Performance-based Prisons

Unlike its practice with many private state and county prisons, the bureau does not pay contractors based on the number of beds they fill. Instead, contractors are paid a set rate to operate the prison based on performance goals. The contractor, however, can receive bonus payments if more than 95 percent of a prison's beds are filled.

Michael Janus, who oversees the Bureau of Prisons' privatization programs, says the agency may pay more than state governments; it is more interested in how well a contractor performs than whether it is getting a bargain. "Our primary concern is a well-run institution. Price is one the last factors we consider [in selecting and evaluating contractors]," says Janus.

Under federal prison contracts, companies establish a quality compliance program to make sure they are meeting performance measures set out by the bureau. Also, a handful of on-site government employees oversee a quality assurance program that monitors the contractor through comprehensive semi-annual reviews and less rigid prison "walk throughs" that occur on a daily basis.

When problems arise, the contractor is notified immediately and asked to fix them. If a problem remains unresolved, it is reviewed at monthly contractor performance meetings. If the situation persists, the bureau can issue a nonconformance report to the contractor, which would allow the government to penalize the company for poor performance.

"The monitoring is done both systematically and ad hoc. It is continuous," says Gary Gilmore, one of four federal contract administrators who oversee the privatized Taft Correctional Institution in Taft, Calif., for the Bureau of Prisons. Taft Warden Raymond Andrews, who works for Wackenhut Corrections Corp., says the bureau's on-site contract administrators are very conscientious. "This is not the easiest contract I have ever worked on," says Andrews, who's also overseen privatized county and state correctional facilities for Wackenhut.

Percy Pizter, who serves as warden of the California City, Calif., federal prison for Corrections Corp. of America, says his operations are under daily review by government monitors, beginning with meetings at 8:15 each morning to discuss what's working and what isn't at the prison, which opened a year and a half ago in the Mojave Desert. "We are monitored very tightly, more so than any place I have ever been," says Pitzer, who was also a warden at several federal prisons before leaving government in 1998.

Angela Person, the bureau's assistant contract administrator at California City, says the daily meetings are critical to building a good working relationship between the government and the contractor. "There are more than 500 of them and seven of us here, so we can't operate in that environment if we don't have a good relationship. A lot of it entails bringing up issues in the daily meetings, so we don't create animosity," says Person.