       (determining service level and quality); Funding  
       (method of financing to pay for service);  
       Administration and Oversight (overseeing day-to-day  
       operations); and Service Delivery (providing the good  
       or service).

       When considering privatization, it is important to make  
       clear which of these four basic functions are to be  
       carried out by the public sector and by the private  




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       sector.  In some cases, it may make sense to split the  
       function between the two entities.

      c.   Are the conditions orighto to privatize?  In order  
       to reap the benefits of privatization there must be a  
       competitive environment.  Such an environment would  
       allocate resources to their most productive uses,  
       encourage efficiency, stimulate innovation, and provide  
       for consumer choice.

      d.   What are the potential problems and risks of  
       privatizing?  The LAO notes a number of potential  
       problems with privatization.  They are as follows:

       Accountability.  How can government ensure it does not  
       lose control and maintainan appropriate degree of  
       oversight and responsibility?

       Accurate Cost Comparisons.  Governments need to ensure  
       that they do not overstate the financial benefits of  
       privatization by conducting accurate cost comparisons.

       Realization of Net Benefits.  What steps are necessary  
       to capture the potential benefits of privatization for  
       taxpayers?  In some negative cases, private firms have  
       kept some financial benefits for profits.

       Quality Control.  What steps can be taken to ensure  
       quality is provided and maintained?

       Legal Considerations.  What is the nature of the  
       stateos legal liability for problems arising from  
       privatized programs?

       Service Disruptions.  How can government protect itself  
       against untimely disruptions in the provision of needed  
       public services by private entities with whom they  
       privatize, either due to lack of adequate performance  
       or withdrawal from services?





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       Transitional Workforce Problems.  How can government  
       best deal with the one-time government job losses that  
       will occur when private sector jobs replace government  
       jobs?

       Dismantling of Public Institutions and Skills.  What  
       are the short-term and long-term implications of  
       dismantling public institutions and public sector  
       skills in the event that privatization turns out to be  
       less than desirable?

6.   Current Forms of Privatization Within the Department of  
Corrections.

One of the most well-developed areas of privatization in the  
country today is within the area of adult and juvenile  
corrections.  As of December 31, 1994, the total rated  
capacity of all privatized adult correctional facilities under  
contract in the United States was 45,476 with the security  
levels ranging from minimum to maximum security inmates.  The  
rated capacity of the facilities range from as low as 32 and  
up to 1,500 inmates.

Although the Department of Corrections currently contracts for  
approximately 5,700 community correctional beds with various  
public and private entities as allowed under existing law,  
these beds are contracted with numerous providers at over 50  
different locations.  The capacities of these facilities range  
from 6 beds to 446 beds with the majority of the facilities  
with less than 80 beds.  Most of these facilities do not enjoy  
the high economy of scale that a larger facility would have.

The Department also currently reimburses local counties for  
incarcerating state prison inmates for short periods of time.   
The Department reimburses some counties at a maximum per diem  
rate of $59 per day.  In addition, the Department contracts  
with Alameda County to house parole violators with short  
prison revocation terms in one of its local county jails.  The  
Departmentos proposed 1996-97 budget includes a proposal to  
contract with Los Angeles County for about 3,000 vacant county  




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jail beds for state prison inmates.

Even though the Department currently has over 134,000 inmates,  
the Department of Corrections is unable to keep all the  
contract beds filled.  With an overall current prison  
overcrowding rate of approximately 181 percent, contract  
community correctional center beds are only at 97 percent of  
capacity and rarely ever overcrowded.

The main reason that the Department cannot provide more  
inmates to these correctional facilities is that the current  
laws are very specific as to what type of offenders may be  
housed in a community correctional facilities.  The contract  
facilities that currently house the roughly 5,700 inmates and  
parole violators are basically designed to house minimum  
(Level I) and a few minimum-medium (Level II) security  
inmates.

In addition to the current 5,700 community correctional center  
beds, the Department of Corrections is currently evaluating 19  
different proposals from private firms for the construction  
and operations of community correctional facilities for  
suitable inmates.  Although the Department is attempting to  
add 2,000 additional beds, the number proposed surpassed 9,000  
beds.

In addition to contracting for private incarceration, the  
Department of Corrections also contracts for a variety of  
other services such as inmate medical care, prison  
construction related services, and parolee services.

GIVEN THE DEPARTMENToS HISTORY OF CONTRACTING FOR THE  
INCARCERATION OF INMATES, WOULD NOT ANY PHILOSPHICAL ARGUMENT  
AGAINST PRIVATIZATION OF LARGER PRISONS BE CONTRADICTORY?

CAN THE STATE TAKE THE NEXT STEP TO NOW CONTRACT FOR LARGER  
PRISONS?  OR PRISONS FOR MEDIUM AND MAXIMUM SECURITY LEVEL  
INMATES?

7.   General Restrictions on State Agencies Contracting Out for  




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Services.

Article VII of the California Constitution, which describes  
the state civil service, is generally interpreted as  
restricting contracting outside of civil service to fulfill  
state tasks or activities.  As one court has recently  
restated:  o...subdivision (a) of 19130 is carefully crafted  
to permit personal service contracts to achieve cost savings  
only when they will not have detrimental effect on the  
integrity of the civil service system...the statute combines  
considerations of efficiency and economy with other interests,  
including those of state employees.o   CSEA v.  State of  
California, 199 Cal. App. 3d 840 (1988). 

Existing law, Government Code Section 19130 (a) specifies the  
authority for state agencies to ocontract outo for services in  
order to achieve cost savings.  That Section includes the  
following:

Contracting out is permissible to achieve cost savings when  
  specific conditions, including the following, are met...

The contracting agency clearly demonstrates that the proposed  
  contract will result in actual overall cost savings to the  
  state, provided that:

   In comparing costs, there shall be included the state's  
      additional cost of providing the same service as  
      proposed by a contractor.  These additional costs shall  
      include the salaries and benefits of additional staff  
      that would be needed and the cost of additional space,  
      equipment, and materials needed to perform the function.

   In comparing costs, there shall be included in the cost of  
      a contractor providing a service any continuing state  
      costs that would be directly associated with the  
      contracted function, such as those for inspection,  
      supervision, and monitoring. 

   Proposals to contract out work shall not be approved solely  




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      on the basis that savings will result from lower  
      contractor pay rates or benefits.  Proposals to contract  
      out work shall be eligible for approval if the  
      contractor's wages are at the industry's level and do  
      not significantly undercut state pay rates. 

   The contract does not cause the displacement of civil  
      service employees.

   The contract does not adversely affect the state's  
      affirmative action efforts.

   The savings shall be large enough to ensure that they will  
      not be eliminated by private sector and state cost  
      fluctuations that could normally be expected during the  
      contracting period.

   The amount of savings clearly justify the size and duration  
      of the contracting agreement.

   The contract includes specific provisions pertaining to the  
      qualifications of the staff that will perform the work  
      under the contract, as well as assurance that the  
      contractor's hiring practices meet applicable  
      nondiscrimination, affirmative action standards.

   The potential for future economic risk to the state from  
      potential contractor rate increases is minimal.

8.   Experience of the State of Florida Corrrectional  
Privatization Commission.

The model for the authoros proposed California privatization  
commission is based on the process recently adopted by the  
State of Florida.  Chapter 93-406, Laws of Florida, created  
the Correctional Privatization Commission for the purpose of  
entering into contracts for the construction and operation of  
private correctional facilities in Florida.  This commission  
was established independently of the Florida State Department  
of Corrections. 




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Since being established, the Florida Commission has authorized  
the construction and operation of six new correctional  
facilities:

      a.  Two adult medium-security level facilities with 750  
       beds each which are already operational;

      b.  One adult close medium-security facility with 1,318  
       beds which is still under construction; and,

      c.  Three juvenile facilities with 350 beds each which  
       are also still under construction.

The State of Florida Office of Program Policy Analysis and  
Government Accountability (OPPAGA) recently conducted a review  
of the progress made by the Florida Correctional Privatization  
Commission in contracting for prison capacity (Report No.  
95-12, 
November 13, 1995).  The report has not made any final  
conclusions as of yet but does provide some interesting  
observations.

In attempting to determine whether the private prisons  
provided any cost savings, the report noted that it was  
difficult to compare state and private institutions since they  
had different inmate programs.  In order to make a conclusion,  
the report stated that the Florida Department of Corrections  
and the Commission would have to first agree on comparable  
institutions for such a comparison.

The department attempted to contract for private facility  
capacity on its own.  In a comparison of privatization efforts  
between the department and the commission, the report noted  
that while the department attempted to facilitate  
privatization efforts by providing vendors with technical  
assistance, they hindered privatization by:

      a.  Requiring vendors to mirror the departmentos own  
       operations, which may limit cost savings and the  




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       identification of innovative approaches to corrections;

      b.  Establishing Requests for Proposals (RFPs) which  
       vendors perceived as overly demanding and highly  
       restrictive, thus, limiting the stateos choices of  
       vendors.  Only two vendors submitted reponses to the  
       departmentos RFP.

      c.  The department changed the mission 9 days before the  
       opening of its contracted private facility, thus  
       requiring physical plant and vendor program changes.

While the commission facilitated privatization by conducting  
open meetings to develop RFPs, by publishing RFPs which  
clearly delineated vendor  requirements and selection  
criteria, and by meeting with vendors who submitted losing  
bids, the report did note that there were two factors which  
possibly hindered privatization:

      a.  The contract award process requires that that the  
       omost qualifiedo vendor be selected.  The most  
       qualified vendor, however, happened to be the highest  
       bidder in four of six contracts awarded.  There were  
       lower bidders who were highly qualified but happened to  
       not be the most qualified.  The report estimates that  
       an additional $26 million could have been saved if the  
       law had been amended to allow the commission to select  
       the lowest bid from the three highest qualified  
       vendors.

      b.  The Florida law does not permit previous employees  
       from the Florida Department of Corrections to be on -  
       or work for - the commission within 2 years of that  
       relationship, nor does it allow the department to  
       review contracts even though the department is  
       obligated to abide by them.  The departmentos role with  
       contracted institutions is not clear.

SHOULD THE LEGISLATURE CONSIDER AMENDING THIS BILL TO REQUIRE  
THAT ONE MEMBER OF THE COMMISSION ALSO BE A MEMBER OF THE  




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STATE BOARD OF CORRECTIONS, EXCLUDING THE AGENCY SECRETARY AND  
THE DIRECTORS OF THE DEPARTMENTS OF CORRECTIONS AND THE YOUTH  
AUTHORITY?

HAS THIS BILL SUFFICIENTLY CLARIFIED THE ROLE OF THE  
DEPARTMENT OF CORRECTIONS? 

9.   Provision in This Bill for Revenues From Inmate Purchases.

This bill proposes to establish a new approach for handling  
revenues generated by the inmate canteen and phone uses in  
private facilities.  Currently, any revenue generated by  
inmate collect calls revert to the state General Fund Account.  
 In addition, the Departments of Corrections and Finance are  
authorized to pay for any services provided to operate or  
audit the institution canteen programs.

SHOULD THE LEGISLATURE OPERATE INMATE CANTEEN OPERATIONS AND  
TRUST ACCOUNTS, AND TREAT INMATE PAY PHONE REVENUE DIFFERENTLY  
THAN NORMAL STATE OPERATIONS?

10.  o Sunseto on the Commission in This Bill.

This bill creates a process for extending the commission by  
five additional years after the first five years at the  
discreation of either the Governor by Executive Order or by a  
Legislative Concurrent Resolution.  The normal process would  
be to have a bill approved by the Legislature and signed by  
the Governor.

IS THIS PROVISION UNIQUE ENOUGH TO BE CHALLENGED BY THE  
COURTS, ESPECIALLY THE PROVISION ALLOWING THE LEGISLATURE TO  
ACT BY RESOLUTION?

WOULD IT BE MORE APPROPRIATE TO SIMPLY ADOPT A TEN YEAR SUNSET  
REPEAL ON THE COMMISSION?

11.   Authority for New Prisons in This Bill. 






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This bill proposes the authorization of a combination minimum  
and minimum-medium security facility with a capacity of 1,000  
to 2,000 inmates.  However, existing law currently authorizes  
the Department to construct such facilities.  In fact, as  
mentioned above, the Department currently is reviewing RFPos  
(Request for Proposals) for an additional 2,000 such beds.

SINCE FUTURE BED SPACE NEEDS ARE FOR MEDIUM AND MAXIMUM  
SECURITY INMATES, SHOULD THE AUTHORIZATION FOR MINIMUM AND  
MINIMUM-MEDIUM SECURITY BEDS BE ELIMINATED? 

SHOULD THIS BILL SPECIFY THE TYPES OF NEW FACILITIES, OR WOULD  
IT BE MORE APPROPRIATE TO LEAVE THE BED CAPACITY UNSPECIFIED?































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12.   Related Legislative Discussion - SB 760 (Lockyer).

The Conference Committtee on SB 760 (Lockyer) is currently  
devising a muti-year plan for accomodating future inmate  
population needs.  That discussion includes the privatization  
of new prisons, as well as orealignmento of county/state  
inmate housing.  

SHOULD THIS BILL SPECIFY A NUMBER FOR PRIVATIZED NEW PRISONS  
OR WOULD IT BE MORE APPROPRIATE TO NOT MAKE THIS BILL SPECIFIC  
PENDING THE SB 760 CONFERENCE COMMITTEE DETERMINATION OF  
ACTUAL INMATE HOUSING NEEDS?

13.   Use of oper cello as Criteria in This Bill.  

This bill would prohibit the commission from contracting for  
prison construction facilities which have a per cell  
construction cost of $75,000.  Under a private contract, the  
state would not directly pay for any construction cost.  These  
costs would be included as part of the overall reimbursement  
schedule.  The Florida statutes allow the ocontracto with a  
private operator to set the bed capacity at a contracted  
facility and the number of inmates shall be between 90 and 100  
per cent of that number.

DOES THIS BILL USE AN APPROPRIATE CONSTRUCTION CAP TO ENSURE  
THAT EFFICIENT FACILITIES ARE CONSTRUCTED?  SINCE SOME PRIVATE  
FACILITIES WOULD NOT HOUSE A MEDIUM SECURITY INMATE IN A CELL,  
SHOULD THIS LEGISLATION CONSIDER ANOTHER METHOD OF CALCULATION  
FOR INMATE HOUSING?

14.   Additional Issues for Consideration.

This bill proposes a relatively complex new process and it may  
be anticipated that additional issues will be addressed in the  
future.  The author may wish to include the following issues  
in that discussion:  (1) providing for the authority and  
training of correctional officers in privatized facilities;  
(2) additional indemnification and liability issues; (3)  
additional changes or cross-reference in law necessary to  
ensure that the private facilities may operate in the same  










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manner as public facilities; (4) any additional changes  
suggested by the Florida experience? 


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