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New Hampshire drops bid to privatize state's prisons

Last modified: 4/5/2013 12:21:08 AM
The state announced yesterday that it has dropped its bid to privatize the state’s prisons because none of the four companies that wanted the job showed they could meet court-ordered requirements for inmate care.

The private prison companies also proposed wages and benefits that are half what security staff at the prisons earn now, according to two reports on the bids released yesterday by the state Department of Administrative Services and Department of Corrections.

“The proposals exhibited a lack of understanding of the overarching legal requirements placed upon the (corrections department) relating to the court orders, consent decrees and settlements which, in large part, dictate the administration and operation of their correctional facilities and attendant services to the inmate populations,” read the report. It concluded that meeting those requirements for inmates’ medical and mental health care “appeared to be too great a burden for the vendors.”

The state’s decision to cancel the bid puts prison privatization off the table for now unless Gov. Maggie Hassan or the Legislature directs the state to reissue the bid, said Michael Connor of the state Department of Administrative Services. That seems unlikely.

Last month, the House passed a bill prohibiting the state from privatizing prisons, and Hassan’s spokesman reiterated her opposition to prison privatization yesterday.

“The governor opposes allowing private companies to operate New Hampshire’s prisons as the track record of such arrangements in other states has not demonstrated success in terms of protecting taxpayer dollars while maintaining the highest level of public safety,” spokesman Marc Goldberg said in an email. “And the lack of clear explanations in bids for how private operators would meet court orders governing corrections speaks to her concerns.”

Goldberg said Hassan is instead focused on building a new women’s prison. The House yesterday passed a capital budget that includes $38 million for the prison, but the capital budget still needs the state Senate’s approval.

Harsh critics

The state employees union and the American Friends Service Committee have been especially harsh critics of privatization and had predicted private companies would cut services to inmates and reduce employee wages and benefits. Both welcomed yesterday’s news and called on the Senate to pass the House bill barring prison privatization.

“Hopefully we will not be spending state dollars on considering this option anymore,” said Arnie Alpert, the state program coordinator for the American Friends Service Committee. “This report takes privatization off the table. Now it’s time to close the door.”

Jeff Lyons, corrections spokesman, said yesterday the reports “speak for themselves.”

State corrections and administrative service officials began investigating prison privatization in 2011 at the direction of former governor John Lynch and the last Legislature. Four companies submitted 17 proposals that were so voluminous and complex that state officials hired a private consultant, at a cost of $171,000, to help them evaluate the bids.

The bidders were Corrections Corp. of America, the GEO Group, Management & Training Corp. and the NH Hunt Justice Group. All submitted bids for a new men’s prison and a hybrid prison that would house men and women. None offered proposals for just a women’s prison, one of the state’s requests. And only one company submitted a bid to renovate an existing prison that the state would run.


After studying the bids for months, both the state and the consultant, MGT of America, came to the same conclusion: None of the companies provided the state all the information it requested, according to their reports.

MGT of America cited several deficiencies in its report:

∎ Some of the companies said they would hire some corrections jobs out to a subcontractor but failed to describe how the subcontract would do the work.

∎ Some bids provided enough security staff for indirect supervision but not the direct supervision preferred by the state.

∎ A number of the proposals lacked enough information on what programs would be offered to inmates or how many seats would be available to inmates.

∎ When it came to meeting the court mandates for inmate care and programming, some companies said they’d satisfy their obligation but didn’t say how.

∎ When it came to wages, MGT said the private companies can pay lower wages in the South and the West, where they operate prisons now, because the unemployment rates there are higher. And, New Hampshire has the second-highest median household income in the country. Those lower wages would lead to high turnover and untrained staff here, MGT said.

That lack of detail, the state and the consultant said, made it impossible for the state to accurately compare the state’s corrections costs against those proposed by the private company. The reports did not reveal what the private companies proposed spending per inmate.

Two of the companies responded to requests for comment yesterday.

“For 30 years, (Corrections Corp. of America) has worked with all levels of government to provide safe, secure correctional services and quality rehabilitation programming at cost savings to taxpayers,” said Mike Machak, a spokesman for CCA of Tennessee, in an email. “We work with all of our partners to ensure compliance with any legal requirements and have successfully helped other departments that have court orders, consent decrees and settlements. We are confident we would be able to address New Hampshire’s specific needs but respect the state’s decision.”

Issa Arnita, spokesman for Management & Training Corp. of Utah, offered a similar response.

“We respect the state’s decision to cancel the private prison RFPs,” Arnita said in an email. “We understand they are trying to do what’s in the best interest of the taxpayers of New Hampshire. MTC successfully operates 22 correctional facilities in eight states. We’ve been a strong partner with both the federal and state governments over the past 25 years in operating safe and secure facilities. We also provide inmates with meaningful education and vocational training to help them effectively transition back to society.”

Not all bad

Despite its criticism, MGT of America cited some strengths in the proposals, too.

Without identifying the companies, MGT said three of the four companies had “excellent” records on getting their prisons in other states accredited. MGT said some of the companies also have comprehensive security protocols. And one company submitted a “robust” plan for behavioral health that would have met most of the state’s requirements, the report said.

And, MGT said, a number of the companies presented training plans that met or exceeded the state’s requirements.

When state officials realized the bids did not include enough information for the state to accurately compare a private company’s costs against the state’s, they shifted their focus to evaluating the state’s current and future prison expenses.

The state spends about $37,000 a year to house an inmate, according to the report. In 20 years, the annual cost for a male inmate will climb to $61,000, while the annual cost for a female inmate will be $74,600, the state’s report said.

Those increases include an annual inflation rate of 2.5 percent but also factor in the cost of building a new women’s prison and four new 64-bed transitional units for male inmates. The report estimates that the state will spend nearly $80 million between 2014 and 2019 on those new prison buildings.

To read the full reports, visit admin.state.nh.us/purchasing/vendorresources.asp.

(Annmarie Timmins can be reached at 369-3323, atimmins@cmonitor.com or on Twitter @annmarietimmins.)


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