Federal Prisons Don't Have Information to Decide if Outsourcing Saves Cash

By Matthew Harwood

A new report from the government watchdog says no sound comparison analysis exists to price whether keeping inmates in federal low and minimum security prisons or in contracted private prisons is more cost-effective because the Bureau of Prisons does not require private prisons to submit comparable data collected on federal prisons.

Over the past 10 years, the cost of keeping federal inmates in prisons operated by private firms has soared from $250 million in 1996 to $700 million in 2006.

The BOP told the Government Accountability Office there are two reasons why they do not collect comparable data for a cost analysis from private prisons: federal regulations don't mandate comparing this information before selecting a contractor and collecting such data may increase the cost of the contractor's service.

Also, the types of prisoners held and programs run in federal prisons and private prisons differ. Federal prisons hold U.S. nationals that will, for the most part, be reintegrated into society. Therefore, programs are provided to help ensure an inmate's first stay is the last. Private prisons, however, mainly imprison non-U.S. citizens and foreign nationals convicted of a federal crime. Because these prisoners are removed from the country, there is no need for programs geared toward preventing a return to prison.

Because there is no comparable data, the GAO report says:

...BOP is not able to evaluate and justify whether confining inmates in private facilities is more cost-effective than other confinement alternatives such as building new BOP facilities.

To rectify this, the GAO recommends the BOP develop a way to collect comparable data across low and minimum security prisons to methodologically determine the most cost-effective way of proceeding—whether that be through privatization or expanding the BOP system further.

The BOP disagreed with the GAO recommendations, saying there is no reason to do such cost comparison because they do not house "soley criminal aliens" and do not expect to receive funding in the future to do so.


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