Contracting for Imprisonment in the Federal Prison System: Cost & Performance of the Privately Operated Taft Correctional Institution

This study examines the performance of the Taft Correctional Institution (TCI) over a six and one-half year period, from 1998 through March, 2004.In 1997, the U.S. Bureau of Prisons (BOP) signed a contract with the Wackenhut Corrections Corporation (now The GEO Group) to manage and operate TCI, a new government-owned low-security correctional facility in Taft, California, designed to hold a total of 2,048 adult male inmates.

This study compares the cost of contracting for operations at TCI to what the government would have spent if the BOP had operated it directly during its first five years of operation, fiscal year (FY) 1998
through FY 2002. It also evaluates how well GEO and the TCI performed during the first six and one-half years.

The federal government's net cost of contracting for operations at TCI for five years was $142.1 million. This included the contractor's fee of $139.5 million, $2.2 million in bonuses, $2.8 million to monitor the contract. The net cost includes a reduction for the contractor's corporate taxes of $2.4 million. If the federal government had operated TCI, the estimated total cost over the five-year period would have approximately $154.9 million, but may have varied between $151.6 and $158.6 million. The quality of care provided was evaluated as similar to the levels that the federal government would have provided.