Let the Rookies Up to Bat: Reevaluating Legislation and Agency Practices in the Procurement of Private Prison Management Services

By Kim, Terence | Columbia Journal of Law and Social Problems, April 1, 2016 | Go to article overview

Let the Rookies Up to Bat: Reevaluating Legislation and Agency Practices in the Procurement of Private Prison Management Services


Kim, Terence, Columbia Journal of Law and Social Problems


I. INTRODUCTION

The use of private firms to operate correctional facilities has seen rapid growth in the United States since the very first private prison contracts in the 1980s.1 Despite this increase in the utilization of the private sector to meet correctional needs, the number of firms that seem able to win large private prison management contracts on the state and federal level is small.2 Three corporations presently operate the vast majority of such private prisons: the Corrections Corporation of America (CCA), the GEO Group (GEO), and the Management and Training Corporation (MTC).3 In comparison, a more diverse group of firms serve as the operators of community-correctional and re-entry facilities, such as halfway houses (CC-RE Facilities).4 Although operating a CC-RE Facility is not a perfect credential toward successfully operating a secure correctional or detention facility,5 having experience in the operation of CC-RE Facilities is exactly how the first private prison operators were able to win their first contracts in the birth of prison privatization.6 The wall that seems to exist now between firms that are permitted to operate private prisons and those that can only operate private CC-RE Facilities, then, appears to be a non-essential and anti-competitive development in the private prison industry.

A large factor in the consolidation of correctional contracts to CCA, GEO and MTC is that these three firms were the first to provide large-scale correctional services in the United States.7 Although simply being first to enter a market generally bestows some first-mover advantage to a firm, being first in an industry where federal and state legislation have given past performance disproportionately great weight bestows an amplified advantage.8 This legislation hinders the agency procurement process,9 leading to the award of contracts to the same few private firms.10 The general lack of diversity is certainly not for lack of other private prison management corporations trying to win these large contracts.11 Without reform to the legislation defining the procurement processes used by the federal and state governments, the trend of favoring the same few private prison firms can be expected to continue into the future.

This Note argues that the present state of legislation and regulation controlling procurement in the private prison industry, and the procurement processes of the agencies themselves, is harmfully anti-competitive and past due for reform. This Note does not discuss the various arguments for or against the use of private prisons as a political or moral matter.12 Instead, the foin cus will be on the economic development of the market for private prison contracts and the state of that market today. Part II explains the basic types of procurement processes, outlines their various costs and benefits and highlights the dangers inherent in each. Part III discusses the growth of the private prison industry at both the federal and state levels and the profitable opportunity that contracts for the operation of private prisons present to those who wish to enter the market. Part IV identifies the problematic federal and state legislation that has contributed to the oligopolistic state of the market for private prison management services. Part V demonstrates the inherent favoritism toward established providers that is present in the procurement documents used in the solicitation of bidders to manage private prisons. Part VI proposes solutions to the aforementioned problems in federal and state legislation and agency procurement processes.

II. THE PROCUREMENT PROCESS

Various types of procurement methods are commonly used by governments to solicit and evaluate bidders offering private prison management services. The entity that solicits bidders through a procurement document is also known as the "issuer" - for the purposes of this Note, the important issuers are the federal and state agencies responsible for incarceration and detention. …

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