Piliero Mazza &
Pargament, PLLC

Vol. 2, Issue 3
March 2001

An Update for Federal, State, and Private Prison Contractors

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Recent GAO Design-Build Protests Focus on Proposer's Price

Second Circuit Deals Private Prisons a Blow with Respect to Liability, Defenses

An Interview with Mike Janus, BOP's Chief of Privatization

Attorney General Ashcroft – A Proponent of Law

A Legislative Update



Construction Contracting

Recent GAO Design-Build Protests Focus on Proposer's Price

In this second part of a three part series on the Department of Justice's ("DOJ") decision to utilize "design-build" contracting for the construction of new prisons, the Corrections Contractor examines recent bid protests decided by the General Accounting Office ("GAO"). The largest number of GAO bid protests relating to design-build contracts involve the weight that a proposer's price should be given in the government=s total evaluation of that proposal.

The GAO has determined that the government must, at least to some degree, consider the price of every proposal that meets all other technical standards set forth by the government agency's request for proposal ("RFP"). For example, in Meridian Management Corporation, the GAO sustained a protest against the General Services Administration ("GSA") where a technically acceptable proposal was excluded without any consideration of price. Although the program was technically acceptable, the bidder was eliminated from the competitive range, despite the fact that its proposed price was lower than many of the competitive proposals. The GAO held that the government must consider price as an evaluation factor in every RFP, including design-build RFPs.


Second Circuit Deals Private Prisons a Blow with Respect to Liability, Defenses

A recent appellate court ruling by the Second Circuit has increased potential liability for private prisons.  The action was brought by an inmate who suffered a heart attack and fell while climbing a flight of stairs in a halfway house owned and operated by a private prison corporation.  The inmate alleges that an employee of the halfway house, who knew of the inmate=s heart condition, nonetheless ordered the inmate to climb flights of stairs rather than use the elevator.

The Second Circuit overturned the District Court=s ruling that the suit should be dismissed.  The Second Circuit reasoned that as private corporations, private prisons and their employees are not subject to the same immunity as federal agencies, such as federally-operated prisons. Further, a private prison does not gain immunity from these suits even when they contract with the federal government. As a result, private prison corporations as a whole are subject to lawsuits, as well as any individuals personally involved in the events that lead to the filing of the lawsuit.


Federal Privatization

An Interview with Mike Janus, BOP's Chief of Privatization

Recently, Mike Janus, the Chief of the Federal Bureau of Prisons' ("BOP" or "Bureau") Privatization Branch, was kind enough to grant an interview to the Corrections Contractor.  Mr. Janus has a wide variety of experiences in the BOP.  He was an Associate Warden for eight years and an assistant to the BOP Director.  He also a background in social science research.  Mr. Janus also has masters degrees in public administration and criminal justice.

Corrections Contractor ("CC"):  Can you explain the structure of the Bureau of Prisons and where the Privatization Branch fits into that structure?

Mike Janus ("BOP"):  The Bureau is organized by divisions and regions.  Each division is managed by an assistant director and has specific functional responsibilities.  The Privatization Branch fits into the Community Corrections and Detention Division.  The Division is responsible for half way houses, detention issues, and most recently, became responsible for privatization.  The Privatization Branch does three things, essentially, with regard to privatization.  First, we are the knowledge resource in the area of privatization and provide general direction in terms of privatization philosophy.  Second, we work with the BOP's Capacity Planning Branch to translate capacity needs into procurement actions.  Third, we provide contract monitoring, oversight and technical assistance to BOP regions which are responsible for the privatization contracts after award.

CC:  Is there a component at the Department of Justice ("Department" or "DOJ") which directs the policies of the Bureau with regard to privatization?

BOP:  The Department provides overall direction to the Bureau but there is no specific DOJ office that provides direction in area of privatization.  There is a general sense of guidance from the Department, but the Bureau for the most part develops its own approach to privatization.


Question & Answer

Attorney General Ashcroft – A Proponent of Law

Q:   Now that John Ashcroft has been confirmed as Attorney General, what impact will he have on the prison industry?

A:   Throughout his political career as Attorney General and Governor of Missouri, as well as United States Senator, General Ashcroft consistently campaigned for tougher sentencing standards for violent criminals.  For example, as a U.S. Senator, he introduced legislation on numerous occasions to stiffen sentences for drug dealers who sell drugs to minors. 

In conjunction with his belief in tightening sentencing requirements for many criminals, Ashcroft has displayed a willingness to invest in additional prison space.  During his tenure as Governor, Ashcroft increased the number of prison beds in Missouri by 60 percent.  However, no private prisons were established in Missouri during Ashcroft=s tenure as State Attorney General or Governor.


Federal Prison Commissaries

A Legislative Update

On January 3, 2001, Rep. Judy Biggert (R-IL) reintroduced a bill in the U.S. House of Representatives authorizing the Director of the Federal Bureau of Prisons to establish, operate and maintain commissaries in federal prisons. The legislation also directs the Bureau of Prisons to implement the Inspector General's August 1999 report which addresses the Bureau's management of inmate telephone privileges.

Under the bill, revenues generated from sales of commissary articles and services to prisoners would be deposited into a newly-created Prison Commissary Fund which would be operated by the United States Treasury. This fund would be used for commissary expenses and any other purpose that benefits the "general welfare" of inmates. However, no individual inmate would be entitled to any portion of this fund for his own personal use. This bill has been referred to the House Committee on the Judiciary.


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