United States Government Accountability Office

GAO

Report to the Subcommittees on
Commerce, Justice, and Science,
Senate and House Appropriations
Committees

October 2007

COST OF PRISONS
Bureau of Prisons
Needs Better Data to
Assess Alternatives
for Acquiring Low and
Minimum Security
Facilities

GAO-08-6

October 2007

COST OF PRISONS
Accountability Integrity Reliability

Highlights
Highlights of GAO-08-6, a report to
congressional committees

Bureau of Prisons Needs Better Data to Assess
Alternatives for Acquiring Low and Minimum Security
Facilities

Why GAO Did This Study

What GAO Found

Over the last 10 years, the cost to
confine federal Bureau of Prison
(BOP) inmates in non-BOP
facilities has nearly tripled from
about $250 million in fiscal year
1996 to about $700 million in fiscal
year 2006. Proponents of using
contractors to operate prisons
claim it can save money; others
question whether contracting is a
cost-effective alternative. In
response to Conference Report
109-272, accompanying Pub. L.
No. 109-108 (2005), this report
discusses the feasibility and
implications of comparing the costs
for confining federal inmates in low
and minimum security BOP
facilities with those managed by
private firms for BOP. GAO
reviewed available data on a
selection of 34 low and minimum
security facilities; related laws,
regulations, and documents; and
interviewed BOP and contract
officials.

A methodologically sound cost comparison analysis of BOP and private low
and minimum security facilities is not currently feasible because BOP does
not gather data from private facilities that are comparable to the data
collected on BOP facilities. GAO’s past work has shown that generally
accepted evaluation criteria for comparing private and public prisons calls for
the comparison to be based on a variety of factors, including selection of
facilities with similar characteristics (i.e., staffing levels and educational
programs offered) and quality of service (i.e., levels of safety and security for
staff, inmates, and the general public). However, according to BOP officials,
BOP and private facilities differ in characteristics and quality of service, and
BOP does not collect or maintain sufficient data on private facilities to
account or adjust for these differences in a cost comparison. According to
private contractors, some characteristics data are maintained for their own
purposes, but at present the data are not in a format that would enable a
methodologically sound cost comparison. BOP officials stated that there are
two reasons why they do not require such data of contractors. First, federal
regulations do not require these data as a means for selecting among
competing contractors. Second, BOP believes collecting comparable data
from contractors could increase the cost of the contracts, but BOP officials
did not provide support to substantiate these concerns.

What GAO Recommends
GAO recommends that BOP
develop a cost-effective way to
collect comparable data across low
and minimum security facilities and
conduct analyses that compare the
cost of confining federal inmates in
these facilities, consistent with
OMB requirements. BOP disagreed
with GAO’s recommendation and
said it did not see the value of
developing a methodology to
compare facilities. GAO believes
this comparison puts BOP in the
best position to weigh alternatives
for confining inmates to help
ensure it is using the most costeffective alternative. OMB did not
comment on this report.

Without comparable data, 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. The Office of
Management and Budget (OMB) requires agencies to consider and weigh
various alternatives using analyses that help determine the benefits and costs
of making decisions about the acquisition of assets, such as prisons.
According to OMB requirements, selecting alternatives to meet capacity needs
without adequate analysis by federal agencies has resulted in higher costs
than expected. OMB provides guidance to help federal agencies analyze and
weigh the costs and benefits of alternatives, which is important for BOP
because BOP officials stated that the population for low and minimum
security facilities continues to grow. OMB staff also added that they need
more and better cost comparison information on the various alternatives for
BOP’s low and minimum security facilities to help them better understand the
long-term costs and benefits of owning versus the short-term costs and
benefits of privatization. Without analyses consistent with OMB requirements,
it is difficult to know whether BOP is deciding on the most cost-effective
alternative for acquiring low and minimum security facilities to confine
inmates, including whether to contract, build, or expand.

To view the full product, including the scope
and methodology, click on GAO-08-6.
For more information, contact Eileen Larence
at (202) 512-6510 or larencee@gao.gov.

United States Government Accountability Office

Contents

Letter

1
Results in Brief
Background
BOP Lacks Data Needed to Perform a Methodologically Sound
Cost Comparison and Is Not Positioned to Evaluate Alternatives
for Confining Inmates in Low and Minimum Security Facilities
Conclusions
Recommendation for Executive Action
Agency Comments and Our Evaluation

10
18
18
18

Appendix I

Objectives, Scope, and Methodology

22

Appendix II

Comments from the Federal Bureau of Prisons

28

Appendix III

GAO Contact and Staff Acknowledgments

32

Related GAO Products

4
8

33

Tables
Table 1: List of Low and Minimum Security Facilities within our
Scope

24

Figure 1: BOP Inmate Population at the End of Fiscal Year 2006

9

Figures

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GAO-08-6 Cost of Prisons

Abbreviations
BOP
FAR
IGA
NIJ
OMB

Federal Bureau of Prisons
Federal Acquisition Regulation
intergovernmental agreement
National Institute of Justice
Office of Management and Budget

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GAO-08-6 Cost of Prisons

United States Government Accountability Office
Washington, DC 20548

October 5, 2007
The Honorable Barbara A. Mikulski
Chair
The Honorable Richard C. Shelby
Ranking Member
Subcommittee on Commerce, Justice, Science, and Related Agencies
Committee on Appropriations
United States Senate
The Honorable Alan B. Mollohan
Chairman
The Honorable Rodney Frelinghuysen
Ranking Member
Subcommittee on Commerce, Justice, Science, and Related Agencies
Committee on Appropriations
House of Representatives
At the end of fiscal year 2006, approximately 83,000 federal, adult male
inmates within the Department of Justice’s Federal Bureau of Prisons
(BOP) were housed or confined in low or minimum security facilities, and
in recent years BOP has relied on means other than building and operating
its own facilities to confine many of these inmates, such as contracts with
private sector firms. BOP’s operating budget nearly doubled over the last
decade from approximately $2.6 billion in fiscal year 1996 to just under
$5 billion in fiscal year 2006. In fiscal year 1996, BOP received
approximately $250 million of its $2.6 billion for contract confinement,
including confining inmates in facilities owned and operated by private
contractors and by state and local governments under intergovernmental
agreements (IGA) with BOP.1 By fiscal year 2006, the amount for contract
confinement, including the cost of confining about 19,000 inmates housed
in private and IGA facilities, had nearly tripled to $700 million of BOP’s
$5 billion operating budget.
There has been an ongoing debate over the privatization of prisons, that is,
contracting for the management of prisons by private firms, whether the

1

IGAs are agreements between BOP and state and local governments to confine BOP
inmates in state and local prison facilities.

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GAO-08-6 Cost of Prisons

prisons are owned by the private sector or by the government. In
particular, proponents of privatization claim it can save money without
reducing the levels or quality of service such as safety and security (i.e.,
levels of safety and security for staff, inmates, and the general public),
whereas others have questioned whether privatization is a cost-effective
alternative to publicly run facilities. Federal guidance from the Office of
Management and Budget (OMB) requires that economic and cost
comparison analyses be conducted to demonstrate the benefits of
privatization, including how it would reduce the government’s long-term
costs. BOP’s use of contracting to meet inmate bed space needs at low and
minimum security facilities, in particular, has generated significant interest
in the comparative costs of confining federal inmates in BOP, private, and
IGA facilities. Conference Report 109-272, accompanying the Science,
State, Justice, Commerce, and Related Agencies Appropriations Act of
2006,2 directed GAO to compare the costs of confining federal inmates in
BOP, private, and IGA low and minimum security facilities.
Regarding IGA facilities, BOP has used IGAs for a number of years to
confine low and minimum security inmates on a short term basis—less
than 45 days—for the purposes of transferring them between facilities or
as halfway houses when inmates are released from prison. These IGAs are
in hundreds of locations throughout the country. However, according to
BOP officials, over time four of the IGAs—located in western Texas, in the
cities of Big Spring and Eden, Texas, and Garza County and Reeves
County, Texas—evolved into facilities confining inmates on a long-term
basis, similar to BOP-owned and -operated low and minimum security
facilities. BOP officials told us that these four facilities confined
approximately 83 percent of BOP’s total IGA inmate population. During
the course of our review, BOP did not renew the four Texas IGAs. Instead,
BOP awarded five contracts to confine inmates in facilities with
approximately 10,000 beds, which are about 3,000 more beds than the
capacity provided under the four IGAs.3 According to BOP officials, BOP
chose to compete the bed space associated with these former agreements
partly because the four Texas facilities outgrew their original purpose of
confining small populations for short periods of time. BOP officials also
stated that acquiring bed space via contracts rather than IGAs enhances
their ability to oversee operations at the facilities. Because BOP no longer
plans to use IGAs to confine inmates on a long-term basis, we shifted the

2

Pub. L. No. 109-108, 119 Stat. 2290 (2005).

3

BOP awarded these five contracts on January 17, 2007.

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GAO-08-6 Cost of Prisons

focus of our review to BOP and private facilities only. Also, we did not
include the five new contracts in the scope of our review because no
federal inmates were housed under the new contract arrangements during
fiscal years 2002 through 2006, the period covered by our review.
This report discusses the feasibility of comparing the cost of confining
inmates in low and minimum security facilities owned and operated by
BOP with the cost of confining these inmates in private facilities and the
implications this has for making decisions on low and minimum security
confinement.
To address this objective, we reviewed applicable laws, regulations, and
studies on BOP programs, prison management, and contracting
requirements.4 We also examined available BOP and private facility
documents on the management of low and minimum security facilities. In
addition, we met with BOP officials and worked with them to identify
potential BOP and private facilities that could be compared considering
basic criteria, including inmate gender (male or female inmates, assuming
that costs for programs and services might be different depending on
gender) and whether cost data might be available on the individual facility
level for a 5-year period covering fiscal years 2002 through 2006.5 Our
discussions with BOP officials resulted in the selection of 34 low and
minimum security facilities managed by BOP and private operators that
confined federally sentenced male inmates on a long-term basis over the
5-year period. Specifically, we focused on (1) 27 BOP-owned and -operated
low and minimum security facilities that are not on the same campus as
medium and high security prisons (BOP does not isolate the costs of
operating individual low and minimum security facilities located on the
same campus with high and medium security facilities), and (2) 7 facilities
operated by private firms under contract to BOP.
Once we selected facilities, we interviewed BOP officials in Washington,
D.C. and private contractors at their corporate headquarters to determine
what data on prison costs and characteristics would be available. Where
possible, we gathered and analyzed available data on the facilities and

4
According to BOP, prison programs include services and classes that provide productive
use-of-time activities and facilitate the successful reintegration of inmates into society,
consistent with community expectations and standards.
5

Because the private facilities we selected for our review do not confine female inmates or
juveniles, we excluded all female and juvenile BOP facilities from our analysis.

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GAO-08-6 Cost of Prisons

examined whether the data would lend themselves to a comparison based,
in part, on key factors—such as similar facility characteristics and levels
of service—needed to do a methodologically sound comparison as
outlined in our 1996 report that provides lessons learned for comparisons
of private and public correctional facilities.6 In addition, we examined BOP
efforts within the context of OMB requirements for capital planning and
space acquisition. We also met with OMB staff responsible for BOP budget
review and preparation to discuss BOP’s efforts to acquire space to
confine inmates in low and minimum security facilities in order to
determine what information BOP provides OMB on capital investments,
how this information is used to inform decisions, and what additional
information OMB needs to make informed decisions. In addition, we met
with officials from the Department of Justice’s National Institute of Justice
(NIJ) to discuss NIJ’s current and past work on prison privatization and
we met with experts from Florida State University College of Criminology
and Criminal Justice and from the JFA Institute—a nonprofit agency
conducting justice and corrections research for effective policy making—
to further our understanding about prisons and the complexities of
comparing the cost of operating private and public prisons. Appendix I
contains more detailed information on our scope and methodology.
We conducted our work from May 2006 through August 2007 in
accordance with generally accepted government auditing standards.

Results in Brief

It is not currently feasible to conduct a methodologically sound cost
comparison of BOP and private low and minimum security facilities
because these facilities differ in several characteristics and BOP does not
collect comparable data to determine the impact of these differences on
cost. Our past work has shown that generally accepted evaluation criteria
for any comparative study of private and public prisons call for the
comparison to be based not just on operational costs, but on a variety of
factors including selection of facilities with similar characteristics (i.e.,
staffing levels and programs offered) and quality of service. This is to
ensure that cost comparison analyses either compare similar facilities or
can account for differences in order to address whether facilities
operating at lower costs can provide the same or better levels of service as
those operating at higher costs. However, according to BOP officials and

6

GAO, Private and Public Prisons: Studies Comparing Operational Costs and/or Quality
of Service, GAO/GGD-96-158 (Washington, D.C.: Aug. 16, 1996).

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GAO-08-6 Cost of Prisons

private contractors, facilities differed in characteristics and in quality of
service. Although BOP collects and maintains characteristic data on its
own low and minimum security facilities, BOP does not gather data on
private contract facilities that would enable us or them to account or
adjust for any differences. While private contractors told us that they
maintain some data for their records, these officials said that the data are
not readily available or in a format that would enable a methodologically
sound cost comparison at this time. According to BOP officials and private
contractors,
•

In terms of facility characteristics, BOP facilities generally confine U.S.
citizens, and programs are designed to teach inmates skills that they
can use when they are released so as to avoid returning to prison. By
contrast, private facilities primarily confine criminal aliens—non-U.S.
citizens or foreign nationals who are serving time for a U.S. federal
conviction. Programs that focus on preventing returns to prison are not
required of private facilities because criminal aliens are released for
removal from the country and are not expected to return to U.S.
communities or BOP custody.

•

BOP does not require private facility data comparable to what it
maintains for its own facilities with regard to safety and security issues
and, consequently, a facility’s quality of service. These include data on
the number of inmates attended to by health care professionals due to
misconduct, staff turnover rates, and the experience level of the staff.

BOP does not collect comparable data on private facilities needed to
conduct a methodologically sound cost comparison with BOP low and
minimum security facilities because (1) federal regulations do not require
BOP to do so when selecting among competing contractors, and
(2) according to BOP officials, collecting additional facility characteristic
and quality of service data could add costs to contracts. Regarding the
latter, BOP’s Senior Deputy Assistant Director stated that private
contractors might charge higher contract prices as a result of having to
collect and provide this information but that BOP has not determined what
these additional costs would be. BOP officials told us they are committed
to contracting to confine inmates in low and minimum security facilities.
They said that their construction priority is medium and high security
facilities because inmates in medium and high security facilities are at
higher risk in terms of their behavior (i.e., rates of misconduct, assaults,
and history of violence) and private contractors have yet to demonstrate
the ability to handle these higher security populations. According to BOP

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GAO-08-6 Cost of Prisons

officials, because of its commitment to contracting, BOP has not recently
considered, nor does it plan to evaluate contracting in relation to other
alternatives for inmates confined in low and minimum security facilities.
These alternatives can include constructing new BOP low and minimum
security facilities, acquiring and using excess military properties, or
expanding or renovating existing BOP facilities.
While BOP does not need to collect comparable data for selecting among
contractors, the purpose of analyzing these data is to evaluate and justify
whether confining inmates in private facilities is more cost-effective than
these other confinement alternatives. In fact, OMB requires agencies to
consider and weigh various alternatives using analyses, such as benefitcost or cost-effectiveness analyses, when making decisions about the
acquisition of capital assets, such as office buildings, hospitals, schools,
and prisons.7 According to OMB, selecting alternatives to meet space
requirements without adequate analysis by federal agencies has resulted in
higher costs than anticipated. Additionally, OMB staff stated that they
need more and better cost comparison information on the various
alternatives for BOP’s low and minimum security facilities to help better
understand the long-term costs and benefits of owning versus the shortterm costs and benefits of privatization. These analyses are especially
important because BOP officials stated that the population for these
facilities continues to grow. Without such analyses, it is difficult to know
whether BOP is deciding on the most cost-effective alternative for
acquiring low and minimum security facilities to confine inmates,
including whether to contract, build, or expand.
Recognizing that there is a cost associated with gathering and analyzing
additional data needed to compare costs across BOP and private facilities,
we are making one recommendation designed to help BOP evaluate
alternatives for confining inmates in low and minimum security facilities.
We are recommending that the Attorney General direct the Director of
BOP to develop a cost-effective way to collect comparable data across

7

Office of Management and Budget, Executive Office of the President, OMB Circular No.
A-11, Part 7, Capital Programming Guide (2006). A benefit-cost analysis is a systematic
quantitative method of weighing the costs associated with implementing or operating an
alternative against any benefits expected from the alternative. A cost-effectiveness analysis
is a systematic quantitative method for comparing the cost of alternatives when such
alternatives achieve the same benefits. According to OMB, it is a less comprehensive
technique than a benefit-cost analysis, but can be appropriate for ranking alternatives when
the benefits of competing alternatives are the same. An alternative is considered costeffective when it is determined to have the lowest cost for a given amount of benefit.

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GAO-08-6 Cost of Prisons

BOP and private low and minimum security facilities confining inmates
under BOP’s custody, and design and conduct methodologically sound
analyses that compare the cost of confining inmates in these facilities in
order to consider contracting among other alternatives for low and
minimum security confinement, consistent with OMB requirements.
BOP disagreed with our recommendation and stated that it does not own
or operate facilities to house solely criminal aliens. BOP also said it does
not expect to receive funding to construct such low security facilities.
Therefore, BOP does not believe there is value in developing data
collection methods to compare costs of confining these inmates in private
facilities with other alternatives for confining inmates. BOP further
commented that, through open competition, it has been able to determine
a fair and reasonable price for its existing contracts and said that requiring
contractors to provide specific comparable data would have the potential
to increase current contract costs at a time when BOP is facing budget
constraints. BOP also noted that it believes a 2005 study conducted for
BOP by a private contractor has already met the intent of our
recommendation because the study compares the cost of operating a
government-owned, contractor-operated facility in Taft, California, with
other low security BOP facilities.8
We agree that full and open competition can establish fair and reasonable
costs for services provided by contractors. However, our recommendation
is about selecting the most cost-effective alternative for confining inmates,
not about selecting among contractors as the only alternative. We believe
that developing data collection methods to determine the costs of
confining inmates in low and minimum security facilities—regardless of
whether those facilities are owned and operated by BOP or a contractor
and regardless of whether the facility confines criminal aliens, U.S.
citizens, or both—is critical to BOP’s ability to evaluate the costeffectiveness of contracting compared to other alternatives for confining
inmates, such as constructing a new facility or modifying existing
facilities. Absent this evaluation, key decision makers, including BOP
managers, OMB, and Congress, are not positioned to have the information
needed to make the most cost-effective investment decisions. We agree
that requiring contractors to provide data so that BOP can conduct a
comparison has the potential of increasing contract costs, but BOP has not

8

Nelson, Julianne, Competition in Corrections: Comparing Public and Private Sector
Operations, the Center for Naval Analysis Corporation (Virginia: December 2005).

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GAO-08-6 Cost of Prisons

assessed what the costs of collecting the data would be or whether the
costs would outweigh the benefit of being able to determine the most costeffective alternative for confining inmates in low and minimum security
facilities. Finally, we disagree that BOP has met the intent of our
recommendation via the study referenced by BOP because it does not
compare the costs of various alternatives for confining inmates in low and
minimum security facilities, as we recommended.

Background

BOP was established in 1930 to provide progressive and humane care for
federal inmates in the 11 federal prisons in operation at the time. Since
then, BOP’s mission has evolved into protecting society by controlling
offenders in the controlled environments of prisons and community-based
facilities that are safe, humane, cost-efficient, and appropriately secure
and that provide work and other self-improvement opportunities to assist
offenders in becoming law-abiding citizens.
At the end of fiscal year 2006, there were over 114 federal prison facilities
located throughout the country at four primary security levels—minimum,
low, medium, and high. BOP facilities are given a security designation
based on the level of security and staff supervision the facility is able to
provide. According to BOP, minimum security facilities, also known as
Federal Prison Camps, have dormitory housing and limited or no
perimeter fencing; low security Federal Correctional Institutions have
double-fenced perimeters and mostly dormitory or cubicle housing;
medium security Federal Correctional Institutions have strengthened
perimeters (often double fences with electronic detection systems) where
inmates are mostly confined to prison cells; and high security institutions,
also known as United States Penitentiaries, have highly secured
perimeters (featuring walls or reinforced fences) and multiple- and singleoccupant cell housing. BOP also maintains administrative facilities, which
are institutions with special missions, such as the detention of pretrial
offenders;9 the treatment of inmates with serious or chronic medical
problems; or the containment of extremely dangerous, violent, or escapeprone inmates. Administrative facilities are capable of holding inmates at
all security levels.

9
According to BOP, a pretrial inmate is a person who is legally detained but for whom BOP
has not received notification of conviction. Thus, pretrial inmates include persons awaiting
trial, being tried, or awaiting a verdict.

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GAO-08-6 Cost of Prisons

According to BOP population data, at the end of fiscal year 2006, BOP’s
total inmate population was approximately 193,000 inmates, of which
about 43 percent, or 83,000, were long-term, adult male inmates confined
in BOP, private, or IGA low and minimum security facilities. About
52,000 (27 percent) of the total inmates were confined in medium security
facilities, and approximately 18,000 (about 9 percent) were in high security
facilities. Additionally, approximately 21 percent of the 193,000 total
inmates, or 40,000 inmates, were females, juveniles, inmates in halfway
houses, inmates in home confinement, or inmates confined in BOP’s
administrative facilities. See figure 1 for a breakout of these populations.
Figure 1: BOP Inmate Population at the End of Fiscal Year 2006
BOP medium security
facilities

27%
33%
43%

BOP, private, and IGA
low and minimum
security facilities

21%

10%

BOP low and minimum
security facilities

Private and IGA low
and minimum security
facilities

9%
BOP high security
facilities
BOP othera
Source: GAO analysis of BOP population data.
a

BOP other includes females, juveniles, inmates in halfway houses, inmates in home confinement, or
inmates confined in BOP’s administrative facilities (i.e., medical facilities or detention facilities).

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GAO-08-6 Cost of Prisons

BOP Lacks Data
Needed to Perform a
Methodologically
Sound Cost
Comparison and Is
Not Positioned to
Evaluate Alternatives
for Confining Inmates
in Low and Minimum
Security Facilities

A methodologically sound cost comparison analysis of BOP and private
low and minimum security facilities is not currently feasible because BOP
does not gather data from private facilities that are comparable to the data
collected on BOP facilities. BOP is not required under federal contracting
regulations to gather data that would enable a comparison, and although
BOP has not evaluated the cost of collecting additional information, BOP
officials maintain that it could increase the price contractors charge BOP
for contract services. However, without comparable data, BOP is not able
to analyze and justify whether confining inmates in private facilities would
be more cost-effective than other confinement alternatives such as
constructing new BOP facilities or renovating existing BOP facilities. Such
an analysis would be consistent with OMB requirements, which call for
agencies to identify and evaluate various alternatives when making
decisions about the acquisition of capital assets (e.g., office buildings,
hospitals, schools, and prisons).

A Cost Comparison Is Not
Currently Feasible because
BOP Lacks Data Needed to
Perform a
Methodologically Sound
Comparison

We determined that it is not currently feasible to compare the cost of
confining male federal inmates in low and minimum security BOP and
private facilities because data needed for a methodologically sound
comparison are not currently available. Our review of BOP documentation
showed that BOP collects basic cost data on a per inmate basis across
BOP and private facilities. For BOP-owned and -operated facilities, BOP
maintains per inmate costs that include salaries, employee benefits,
equipment, and utilities. For private facilities, BOP maintains the
negotiated per inmate contract price, award fees, and deductions made as
a result of the performance-based contract terms. However, these cost
data are not sufficient for doing a methodologically sound cost
comparison. As we reported in 1996, any comparative study of private and
public prisons should not only be based on operational costs but also on
an analysis of similar facilities—including the design, capacity, security
level, and types of inmates and quality of service—and on sufficient
statistical controls to measure and account for any differences among
facilities.10 Otherwise, any comparative analysis of operational costs could

10

GAO/GGD-96-158. While exploring how we would conduct a comparison for this report,
we took into account factors outlined in our 1996 report on studies that compared the cost
of private and public prisons to ensure that our comparison would be methodologically
sound and generalizeable to federal low and minimum security facilities nationwide
regardless of the operator. In addition to the factors mentioned above, our 1996 report
stated that a variety of other factors could affect a cost comparison of prison facilities such
as cost-of-living and economic differences among the nation’s geographic regions.

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GAO-08-6 Cost of Prisons

be skewed. For example, one study we reviewed as part of our 1996 report
did not assess quality of service as part of the cost comparison between
private and public facilities and, as a result, could not conclude whether
the levels of service affected the differences in costs.
According to BOP officials and private contractors, BOP and private
facilities have different characteristics and provide different levels of
service. Thus, statistical methods would need to be used to account for
these differences once cost data were collected to determine the impact
they have on the operating cost of the facilities. Using guidelines
established in our previous work, we sought to compare facilities with
similar characteristics to ensure results of a comparison would not be
skewed. However, we were unable to do so because the data needed to do
the comparison were not available. BOP and private contracting officials
reported that there are numerous differences among BOP and private
facilities, including inmate population, program requirements, and
economic differences within the different geographic locations of the
facilities. According to BOP officials, private contractor facilities have
fewer contractual requirements for programming, such as vocational
training and release preparation courses, than BOP facilities, in part,
because of the different types of inmates confined in the facilities. In
general, BOP facilities confine U.S. citizens and programs are designed to
teach inmates skills that they can use when they are released, such as job
training skills, so as to help avoid their return to prison. By contrast,
private facilities primarily confine criminal aliens—non-U.S. citizens or
foreign nationals, who are serving time for a U.S. federal conviction.
Programs that focus on preventing returns to prison are not required of
private facilities because criminal aliens are released for removal from the
country and are not expected to return to U.S. communities or BOP
custody.
Given the differences with regard to facility characteristics, statistical
techniques such as analyzing the extent to which characteristics—
including program differences—vary among facilities, would have to be
applied to strengthen conclusions of a cost comparison analysis. For
example, if BOP facilities provide more programs for inmates than
contractors do, then comparable data on the number and types of
programs across all facilities would be needed to adjust for this difference
in order to conclude how the difference in programs affect operating
costs. BOP maintains data on its own low and minimum security facilities
and collects some similar facility data on private facilities, including the
age of the facility, the citizenship status of inmates, and inmate population.
However, BOP does not maintain comparable data on various aspects of

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private facilities, such as inmate-to-staff ratios, size of the facility, specific
programs available to inmates, and whether inmates in private facilities
are completing those programs. Because BOP does not maintain
comparable data for private facilities on the differing facility
characteristics that could affect costs, we could not determine the extent
to which these facilities differed nor use statistical methods to determine
the impact of these differences on costs. Since we could not control or
adjust for such differences, the results of a cost comparison analysis
conducted at this time would be skewed.
With regard to quality of service, BOP also lacks sufficient data on
measurements of safety and security for inmates, staff, and the general
public for a methodologically sound cost comparison of BOP and private
facilities. As we reported in 1996, a cost comparison analysis should
include not just operational costs but also an assessment of quality to
ensure that if a contractor is operating at lower costs than BOP, it is
providing the same or a better level of service. We attempted to review
numerous quality of service data—such as data that measure safety and
security—so that differences could be accounted for by comparing data on
what is achieved by these services. However, according to officials in
BOP’s Office of Research and Evaluation, BOP does not maintain data on
private facilities that we could use to compare quality of service across the
different facilities. This includes the number of grievances submitted by
inmates, the number of inmates attended to by health care professionals
due to misconduct,11 staff turnover rates, and the experience level of the
staff. As a result, we could not assess the trade-offs between the levels of
services being offered and the costs of operating the facilities.
While the contract requirements for the private facilities direct contractors
to maintain some data on inmates in BOP’s central database system called
SENTRY,12 according to BOP officials, the data private contractors enter
are not necessarily consistent with those data collected on BOP facilities,
and BOP officials stated that they cannot attest to the reliability or validity

11

Studies we reviewed identified misconduct incidences as inmate-on-inmate assaults, staffon-inmate assaults, inmate-on-staff assaults, drug and contraband violations, sexual
assaults, homicides, suicides, and escapes from the facility.
12

SENTRY is BOP’s online, real-time database system, used primarily for maintaining
information about federal inmates including sentencing, work assignments,
admission/release status, and other special assignments for monitoring inmate status.
According to contracting requirements, each private contractor is required to provide and
maintain hardware and software to access SENTRY.

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GAO-08-6 Cost of Prisons

of the private contractor data. For example, BOP officials and private
contractors we spoke with stated that although private contractors are
required to report incidences of misconduct to BOP, neither could confirm
if the private contractor system for categorizing or tracking incidences of
misconduct is consistent with BOP’s misconduct categories.13 BOP further
reported that program data were not comparable. For example, according
to BOP officials, private contractors reported that inmates completed the
U.S. General Educational Development program, when the program
actually completed by the inmates was a Mexican equivalent of the
program. Additionally, private contractors we spoke with told us that they
maintain some facility characteristic and quality of service data, but the
data are not maintained in the same format as BOP facility data and are
not readily available because they are only maintained in hard copies at
some of the facilities contractors manage.
BOP officials provided two reasons why they do not collect or require
contractors to collect comparable data that would facilitate a comparison
of the cost of confining inmates in low and minimum security BOP and
private facilities: (1) federal regulations do not require such data as a
means for selecting among competing contractors, and (2) BOP believes
collecting comparable data from contractors could add costs. However,
BOP officials had not evaluated the probable amount of added costs.
When choosing among private contractors, federal regulations do not
require BOP to collect comparable facility characteristic or quality of
service information from private facilities. According to BOP officials, all
BOP private contracts in our review are firm-fixed price and, under federal
regulations for competing contracts, BOP does not need this information
for technical evaluations of the proposals.14 BOP officials added that
during the acquisition process, BOP maintains data needed to evaluate
proposed contract prices, such as the price to manage and operate each
facility and the government’s estimate of the price, in accordance with the

13
Although we reviewed the available data maintained by BOP, for the purposes of this
report, we did not assess the contractor’s compliance with BOP’s data entry requirements
to confirm whether the private sector data were consistent with BOP’s misconduct
categories because BOP’s monitoring and oversight of its contracts was beyond the scope
of our review.
14

Firm-fixed price contracts provide for a price that is not subject to any adjustment on the
basis of the contractor’s cost experience in performing the contract. This contract type
places upon the contractor maximum risk and full responsibility for all costs and resulting
profit or loss.

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Federal Acquisition Regulation (FAR). The FAR requires the contracting
official to determine if proposed prices are fair and reasonable and further
states that the performance of a cost analysis is not needed if there is
adequate price competition.15 In general, adequate price competition is
established when two or more responsible parties independently submit
prices for the solicitation that meet the government’s requirements. The
award is made to the party whose proposal represents the best value and
there is no finding that the price of the other parties is unreasonable. In
addition to price, the FAR recommends agencies evaluate one or more
nonprice criteria, such as past performance and prior experience.
However, agencies have broad discretion in the selection criteria and in
determining the relative importance of each criterion. Consequently, the
regulation does not require BOP to collect comparable data on various
facility characteristics and quality of service measures needed to conduct
a methodologically sound cost comparison.
Additionally, while BOP is concerned that the cost of contracts could
increase if it were to require comparable data from private contractors
because it would be beyond the scope of existing contract requirements, it
has not evaluated the costs or benefits of acquiring the additional data.
BOP’s Senior Deputy Assistant Director and other BOP officials said they
suspect that it is likely that private contractors would charge BOP a higher
contract price if it required private contractors to meet additional
requirements, such as providing data similar to those collected by BOP for
its facilities. However, because BOP has not requested such data during
the contract process or estimated the incremental costs and benefits of
requiring comparable data from private facilities, BOP officials could not
speak to the extent of the potential cost increase.
Although in the Department of Justice Fiscal Year 2003-2008 Strategic Plan
BOP identified several alternatives for space acquisition, such as
expanding or renovating existing facilities, acquiring military properties
for prison use, contracting with private companies, and constructing new
facilities, BOP officials stated that they do not consider all of these
alternatives for confining inmates in low and minimum security facilities
because they are committed to contracting with nonfederal entities for low
and minimum security bed space.

15

Federal Acquisition Regulation, 48 C.F.R. §§ 15.305(a)(1), 15.403-1(c) (2006).

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Our past work has shown that over the long term, it is usually more costeffective for an agency to own a facility than to lease one.16 For example,
we previously reported that for nine major operating lease acquisitions
proposed by the General Services Administration—the central leasing
agent for most federal agencies—construction would have been the least
expensive option in eight cases and would have saved an estimated
$126 million compared to two leasing options that spread payments out
over time.17 However, when funds for ownership are not available, leases
become a more attractive option from the agency’s budget perspective
because they add much less to a single year’s appropriation total than
other alternatives. According to BOP officials, they consider alternatives
for space acquisition only for medium and high security facilities, because
medium and high security facilities are BOP’s priority based on capacity
needs. In addition to capacity needs, from BOP’s perspective, inmates in
medium and high security facilities are at higher risk in terms of their
behavior (i.e., rates of misconduct, assaults, and history of violence) and
private contractors have yet to demonstrate the ability to handle these
higher security populations, so BOP has chosen to continue to confine the
higher security inmates in BOP-owned and -operated facilities. As a result,
BOP officials stated that they have not considered nor do they plan to
consider alternatives besides contracting for low and minimum security
facilities.

BOP Cannot Evaluate
whether Privately
Contracted Facilities
Provide Better or Worse
Value than Other Low and
Minimum Security
Confinement Alternatives

Because BOP is not able to compare the cost of BOP and private facilities
in a methodologically sound manner, it cannot determine if confining
inmates in private facilities is more or less cost-effective than other
confinement alternatives such as constructing and operating new BOP
facilities, acquiring and using excess properties (i.e., former military
bases), or expanding or renovating existing BOP facilities. OMB requires
agencies to follow capital planning principles set forth in its Capital
Programming Guide.18 OMB’s guide identifies the need for effective

16

GAO, Federal Real Property: Reliance on Costly Leasing to Meet New Space Needs Is an
Ongoing Problem, GAO-06-136T (Washington, D.C.: Oct. 6, 2005), 5-8.

17

The cost of construction was compared to the options of (1) lease-purchases in which
payments are spread out over time and ownership of the asset is eventually transferred to
the government, and (2) operating leases in which periodic lease payments are made over
the specified length of the lease.
18

Office of Management and Budget, Executive Office of the President, OMB Circular
No. A-11, Part 7, Capital Programming Guide (2006).

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planning and management of investments. Among other things, this guide
articulates key principles agencies should follow when making decisions
about the acquisition of capital assets such as prisons. The Capital
Programming Guide requires that agencies consider as many alternatives
as possible because, according to the guide, whenever the government
lacks viable alternatives, it may lack a realistic basis to manage contract
costs. Once a list of alternatives is established, the guide requires that
agencies then compare those alternatives based on a systematic analysis
of expected benefits and costs. The fundamental method for formal
economic analysis is a benefit-cost analysis. OMB guidance on benefit-cost
analyses can be found in OMB Circular A-94—a circular that helps
agencies conduct a study on the benefits and costs of whether to acquire a
new capital asset, undertake a major modification to an existing asset, or
use some other method such as contracting for services.19 More
specifically, the goal of the circular is to promote efficient resource
allocation through well-informed decision making by the federal
government. The circular provides general guidance for conducting
benefit-cost and cost-effectiveness analyses, and serves as a checklist of
whether an agency has considered and properly dealt with all elements of
a sound analysis.
OMB’s Capital Programming Guide reports that credible cost and benefit
analyses, such as those described in OMB Circular No. A-94, are the basis
of sound management decision making, enabling agencies to determine
the best investment option for meeting their goals and making them better
equipped to evaluate alternatives. OMB’s guide states that data are the
most important piece of such analyses, including various procurement or
contract data. Consequently, to do the analyses described in OMB Circular
No. A-94, BOP would have to first collect and maintain comparable BOP
and private facility data. BOP senior officials acknowledged that they have
not done any such analyses to assess alternatives for confining inmates in
low and minimum security facilities, and they were unable to explain why
such analyses have not been done. Nonetheless, according to the OMB
guide, selecting alternatives to meet space requirements without adequate
analysis by federal agencies has resulted in higher costs than anticipated.
Consequently, without such an analysis, it is difficult to know whether
BOP is deciding on the most cost-effective alternative for acquiring low

19
Office of Management and Budget, Executive Office of the President, OMB Circular
No. A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal
Programs (1992).

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and minimum security facilities to confine inmates, including whether to
contract, build, or expand.
The results of any analysis conducted by BOP consistent with OMB
requirements would be important because BOP officials expect inmate
populations in low and minimum security facilities to rise. Inmates in low
and minimum security facilities made up approximately 43 percent of
BOP’s total population in fiscal year 2006, and according to BOP officials,
this population will continue to grow. As a result, there would be an
increase of inmates requiring confinement in low and minimum security
facilities. BOP also projects about a one-third increase in its long-term
criminal alien population,20 or approximately 5,700 more criminal alien
inmates between fiscal years 2005 and 2008, which could further strain
BOP resources as these inmates are confined primarily in low security
facilities. While the private sector has additional capacity to accommodate
at least some of this expected growth in inmate populations, BOP cannot
determine whether private contracting is or would be the most costeffective alternative because of the data limitations discussed above.
While there are costs associated with gathering data needed to compare
costs across BOP and private facilities, without the data to conduct
benefit-cost or cost-effectiveness analyses, BOP is not able to compare
alternatives for confining inmates in a methodologically sound manner.
Additionally, the absence of data also has potential long-term costs
because BOP managers, OMB staff, and congressional decision makers do
not have the information needed to weigh alternatives and make the best
investment decisions. Although OMB staff told us that BOP provides
several documents in accordance with the Capital Programming Guide,
such as information about facilities in BOP’s inventory and weekly reports
about inmate population, OMB staff stated that it would be useful to have
more and better comparison information on the cost of confining inmates
in BOP and private low and minimum security facilities. They said that
without such data, it is difficult to understand how BOP is making
decisions on the most cost-effective way to manage and confine future
inmates sentenced to low and minimum security facilities. OMB staff
added that they consider contracting a viable option because it gives BOP
the flexibility to immediately deal with population changes. However,
according to OMB staff, they would not expect contracting to always be

20

According to BOP, long-term criminal aliens are those criminal aliens confined in low and
minimum security facilities for more than 45 days.

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cheaper because owning a facility may be more cost-effective in the long
run. As a result, comparative analyses would be beneficial to help them
better understand the long-term costs and benefits of owning versus the
short-term costs and benefits of privatization.

Conclusions

Because of projections of future growth of inmate populations, BOP will
need to continue to acquire additional capacity. However, deciding what
to do in response to this need will be difficult because BOP does not have
the data necessary to do a methodologically sound cost comparison of its
various alternatives for confining inmates in low and minimum security
facilities. Because contracting regulations do not require BOP to collect
private facility data comparable to BOP facility data, BOP has not gathered
or maintained data needed to conduct a methodologically sound cost
comparison. Additionally, BOP is concerned with increased contract costs.
However, BOP has not assessed the cost of collecting the data or whether
the estimated costs would outweigh the benefits of having it. As a result,
BOP is not in a position to meet OMB’s capital planning requirements and
evaluate whether contracting is more cost-effective than other
alternatives, such as building new low and minimum security facilities,
buying existing facilities that may be available, or expanding facilities
already operated by BOP. Without such data, BOP cannot determine
whether procuring prison confinement and services from private firms
costs the government more or less than other confinement alternatives, as
required by OMB.

Recommendation for
Executive Action

To help BOP evaluate alternatives for confining inmates in low and
minimum security facilities, and recognizing that there is a cost associated
with gathering and analyzing data needed to compare costs across BOP
and private facilities, we recommend that the Attorney General direct the
Director of BOP to develop a cost-effective way to collect comparative
data on low and minimum security facilities confining inmates under
BOP’s custody and design and conduct methodologically sound analyses
that compare the costs of confining inmates in these facilities in order to
consider contracting among other alternatives for low and minimum
security confinement, consistent with OMB requirements.

Agency Comments
and Our Evaluation

We requested comments on a draft of this report from the Director of the
Office of Management and Budget and from the Attorney General. While
OMB did not provide comments, in a September 17, 2007, letter, BOP

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provided written comments, which are summarized below and included in
their entirety in appendix II.
BOP disagreed with our recommendation and stated that it does not own
or operate facilities to house solely criminal aliens. BOP also said it does
not expect to receive funding to construct such low security facilities.
Therefore, BOP does not believe there is value in developing data
collection methods to compare costs of confining these inmates in private
facilities versus other alternatives for confining inmates. BOP stated that,
through open competition, it has been able to determine a fair and
reasonable price for its contracts. In a related comment, BOP stated that
our report does not reference that Congress has provided funds to
contract out for inmate bed space but has not provided funding for new
construction of low and minimum security facilities. BOP also noted that it
does not currently have the capacity to confine low security criminal
aliens and is dependent on private contractors to fill the gap, and, if
construction funds were available for low and minimum security facilities,
it would take several years before the bed space would become available.
In addition, BOP noted that it is committed to contracting, in part, because
OMB has directed BOP to take greater advantage of state and local
governments and the private sector to meet its space requirements to
confine inmates in low and minimum security facilities. With regard to the
recommendation, BOP also stated that gathering data from contractors to
aid in a cost comparison would have the potential to increase current
contract costs at a time when BOP is facing budget constraints. Finally,
BOP pointed out that an independent review conducted in 2005 which
compared the operational cost of a BOP-owned, contractor-operated
facility in Taft, California, with other low security BOP facilities meets the
intent of our recommendation.21
We agree that full and open competition can establish fair and reasonable
costs for services provided by contractors. However, our recommendation
is about selecting the most cost-effective alternative for confining inmates,
not about selecting among contractors as the only alternative. We believe
that developing data collection methods to determine the costs of
confining inmates in low and minimum security facilities—regardless of
whether those facilities are owned and operated by BOP or a contractor
and regardless of whether the facility confines criminal aliens, U.S.
citizens, or both—is critical to BOP’s ability to evaluate the cost-

21

Nelson (2005).

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effectiveness of contracting compared to other alternatives for confining
inmates, such as constructing a new facility, modifying an existing facility,
or acquiring military properties for prison use. OMB’s Capital
Programming Guide requires agencies to undertake the kind of
comparison we are recommending in order to consider alternatives when
making decisions about the acquisition of capital assets, such as prisons.
Adhering to OMB requirements better ensures that key decision makers,
including OMB and Congress, have the information needed to make the
most cost-effective investment decisions.
We recognize that BOP has not received funding to construct new low and
minimum security facilities, but this does not mean that funds will not be
appropriated in the future, especially if data demonstrate that this option
is more cost-effective. Without these data, BOP is not in a position to
justify funding for new construction or other alternatives because BOP
cannot do a methodologically sound comparison among low and minimum
security facilities. With regard to BOP’s comment that it currently does not
have the capacity to confine criminal aliens and must rely on contracting
to address capacity issues, our report noted that, according to OMB staff,
contracting may be a viable option because it provides BOP the flexibility
to immediately deal with population changes. Nonetheless, OMB staff also
said that they need more and better cost comparison information to help
them understand the long-term costs and benefits of owning versus the
short-term costs and benefits of privatization. OMB staff also stated that
they would not always expect contracting to be cheaper because owning a
facility may be more cost-effective over the long run, which is consistent
with our past work.22
With regard to BOP’s concern that requiring comparable data from
contractors could raise the cost of current contracts, our report
recognized that there is a cost associated with gathering and analyzing
additional data needed to compare costs across BOP and private facilities.
However, BOP has not determined the cost of collecting the data or
whether the estimated costs would outweigh the benefits of knowing the
most cost-effective alternative for confining inmates. Without a costeffective way to collect comparable data, BOP cannot conduct a
methodologically sound cost comparison analysis that takes into account
factors, such as facility characteristics and quality of service, which can
differ from facility to facility. Collecting and analyzing these data would

22

GAO-06-136T.

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provide key decision makers the information needed to make the most
cost-effective investment decisions.
We disagree with BOP’s assertion that it has met the intent of our
recommendation via the 2005 study by the Center for Naval Analysis. In
citing this study, BOP failed to recognize that this study does not compare
the costs of various alternatives for confining inmates in low and minimum
security facilities. Rather, it compares BOP-owned and -operated facilities
with one BOP-owned and contractor-operated facility in Taft, California.
In addition, BOP stated it had provided detailed cost information and that
it believed we would obtain comparable data from the private sector in
order to conduct a methodologically sound cost comparison. As discussed
throughout our report, the cost data BOP provided were not sufficient to
conduct a methodologically sound cost comparison. As our report states,
any comparative study of private and public prisons should not only be
based on operational costs, but should also account for facility
characteristics and the quality of services provided. We requested this
information from the private sector. As our report notes, private
contractors do not maintain similar data, because BOP does not require
them to report or collect the data it requires of its own facilities.
BOP also provided technical comments, which we considered, and we
have amended our report to incorporate these clarifications, where
appropriate.
We are sending copies of this report to the Attorney General and the
Director of OMB. Copies will also be made available to others on request.
In addition, the report will be available at no charge on GAO’s Web site at
http://www.gao.gov.
If you or your staff have any questions regarding this report, please
contact me at (202) 512-6510 or larencee@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Key contributors are listed in appendix III.

Eileen Regen Larence
Director, Homeland Security and Justice Issues

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Appendix I: Objectives, Scope, and
Methodology

Appendix I: Objectives, Scope, and
Methodology
Our work focused on the comparative cost of confining federal inmates in
low and minimum security facilities owned by the Federal Bureau of
Prisons (BOP) and privately managed facilities under contract to BOP.
Specifically, our objective was to assess the feasibility of comparing the
costs for confining inmates in low and minimum security facilities owned
and operated by BOP with the cost to confine these inmates in private
facilities and the implications this has for making decisions on low and
minimum security confinement. Our work was initially designed to
address Conference Report 109-272, accompanying the Science, State,
Justice, Commerce, and Related Agencies Appropriations Act of 2006,1
which directed GAO to compare the costs of confining federal inmates in
low and minimum security facilities owned by BOP, privately managed
facilities under contract to BOP, and local facilities or jails via
intergovernmental agreements (IGA) with BOP.2 However, during the
course of our review, BOP did not renew IGAs for four facilities in
Western Texas—in the cities of Big Spring and Eden, Texas, and Garza
County and Reeves County, Texas—that confined 83 percent of federal
inmates in IGA facilities. Although BOP has, over time, used hundreds of
IGAs across the country to confine inmates on a short term basis—45 days
or less—the four Texas facilities had evolved into facilities confining
inmates on a long-term basis, similar to BOP-owned and -operated low and
minimum security facilities. In January 2007, BOP awarded five contracts
to confine inmates in facilities with approximately 10,000 beds, which are
about 3,000 more beds than the capacity provided under the four IGAs.3
According to BOP officials, BOP chose to compete the bed space
associated with these agreements partly because the four Texas facilities
outgrew their original purpose of confining small populations for short
periods of time. BOP officials also stated that acquiring bed space via
contracts rather than IGAs enhances their ability to oversee operations at
the facilities. Because BOP no longer plans to use IGAs to confine inmates
on a long-term basis, we shifted the focus of our review to BOP and
private facilities only.

1

Pub. L. No. 109-108, 119 Stat. 2290 (2005).

2

IGAs are agreements between BOP and state and local governments to confine BOP
inmates in state and local prison facilities.

3

Three of the five contracts were awarded to the private firms that operated the former IGA
facilities for the local governments. The fourth contract was awarded directly to the local
government that owns the facility, Reeves County. BOP also awarded a fifth contract to a
new contractor in Pine Prairie, Louisiana.

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Appendix I: Objectives, Scope, and
Methodology

We did our work at BOP headquarters and the Office of Management and
Budget (OMB) in Washington, D.C. We reviewed applicable laws,
regulations, and studies on BOP programs, prison management, and
contracting requirements.4 We also examined available BOP and private
contractor documents on the management of low and minimum security
facilities. In addition, we met with BOP officials and worked with them to
identify potential BOP and private facilities that could be compared
considering basic criteria including inmate gender (male or female
inmates, assuming that costs for programs and services might be different
depending on gender) and whether cost data might be available on the
individual facility level for a 5-year period covering fiscal years 2002
through 2006. In selecting low and minimum security facilities, we met
with BOP officials to identify potential BOP and private facilities that
could be compared over a 5-year period covering fiscal years 2002 through
2006. Our discussions with BOP officials resulted in the identification of
34 low and minimum security facilities operated by BOP and private
contractors that confined federally sentenced male inmates over the 5-year
period. Specifically, we focused on (1) 27 BOP-owned and -operated low
and minimum security facilities, and (2) 7 facilities operated by private
firms under contract to BOP. Table 1 lists the 34 facilities we selected.

4
According to BOP, prison programs include services and classes that provide productive
use-of-time activities and facilitate the successful reintegration of inmates into society,
consistent with community expectations and standards.

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Appendix I: Objectives, Scope, and
Methodology

Table 1: List of Low and Minimum Security Facilities within our Scope
BOP low and minimum
a
security facilities

Location

Security level

Security level of
adjacent facility
(if applicable)

Allenwood

Pennsylvania

Low

Minimum

Ashland

Kentucky

Low

Minimum

Bastrop

Texas

Low

Minimum

Beaumont

Texas

Low

Minimum
Minimum

Big Spring

Texas

Low

Butner

North Carolina

Low

Coleman

Florida

Low

Elkton

Ohio

Low

Minimum

Forrest City

Arkansas

Low

Minimum
Minimum

Fort Dix

New Jersey

Low

Fort Worth

Texas

Low

La Tuna

Texas

Low

Minimum

Lompoc

California

Low

Loretto

Pennsylvania

Low

Milan

Michigan

Low

Petersburg

Virginia

Low

Safford

Arizona

Low

Sandstone

Minnesota

Low

Seagoville

Texas

Low

Minimum

Texarkana

Texas

Low

Minimum

Waseca

Minnesota

Low

Yazoo City

Mississippi

Low

Duluth

Minnesota

Minimum

Montgomery

Alabama

Minimum

Morgantown

West Virginia

Minimum

Pensacola

Florida

Minimum

Yankton

South Dakota

Minimum

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Minimum

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Appendix I: Objectives, Scope, and
Methodology

Private contract facilities

Location

Security level

California City

California

Low

Cibola

Arizona

Low

Northeast Ohio

Ohio

Low

McRae

Georgia

Low

Moshannon Valley

Pennsylvania

Low

Rivers

North Carolina

Low

Taft

California

Low

Security level of
adjacent facility
(if applicable)

Minimum

Source: BOP.

Note: The facilities included in this table confined federal inmates for fiscal years 2002 through 2006.
a

During the early stages of our work, BOP identified the 27 BOP low and minimum security facilities
listed above as those that had individual facility costs for fiscal years 2002 through 2006. However, in
the later stages of our work, BOP officials clarified that 8 of the 27 facilities—Allenwood, Beaumont,
Butner, Coleman, Forrest City, Lompoc, Petersburg, and Yazoo City—were part of complexes which
included medium or high security facilities during some or all of this time period. Therefore, the
individual costs for the low and minimum security facilities within these 8 complexes could not be
isolated for fiscal years 2002 through 2006.

Several facilities were excluded from our scope because of issues with the
availability of cost data for fiscal years 2002 through 2006. We excluded
from our analysis those BOP low and minimum security facilities that are
co-located with other facilities in a prison complex, since BOP does not
isolate the costs of operating individual low and minimum security
facilities located on the same campus with high and medium security
facilities. Additionally, the Federal Correctional Institutions Miami,
Oakdale, and Terminal Island are excluded from the list, as between
November 2004 and June 2005 they were converted from medium to low
security facilities so they do not have a comparable low security cost
history. We did not include the competitive, private contract Reeves
County Detention Center III in our study because the facility did not begin
receiving federal inmates until 2007 and consequently did not have cost
data associated with confining federal inmates. We also excluded the
privately operated facility in Eloy, Arizona, as BOP chose to not exercise
its option to continue contracting with the private operator at this facility
in February 2006 and it became an Immigration and Customs Enforcement
detention facility exclusively. In addition, because the private facilities do
not confine female inmates or juveniles, we excluded all female and
juvenile BOP facilities from our analysis, assuming that costs might be
different depending on these inmate characteristics.

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Appendix I: Objectives, Scope, and
Methodology

Once we selected facilities, we interviewed BOP procurement officials;
budget officials; and officials from the Office of Research and Evaluation,
Office of Policy Development and Planning, and Office of Design and
Construction. We interviewed accounting, contracting, and operations
officials as well as general counsel representing the seven individual
prisons of the private firms. Over the course of our review, we used
numerous studies as well as data from the Bureau of Justice Statistics to
put together a list of variables that might affect a cost comparison
analysis. We coordinated with BOP officials from the Office of Research
and Evaluation to generate a list of comparable variables for BOP and
private facilities. Later, we were told by BOP officials that data for many
variables needed for a cost comparison analysis are not collected or
maintained for private facilities. Given the current status, we focused our
efforts on whether a methodologically sound cost comparison was
feasible. Where possible, we gathered and reviewed available data on the
facilities and examined whether the data would be suitable for a
comparison based, in part, on key factors—such as similar facility
characteristics and levels of service—needed to do a methodologically
sound comparison as outlined in our 1996 report and Office of
Management and Budget (OMB) Circular No. A-76: Performance of
Commercial Activities.5 Some studies in our 1996 report, for instance,
used a variety of quality measures or outcomes such as safety, incident
data, and the extent of programs available to inmates.6
In order to determine if the selected BOP and private facilities were
sufficiently similar to allow a methodologically sound comparison, we
attempted to analyze facility characteristics data. In addition, we analyzed
the historical costs to the government including direct (i.e., salaries,
supplies, and cost of services) and indirect costs, such as support costs
and operating and maintenance costs for buildings, equipment, and
utilities and cost-related data between fiscal years 2002 and 2006
associated with operating low and minimum security BOP and private
facilities. Additionally, we met with prison experts from Florida State
University College of Criminology and Criminal Justice and from the JFA

5

GAO/GGD-96-158 and Office of Management and Budget, Executive Office of the
President, OMB Circular No. A-76, Performance of Commercial Activities (2003).

6

While we attempted to collect data to compare the level of service provided, we did not
attempt to assess BOP’s monitoring and oversight of its contracts as they relate to the
contractor’s performance and quality of service because doing so was beyond the scope of
our review.

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GAO-08-6 Cost of Prisons

Appendix I: Objectives, Scope, and
Methodology

Institute—a nonprofit agency conducting justice and corrections research
for effective policy making—to further our understanding about prisons
and the complexities of comparing the costs of operating private and
public prisons. We reviewed documentation on how BOP evaluates and
assesses contract proposals to determine what data are used to make
contracting decisions. In addition, we reviewed the Federal Acquisition
Regulation to determine what requirements were applicable to BOP with
respect to cost data and cost comparisons. Finally, we examined studies
done to compare the cost of operating one BOP facility in Taft, California,
that is owned by BOP but operated by a private contractor, as well as a
study conducted by the National Academy for Public Administration on
the feasibility of using low and minimum security BOP facilities to confine
federal medium and high security inmates.
To assess the implications a cost comparison has for making decisions on
low and minimum security facilities, we met with BOP officials and
reviewed BOP population data, population projection data, and data on
short-term and long-term facility planning. We also examined BOP
documents within the context of OMB requirements on capital planning
and space acquisition.7 In addition, we met with OMB staff responsible for
BOP budget review and preparation to discuss BOP efforts to acquire
space to confine inmates in low and minimum security facilities in order to
determine the information BOP provides OMB on capital investments and
how this information is used to inform decisions. We also met with
officials from the National Institute of Justice (NIJ) to discuss NIJ’s
current and past work on prison privatization and NIJ’s role within the
Department of Justice.
We conducted our work from May 2006 through August 2007 in
accordance with generally accepted government auditing standards.

7

Office of Management and Budget, Executive Office of the President, OMB Circular
No. A-11, Part 7, Capital Programming Guide (2006).

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GAO-08-6 Cost of Prisons

Appendix II: Comments from the Federal
Bureau of Prisons

Appendix II: Comments from the Federal
Bureau of Prisons

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GAO-08-6 Cost of Prisons

Appendix II: Comments from the Federal
Bureau of Prisons

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GAO-08-6 Cost of Prisons

Appendix II: Comments from the Federal
Bureau of Prisons

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GAO-08-6 Cost of Prisons

Appendix II: Comments from the Federal
Bureau of Prisons

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GAO-08-6 Cost of Prisons

Appendix III: GAO Contact and Staff
Acknowledgments

Appendix III: GAO Contact and Staff
Acknowledgments
GAO Contact

Eileen Larence, Director, Homeland Security and Justice Issues
(202) 512-6510

Acknowledgments

In addition to the contact named above, John Mortin, Assistant Director;
David Alexander; Ben Bolitzer; Billy Commons; Katherine Davis;
Maria Edelstein; Erin Henderson; Carol Henn; Jeff Isaacs;
Charles Johnson; Dawn Locke; Michele Mackin; Jan Montgomery;
Don Neff; Bill Sabol; David Sausville; John Stambaugh; Stephanie Toby;
Lacy Vong; and Michelle Zeidman made key contributions to this report.

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GAO-08-6 Cost of Prisons

Related GAO Products

Related GAO Products

Federal Capital: Three Entities’ Implementation of Capital Planning
Principles Is Mixed, GAO-07-274. Washington, D.C.: February 23, 2007.
Federal Real Property: Reliance on Costly Leasing to Meet New Space
Needs Is an Ongoing Problem, GAO-06-136T. Washington, D.C.:
October 6, 2005.
Federal Real Property: Further Actions Needed to Address Long-standing
and Complex Problems, GAO-05-848T. Washington, D.C.: June 22, 2005.
Courthouse Construction: Overview of Previous and Ongoing Work,
GAO-05-838T. Washington, D.C.: June 21, 2005.
Budget Issues: Agency Implementation of Capital Planning Principles Is
Mixed, GAO-04-138. Washington, D.C.: January 16, 2004.
Federal Drug Offenses: Departures from Sentencing Guidelines and
Mandatory Minimum Sentences, Fiscal Years 1999-2001. GAO-04-105.
Washington, D.C.: October 24, 2003.
Justice Impact Evaluations: One Byrne Evaluation Was Rigorous;
All Reviewed Violence against Women Office Evaluations Were
Problematic. GAO-02-309. Washington, D.C.: March 7, 2002.
Standards for Internal Control in the Federal Government.
GAO/AIMD-00-21.3.1. Washington, D.C.: November 1999.
Executive Guide: Leading Practices in Capital Decision-Making.
GAO/AIMD-99-32. Washington, D.C.: December 1998.
Courthouse Construction: Improved 5 Year Plan Could Promote More
Informed Decisionmaking. GAO/GGD-97-27. Washington, D.C.:
December 31, 1996.
Private and Public Prisons: Studies Comparing Operational Costs
and/or Quality of Service. GAO/GGD-96-158. Washington, D.C.:
August 16, 1996.
Federal Courthouse Construction: More Disciplined Approach Would
Reduce Costs and Provide for Better Decisionmaking. GAO/T-GGD-96-19.
Washington, D.C.: November 8, 1995.

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GAO-08-6 Cost of Prisons

Related GAO Products

State and Federal Prisons: Factors That Affect Construction and
Operations Costs. GAO/GGD-92-73. Washington, D.C.: May 19, 1992.
Designing Evaluations. GAO/PEMD-10.1.4. Washington, D.C.: March 1991.
Private Prisons: Cost Savings and BOP’s Statutory Authority Need to Be
Resolved. GAO/GGD-91-21. Washington, D.C.: Feb. 7, 1991.

(440518)

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GAO-08-6 Cost of Prisons

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