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Nh Doc Report on Facility Rfp Review April 2013

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STATE OF NEW HAMPSHIRE
Department of Corrections and
Department of Administrative Services

Report on Review of Correctional Facility RFPs 1356-12, 1380-12 and
1387-12
April 2013

1

I.

Release of RFPs

Chapter Law 224 of the 2011 legislative session directed the New Hampshire Department of
Administrative Services, in conjunction with the New Hampshire Department of Corrections (the
“Departments”), to issue a series of request for proposals (“RFPs”) related to the construction,
operation and potential privatization of certain of the State’s correctional facilities. In accordance
with this directive, the Departments issued a series of RFPs in late 2011. More specifically:
RFP #1356-12 for Male Facility – Released 11/15/2011, Responses Due 3/9/2012
RFP #1380-12 for Female Facility – Released 12/2/2011, Responses Due 3/1/2012
RFP #1387-12 for Hybrid Facility – Released 12/19/2011, Responses Due 4/2/2012
In response to these solicitations the Departments received proposals for the RFP for a Male Facility
and the RFP for a Hybrid Facility from four vendors (there were no proposals submitted in response to
the RFP for a Female Facility). There were four different options for the male and hybrid facility. They
were as follows:
Option #1 Contractor builds and operates new correctional facility
Option #2 Contractor builds and the State operates new correctional facility
Option #3 Contractor renovates existing facility and builds or adds onto existing facility and
Contractor operates the renovated and or new correctional facility
Option #4 Contractor renovates existing facility and builds or adds onto existing facility and the State
operates the renovated and or new correctional facility
The Department received proposals as follows:
Description
Option #1 Male Facility
Option #2 Male Facility
Option #3 Male Facility
Option #4 Male Facility
II.

Number of
Proposals
5
0
2
1

Description
Option #1 Hybrid Facility
Option #2 Hybrid Facility
Option #3 Hybrid Facility
Option #4 Hybrid Facility

Number of
Proposals
6
0
2
1

Review of RFPs

Summary of Process
In order to review these responses the Departments organized evaluation teams made up of select
staff. These evaluation teams were put together for purposes of reviewing the proposals against the
requirements set forth within the respective RFPs. More specifically the Departments organized:
A Design Build Team – Made up of individuals from the Departments with duties related to the
design, maintenance and efficient utilization of facilities. This team focused on evaluating the
design aspects of the subject proposals;
2

An Operations Team – Made up of individuals from the Department of Corrections with duties
related to the operation of correctional facilities. This team focused on evaluating the
operational plans submitted as part of the subject proposals ; and
A Financial Team – Made up of individuals from the Departments with backgrounds in finance
and accounting. This team focused on evaluating the pricing proposals submitted by the
vendors.
In addition to organizing the above referenced teams, it was determined that it would be beneficial
to hire a consulting firm to assist in the evaluation in relation to the design/build, operational and
financial aspects of the responses. This assistance would include review of the proposals against the
requirements of the RFPs, including review of the associated and underlying court orders, consent
decrees and American Correctional Association (ACA) standards. It should be noted that these
requirements are an area of particular concern as failure to comply with the applicable court orders
and consent decrees could result in significant liability to the State.
The Departments, pursuant to Chapter 145:9, Laws of 2009, requested a transfer of appropriations to
enable the hiring of an independent consultant. This transfer of appropriations, which was granted,
allowed the use of funds to hire a consultant to assist with the review of the various proposals. As a
result, and with the approval of Governor and Executive Council in June of 2012, the Departments
engaged MGT of America, Inc. to review the proposals, particularly as it relates to operational and
financial concerns.
In terms of evaluating the content of the proposals the teams, in general terms, evaluated the
following:
Design/Build Evaluation Experience
o Project Experience General – Did the proposal exhibit the requisite level of
general design/build experience for a firm to ably undertake and deliver on the
project?
o Project Experience Specific – Did the proposal exhibit significant experience in
handling similar projects? Note, at a minimum there must have been one project
of similar requirements in the last ten (10) years.
Organization
o Skills and Experience of Design Team – Did the proposal showcase a Design
Team with the skills and abilities to undertake and deliver on the project?
o Skills and Experience of Construction Team – Did the proposal showcase a
Construction Team with the skills and abilities to undertake and deliver on the
Project?
Development Plan – Did the development plans adequately address specific concerns
related to:
o Feasibility?
o Functionality?
o Security?
o Location?
o Applicable Standards set forth in the RFP/ACA/Court Orders?
3

Work Plan – Did the work plan adequately depict tasks, dependencies, schedule,
milestones and deliverables? Did the plan reflect a realistic opportunity for success at
completing the project on time?
References – Did the references support the proposition that the proposing firm is
capable of undertaking and delivering on the project?
Operations Evaluation
Experience –Did the proposal exhibit that the proposing firm has directly relevant
experience in operating a facility of similar size and scope of operations? Note, at a
minimum the proposal must have shown that the firm , since 2001, has either
continuously or concurrently operated at least two (2) criminal justice facilities of at
least 400 beds for a minimum of two years, or one (1) criminal justice facility of at least
1200 beds for one year or more.
Organization – Did the proposal exhibit the organizations’ resources (primarily through
review of the prison’s proposed organizational chart) are sufficient to address the
operational requirements of the facility? Did the job descriptions and identified
responsibilities of said jobs illustrate an understanding and appreciation of the
operational tasks to be undertaken?
Staffing – Did the staffing plans/patterns appear feasible/functional and in accord with
applicable (RFP/ACA/Court Orders) standards?
References – Did the provided references support the proposition that the proposing
vendor is capable of undertaking the operational obligations of the project?
Price/Financial Evaluation
Attachment C (Per Diem Rates and Cost Breakdown)
Attachment G (Buyout)
Financial stability and wherewithal of organization – Did the proposal exhibit that the
relevant firm is sufficiently sound in terms of finances to undertake and deliver on the
Project?
Summary of State’s Findings
Individual team members reviewed the proposals independently and then met with the respective
members of their teams on a weekly basis over the course of several months for purposes of
discussing their findings. In addition to finding that all of the vendors had some areas of noncompliance with the design/build requirements, they also discovered all were non-compliant with
meeting the Department of Corrections’ (DOC) legal obligations stemming back to a deliberate
decision the RFPs drafting team made to simply list the requirements of the various court orders and
settlements instead of describing how the DOC currently implements those mandates. The intent
behind making this decision was to give vendors wide-latitude to propose alternative methods of
implementing the mandates. During the selection process, however, it became apparent that there
were significant issues in evaluating compliance with the RFPs’ criteria. More specifically, the
proposals exhibited a lack of understanding of the overarching legal requirements placed upon the
DOC relating to the court orders, consent decrees and settlements which, in large part, dictate the

4

administration and operation of their correctional facilities and attendant services to the inmate
populations.
These consent decrees and settlements, of which there are four principal cases that impact
operational compliance, are longstanding, iterative and overlapping dating back to the late 1970’s
and have evolved over time into robust policies governing the operation of the prison system. As a
result their review, assessment and practical implementation, as described in the context of
responding to the RFPs, appeared to be too great a burden for the vendors who did not fully
understand the mandates and did not adequately address them in their responses.
In short, the responses to the RFPs did not provide sufficient detail in this area to ensure compliance
with the RFP. 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 solicitations did not elicit adequate responses capable of meeting the state’s legally
prescribed needs.
Role of the Independent Consultant
As noted above, the impetus for engaging an independent Consultant arose from the desire for
independent expertise in evaluating operational and financial aspects of the vendor’s responses.
The role of the Consultant was to evaluate how the responses correlated to the requirements of the
RFPs and, furthermore, to provide detailed costing/financial analysis which would facilitate like-to-like
comparison of the proposals to current New Hampshire Department of Corrections’ operations. Said
information is vital in order to make the difficult policy decisions needed to address the aging
architecture of the State’s Concord and Goffstown correctional facilities.
It should be stressed that the Consultant evaluated the responses independently from the State
teams. In addition, the Consultant was not employed for purposes of providing a recommendation.
Rather, their focus was on going through the stated requirements set forth in the RFP, assessing
conformity to said requirements and in providing much needed comparison and assessment
information. In terms of financial analysis, the initial goal was to have the consultant provide a
financial model capable of empowering the Departments to engage in worthwhile what-if scenarios
based upon the numbers provided within the responses resulting from the RFPs.
This goal shifted based upon the Departments finding fault within the resultant responses. More
specifically, the Departments determined that comparison of and to the responses would be
confusing as the responses were not in conformity with the State’s prescribed needs, as detailed
above. As a result, in an effort to provide decision makers with the most useful information possible
from what was received, the Departments worked with the consultant to provide financial analysis
that instead focused on identifying those facility driven costs of current correctional operations,
independent of any comparison to the responses resulting from the RFPs.

5

Summary of Independent Consultant’s Report and Underlying Findings
The Consultant, as described in detail above, was tasked with reviewing the responses for
compliance with the RFP and assisting with the formulation of a forward looking financial model. In
completing these tasks the Consultant provided detailed and independent analysis which gave
greater specificity to the general and broad based concerns of the State regarding compliance. In
sum, the Consultant’s findings echoed those of the State teams in terms of identifying disconnects
between the RFP requirements (inclusive of Court Orders and Consent Decrees) and the resultant
responses.
The Consultant prepared and provided detailed overviews assessing the subject proposals’
compliance to the requirements of the RFPs. These assessments were in the areas of Design/Build
specifications and Operational aspects (staffing, programming, etc.). In addition to these
assessments, the Consultant worked with the Departments to produce a financial forecasting tool for
purposes of informing decision/policy makers. Lastly, the Consultant provided a Business Case
Assessment for the potential privatization of State facilities.
Financial Forecasting Tool
The purpose of the revised financial forecasting tool was to project State costs by facility for 20 years
into the future. The State provided the Consultant with the baseline data that included FY2012 costs
and future capital expenditures. Based on this information a revised financial model was developed
and submitted projecting the operating costs by facility for the next 20 years. Additionally, it
developed a Net Cost per Inmate for the total population and is broken down by male and female
offenders. The tables below, which are snapshots taken from the model which is attached to this
report, identify:
Assumptions which were made for purposes of populating and preparing the model;
The Net Cost per Inmate; and
The projected increase in these costs over the next 20 years

6

rNEW HAMPSHIRE DEPARTMENT OF CORRECTIONS FINANICAL MODEL
SUMMARY OF ASSUMPTIONS

I

INMATE ASSUMPTIONS: For the purposes of the State "As Is" model, the financial projections have been based on the FY12 actual spending and related average inmate census for FY12
which was then adjusted to estimate a cost structure for the inmate census as of 12/1/12 (note: the ave FY12 census was 2,460 and the 12/1/12 actual census was 2,608). Future
changes in census have not been projected and/or accounted for within this model.
PRISON CAPACITY: As of 12/1/12, the estimated "Operating Capacity" as defined by the Department of Corrections for existing facilities was as follows: 2,178 for Men and 179 for
Women (all security classifications). As of 12/1/12, the inmate census per the Department of Corrections was as follows: 2,415 Men and 193 Women. Accordingly, the State's 'As Is'
model assumes the additional and ACA compliant capacity needed for the 12/1/12 census. Note: The capacity need for men is primarily in the C1/C2 Security Level (Transitional
Housing/Transitional Work Center)
CAPITAL EXPENDITURES: Based on the capacity analsyis performed as of 12/1/12, it appears that the primarly capacity need for the male population is C1/C2 Security levels (Transitional
Housing/Work Centers). Although the capacity for the female population appears close to the census, the capital improvements (new female prison) is proposed to replace the existing
capacity. See Capital Expenditure Summary which included approximately $80M of requirements between FY14-FY19.
EXPENDITURE GROUPS AND RELATED ALLOCATION ASSUMPTIONS FOR FINANICAL MODEL:
GROUP
EXPENDITURE EXAMPLES
ALLOCATION METHOD
I
Department-Wide Management and Administrative Costs
Commissioner's Office
Assumed to be 100% fixed cost allocated to facilies based on the number of
Financial Services
inmates (census)
Human Resources
Security and Training
Professional Standards
Programs
& Others
Department-Wide Medical, Dental & Pharmacy
Medical - Dental
Assumed 70% variable with inmates and 30% fixed costs for staff, etc.
Mental Health
Pharmacy
IAllocated to the Transitional Housing Units (C1/C2) based on census
Community Corrections - Transitional Housing
Community Corrections
Shared Debt Service
Includes Electronic Medical Records and Allocated to all facilities based on census
Staff Scheduling System Capital Projects
Facility Debt Service
Facility Specific Debt Service as estimated Allocated to specific facility based on capital projects related to the facility.
by Treasury including existing Debt Service New projects assumes a fixed coupon of 5%
(as of FY12)
Facility
Concord Men's Prison Excl SPU/RTU No allocation utilized / based on FY12 actual expenses incurred as reported
RTU
wtihin each Accounting Unit
SPU (Includes women)
Goffstown
Berlin
North End House
& All Other Facility Costs as Reported
Additional Cost Notes / Assumptions:
A 2.5% annual inflation factor for all expenses (excl debt service) was assumed - this rate appears reasonable based on the
Iprior/historical cost increases realized by the Department of Corrections.
Existing Debt Service as of FY12 "Concord Mens" has all been included within the Concord Men's Facility (nothing allocated
Ito RTU/SPU/Transitional Housing Unit)
The new facilities incremental operating costs were based on capital expenditure requests as submitted by the Department
Iof Corrections for the most recent budget.

I

I

t

t

j

~

j

~

* Population figures for the out years of the model are difficult to project since they are so easily affected by outside
influences such as legislative changes. The recent impacts on population trends under SB500 and SB52 illustrated wide
swings in the prison population in New Hampshire.

7

Net Cost per Inmate per Year
2012 Baseline 2033 Projected
2012 Baseline 2033 Projected
Male
$36,435
$61,050
Female
$37,573
$74,631

Increase
Increase
+68%
+99%

t

NH DEPARTMENT OF CORRECTIONS
OPERATIONS MODEL (Excludes Probation & Parole)
Base Expenditures for Model = FY12 Actuals & Related Census

t

t

FY 2012 Base
Year

FY19

FY21

2,460

2,608

2,608

2,608

245,505

291,828

306,602

412,346

I

FY33

MEN + WOMEN
FY12 = Ave Census for FY12 / FY13-FY33 = 12/1/12 Census
TOTAL ANNUAL REVENUE (if applicable)
TOTAL ANNUAL COST :
Dept-Wide Mgmt & Administrative
Dept-Wide Medical, Dental & Pharmacy
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Department of Corrections Cost
TOTAL NET STATE COST
TOTAL ANNUAL STATE COST Per Inmate:
Department-Wide Mgmt & Admn
Department-Wide Medical, Dental, Pharm
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Estimated Cost Per Inmate
Less REVENUE PER INMATE
TOTAL NET STATE COST PER INMATE
Per Diem Cost
% Increase Vs FY12 Base

I

1I

t

12,750,789
16,484,304
1,201,802
0
3,043,394
56,574,020
90,054,309

5,183
6,701
489
0
1,237
22,998
36,607
(100)
36,508
$100

15,156,681
20,419,863
1,428,565
60,580
11,836,809
72,562,964
I 121,465,462

1I

t

5,812
7,830
548
23
4,539
27,823
46,574
(112)
46,462
$127
27%

15,923,988
21,453,619
1,500,886
56,860
12,152,662
77,949,341
I 129,037,355

1I

t

21,415,993
28,852,732
2,018,525
27,160
5,105,425
104,833,198
162,253,033

6,106
8,226
575
22
4,660
29,889
49,478
(118)
49,360
$135
35%

8,212
11,063
774
10
1,958
40,197
62,214
(158)
62,055
$170
70%

MEN ONLY
FY12 = Ave Census for FY12 / FY13-FY33 = 12/1/12 Census
TOTAL ANNUAL REVENUE (if applicable)
TOTAL ANNUAL COST :
Dept-Wide Mgmt & Administrative
Dept-Wide Medical, Dental & Pharmacy
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Department of Corrections Cost
TOTAL NET STATE COST
TOTAL ANNUAL STATE COST Per Inmate:
Department-Wide Mgmt & Admn
Department-Wide Medical, Dental, Pharm
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Estimated Cost Per Inmate
Less REVENUE PER INMATE
TOTAL NET STATE COST PER INMATE
Per Diem Cost
% Increase Vs FY12 Base

I

1I

1-

2,302

2,415

2,415

2,415

245,505

291,828

306,602

412,346

11,931,835
15,500,179
1,039,501
0
3,005,397
52,640,909
84,117,821

5,183
6,733
452
0
1,306
22,867
36,541
(107)
36,435
$100

14,035,040
19,031,067
1,282,934
56,097
7,575,965
66,372,653
I 108,353,757

1I

1-

5,812
7,880
531
23
3,137
27,484
44,867
(121)
44,746
$123
23%

14,745,564
19,994,515
1,368,455
52,652
8,147,443
71,445,646
I 115,754,275

1I

1-

6,106
8,279
567
22
3,374
29,584
47,931
(127)
47,804
$131
31%

19,831,144
26,890,400
1,840,419
25,150
3,175,725
96,086,451
147,849,289

8,212
11,135
762
10
1,315
39,787
61,221
(171)
61,050
$167
68%

8

WOMEN ONLY
FY12 = Ave Census for FY12 / FY13-FY33 = 12/1/12 Census
TOTAL ANNUAL REVENUE (if applicable)
TOTAL ANNUAL COST :
Dept-Wide Mgmt & Administrative
Dept-Wide Medical, Dental & Pharmacy
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Department of Corrections Cost
TOTAL NET STATE COST
TOTAL ANNUAL STATE COST Per Inmate:
Department-Wide Mgmt & Admn
Department-Wide Medical, Dental, Pharm
Community Corrections - Trans Housing
Shared Debt Service
Facility Debt Service
Facility
Total Estimated Cost Per Inmate
Less REVENUE PER INMATE
TOTAL NET STATE COST PER INMATE
Per Diem Cost
% Increase Vs FY12 Base

158

193

193

193

0

0

0

0

818,953
984,125
162,301
0
37,997
3,933,111
5,936,488

1,121,641
1,388,796
145,630
4,483
4,260,844
6,190,311
13,111,705

1,178,424
1,459,104
132,431
4,208
4,005,219
6,503,695
13,283,081

1,584,849
1,962,333
178,105
2,010
1,929,700
8,746,747
14,403,744

5,183
6,229
1,027
0
240
24,893
37,573
0
37,573
$103

5,812
7,196
755
23
22,077
32,074
67,936
0
67,936
$186
81%

6,106
7,560
686
22
20,752
33,698
68,824
0
68,824
$189
83%

8,212
10,168
923
10
9,998
45,320
74,631
0
74,631
$204
99%

In short, the repurposed model developed and submitted to the State provides a comprehensive 20
year projection of the state’s cost of operation broken down by facility and major cost category.
Utilizing the baseline data, the Consultant created a 20 year projection model that adjusts the costs
and revenues by category and facility assuming a 2.5% annual inflation rate. The model also includes
adjustments in the appropriate years for each of the projected capital requirements – including both
the expected debt service payment and increase in operating costs, if any, associated with each
planned project. In the fiscal years that the new facilities are projected to be operational, the inmate
census data was adjusted to correspond with the movement of prisoners between facilities, and for
the increase in the expected number of total prisoners housed.
The projections result in two detailed reports that were provided to the State:
20 Year Detail: This report shows the operating costs by facility by year for the next 20 years in
the same format that the baseline FY 2012 data was provided. Much of this worksheet is
formula driven and will automatically recalculate if the FY 2012 baseline cost data, capital
requirements, debt payments, or census data is modified. This allows the State to conduct
comparative what-if analysis for different scenarios.
20 Year Summary: This report is a summary of the 20 Year Detail report and displays costs by
category of expense and by gender of inmate. The primary difference between this and the
detailed report is the summary report does not display the cost projections at the facility level.
9

Business Case Assessment
The Consultant’s business case analysis of privatization in the New Hampshire Department of
Corrections (NHDOC) assesses whether it is in the basic interests of the State to privatize a substantial
portion of the operations of the state prison system, as called for in the RFP’s issued by the State. The
Consultant’s approach to this analysis sought to establish the degree (if any) to which private
operation of correctional facilities may result in less total government spending than the State’s
management of the current correctional system, given a specified standard of operational
performance.
This approach represents a modified version of the privatization assessment methodology developed
by the federal Office of Management and Budget (OMB), currently described in OMB Circular A-76.
This methodology works backward from the known costs associated with prison system operations,
comparing the actual costs to government of its current operations with the projected total system
costs of incorporating contracted facilities into its business model.
The A-76 assessment methodology begins first with the definition of current system costs. In order to
establish a baseline for comparison, the Consultant developed the financial model discussed earlier,
which is a comprehensive cost projection for the state correctional system that identifies current
business model expenditures for the next twenty years. The projection makes two key assumptions, 1)
that system costs and revenues will grow over time, consistent with a 2.5% annual cost inflation rate;
and 2) that the correctional system will require significant capital investments to assure the
operational integrity of current state owned facilities and to create new male transitional center and
female correctional center capacity. In total, we project these capital investments, summarized in
the table below will total $79.7 million (approximately 94 percent of this spending goes to build a new
women’s correctional facility and four new male transitional centers).
It is important to note here that in using the financial model of current and future state costs certain
factors must be factored in including:
1. Determination of fixed versus variable cost dictated by a proposed scenario;
2. Determining what costs would be retained by the state in a proposed scenario;
3. Medical costs that would be required of the state under a proposed contract;
4. Travel cost necessitated under a proposed scenario; and
5. Cost for oversight, quality assurance and contract management.
As has been noted in the table on page 7, other than the need for a new prison facility for women
the bulk of the remaining capital costs forecast in the model are for C-1/C-2 transitional housing for
men. These costs are included as a means to avoid significant capital investment on additional
secure housing for men. Since the state does not often release inmates to other states these
transitional facilities need to be sited in New Hampshire.
10

Summary of Capital Improvement Projects
Financial Model for NH Department of Corrections

Project Title/Name
New 225 Bed Women's Prison (C2-C5 Security)
New Men's 64 Bed C-1 (Trans Housing) Facility - 1 of 2
Replace Steam Lines and Install Steam Injector Pumps
Repair Bathroom Floors - Hancock Building
New Men's 64 Bed C-1 (Trans Housing) Facility - 2 of 2
Replace Roofs in Gym, Auto Shop, Outside Canteen, and Warehouse
Replace Two 20,000 gallon Oil Tank & One 5,000 Gal. Diesel Tank
Replace Access Road - Berlin facility
Electronic Medical Records System
Staff Scheduling System
Men's 64 Bed C-2 (Transitional Work Center) Facility at NCF
Men's 64 Bed C-2 (Transitional Work Center) Facility in Concord
Bathrooms - MCN, MCS
TOTAL ESTIMATED CAPITAL REQUIREMENTS

Estimated
REVISED CAPITAL EST. AND SUGGESTED TIMING - January 2013
Incremental Annual
Square Estimated
Footage Useful Life 2014/2015 2016/2017 2018/2019 Compl Date In Operation Location Operating Costs
90,000 50 Years $ 41,950,000
2017
2018 New Women 1,478,124
23,053 50 Years
$ 8,450,000
2018
2019
Concord
1,043,139
25 Years $ 495,000
2014
2015
Concord
20 Years $ 312,500
2015
2016
Concord
23,053 50 Years
$ 8,450,000
2018
2019
Concord
1,043,139
20 Years
$ 1,570,000
2016
2017
Concord
20 Years $ 130,000
2014
2015
Concord
20 Years $ 580,000
2015
2016
Berlin
20 Years $ 500,000
2015
2016 Dept wide
20 Years $ 120,000
2014
2015 Dept wide
23,137 50 Years
$ 7,910,000
2018
2019
Berlin
1,712,877
23,053 50 Years
$ 8,450,000 2020
2021
Concord
1,712,877
20 Years
$ 755,000 2019
2020
Concord
$ 44,087,500 $ 26,380,000 $ 9,205,000

TOTAL ESTIMATED CAPITAL REQUIREMENTS FY14-FY19

$ 79,672,500

It should be noted that in reviewing the Business Case Assessment it is difficult, if not impossible, to
utilize the received proposals for purposes of comparison with existing and forward looking
correctional costs. This difficulty stems from the fact that, as described in general terms above, the
received proposals lacked certain essential components. As an example, the proposals exhibited
insufficiency in the areas of staffing, spacing and their configuration of services and programming.
As a result, a comparison of their costs would not be helpful in that there is the potential that they are
woefully understated to what it would actually cost for a fully compliant facility.
Overview of Construction Costs for Comparison
Construction Cost Benchmarks
As part of their review the Consultant identified benchmarks for prison construction costs. The
Departments requested this information to have a baseline understanding of cost to construct
correctional facilities across the country. To accomplish this, the Consultant polled numerous sources
of prison construction data to identify where facilities were constructed and the type and cost of
construction. The Consultant found limited available data relative to the construction costs for prison
facilities completed since the year 2000. The Consultant felt that this is likely due to the fact that after
11

the prison population boom of the 1980’s and 1990’s had ended few new prison facilities were
constructed by states. In fact, during the last decade several states had begun closing facilities as a
way of reducing correctional budgets. As a result, their capital programs have been essentially
maintenance and specific need projects. The exception has been the Federal Bureau of Prisons
(FBOP) which continued their facility expansion initiative.
The Consultant found data on fourteen construction examples that span from 2000 – 2012. This
information is provided in the table which follows. Since much of the data available is aged, inflation
factors, regional construction cost indexes and a conversion factor have been applied to each
project to provide costs as they could be reasonably be for a similar type project located in
Concord, New Hampshire in the year 2012.
The Consultant found wide variance in the average construction cost per bed, even between
facilities that house the same classification of offenders. For example, the cost per bed for a
maximum security facility constructed in Illinois in 2003 was $97,169.62 while the cost per bed for a
Federal Bureau of Prisons (FBOP) maximum security facility constructed in Kentucky was $247,546.57. It
should be noted that little or no data is available relative to programs and program spaces in these
respective institutions. However, the square feet area per bed can be used as a measure of the
probable richness of program activities and space. It is also noted that the costs per square foot tend
to increase with higher square feet per inmate, another indication of probable program richness. In
the example above, the cost per square foot of the Illinois facility was $249.93 while the cost per
square foot of the FBOP facility was nearly 35% higher ($337.45). In total for the fourteen facilities the
average construction cost per square foot (adjusted) was $312.03, as is shown in the table below.

12

Maximum Security Facilities

Agency

State of
Delaware Div.
of Fac.Mgt.

Federal
Bureau of
Prisons

Illinois Capital
Dev. Bd.

Federal
Bureau of
Prisons

Special Population/Special Needs Facilities
Medium Security Facilities
State of
MIDLANT
Bledsoe
Florida (GEONaval Fac.
County
Nebraska
Washington
Des/Bld/Oper
Eng.
Correctional
DOCS
State DOC Colorado DOC
ate)
Oregon DOC
Command
Facility

Location

Delaware

Kentucky
(Eastern)

Illinois (N.
West)

Florida
(Central)

Nebraska

Washington
(East)

Colorado
(Central)

Milton, Florida

Oregon

Washington,
D.C.

2001

2002

2003

2004

2001

2002

2003

2010

2008

2010

Max./Close

US Pen.
Max./Work

Max. Male

US Pen.
Max./Work

Special Mgt.

No. of Beds

900

896

1800

960

960

108

250

2000

1900

400

1444

1864

1230

1024

No. of cells

600

No data

1600

No data

640

108

250

No data

No data

400

632

971

No data

464

Year completed

Security level

Total Cost

418,686
$

Sq. ft.per bed
Cost per s.f.

Sp. Needs/
Mental,

Federal
Bureau of
Prisons

Federal
Bureau of
Prisons

Georgia DOC

Tennessee

California
(Southern)

Berlin, N.H.

Georgia

2011

2000

2010

2003

Special Needs Medium Male
FCI Minimum
& Med.
& Female
Medium Male
Male

107,386

657,289
$

465.21
$

230.83

795,000

162,946 $
733.58

$

222.12

$

538,190

364,563

61,864 $

93,217 $

67,083

441.67

560.61

379.75

140.07

$

166.28

$

176.65

56,000
$

117,200

135,185 $
518.52

$

260.71

$

400,000

87,483 $

60,500

468.80

200.00

186.61

$

302.50

600,000
$

100,000

210,000
$

315.79
$

316.67

459,117

175,000 $
525.00

$

333.33

$

645,714

99,592 $

46,775

317.95

346.41

313.23

$

135.03

686,766
$

200,000 $
558.35

$

358.20

$

42,592

53.5%

50.2%

45.2%

7.1%

6.5%

7.1%

2.7%

55.6%

7.1%

45.2%

Regional cost factor

103.5%

96.6%

90.3%

88.8%

87.3%

103.8%

92.2%

85.1%

99.6%

97.3%

84.2%

100.8%

100.0%

88.0%

Concord, N.H.
adjustment factor

94.4%

101.1%

108.2%

110.0%

111.9%

94.1%

106.0%

114.8%

98.1%

100.4%

116.0%

96.9%

100.0%

111.0%

Concord adjusted cost
per bed (2012)

$ 155,629.78

$ 247,401.35

$

220.03

$ 97,180.94

$

249.91

$ 140,105.52

$

303.51

$ 115,259.51

$

368.60

$ 191,127.73

$

287.10

$ 134,593.41

$

371.95

$ 74,389.12

$

330.66

$ 104,418.93

$

358.47

$ 188,195.32

$

373.12

$ 118,632.90

$

203.64

$ 70,543.61

$

383.63

$ 214,200.00

$

102,830

235.34

36.6%

337.25

$

152.59 $

45.2%

$

445,312

436.48

50.1%

334.54

103,283,830

279.14

53.5%

$

$

285,836

Inflation cost factor

Concord adjusted cost
per s.f. (2012)

AVERAGE

FCI Minimum Min/Med/Clos
Male
e/Max

$ 96,647,000 $146,000,000 $111,355,000 $ 89,487,928 $ 64,400,000 $ 14,600,000 $ 21,870,800 $121,000,000 $190,000,000 $ 70,000,000 $143,810,161 $ 87,188,300 $246,000,000 $ 43,614,436

Total sq. ft.
Cost per bed

Special Needs Special Needs

Minimum Security Facilities

245.96

$

312.03

$ 68,656.23

$

137,166.74

*Note: Inflation factors used are based on U.S. Department of the Interior Bureau of Reclamation "Structures and Improvements" published in 2012. Regional construction cost indexes used are
based on R.S. Means Cost Data 2013. Conversion factors are the New Hampshire regional cost index divided by the regional cost index of the subject project location.

13

Confidentiality Concerns Related to Substance of Independent Consultant’s Work Product
It should be noted that the vast majority of the Consultant’s work, or, more particularly, the vast
majority of work product that they provided, are unsuited for public dissemination based upon the
confidentiality requirements which attach when bids are not actually awarded. More specifically,
RSA 21-I:13-a (II) provides:
“No information shall be available to the public, the members of the general court or its staff,
notwithstanding the provisions of RSA 91-A:4, concerning specific invitations to bid or other
proposals for public bids, from the time the invitation or proposal is made public until the bid is
actually awarded, in order to protect the integrity of the public bidding process .”[Emphasis
added]
In this instance, where the solicitation has been cancelled and an award has not been made, and
where the State is still considering its options with regards to soliciting for the same services,
information specific to the proposals resulting from the RFPs cannot be released at this time. It is for
this reason that the work product of the Consultant which contains specific reference to the
substance of the proposals is not available for public disclosure at this time.
III.

Cancellation of RFPs and Suggested Next Steps

The immediate next step, taken in conjunction with the release of this report, is the formal
cancellation of the solicitation process. This decision, based upon the detail provided above, is
made in the best interests of the State. While the released RFPs will not give rise to an executed
contract, the Departments believe that the exercise was far from fruitless. As an initial matter, and as
noted above, it is the Departments’ belief that the financial analysis provided by the Consultant
helps to inform the discussion of where to go next. It aids in the upcoming consideration of the
manner and method by which to tackle the responsibilities of conducting correctional facilities’
operations. In addition to having specific financial information to serve as a foundation for these
discussions, the Departments are in a far better position to identify, and if need be, solicit for, the
facilities driven needs of correctional operations going forward.
More specifically this process has stressed the importance of defining and clearly specifying the
detailed requirements which are associated with constructing and operating a correctional facility
given the array of applicable standards. In short, to the extent that a decision is made to re-issue a
solicitation to secure the subject services (whether it is for construction or operationally related
services), the Departments would recommend specifically spelling out the manner in which
compliance with the relevant court orders and consent decrees is assured. Simply stated, leaving
matters such as this open to the responding vendor’s interpretation is inefficient for purposes of
reviewing responses and comparing proposals. In addition, and perhaps more importantly, it is
problematic in that the State risks contracting for services that do not meet the prescribed standards.

14

IV.

Conclusion

Pursuant to legislative direction, the Departments released a series of RFPs related to the
construction, operation and potential privatization of certain of the State’s correctional facilities.
Based upon concern over the lack of responses with a clearly articulated understanding of the
requirements set forth in the RFPs, particularly the Court Orders and Consent Decrees, a decision was
made to cancel the solicitation process. In working with an independent Consultant the
Departments harnessed an increased appreciation of current operational costs. Based upon this
appreciation of facilities driven costs, and an honest assessment of the cancelled RFP process, the
State is in a better position to identify and solicit for its correctional needs, whether operational or
strictly construction related, going forward.

15

 

 

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