General FAQs
What exactly is prison privatisation?
The term 'privatisation' is a misnomer since it correctly and narrowly applies to private sector financing and ownership of infrastructure traditionally financed and owned by the public sector. In common usage, however, prison privatisation has come to include not only the transfer of infrastructure from the public to private sector, but the fast-track design and construction and the contracted operation of a facility by the private sector.
Why can't the public sector adopt private sector methods and save even more since the public sector doesn't need to make a profit?
Many public sector agencies operate efficiently. But public sector efficiencies are generally 'spent' in growth – growth in staff, procurements and bureaucracy. Despite the best efforts of governments around the world to emulate private sector methods more than marginal savings frequently seem unobtainable or unsustainable. This is, in our opinion, due to the lack of a profit-based structure.
Won't a private company's focus on the 'bottom line' result in a lower quality of safety, security and service to the staff, prisoners and government?
Within this question are a host of closely associated suspicions, such as: "Won't a company cut costs by paying its employees less, serving offenders worse quality food and/or providing fewerÊoffender programs?"
These questions and others like them betray a misunderstanding of the nature of a service company and its relationship to its customers, as well as a flawed concept of how a service company makes money.
Paying employees in a labor-intensive service industry such as corrections less than competitive wages and benefits inevitably results in a dissatisfied workforce and a high rate of attrition.
Each correctional officer represents a significant investment of time and money by a private operator. A high rate of staff turnover means substantial operating losses as well as operational inefficiency associated with lack of employee continuity and loss of experience-linked productivity.
Similarly, the delivery of low-quality food would prove disastrous in a prison, where the maintenance of order is often dependent upon the quality and portions of daily meals.
The quality of offender rehabilitation programs is frequently the means by which the private operator distinguishes its service from that of the public sector. Professional and effectiveÊoffender programs result in a safe, secure and ordered routine, the foundation of cost-effectiveness in any prison.
So where are the savings?
Quite significant savings of approximately 20-30 per cent are achieved by the private sector in the design and construction of a prison. The traditional governmental method of linear and time-consuming contracts for the design and then the construction of a facility is thrown out in favor of a fast-track, design-build approach backed by a fully guaranteed, firm, fixed-fee contract.
By designing out staffing redundancies, a private company is able to save significant costs over the long term. We estimate that the operating costs of a prison over its lifecycle are at least 80 percent of its total costs and that labor costs represent approximately 70 percent of that total; any reduction of redundant staffing costs will obviously generate huge efficiencies and savings over time.
A prison designed by its private sector operator is the best guarantee of a prison designed to maximise safety, security and cost-efficiency. The GEO Group, Inc. employs five in-house architects to guarantee the safety, security and cost-efficiency of all of its facility conceptual designs.
In operations, the private sector is able to save money, generally estimated as equal to at least 10-20 per cent of the public sector's cost for operating a similar facility, by the development of an efficient, operator-driven design, and through the application of private sector management methods primarily focused on employee productivity and performance and efficient procurement of supplies.
Examples of such effective management methods include the daily management and elimination of employee sick time and overtime abuses, as well as the introduction of private sector procurement methods that reduce 'red tape' and bureaucratic inefficiencies. GEO employs the latest human resource and procurement management tools to track its bottom line and to ensure the quality of its service.
How do we know that a company will do all that it promised to do when it signed a contract?
This is really a question directed to the critical issue of accountability. In a very real sense, private operators are more accountable to the government than their public sector counterparts. At least seven factors contribute to this enhanced level of accountability:
Contract Terms – The terms of every private operational contract require the operator to meet, and in some cases exceed, all performance standards, laws, regulations and rules applicable to the public sector. A breach of these standards can result in contractual sanctions, including termination.
Government Monitor – Most contracts call for the provision of a public sector monitor who has complete and unrestricted access, at all times, to all facility employees, offenders, records and information.
Annual Government Audits – It is common for the government to perform an annual audit of contract performance. Some contracts tie performance to remuneration through a system of performance-linked bonuses.
In-House Audits – Private companies employ personnel to monitor and audit all aspects of operational performance. GEO's personnel monitor such matters as security incident reports, health services, overtime and sick leave, and facility purchases on a daily, weekly and monthly basis.
Accreditation – In addition to government and in-house monitors and auditors, most contracts call for accreditation of operations by third-party accreditation agencies such as the International Standards Organisation (ISO). These accreditation systems serve as an outside and objective quality assurance program. The GEO Group Australia has achieved numerous accreditations for its facilities.
Competition – There is healthy competition among the handful of private correctional service providers that results in the need for each to maintain a standard of performance consistent with a marketable reputation. At GEO we consider our reputation to be our single most important marketing asset.
Media Scrutiny – Members of the public are naturally curious about an institution that is financed by all but seen by few. Add to this natural curiosity the fact that the operation of a prison by a private company is still a relatively novel idea and you can appreciate the media's heightened focus on privately operated prisons. Private operators have come to understand and to expect that an otherwise uneventful incident in a publicly operated prison will generate significant media interest and coverage when occurring in a privately operated facility.
Isn't it wrong for the government to contract out a core governmental responsibility?
It is important to remember that the government is not contracting away its responsibility for the safe, secure and humane incarceration of offenders; that responsibility always remains with the government. Rather, it is contracting out to a private company the performance of those tasks that comprise that responsibility.
Many of the individual tasks within a prison have long been contracted out to the private sector – health services, food services, maintenance, to name a few. Contracting out the 'complete package' is a difference of degree, not of kind.
Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government is dependent upon the service?
Prison operating contracts are generally for an initial term of not more than five years. Few company executives can offer their shareholders 'loss leaders' for very long without dusting off their resumes.
As already discussed, competition among private operators remains keen. Any operator who believes that today's losses can be made up at tomorrow's negotiating table forgets that the competition is eager to take a seat at that table.
Since a company gets paid a fee for eachÊoffender it keeps, won't it try to increase the amount of timeÊoffenders stay in prison?
Private prison operators do not legislate, consider, nor impose the sentences served by offenders. We are contractually prohibited from adding or subtracting one day to an offender's sentence.
How can a global company understand the cultural and community needs associated with a specific facility and a particular state's offenders?
GEO is primarily a service company with acquired expertise and experience in the design, financing, construction and operation of prisons.
There is no single GEO prison design, no fixed method of financing, no one system of construction, no single set of operating rules. We are not a franchise company. Each of our prisons represents a comprehensive and creative response to the unique requirements of each government client.
What GEO offers to our clients is knowledge Ñ proprietary information Ñ in the form of a transfer of technology. We bring our insights and experience gained from around the world to a collective, local effort, and we adopt and adapt until we have achieved a local solution that represents world-best standards.
In short, our Texas and our Australian prisons have far more in common with their local public sector facilities than they do with each other - except insofar as each, and all, represent our commitment to professionalism, integrity, and quality, client-based service.
Cultural and community ties are often one of the most critical factors in the success of any rehabilitation program and it is vital that offender programs are tailored to meet the peculiar needs of the offenders they are designed to assist. The GEO Group Australia has a strong record in this area, particularly in relation to developing specific programs for indigenous inmates.
Offender programs are carefully designed to reflect not only local cultural characteristics, but also to operate in line with the established program objectives of the state correctional system.
GEO also recruits nearly every facility employee from the immediate local region. This extends to offering casual employment on a seasonal basis to meet particular community needs in regional areas.
How do we know a company won't buy all of its daily operational supplies from central wholesalers located outside of the state?
It is a top priority of our company to demonstrate our commitment to a long-term relationship with our government client. One of the primary ways this is achieved is by being a good corporate citizen.
Local suppliers are given every opportunity to meet our needs and we have a strong bias in favor of 'buying local'.
In addition, each GEO centre has a community consultative committee. This committee work diligently to fully involve the community in the 'life' of the prison and to address any questions or concerns community groups or citizens may have regarding the facility's operation.
The committee also develops relationships with local non-profit organisations and coordinates staff volunteer efforts and fundraising events.
Isn't it wrong for a company to make a profit from the suffering of others?
Firstly, "the suffering of others" is hardly how corrections professionals, including GEO, would characterise the conditions under which our offenders are held.
The loss of freedom – not the conditions of confinement – is the only punishment that an offender should face. Our offender regimes are strict and well organised, but they are not punitive or demeaning. Offenders are shown, and they are expected to return, simple courtesies and respect.
The privatisation of prisons is a public-private partnership and this relationship is no less true in the area of profit sharing. Every dollar of taxpayer funds saved through this partnership can be spent on competing public services such as schools, hospitals and roads.
