Topic of Interest: America’s Prison System

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Prison systemThe Corrections Corporation of America (CCA) allocated $250 million for purchasing and managing government-owned correction facilities. This program is a new opportunity for federal, state and local governments that are considering the benefits of this proposition.

CCA believes the state can benefit from a one-time payment and will be able to achieve cost savings through outsourcing, as prison corporations give fewer benefits to employees. The Huffington Post reports that CCA has recently sent letters to 48 states offering to buy their prisons as a solution for “challenging corrections budgets.” In CCA’s offer, they are asking for a “20-year management contract, plus an assurance that the prison would remain at least 90 percent full.”

“We believe this comes at a timely and helpful point in time and hope you will share our belief in the benefits of the purchase-and-manage model,” said Harley Lappin, CCA’s chief corrections officer, who was also a former director of the Federal Bureau of Prisons.

This business move reflects a major shift in its approach for the private prison industry, which until now has expanded by building prisons of its own or managing state-controlled prisons. It also represents a unique bid for more control of state prison systems.

CCA is known as the nation’s largest provider of partnership corrections to federal, state, and local governments. CCA’s mission is to combine the power of the marketplace with the standards, regulation, and oversight of the government. The Ohio Department of Rehabilitation and Correction is one of the states that took advantage of this opportunity.

“On Jan. 1, 2012, CCA assumed ownership and management responsibility in a transition described by all parties as seamless,” Lappin says in his letter sent to the Ohio prison system. “This transfer culminated a process that, according to state officials, generated more than $72.7 million in proceeds for Ohio taxpayers, about $50 million of which was allocated for the Ohio Department of Rehabilitation and Correction. Estimated annual savings in corrections operations are placed at $3 million.”

CCA is currently operating 66 facilities, including 45 company-owned facilities, with approximately 90,000 beds, in 19 states, and the District of Columbia. Although CCA is seeing some results of creating partnerships with the prison systems within the U.S.  The Huffington Post says, “State corrections officials who were contacted in California, Pennsylvania, Virginia, Montana, Georgia, Texas, Illinois, and New York all said they were not considering such prison sales at this time. In Illinois and New York, laws prohibit state inmates from being housed in private prisons, according to corrections officials.”

Read more at The Huffington Post.