Appendix 3 : Attorney Richard Crane's Analysis of DOC's Solicitation and Contract with CCA
Attorney Richard Crane's Analysis of DOC's
Solicitation and Contract with CCA
September 16, 1998
Mr. John L. Clark
800 K Street NW
Washington, DC 20001
ATTN: H. Vic Loy
Dear Mr. Clark:
Per your request, I have reviewed the contract between the District of Columbia and Corrections Corporation of America for the housing of prisoners at CCA's Northeast Ohio Correctional Center located in Youngstown, Ohio.
Attached is my review of that contract. Based on that review, I have the following observations:
1. Awarding the contract on the basis of "price and other price-related factors" (Solicitation §L17.1) was inappropriate because is did not address the suitability of the facility, the experience of the staff, or the programs to be offered. An analysis of these important factors should have been undertaken before making a decision to award the contract. Although the solicitation did provide that the contractor address various requirements in its proposal, there was nothing in the evaluations section of the bid package which factored those elements into the evaluation. Likewise, the solicitation indicated that the District might make an on-site tour of the facilities being offered, but again there was nothing factoring anything reamed on those tours into the contract evaluation.
Finally, by requiring that the facility be ready to accept inmates within 14 days of the contract award, the District reduced the competition for this contract to practically zero. One of the important benefits of privatization is the competition it brings to the process. Writing a solicitation which negates all or most competition can result in the award of a contract to an entity which, while competent, may not have the same incentive to provide top level services.
2. The failure to put into the bid solicitation/contract many important items as noted throughout my review indicates that the document was prepared either hastily or by persons not familiar with prison privatization contracts.
3. The start-up period, pre-transfer approval and classification mechanisms were inadequate to provide a sufficient review of inmate records prior to sending them to the Youngstown facility. The lack of definitions of medium and high medium custody and the insufficient amount of time to review inmate records lends itself to the transfer of inappropriate inmates to the facility.
4. The failure to require sufficient training and background investigation of CCA's employees, or to require that seasoned employees be placed at the facility could have been the cause of many of the problems which resulted at the facility. Likewise, the failure to address issues which would have enhanced inmate satisfaction with the facility could have precipitated the problems which ensued.
5. While the contract calls tor a contract administrator it is unclear what his role was regarding the day-to-day operation of the facility and whether he was even on-site. Section E. 1.1 provides only that the District has the right to inspect for compliance with ACA Standards and equal protection standards. Privatization contracts of this size routinely have a full time monitor on-site to represent the interests of the governmental entity. The monitor's role would include reviewing and approving disciplinary and classification recommendations, auditing for compliance with the terms of the contract, and speaking with inmates and staff to get a feel for the organizational culture (e.g. us v. them; open communication) of the facility
To adequately review the solicitation and contract, the proposals which the District received in response to the bid solicitation should be reviewed. The CCA bid proposal should be reviewed, as well as other proposals, H any, to determine whether there were other bidders who could have taken some of these inmates rather than placing so many hardened inmates into one new facility. If I can assist in that endeavor or if you have questions concerning my review, please give me a call.
REPORT ON THE DISTRICT OF COLUMBIA DEPARTMENT OF
CORRECTIONS SOLICITATION AND CONTRACT WITH
CORRECTIONS CORPORATION OF AMERICA
Prepared by Richard Crane
§F.5 -- Start-Up Period
The start-up period requires that the Contractor be ready to accept inmates within 14 (fourteen) days of the contract award. This is too short a period for a facility which may not even be operational to get up to speed to receive inmates. Further, fourteen days is not sufficient time to review inmate records before the transfers began. (See §H.8.2, below) Finally, the contract does not set forth a ramp-up period for receipt of inmates and seems to contemplate that all of the inmates would be delivered to the facility within the 14-day start-up period. This is too short a period to assimilate 1440 inmates into a new facility, especially one with a large contingent of rookie correctional officers.
§H.8.2 - Pre-transfer Approval
This section requires that a pre-transfer application be made by the District for each inmate it contemplated sending to the Contractor. The application must be made at least seven (7) days prior to an inmate's transfer. It does not appear that the District is required to include the inmate's institutional disciplinary record in the application. The Contractor then has five (5) days to review the application. It the Contractor objects to the transfer, the parties are to attempt to resolve the objection "within ten (10) days from receipt of the transfer package". A literal reading of this section would thus require that the objection be resolved within 5 to 10 days of the Contractor first receiving the transfer application.
§H.8 -- Classification and Application
The section provides that the District will only send medium and high medium inmates in accordance with its classification system. The classification system is neither explained nor included as an attachment. The section also provides that the District shall at its own expense and within 45 calendar days take back an inmate if it is determined by the Contractor and the District concurs that the inmate is no long a medium or high medium inmate. Did the District determine that the CCA facility had sufficient resources to incarcerate maximum security inmates for up to 45 days.
* The fourteen day start-up prevented companies which did not have facilities already on-line from submitting proposals for consideration.
There are no definitions of medium and high medium custody and nothing to indicate how many medium security beds and how many high medium beds were needed by the District or how many of each CCA had available.
No on-site classification is required upon receipt of inmates.
This provision requires the Contractor to provide the District with a copy of its inmate rules and regulations, but does not require the District to review or approve the rules. At a minimum approval should have been required. A better provision would be to require the Contractor to utilize the District's disciplinary rules and regulations.
Assuming District inmates can earn good time, this provision would allow for the taking away of good time by the Contractor without approval by the District. This delegation of authority is probably a denial of due process. Most legal commentators feel that you cannot delegate a quasi-judicial function to a private entity without having a provision for review of the decision. Additionally, in the case of a private prison there is a perceived conflict of interest since the Contractor gets paid on the basis of how many inmates are incarcerated in its facility.
§H.10.1 - Firearms
This section provides that Contractor's employees are authorized to carry weapons in accordance- with federal law and the laws and regulations of the state in which the facility is located. Did CCA's proposal address this?
The authorization for use of deadly and non-deadly force refer to pertinent federal and state law but not to the District's own policies and procedures. Further, the contract does not say when this deadly force could be used. For example, could it be used to stop an escape or while transporting inmates away from the facility.
The contract should require, but it does not, that the District approve the Contractor's use of force policies and procedures.
§H.11 - Removal From Institution
This section states that inmates cannot be removed from the institution without prior written authorization except tor emergencies. or disasters. As written this would require approval even if an inmate is taken to a clinic in a non-emergency situation.
§H 12.2-- Reclassification
This section allows for reclassification of inmates without approval by the District or reference to whose classification system will be used. Typically, contracts require approval of the sending agency of any reclassification of an inmate.
§H.13 -- Escape
As it relates to the solicitation this provision is inadequate because it does require a showing that the jurisdiction in which the facility is located can prosecute a District inmate for escape.
As a contract provision, read together with §H.17.1, the Contractor would not be able to advise anyone, including law enforcement agencies, that an inmate had escaped. Nor could the Contractor release personal histories, photographs or other information concerning the escapee to assist law enforcement agencies with the inmate's recapture.
The contract does not address who is responsible tor inmate transportation if an escapee is found in another state or who will handle extradition proceedings.
§1.2 -- Drug-Free Workplace
This is perhaps the longest section of the contract yet it does not require drug testing of either the Contractors employees or of the inmates under their care.
§C. 1.13 - Mutual Aid Agreements
The Contractor is to develop mutual aid agreements with local law enforcement agencies. But, the contract does not require that any documentation be provided to the District that this has been done.
§E. 1 -- Right of Inspection
§H.3.2 -- Access to Records
The District has the right to inspect the facility at any time and the right to inspect books, records and accounts with respect to the operation of the facility. These provisions are extremely vague.
The contract should make clear that the Compliance Officer has the right to review facility records, inmate records, budget documents, disciplinary and incident reports, computer records, employee disciplinary records, incident reports, training records, or other documents maintained by the Contractor in connection with the contract. It should also be clear that the Compliance Officer has the right to speak with inmates and staff at any time. See the Attachment for typical monitoring provisions.
§G.2.1 and § G.4.3 - Contract Administrator
This section provides that a Contract Administrator will be responsible for the day to day monitoring and supervision of the contract. However, it does not set forth what that monitoring will entail. The Contractor is not required to provide an office, phone, furniture or office equipment for the Compliance Administrator.
The contract states that the Contract Administrator 'shall be required to certify receipt of satisfactory services prior to authorizing payments to Contractor. There is no definition of satisfactory services, no indication a to how a Contract Administrator would know if the services were satisfactory, and no formula for any reduction in the amount to be paid if the services are not satisfactory.
§1.1 - Disclosure of Information
This paragraph prevents the Contractor from releasing any information about its operation to local officials without written approval in advance from the District's contracting officer. See also, Section H.13 above.
§H. 14.3 -- Release of Inmates
This paragraph permits release of a District inmate in the State of Ohio. This is unusual as contracts of this type almost always require--as a pubic relations gesture--that the inmate be released in the jurisdiction where convicted.
The contract does not require that the Contractor submit a staffing pattern nor does it set forth employee training requirements or require that background investigations be conducted. All three of these items are standard in privatization contracts.
The following items are important in ensuring that inmates have some level of comfort at their new facility. Corrections administrators with experience dealing with out-of-state transfers believe that it is important to try to ensure that inmatesencounter as few changes as possible as a result of the transfer. Unfortunately this contract does not address the following items which are important to inmates:
§ C.188.8.131.52 -- Primary Health Services
This section fails to indicate what dental, optometry and mental health services are to be provided. Reference to state and federal law or ACA Standards does not adequately resolve this shortcoming.
§ C.184.108.40.206 -- Medical costs
This section requires approval by the District before the Contractor incurs any medical, psychiatric or dental expenses. However, § C.220.127.116.11 requires approval by the District only for costs in excess of the first $5000 per inmate.
§H.1.2 -- Cost Reimbursement Ceiling
This section provides that the Contractor shall not exceed the cost reimbursement ceiling specified in § C.18.104.22.168 ($864,800). The procurement was put out for facilities to house a minimum of 350 inmates at any given location. (§ L 17.2). Because the reimbursement ceiling was not tied to a formula per inmate, nor was there any language indicating the ceiling would be prorated based on the number of District inmates housed at the facility, the $8",000 would apply to each facility housing District inmates.
Section H.1.6 provides that the Contractor is net obligated to provide further medical services outside of the Contractors facilely or otherwise incur costs in excess of the cost reimbursement ceiling. specified in §C.22.214.171.124 until the contracting officer issues a written change order to revise upward the cost reimbursement ceiling. These sections taken together imply that the ceiling is illusory. It is a ceiling only until it is reached and then there will be an adjustment to the contract raising the ceiling upward. Also, see §H.1.7 and §H.1.7.
§H.2 -- Indemnification, Insurance and Defensive Claims
Although the amount of liability insurance is adequate, insurance for civil rights claims is not specifically required. The contract provide. that the District has the right to advance money to prevent the insurance from lapsing for non-payment, but the contract does not required that the District be either a named insured or that it receive all notices. Without these provisions, the District would not be aware that the insurance was about to lapse for non-payment.
There is no requirement for automobile or business interruption insurance. Vehicle insurance is especially important since the Contractor is responsible for transporting the inmates (See, e.g. §C1.2.10). Business interruption insurance would be important if the facility were totally or partially destroyed to fund the movement of prisoners elsewhere and the payment of a per diem which might be higher than that contracted for with CCA.
There is no provision for who is responsible tor defense of claims contending that inmates have been illegal transferred or held beyond their discharge dates.
§H.16 - Gratuities Upon Release
The section provides that the District will be responsible for the expense of clothing, gratuities, and other supplies when an inmate is released. However, it does not state what this includes. Therefore, if an inmate was released in Ohio, the Contractor would not know--by examining the contract--what to provide to the inmate.
There is no requirement that CCA have policies and procedures in place or that they be reviewed by the District.
CCA's proposal is not incorporated by reference into the contract, so CCA cannot be held to any promises they may have made therein.
There are no requirements as to the maintenance of the physical plant except in the food services section of the contract and no mention of the Contractor doing repairs and replacements within the facility.
There is nothing in the contract addressing breaches, nothing which would permit the withholding d payments, and nothing which would permit early termination of the contract except lack of appropriation.
There is nothing in the contract addressing how disputes between the Contractor and the District will be handled and nothing about jurisdiction or venue tor lawsuits.
Of interest is the fact that the base year price is adjusted upward for Option Year 1 by 3%, for Option Year 2 by 6.6%, for Option Year 3 by 3%, and for Option Year 4 by 3% with no explanation as to why the increase in the second option year is more than twice that of the other years.
§ H.2.7 -- Review at Insurance
The District was to receive and review insurance policies prior to the award date to determine if they provided "satisfactory coverage". Did the District receive the policies and were they reviewed?
§H 4 1 -- Facility Inspection
The contract states that the District has the right to conduct a pre-award inspection of the facility. Was this done?
§H.6.1 -- Authority to Conduct Business
The contract states that the Contractor shall be in good standing in the jurisdiction in which his facility is located. Did CCA submit information showing that it was in good standing?
Section C.1.2 - Policies
The contract requires the Contractor to perform services in accordance with District policies contained in Attachment J.7. What policies are these?
§1.12 and §1.13 -- Termination of Contract
Section 1.12 provides that it is mandatory if the District is privatized that the contract be terminated but §1.13 provides that in the event of a federal take over it is discretionary whether the contract is terminated. There is no indication as to why one would be mandatory and the other discretionary
Typical Contract Monitor Contract Provisions
A. The Operator shall be responsible for providing office space and equipment/furnishings for the Contract Monitor in close proximity to other administrative offices. The Contract Monitors office shall have windows, and its location, size, finishes and furnishing shall be comparable to the Operator's assistant facility administrator. The Contract Monitor's office door shall have a lock which is not master keyed and his office shall be provided with desks, chairs, computer equipment, telephones and dedicated telephone/fax/computer lines for his exclusive use.
B. The Authority, through tho Operator, shall provide clerical support for the Contract Monitor.
C. Tho Contract Monitor, in the performance of his duties shall have access at all times with or without notice, to inmates and staff, to all areas of the Facility and to all books, records (including financial reports relating to the Contract and employee disciplinary records) and reports kept by the Operator concerning the repair, maintenance and operation if the Facility. The Operator shall obtain written waivers from its employees permitting the Monitor to review employee applications and disciplinary records.
D. Other State employees and state and local officials shall have access to the Facility and records it is necessary to the performance of their duties.
E. The Contract Monitor may attend all staff meetings and hearings pertaining to the Facility, except for meetings involving individual employee disciplinary matters or meetings with representatives of the Operator's corporate office. The Contract Monitor may attend these meetings upon approval ot the Operator.
F. The Contractor shall prepare and submit to tho Contract Monitor such report. and provide such notice as arr required by the State.
G. Unless otherwise notified in writing by the Contract Monitor, the Contractor shall notify the State immediately by telephone and an incident report will be faxed to the State within 24 hours tor any:
b) Use of deadly force;
c) Use of force in which there is any injury requiring medical treatment;
d) Assault, including sexual assault, by an employee, inmate, or civilian in which there is any injury requiring medical treatment;
e) Disturbance involving three or more Inmates which is not brought under control within 10 minus.
f) Death of an Inmate;
g) Rape of an inmate;
h) Property destruction from which a living unit or support service area is rendered unusable
i) Hostage situation;
j) Use of chemical agents requiring medical treatment;
k) Life-threatening emergency involving an Inmate.
During business hours, the Contract Monitor shall be contacted. During non-business hours the Duty Officer shall be contacted.
All other incident reports must be faxed or delivered to the Contract Monitor by the Contractor within twenty-four (24) hours of the incident.
Disciplinary reports, re-classification requests, or diagnoses that an Inmate is HIV positive shall be delivered to the Contract Monitor weekly.
- Access to telephones by inmates; cost; commissions
- Laundry services
- Supplying weather-appropriate uniforms
- Providing clean linens on a regular basis
- Supplying clean mattresses, pillows and blankets
- Commissary operations, including what items must be provided, how much can be charged, and what will be done with the profits
- Provisions for an inmate grievance system
- Whether visits will be contact or non-contact; provisions for video conference visiting given the distance between the facility and the District
- Requirements specifying the number of inmates who can participate in education, vocational or drug treatment programs at any given time
- Inmate Property
- Inmate Trust Accounts
- Inmate pay
- Paper, stamps, envelopes, etc. for indigent inmates
- Amount of indoor and outdoor recreation time; providing recreation equipment
- Supplying inmates with hygiene items
- No mention of whether tobacco use is allowed, prohibited or restricted
- The contract contains no requirement that medical, mental health, dental, pharmaceutical and related health services be available 24 hours a day, seven days a week no requirement tor on-site nursing care; no requirement that Sick call be provided a certain number of days per week; no requirement for medical screening upon initial intake; no mention of inmate co-pay and whether this is allowed, required, or prohibited
- Access to telephones by inmates; cost; commissions