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. 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. According to BOP officials and private contractors, BOP and private  facilities have different characteristics and provide different levels of  service. 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. 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. Our past work has shown that over the long term, it is usually more cost- effective for an agency to own a facility than to lease one. Among other things, this guide  articulates key principles agencies should follow when making decisions  about the acquisition of capital assets such as prisons. 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  and minimum security facilities to confine inmates, including whether to  contract, build, or expand. 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. 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. 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. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. 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.
Why GAO Did This Study

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.

What GAO Found

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. 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.