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Reforming Federal Halfway Houses, DOJ Dep AG - Memo for the Acting Director of FBOP, 2016

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U. S. Department of Justice
Office of the Deputy Attorney General

The Deputy Attorney General

Washitl8101I. D.C. 20530

Novembe r 30, 20 16

MEMORA N DUM FO R TH E ACT ING DI RECTO R
FEDERAL BUREAU OF PRJ SONS

~( )/

FROM:

Sa lly Q . Yates
Deputy Attorne/Ge;;'e~O

SU BJ ECT:

Reforming Federal Halfway Houses

Since the I 960s, the Federal Bureau o f Pri sons has permitted certain inmates to spend the
fin al months of their pri son terms in residential centers designed to facilitate their transition back
to the community. T hese fac ilities- known generall y as "ha lfway houses" and which the Bureau
now call s " Residential Reentry Centers" (RRCs)- provide a structured, supervised environment
where res idents can find outside empl oyment, reconnect with family, and prepare fo r release.
Successful reentry is critical for public sa fety, and so it is crucial that we get those
services ri ght. A growing body of research demonstrates that inmates are far more li ke ly to
return to society successfull y if they are equipped with the prerequi sites fo r a stabl e li fe. These
include a steady job, a safe place to li ve, state-i ssued identification, and access to essenti al
services such as health care, particul arl y menta l hea lth and substance abuse treatment. The
di fference between effecti ve and inadequate reintegration programs is the di fference between
producti ve li ves and recidi vism, between safe streets and cycles of violence.
In the early years o f halfway houses, the federal government operated its own residential
faci liti es. Since 1981 , however, the ownership and operation of RRCs has been full y privatized,
with the Bureau relying on a mi x of for-profit companies and non-profit organizations. Today,
the Bureau maintains agreements with 103 di fferent contractors to operate 18 1 fac il it ies
nationwide, serving more than 30,000 residents a year.
As noted in my August 18, 201 6 memorandum on ending the use of pri vate pri sons, the
Department has serious reservati ons about outsourcing the Bureau' s core correctional and
rehabilitati ve services to pri vate compani es. As a practical matter, however, the Bureau
currentl y lacks the capacity to own and operate its own RRCs. Instead, we must direct our
efforts in the short term towards ensuring that the pri vate market for federa l ha lfway houses
operates efficientl y, transparentl y, and fa irly, with a foc us on both the publi c' s safety and the
needs of those leav ing pri son.

In recent months, the Department has conducted an in-depth analysis of the Bureau's
RRC operati ons, including an assessment by an outside consulting firm and an aud it by the
Office of the Inspector General. Thi s wo rk reveals that the Bureau can and must do more to
improve the quali ty of reentry services provided by halfway houses.
I am therefore directing that the Bureau immedi ately take the fo llowing ten steps to
reform the pri vate market for RRC services. I understand that the Bureau has al ready begun to
incorporate in policy and practi ce many of these steps, and I appl aud you all for your work in
thi s area.
I. Establish clear, uniform standards that apply to all RRC providers. One of the
most significant barri ers to a well-functi oning pri vate market fo r federal halfway houses is the
lack of a single set of standards fo r all RRC providers. Up to now, the Bureau has never required
all RRCs to provide the same baseline of uniform services, resulting in a patchwork of
requirements laid out in each indi vidual contract. The resulting lack of standardi zati on makes it
diffi cult for the Bureau to monitor and gather data on its contracted facilities, which in turn
impedes the deve lopment of best practices and results in inconsistent resident serv ices. To
address thi s, the Bureau must promptl y transiti on all RRCs to the same "S tatement of Work"
(SOW) for all competiti vely procured contracts, providing a standardized range of essential
services. I am pleased that thi s effort is already underway, with the Bureau issuing a new SOW
earlier thi s month for all pending RRC contract so licitati ons. To complete the process, I am
directing the Bureau to decline to exerci se the opti ons o f all ex isting RRC contracts at the nex t
available opti on period and then re-compete those contracts under the new SO W. '

2. Require all RRCs to provide the most essential reentry services. It is not enough
to establi sh a uni form standard for RRCs; this standard must al so ensure that RRC providers
provide a high leve l of reentry services most likely to reduce recidi vism. The SOW issued
earlier thi s month requires RRCs to recruit and retain skill ed staff members, including
employment-pl acement spec iali sts, case managers, and substance abuse treatment speciali sts,
and to provide extensive training to these employees. In addition, the new SOW will ensure that
RRCs provide appropri ate mental health services, including cogniti ve behavioral training, and
the too ls residents need to find employment, such as access to internet-enabled computers.
3. Collect and publish RRC data to drive performance. Currentl y, the Bureau does
not co ll ect adequate data about RRCs ' operations, making it difficult to compare RRC providers
and determine whi ch ones best prepare residents fo r a successful return to the community.
Under the new SOW, RRCs are now required to submit quarterl y data on a range of performance
metrics, including the average length of time it takes res idents to obtain empl oyment, the
percentage of residents participating in community treatment services, and the percentage of
, Three limited exceptions apply. The Bureau is permitted to renew an existing RRC
contract if: (a) the current prov ider already provides the services required under the new SO W;
(b) the current prov ider agrees to promptly mod ify its current contract and adopt the new SOW
wi thout substantia ll y raising the rate it charges the Bureau; or (c) the contract' s next avai lable
option occurs less than one year from the date of thi s memo and the Director of the Bu reau
concl udes that it would be more practicable to renew the contract fo r a one-year period and then
re-compete the contract at that time.
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residents registered for various public benefits at the time of their release, including health care,
veterans, di sability, and social security benefi ts. The Bureau should use thi s data to develop
"report cards" for each RRC and post thi s material on the Bureau 's public website, with the goal
of using the data to develop benchmarks and devise a contracting model that provides increased
incentives to RRC providers based on measurable results. In additi on, the Bureau shou ld seek to
link its own data with other crim inal justice databases to improve its risk assessment tools and its
understanding of the facto rs lead ing to recidivism.
4. Expand the Bureau's oversight and monitoring of RRC contracts. The Bureau 's
Residential Reentry Management Branch (RRMB) is responsible for overseeing the 181 halfway
houses, ensuring that the RRC providers effective ly supervise residents and that the federal
government receives the hi gh quality services it ex pects from its contractors. The Bureau should
expand its RRMB staff to improve its ability to monitor contract performance and correct
deficiencies. I am pleased that the Bureau recently posted openings for 30 new RRMB staff
positions and nine contracting officers dedicated to the oversight and procurement of RRC
services, with the goal of onboard ing the new empl oyees by early January 20 17. I encourage the
Bureau to continue eva luating ways to support RRMB ' s work, to include upgrading positions to
correctly reflect the increased duties and responsibiliti es of these positions.
S. Reevaluate the Bureau's RRC inmate-placement system, prioritizing the higher­
needs, higher-risk inmates most likely to recidivate. Although approximately 80 percent of
fede ral inmates spend a portion of their fin al months of their sentence in a halfway house, some
are transferred directl y to a period of " home confinement," whi ch is less cost ly to the Bureau
than housing a resident in a prison or an RRC. Add itionally, most RRC residents eventually
transition to home confinement prior to their release from custody. (In rare cases, certain
inmates are released directly from pri son to the comm unity.) Given limited resources and our
goal of promoting public safety, the Bureau sho uld prioritize RRC placements for inmates with a
higher ri sk of recidivism , wh ile shifting lower-ri sk inmates to home confinement where
appropri ate.
6. Reduce costs to RRCs and the Bureau by ensuring all federal inmates receive
government-issued identification documents prior to their transfer to a halfway house. Too
many federal inmates arrive at halfway houses without the identifi cation documents they need to
obtain employment and post-release housing, including a Social Security card, a birth certificate,
and a state-i ssued photo \D . RRCs currentl y assist residents in obtaining these documents but
the lengthy process can delay reentry progress for several weeks or months, and many
unemployed residents lack funds to cover the processing and application fees . The sooner
residents obtain these documents, the sooner they can find work and eventuall y transfer from a
halfway house to home confinement, resulting in signifi cant cost savings for the Bureau. The
Bureau has entered into a Memorandum of Understanding with the Social Security
Administration to fac ilitate inmates' obtain ing Social Security cards at no cost. I am pleased
that, concurrent with the release of thi s memo, the Bureau has committed to cover all costs
associated with inmates' obtaining birth certificates and state-issued photo 10 cards while they
are incarcerated . To the ex tent that an inmate arrives at an RRC without such documents, the
Bureau will reimburse the RRC for the cost of obtaining them , as outl ined in the new SOW.

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7. Reduce RRC operating expenses by procuring a single, nationwide Bureau
contract for location-monitoring services. Currently, each RRC is responsible for
implementing its own system for moni toring the whereabouts of residents when they leave the
halfway house for employment, family visits, or other approved reentry activities. These
surveillance systems often involve ankle bracelets and/or regular telephone call s to residents '
employers, which are unnecessarily burdensome. To create a more efficient and cost-effective
service, the Bureau should attempt to negotiate a single, nationwide contract for location­
monitoring and then require all RRC providers to use the same technology. I understand that the
Bureau issued a Request for Informati on (RFI) from potential contractors earlier this year and I
encourage the Bureau to compl ete the contracting process as quickly as practicable.
8. Develop a plan to limit the use of counterproductive "subsistence" fees imposed
on indigent residents. Federal law requires that RRC residents pay the Bureau a "subsistence"
fee of25% of their gross paycheck for any employment-related income earned wh ile living in
the halfway house, in addition to applicable federal and state taxes. (U ntil recently, the Bureau
imposed the same fee on individuals on home con finement, but eliminated that requirement in
August 20 16.) The Bureau' s process fo r collecting these subsistence fees is cost ly and
administratively burdensome for both RRCs and the Bureau, and these fees makes it difficult for
residents, who typica lly earn minimum wage, to meet their other financial obligations, including
restitution, fines, and child support. Federal law allows the Bureau to waive or reduce this fee in
certai n cases, and I am directing the Bureau to exp lore ways to expand its waiver authority to
substantiall y reduce or eliminate these counterproductive fees for indi gent residents.
9. Establish partnerships and information-sharing agreements with other
stakeholders involved in the reentry process. The Bureau and RRC providers should develop
partnerships with a wide range of stakeholders- including other federal agencies, state and loca l
governments, non-profits and private foundations, academic institutions, and companies that
employ forme r irunates- to enhance public safety and ensure the continuity of information and
care for inmates. Among other things, the Bureau should work with other stakeholders,
including RRCs and the U.S. Probation Office, to develop a consistent approach for identifying
each inmate's needs and crim inogen ic risks. To facilitate thi s, the Bureau should develop an
updated and standard ized " Indi viduali zed Program Plan" (IPP) that follows an indi vidual
through each stage of the reentry process.
10. Identify sites for pilot programs that would lower costs, increase competition,
and improve performance in the private RRC market. With the assistance of an outside
consulting firm , the Bureau has identifi ed a number of alternative contTacting and operating
models that, if successful , could strengthen the overall market for federal halfway houses and
result in substantial cost-sav ings for the Bureau. As a nex t step, the Bureau should conduct a
financial analysis to determine locations where it could pilot these alternat ives, specifically those
involving: (a) "umbrella " contracts, whereby the Bureau hires a single entity to oversee a
number of separately managed RRCs; (b) incentive-based contracts, whereby a portion of the
Bureau' s payments would depend on the contractor' s ability to meet certain outcomes for its
residents, such as lowering recidivism rates or increasing employment rates; (c) developmel1l of
government-owned, contractor-operated halfway houses, designed to increase competition in
areas with few private facilities; and (d) development ofgovernmel1l-owned, government­

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operated halfivay hOllses, to provide reentry services in areas signifi cantly underserved by the
private market. Once the Bureau has compl eted its fin ancial analysis and determined potenti al
sites, it should move quick ly to put these pilots into effect, seeking Congressional authori zation
where necessary.

In add ition to these ten steps, I have asked my staff in the Office of the Deputy Attorney
General to work with the Bureau to implement additi onal recommendations identi fied by outside
consultants and the Department 's Office o f Inspector General. Although there is much work to
be done, I have great confidence in the Bureau staff to carry out these critica l reforms. Thank
you, as always, fo r your tremendous work protecting the publi c's safety and ensuri ng the
successful reentry of individuals back to our communiti es.

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