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Federal Bureau of Prisons
Letter to Senator with concerns about for-profits.

U.S. Department of Justice
Washington, DC 20534
June 20, 2002

The Honorable Don Nickles
United States Senate
Washington, DC 20510

Dear Senator Nickles:

This is in response to your request for the Bureau of Prisons (BOP) to reply to a letter you received from Richard Loud, President, Corrections U.S.A., regarding prison privatization. The Bureau has contracted with the private sector for the confinement of certain Federal inmates for decades. The BOP started contracting with the private sector for space in non-secure, community-based halfway houses in the 1960's. In the mid-1980's, we began contracting for bed space to confine low-security, non?U.S. citizen inmates with relatively short sentences. That effort gave our agency the needed flexibility to manage a rapidly growing inmate population and to help control crowding.

....With the ongoing growth of the Federal inmate population, the Bureau's utilization of private sources for secure bed space has grown significantly in the recent past. We contract for private corrections beds to complement the facilities owned and operated by our agency. Currently, the Bureau has approximately 13,500 inmates in secure adult facilities operated by private corrections firms (through direct contracts with the private prison or through intergovernmental agreements in which the local government contracts with a private prison company). We have had success in contracting with the private sector for the confinement of minimum-security and low-security inmates (populations for which the private sector has established an acceptable record). We have concerns with privatization for the confinement of inmates classified as medium-security or high-security, in accordance with Federal classification standards. Over the years, the private sector has had significant problems with the incarceration and management of medium-security and high-security offenders. In particular, the private sector has not demonstrated the ability to manage high-security sentenced inmates for long-term confinement, though they have held such offenders as short-term detention cases.

The Bureau carefully evaluates past performance prior to making a contract award for private secure corrections services. Likewise, the Bureau has implemented a comprehensive oversight process to monitor contractor performance after award. The Bureau also assesses a contractor's financial condition, including a routine review of financial information, as a way to determine responsibility prior to contract award and the exercise of each contract option. Contracts also include a bankruptcy clause which requires the contractor to notify the Bureau within 5 days of initiating bankruptcy proceedings. With regard to cost efficiencies, a recently-completed comparison of the cost of the privately-operated prison in Taft, California, with similar Bureau facilities found that the BOP institutions were somewhat less costly than the private facility. I trust this information will be useful as you continue to examine prison privatization. Please contact me if I can provide more detailed information or be of any further assistance.


Thomas R. Kane
Assistant Director for
Information, Policy, and
Public Affairs

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