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What to look for when contracting for beds.

For Missouri, it was like the lull before the storm. By the end of 1993, the state's inmate population decreased by 1.19 percent, a figure considerably lower than its historical average increase of 1.46 inmates per day. But this lull didn't last long. In 1994, Missouri's inmate population increased 16 percent, with an average of new inmates admitted per day, which translates into the need for a 525-bed facility every 100 days.

The Missouri Department of Corrections (DOC) responded to this emergency by adding 1,684 beds at existing facilities and acquiring 480O beds at a mental hospital that was closing. In October 1995, a federal court modified a consent degree and allowed a medium security facility to add 300 more inmates. However, even taking these measures, the state clearly could not handle the expected continued growth in its prison population unless it built new facilities.

Faced with this dilemma, the department worked with the state executive and legislative branches to secure more than $360 million to fund an additional 9,500 secure beds in three years. But even after securing this funding in its 1995 and '96 fiscal year budgets, the state still projected that it would face a housing shortfall for at least part of fiscal years 1996 and '97 until funded beds were brought on line. The shortfall would be even more acute if projects were not completed on time, if population projects proved to be low or if new legislative mandates led to higher net inmate growth.

The state continued to pursue other options. In early 1995, the department considered converting National Guard camps, using tents at a reception and diagnostic center when the weather was mild and securing leased cell space from governmental and private entities. The National Guard camps proved to be a security problem and were never used, but tents were used for five months. The Missouri DOC then turned to another alternative. leasing beds on a short-term basis.

A Burgeoning Trend

In an October 1995 survey, the Texas Department of Criminal Justice reported that they states were leasing beds either from other governmental agencies or from private contractors; 14 states were exploring this option. Under these contracts, "vendors" furnish housing and are responsible for caring for the transferred inmates. These services are most often provided on a set per diem rate for each inmate.

As of Oct. 6, 1995, the following states report using contract beds: Alaska, California, Colorado, Iowa, Minnesota, Missouri, New York, North Carolina, Oregon, Utah and Virginia. The Federal Bureau of Prisons is contracting for approximately beds in Texas (see Table 1 on page 46).

Table 1. States Contracting for Beds or Facilities
 Private Bed
 State Beds/ Contract
 Facility Out of
 In State State

Alabama *
Alaska *
Arizona *
California *
Colorado * *
Florida *
Indiana *
Iowa *
Kansas *
Kentucky *
Louisiana *
Minnesota * *
Mississippi *
Missouri *
New Mexico *
New York * *
North Carolina *
Oklahoma * *
Oregon *
Rhode Island *
Tennessee *
Texas *
Utah *
Virginia *

After considerable evaluation of contract bed options, the Missouri DOC contracted with Crystal City, Texas, in June 1995, which also is leasing space to the state of Utah. Under the terms of the agreement, the city, acting as a political sub division of the state, is providing housing, care, treatment and programming for felony offenders from Missouri.

The Missouri Experience

Contracting for beds is not as simple as it may sound. Of immediate concern to any state corrections department trying to quickly secure beds are the parameters of the department's procurement process. Instead of going through a formal request for proposals and bid evaluation process, Missouri opted to contract under state-adopted provisions of the Interstate Corrections Compact Act, which authorizes the receiving and sending states to enter into contracts for "programs of cooperation for the confinement, treatment and rehabilitation of offenders" (Title 4 U.S. Code Annotated, Sec. 112; Sec. 217.525 et. seq., RSMo 19994. Thirty-eight states have complementary Interstate Corrections Compact legislation. Other states, such as Colorado and Utah, have relied on provisions related to emergency or abbreviated contracting requirements in their procurement laws. In any case, a contracting state is advised to be ready to document that they received the best price for the services secured when the contract was executed. It also should be able to explain that under the formal procurement process, the state would not have been able to secure beds as quickly or economically.

Another important consideration is the length of the contract. Like many other corrections departments, the Missouri DOC receives budget appropriations annually. However, the one-year contract that Missouri entered into has a no-fault termination clause requiring a 60-day notice. If appropriation funding is not received or is discontinued, the contract can be terminated without cause at any time with a 60-day notice. Utah's contract with the same vendor actually states that the contract is dependent on funding authorization based on available appropriations for each fiscal year. Although most governmental and private providers are aware of appropriation limitations, corrections departments should be certain not to enter into any standard long-term contractual obligations.

Once the length of the contract has been established, the corrections department will need to carefully consider all of the contract's other terms and provisions. The primary concern is cost, particularly because these expenditures will likely be made to out-of-state vendors and will not be "pumped" back into the local economy.

As of December 1995, the per diem rates for medium custody inmates ranged from $35 to $75 per day, depending on the services provided and the state of the market at the time the contract was signed. The latter half of 1995 has been a buyer's market because a number of Texas Department of Criminal Justice facilities (45,248) total beds in 1995, of which 24,109 were state jails) have come on line. The result has been that the demand for locally held, "paper ready" sentenced beds has been greatly reduced. Hundreds of private, county and city facility beds are now vacant because the state prisoners once housed there have been transferred to the new Texas state facilities.

Another factor that can drive per diem contract prices is a corrections department's use of a provider "broker." Such brokers or agents act as intermediaries, helping jurisdictions find available beds, mediate contract terms and provide inmate transportation. The broker's fee, however, will be absorbed somewhere in the per diem rate, therefore, a corrections department will need to consider this when deciding whether or not to use a broker.

In addition to considering price, corrections departments will need to ensure that transferred inmates receive the same constitutionally mandated rights that they are entitled to in the sending state. Federal and state case law on inmate access to medical treatment, education, programming, recreation, and law libraries and legal materials all remain inviolate. Because transferred inmates are sentenced offenders, not pre-trial detainees, they have the same rights as inmates who remain in the state system. This leads to a thorny problem. How does one handle family visits when the inmate is in a facility 1,000 miles away? Although there is no federal law that ensures the right to "reasonable visitation," state case law should be reviewed.

Just as important as the preceding considerations is the provider's status as an independent contractor, which insulates the sending state's liability as much as possible. The sending state and the receiving facility should be legally responsible for their own actions, the state defends actions challenging in the inmate's conviction and transfer, while the provider defends allegations on the conditions and terms of the confinement. Even with the appropriate terms in the contract, both the sending state and receiving entity undoubtedly will be named as party defendants. Sending states need to ensure that they may apply their state laws when interpreting the contract's terms.

Contract Execution

Once contract terms have been negotiated, the two parties must focus on executing the contract. The provider is responsible for delivering medical services. If not accounted for in a quoted per diem, added costs for X-rays, blood work, and dental and optometric services will reduce or eliminate a provider's profit margin. Missouri's biggest problem in contract performance has been establishing which medical services in the receiving facility are included in the term "customarily provided."

Both parties should anticipate the issue of law library access to emerge in their discussion of contract performance. States with paid legal staff may find providing legal assistance to transferred inmates to be less of a problem. Inmates do their own legal research or use inmate law clerks in Missouri, so the DOC had to provide a Missouri and federal law library for the inmates transferred to the Texas facility. Missouri has interpreted the "adequate law library" required in the Supreme Court case of Bounds v. Smith (430 U.S. 827, 52 L.Ed.2d 72 [1977] to mean that both state statute and case law should be provided, as well as U.S. Code Annotated and Federal Circuit and District Court cases. Inmate law clerks now have access to this through a CD-ROM provider.

Part of the contracting process is deciding which inmates to transfer. Missouri's contract states that inmates without significant medical or psychological problems and with at least one year to serve before release or parole eligibility may be transferred. This avoids continually transporting inmates back for special medical services or pre-release screening. In December 1995, Missouri began conducting initial parole eligibility hearings for transferred inmates through video conferencing. Employing this method maintains compliance with state statute, which requires that the offender "appear" before a panel and that a "personal interview" is conducted.

A second issue that the sending state must consider when choosing which inmates to transfer is the inmates' initial location. Missouri transfers inmates as they are processed through the state's reception and diagnostic center, before they begin to accrue personal property and meet other inmates. The state selects the eligible inmates and transfers them before they are assigned to a permanent facility. The advantage of this approach is that a facility is not disrupted when established inmates are removed and the remaining inmate population is not anticipating the next "pull" for out-of-state shipment. The disadvantage of the Missouri approach, which may soon force another option, is that population crowding relief is smaller and incremental, a relief in Missouri of only about 20 inmates every two weeks. A contract with a 500-bed facility could actually provide total relief in a week, because some of these providers rent planes that can transport large groups of inmates.

Asked how the Missouri Department of Corrections found a provider for leased beds, arrived at a price and finally executed a contract, the response is that the process was like buying a car. You think you know what you need, shop until you feel comfortable with the product and prices, negotiate and finally sign on the dotted line. Although some of the concerns addressed m this article clearly must be included in a contract, such as whether a department can legally contract for these services, the price and services needed are negotiable. Market timing and knowledge are everything.
COPYRIGHT 1996 American Correctional Association, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Missouri's Department of Corrections rents prison beds
Author:Brown, Stanley D.
Publication:Corrections Today
Article Type:Cover Story
Date:Feb 1, 1996
Previous Article:The population boom.
Next Article:The juvenile justice dilemma.

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