NH closes door on private prisons
State officials formally cancelled the bidding process to privatize state prisons Wednesday because all four vendors who submitted proposals failed to show how they would meet legal requirements to administer prisons and provide inmate services.
The proposals revealed a lack of understanding of the court orders, consent decrees and settlements that govern the operation of the state corrections system, according to the report by the state Department of Administrative Services and Department of Corrections.
Failure to comply with these mandates "could result in significant liability to the state," the report added.
"As a result, the departments determined that it was in the best interest of the state to cancel the solicitation process. The decision to cancel, after having invested so much time and consideration, was not made lightly. Rather, it was a decision based upon an appreciation of the fact that the solicitation did not elicit adequate responses capable of meeting the state's legally prescribed needs," the 15-page report added.
The two agencies issued requests for proposals to construct, operate and potentially privatize state prisons at the direction of the state Legislature in late 2011.
The four vendors submitted a total 17 proposals last year to build and operate prisons. The proposals were for men-only prisons and hybrid prisons that would house men and women. No bids were received for women-only prisons.
"The RFPs (Requests for Proposals) were insufficient to convince us that they would be in compliance with those court orders and mandates," said Mike Connor, director of planning and property management for the Department of Administrative Services.
The state corrections system is governed by a series of court orders, consent decrees and settlements that have evolved since the 1970s, Connor explained.
They include court orders that male and female inmates have equal access to services and programs, and that there be a certain number of medical staff, Connor said. Other orders and decrees mandate minimum staffing levels with required levels of training and certification, he said. The requests for proposals required blueprints of how the prisons would meet these requirements, Connor said.
"There wasn't enough information that would convince us that they would meet those standards. In some instances, they just said they would comply, but they didn't say how they would comply," he said.
While the request for proposals did not result in a signed contract, the state agencies believe the process "was far from fruitless," the report said.
An independent consulting firm hired to analyze the proposals, MGT of America Inc., looked at whether privatizing state prisons would result in less total state government spending than if the state managed the current system.
The consultant developed a financial model that assumed state correctional costs over the next 20 years would grow at a 2.5 percent annual inflation rate and will require $79.7 million in capital investments, nearly all of which would go to build a new women's prison and four new male transitional centers.
The consultant found it "difficult, if not impossible, to utilize the received proposals for purposes of comparison with existing and forward-looking correctional costs," the report said. This is because the proposals provided inadequate information about staffing, spacing and how services and programming would be configured, the report said.
The state approved $171,347 last summer to hire MGT of America.
Connor said corrections department staff also participated in the evaluation teams set up to review the proposals against the criteria set down in the RFPs.
"In sum, the consultant's findings echoed those of the state teams in terms of identifying disconnects between the RFP requirement (inclusive of court orders and consent decrees) and the resultant responses," the report said.
The consultant also found "wide variance" in the average per-bed construction cost.
A coalition that opposes prison privatization called for the state to pass a bill that would make it illegal to privatize state prisons. House Bill 443 passed the House last month and is now before the Senate.
"This report takes privatization off the table. Now it's time to close the door," said Arnie Alpert, state program coordinator of the American Friends Service Committee, a member of the coalition.
The coalition cited the consultant's finding that for-profit vendors "planned to pay substandard wages that 'may make it difficult to maintain a trained and experienced staff. This could result in high turnover and ultimately impact the safety and security of correctional facilities."
Gov. Maggie Hassan's spokesman said she respects the decision made by the Administrative Services department in conjunction with the Departments of Corrections and Justice.
"The governor opposes allowing private companies to operate New Hampshire's prisons, as the track record of such arrangements in other states has not demonstrated success in terms of protecting taxpayer dollars while maintaining the highest level of public safety, and the lack of clear explanations in bids for how private operators would meet court orders governing corrections speaks to her concerns," spokesman Marc Goldberg said in a statement.
"Moving forward, the governor is focused on building a new women's prison, which we are pursuing through the traditional capital budgeting approach," he added.
Corrections Commissioner William Wrenn could not be reached for comment.