Audit of the Federal Bureau of Prisons’ Contract with CoreCivic, Inc. to Operate the Adams County Correctional Center in Natchez, Mississippi, December 16, 2016

Background

In April 2009, the Federal Bureau of Prisons (BOP) awarded a contract to Corrections Corporation of America (CCA), which is now known as CoreCivic, Inc., to house up to 2,567 low-security, non-U.S. citizen adult male inmates in the Adams County Correctional Center (Adams County).1 The BOP exercised the contract’s second of three 2-year option periods in 2015, extending it through July 2017 and increasing its value to about $468 million. As of June 2016, it was the third largest Department of Justice (Department or DOJ) contract in terms of dollars obligated since fiscal year (FY) 2009.

The DOJ Office of the Inspector General (OIG) conducted this audit, covering the period April 1, 2012, through March 31, 2015, to: (1) assess CoreCivic’s contract performance; (2) determine whether CoreCivic complied with the terms, conditions, laws, and regulations applicable to the contract; and (3) assess the BOP’s formation and administration of the contract. We found that CoreCivic’s execution of the contract’s requirements did not fully accomplish the BOP’s program goals in several respects.

In May 2012, an inmate riot at the facility resulted in a correctional officer’s death and injuries to approximately 20 staff and inmates. The riot, according to a Federal Bureau of Investigation (FBI) affidavit, was a consequence of what inmates perceived to be inadequate medical care, substandard food, and disrespectful staff members. A BOP after-action report found deficiencies in staffing levels, staff experience, communication between staff and inmates, and CoreCivic’s intelligence systems. The report specifically cited the lack of Spanish-speaking staff and staff inexperience.

Four years after the riot, we were deeply concerned to find that the facility was plagued by the same significant deficiencies in correctional and health services and Spanish-speaking staffing. In 19 of the 38 months following the riot, we found CoreCivic staffed correctional services at an even lower level than at the time of the riot in terms of actual post coverage.2 Yet CoreCivic’s monthly reports to the BOP, which were based on simple headcounts, showed that correctional staffing levels had improved in 36 of those 38 months. With regard to Spanish-speaking staff, while the BOP’s post-riot after-action plan recommended adding to the contract minimum requirements for bilingual staff, we found that the BOP did not modify the contract to include this requirement until June 2015,  subsequent to the start of our audit. Moreover, the contract modification does not define the level of speaking proficiency required and has no deadline or target date for compliance. As of July 2015, the facility’s inmate population consisted of approximately 2,300 aliens, predominately Mexican-nationals, yet only 4 of 367 staff spoke fluent Spanish. By February 2016, CoreCivic officials told us the number of fluent Spanish-speaking staff actually dropped to three people, and CoreCivic’s January 2016 job announcements for correctional officers stated no preference for bilingual applicants. In addition, the BOP told us that it does not validate the contractor’s staff for Spanish-speaking skills, and has not established any validation criteria for doing so.

We also found lower qualification levels and significantly higher staffing turnover rates for Adams County correctional officers and believe these factors contributed to the facility’s lack of experienced staff, which the BOP identified in its after-action report as a systemic problem in the area of safety and security at the facility. We reviewed CoreCivic’s hiring practices and determined the facility employs correctional officers with qualifications that would have been insufficient for employment at BOP-managed institutions. For example, the BOP requires entry-level correctional officers to have either a 4-year college degree or equivalent work experience, while CoreCivic does not require education beyond high school.

Additionally, we found significantly higher turnover rates at the facility than those at comparable BOP institutions and believe it likely results from the  substantially lower pay and benefits provided by CoreCivic. We found CoreCivic pays significantly lower wages and offers less time off than the BOP, and provides fewer career advancement opportunities. For example, the BOP pays entry-level correctional officers $18.69 per hour, 48 percent higher than the $12.60 per hour paid by CoreCivic. The State of Mississippi also offers its correctional officers more generous wages and paid time off than CoreCivic. Furthermore, the BOP offers new correctional officers noncompetitive promotion potential to $26.91 an hour, while CoreCivic pays correctional officers, throughout their careers, only the required prevailing wage rates set forth by the Department of Labor’s Service Contract Act wage determinations. The BOP’s contract with CoreCivic does not address either correctional officer qualification requirements or staff pay and benefits. We believe the BOP should evaluate the extent to which employee qualification levels and turnover rates impact safety and security concerns, and whether its contractual terms should be modified to address those concerns.

In addition, while the BOP’s solicitation that resulted in the Adams County contract required companies to develop a staffing plan that would illustrate the “total number of full-time equivalents (FTE) for each position title,” based on our discussions with BOP and CoreCivic officials, it became apparent that the contract was vague about how staffing levels should be calculated. A 2011 contract modification provided that staffing levels should not fall below a monthly average of 90 percent for Correctional Services and 85 percent for Health Services of the BOP-approved staffing plan. Both the BOP and CoreCivic told us they interpreted the contract to allow the calculation of staffing levels to be based on headcounts rather than FTE, and leave the determination of day-to-day staff assignments to the discretion of CoreCivic. As a result, we found the staffing levels CoreCivic reported to the BOP reflected neither actual staffing at the facility nor staffing insufficiencies.

Specifically, CoreCivic reported to the BOP simple headcounts of staff recorded on payroll records, regardless of the hours each employee actually worked. When we re-calculated correctional services staffing levels based on FTEs using time and attendance records, we found that, throughout the 4-year period we reviewed, staffing levels were lower than the levels represented by CoreCivic’s headcounts and were frequently lower than the BOP’s minimum staffing threshold. We found similar issues regarding CoreCivic’s reporting of health services staffing. Because the BOP was unaware of these staffing insufficiencies, it was unable to assess  the adequacy of staffing levels at the facility. When we reported these issues and our concerns about them to BOP officials, they told us CoreCivic’s reporting was consistent with the contract. We found that had the contract clearly specified that staffing levels should be measured using FTEs, between July 2011 and July 2015 the BOP could have taken $1,927,307 in invoice deductions as a result of inadequate correctional and health services staffing levels. We believe this nearly $2 million that the BOP expended could have been avoided with more precise contract language and was wasteful.

We also found that, beginning in December 2012, CoreCivic excluded from its required staffing reports the status of five critical health services positions  identified in the approved staffing plan, namely two dentists, two physicians, and one advanced registered nurse practitioner. As a result, the BOP, which was not notified of and did not identify the change, was unable to assess the effect of any vacancies on service provision or invoice amounts. We believe that this gap in oversight had a negative effect on CoreCivic’s ability to provide quality health care at the Adams County facility. In fact, we found that between December 2012 and September 2015, the Adams County facility was staffed with only a single physician for 434 days (43 percent of the time) and a single dentist for 689 days (69 percent of the time), resulting in inmate-to-provider ratios that were about double those specified in BOP program statements.

Finally, we found several aspects of the BOP’s control and oversight of the contract performance to be inadequate. The BOP structured this contract as a performance-based acquisition, for which the Federal Acquisition Regulation requires a performance work statement, measurable performance standards, and a
method of assessing contractor performance against those standards. However, the BOP did not implement appropriate performance standards to measure and evaluate CoreCivic’s performance. For example, the BOP’s oversight of staffing levels is limited because the contract requirements do not sufficiently specify how CoreCivic should measure and report facility staffing levels. We also found CoreCivic inconsistently used industry-standard dietary guidelines to evaluate the nutritional adequacy of food service offerings at the facility, an issue that may have been avoided had the contract specified which standards CoreCivic should have followed. Additionally, the BOP’s oversight of billings was inadequate in several ways, resulting in the BOP failing to identify instances where CoreCivic did not apply mandatory invoice deductions.

In August 2016, the Deputy Attorney General directed the BOP to begin reducing, and ultimately end, its use of privately operated prisons. Because this order was issued after the close of our audit period, any analysis of its basis or effect were outside of this audit’s scope.

This report makes 9 recommendations to assist the BOP in improving operations under the Adams County contract and in addressing $42,300 we have identified as questioned costs.

The Investigation

 Audit of the Federal Bureau of Prisons’ Contract with CoreCivic, Inc. to Operate the Adams County Correctional Center in Natchez, Mississippi, December 16, 2016 [73 Pages, 2.3MB]

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