Policy Brief Project Description: Prison and Privatization - Research Paper Example

Outline A First Draft of the Policy Brief Introduction Economic Aspects of Prison Privatization Arguments in Favor & Against The Changing Policy Trend Case Study – Florida Policy Process Procurement Analysis Process Political Influence Shifting Public Values – Citizens’ Participation Conclusion First draft of the policy brief It starts with the introduction to the trend of prison privatization that started in the mid-1980s in the U.S. It covers the growth of prison privatization business. The root cause of encouraging privatization of corrections facilities is analyzed by covering the Reagan era when the public mood was against the President Reagan’s policies, and later political interference with such policy issues as prison privatization. The policy initiative was politically exploited, as becomes evident from the data analysis of 50 states. Economic aspects of policy over prison privatization are analyzed by covering sub topics on economic perspectives, which include arguments in favor and against the policy through cost factor discussion, theoretical considerations on the policy, and how prison prisons are managed. The changed policy trend includes a case brief of Florida. The process of policy making is elaborately evaluated. Analysis includes the procurement process. Role of politics is analyzed. Role of social stakeholder groups on changing values and participation of various stakeholders on the policy highlights the mood of the public and haste of the government in allowing privatization. Conclusion is derived on taking a restraint approach. Policy Brief Project Description (prison and privatization) Introduction The trend of prison privatization started in mid-1980s in the United States. Taking the lead from thereon, the prison privatization not only grew quite fast in the federal, state and county correctional facilities, but also captured market for other fields of the prison industry like providing financial services for the building of new prisons and the maintenance of the existing prisons. Additionally, a number of such private companies have become public limited concerns by indulging in stock trading as well. The business of prison privatization has seen relatively more growth than other services businesses. Generally, privatization of prisons is rooted in “public choice” reasoning of the socio-political environment, created from the antigovernment mood during the Reagan era. It led to policy change in the initial stages of policy formulation, and in the operations of prisons. The issue of prison privatization has aired the notion that incarceration has become a tool in the hands of politicians for formulating policies on essential minimum imprisoning for the growth of prison privatization industry (Price a& Riccucci, 2005). Analysis of the data of the 50 states indicates the role of political elements like the political environment of a state and the political party governing the legislation, playing their cards to impress the motivation to privatization relatively to economic elements of cost-cutting. Interesting thing to observe is that irrespective of which party a state is ruled by, all states are focusing their efforts towards privatization to resolve the situation of over-crowing in prisons, as one factor among others (Price a& Riccucci, 2005). Economic Aspects of Prison Privatization Argument in the support of prison privatization has been presented from the economic point-of-view. Long-term viability of the prison privatization can be possible only if it relatively performs better in functional efficiency and service ranking to public prisons. The economic traits of the private prison industry come in the way because the private market is not competitive. Major players during 1995 to 2001 had captured 75% business of the private prison market. Private prison businesses had been just copying the public prison management in almost all areas to gain institutional relevance (Jing, 2010). Additionally, the complicated nature of incarceration services poses serious challenges to accomplish instrumental objectives of prison privatization. Customers have no other alternate service provider, which the private prisons exploit by offering sub-standard services. Approximation of their services is hardly done as it burdens the exchequer. The contractors of private prison services get hold of the business of private prison such that it becomes a hurdle for the government to supersede them (Jing, 2010). Arguments in Favor & Against Cost Factors -- Labor Labor cost is the biggest hindrance to public prisons. As per 2001 statistics, the total labor cost constituted 65% of the state operating costs, while the private prisons in 2000 incurred 59% on availing the same resources. It created the possibility of compromising with quality of the services. The yearly turnover rate in private prisons was 52% relatively to 16% by the publicly managed prisons. The pre-service training hours were also 39% relatively less to public prisons (Jing, 2010). The private prisons could be relatively more effective but it does not stand surety that the governments would distribute the efficiency benefits with concerned stakeholders and owners of private prisons. The governments stand at a loss due to the non-competitive nature of the private prisons and also due to management deficiencies of public prisons. Available statistical figures of functional costs of the governments only indicate irregular support for cost savings through prison privatization (Jing, 2010). Theoretical Considerations A more basic logic for the ineffective management of public prisons erupts straight from the theory of bureaucracy/public choice. Public prisons do not follow the functional goal of profit maximization or cost-cutting, as pursued by private prisons. Bureaucratic models tread on both the paths, depending on the allocated budget. If the budget is tight, they will create and manage facilities cost-effectively, while some other models don’t pursue the cost-efficiency, as bureaus focus on optimization in relation to private prisons. This model promotes centralization of information. On the other hand, privatization and profit aim gets away with the gap between outcome and benefits for public employees, resulting in cost-cutting in private prisons (Kenneth, 1999). Functioning of Private Prisons The corporate private prison charges for the prisoners on the number of days, a prisoner is kept in confinement besides providing some agreed necessities. It lacks any encouragement to offer rehabilitation other than when there are inherent cost-cutting possibilities. In case, the criminal behavior gets discouraged through rehabilitation, the market for private contracting of prisoners should be encouraged in comparison to paying to the private prisons on the basis of recidivism success. Suitably framed remuneration methods strengthen the market to develop such imprisonment methods that reduce long-term social costs. This argument also includes the probability that the private prison functioning under the old remuneration method might advertently promote relapse. Private prisons could manipulate the business if the entry of prisoners reaches a definite number, which could be increased by sneaking them through negative training. An incoming of new offenders enough to the functioning of singular prisons at the least of their average cost curves, could create the need of concurrently building of new prisons to earn higher profit margins by private corporations, depending on the use of market strength by those private prisons already in the business, desirous of getting more similar contracts for building new prisons. Such a possibility can be envisioned considering the incentive mechanism in the public prison system, not in-line with the tenets of social welfare (Kenneth, 1999). The debate between private prisons and public prisons seems inconclusive; the private prisons encourage efficiencies for better margins, while public prisons’ motive is not profit. That’s why they are better. Private prisons promote convenience at the cost of reducing profits, as the line staff of private prisons, whose performance is critical to the post-release conduct of the inmates, is quite away from the fulfillment of the profit motive but in the same line, the provided efficiencies fort part of the profit purpose, stated as the overall logic for prison privatization (Kenneth, 1999). The Changing Policy Trend Policy on prison privatization not only gets favorable response as a fad but it is seen as a noble place for prisoners, substituted for the earlier ‘corrections’ model. According to Benson (1990, 1994b), the technological leverage of the prison privatization is so huge that possibilities are endless over its use through privatization of prisons as a social medium once the administrative hurdles are removed (Kenneth, 1999). Case Study -- Florida An independent research by Florida Center for Fiscal and Economic Policy to create awareness among the people and the policy makers, throws light on the way the Florida state transfers the duties for managing prison facilities. Private prisons in Florida are inefficient in delegating duties and lack transparency over prisoners’ custody, public security besides recording decrease in recidivism rate of prisoners. There is no unanimity over the process of opening new prisons and the shouldering of their management to private or public hands. The process of achieving a 7% cost-efficiency is full of flaws. Further research by a neutral agency such as OPPAGA can help in deciding whether the contract for new prisons should be given to private corporations or not, and the process of decision-making needs to be more transparent (Hall & Walsh, 2010). Flaws in the Procurement Process The contract to private prisons’ procurement process needs to be improvised. Acknowledging that the maximum 7% per diem saving rate might not produce the optimum level of savings for the state, the process becomes further complicated because of later program adjustments. For instance, advance information of maximum bid can inspire a private company to shrink its profit margins from 30% to 23% although it might be possible to reduce the margins further down by organizing a more competitive bidding process (Hall & Walsh, 2010). The Florida experience indicates inefficient use of tax-payers’ funds. Total approximation of allotting the contracts to private prisons should be undertaken by taking the following measures: The main responsibility of procuring and contract management operations should remain with the Department of Corrections. DOC has the relevant skill-set to look after prison matters, including the private prisons. In stead of informing the bidders about the per diem rate, bidders should make their final offer, as it happens in a competitive market, after thoroughly analyzing their strengths and cost factor with functional prisons within the range segregated in the procurement. The state should workout to compute a rate that is actually 7% less than the cost if the prison is to be functioned by DOC. Bids crossing that figure should be rejected and either DOC should take the prison management in its own hands or it should solicit new bids. The Office of Program Policy Analysis and Government Accountability should organize research to conclude whether cost benefits can be incurred in the building and management of new prisons by the private sector. Parameters should be built to assist the legislature decide who should be given the responsibility of managing a new prison – the state or a private company. The Auditor General should organize yearly performance and financial audits of private prison contractors to guarantee adherence with the 7% cost-cutting criteria. The Prison Per-Diem Workgroup should conduct scheduled routine meetings. A more transparent and clear procedure that includes given parameters and processes to align the AG-certified rates for a confirmable public prison besides the programming cost supplement would also help in developing belief over appraisals and adherence with the cost savings declaration (Hall & Walsh, 2010). Policy Process Whenever a state government plans to enter into a contract for building new prisons, a good number of beds are arranged for medium and low security prisoners, which is an attraction for increased competition in the contacting procedure. The Legislative Budget Committee initiates the process of cost and efficiency leverages involved in competitive contracting. It is for the legal mechanism to survey and find out how much dire need is to develop and manage prisons privately although at political level, legislative action seems not easy but solution to the problem of overcrowding in prisons can only be found through private prisons (Montague, 2001). Next step in the policy process is running a pilot program by the legislation, attending to civil service limitations by not allowing DOC managers to make job-related decisions. The pilot program can be limited to state-managed prisons so that local legal limitations are not enabled. As the pilot program finishes, competitive contracting could be practiced to promote competition across the state and local corrections system, to minimize costs and increase the standard of corrections (Montague, 2001). Public expectations from the state authorities are to make criminals socially acceptable after undergoing imprisonment, as they mingle with the community. The public expects better system to manage prison system. A well-framed privatization program can enlarge the alternatives for state and local authorities, and provide the leverage from competition to the taxpayers (Montague, 2001). Procurement Analysis Process The critical factor in the outsourcing of the prison contract is to award the contract to award the prison management contract to that company only which provides the best value. Three criteria need to be decided at the initial stage. First is the completion date, safety needs, mobilization, etc. Second is the development of major project parameters, transformed into performance appraisals. Lastly, and the most critical is the creation of evaluation parameters. Evaluation parameters can be either tangible for measurement or intangible. General parameters include: technical expertise, controlling ability, financial strength, past experience, past presentation, alternate characteristics offered, completion date, and risk to government (Segal & Moore, 2002). Once selection parameters have been fixed and bidding process is over, finalization of successful bidder depends on evaluation. The following five measures can assist in guaranteeing a successful selection: First, mark technical differences between proposals, matching their strong points, drawbacks, and risks against evaluation parameters; Second, outline the possible effect of each difference, creating a positive or negative effect to each strong point or drawback; Third, gather matching technical differences and erase such differences that will possibly have a negligible effect on selection. Rest of the proposal differentiators should be built, guaranteeing that the team knows what is offered and why it strengthens and weakens the value to the proposal; Fourth, rank the differentiators on a comparative scale. This is very critical. Intangible parameters should be listed as desirable, neutral, or undesirable. Once intangible parameters are listed, tangible differentiators are checked; and, Finally, maintain a record of the analytical procedures and the cost/technical bargain procedure employed in selection (Segal & Moore, 2002). Political Influence Contractors providing prison privatization services can take undue advantage through their political network. It is argued that the industry has the potential and time to decide what tenure the convicts will remain in prisons, which can be a hurdle to the delivery of justice. Imprisonment can be furthered in two ways. First, political influence is made through lobbying and campaign additions, behind “tougher” laws like "three strikes", minimum sentencing, and "truth in sentencing" that extends the time of sentences. The conservative American Legislative Exchange Council (ALEC) has been highly proactive in supporting truth-in-sentencing and three strikes policies all over the United States (McFarland et al., 2002). ALEC is highly financed by the corrections industry, and actually ALECs Criminal Justice Task Force is jointly managed by Brad Wiggins, an earlier director of business development for the Corrections Corporation of America (Bender, 2000). The power of such political influence will increase as the industry grows. It is stated that corrections corporations have "paid handsomely to play the public policy game, and will likely do so again" (OConnell, 2002). Shifting Public Values – Citizens’ Participation Supporters of the private prison industry argue that incessant expansion of the privatization of prisons is valid considering the increasing incarceration rate, but on the other hand, voters have been regularly advocating stricter sentencing steps that create a genuine demand for more prison beds. There is a heightened wave going on the social front that more incarceration facilities in general, and increase in the number of private prisons in particular will be risky to public values. For instance, the mission statement of the Grassroots Leadership organizations "Public Safety and Justice Campaign" states: For-profit private prisons, jails or detention centers have no place in a democratic society. Profiteering from the incarceration of human beings compromises public safety and corrupts justice. In the spirit of democracy and accountability, we call for an end to all for-profit incarceration (www.stopprivateprisons.org). Grassroots Leadership has rallied with religious, labor, student, and community groups to oppose private prisons via media support, education, lobbying of government functionaries at various ranks, and using pressure tactics with companies in the private prison business. For instance, Sodexho Marriott, the biggest individual investor in CCA, withdrew its holdings from the prison company after pressurized on college campuses to revoke catering contracts. (www.grassrootsleadership.org) (McFarland et al., 2002) Many states, including Louisiana and New York, after getting pressurized from labor unions and other stakeholders, have put on hold or prohibited private prisons facilities, while other states, like Wisconsin, have stipulated directions on banning the building of private prisons on market hypes, which means no construction without entering into contract. While the speed of this billion dollar market to construct prisons at state level has paced, the federal government is inclined to enter into contracts for constructing a number of prisons through private firms. It is yet to be seen whether the guaranteed efficiency gains will materialize, and whether the government succeeds in resolving the issues related to prison privatization through novel contracting approaches (McFarland et al., 2002). Conclusion Things are changing fast. Lat year, the Florida State canceled its plan to outsource its 29 prisons to private management. Rather than going against the court decision of declaring the plan unconstitutional, Gov. Rick Scott did not appeal against it. Such a huge policy change was uncalled for without undergoing full-scale debate, and the bill should have been presented as a stand-alone bill (Alvarez, 2011). The very next year, the Florida Legislature has introduced bills in the Senate and House to privatize nearly 30 state prison facilities in FDOC Region IV, including prisons, annexes, work release centers and work camps. A relevant Senate bill, SB2036, would ease current statutory obligations for agreements involving the privatization of state prison among other government functions. Once again, the bills have been speeded up, without holding public debate and assigning committees on the issues (Private Corrections Institute, 2012) The approximate outcome of prison privatization has been overall positive. There are a number of drawbacks in the private prison system, but the high standard, security, reduced cost and management innovations that are emerging from competitive pressures have been advantageous to the public cause. It is recommended that states should go for a policy of prison privatization to resolve the problem of prison overcrowding and reduce the increase in the government’s long-term structural costs (Guppy, 2010). References Alvarez, L. (2011, Nov. 1). Florida: prison privatization plan is scrapped. The New York Times, P A16 (L). Retrieved from: http://go.galegroup.com Florida Center for Fiscal and Economic Policy. (2010). Are Florida’s private prisons keeping their promise? FCFEP. Retrieved from http://www.fcfep.org/attachments/20100409--Private%20Prisons Guppy, P. (2003). Private prisons and the public interest: improving quality and reducing costs through competition. Retrieved from http://www.washingtonpolicy.org/sites/default/files/PN2003-06.pdf Jing, Y. (2010). Prison privatization: a perspective on core governmental functions. Crime Law Soc Change, 54, 263–278. DOI 10.1007/s10611-010-9254-5 Kenneth, L. A. (1999). The Economics of Prisons. University of Victoria. Retrieved from http://encyclo.findlaw.com/8300book.pdf Mcfarland, S., McGowan, C., & O’Toole, T. (2002). Prisons, privatization, and public values. Retrieved from http://government.cce.cornell.edu/doc/pdf/PrisonsPrivatization.pdf Montague, E. (2001). Private prisons: a sensible solution. Washington Policy Center. Retrieved from http://www.washingtonpolicy.org/sites/default/files/PrisonPrivatization.pdf Price, B.E., & Riccucci, N.M. (2005). Exploring the determinants of decisions to privatize state prisons. The American Review of Public Administration, 35 (3). Retrieved from http://arp.sagepub.com/content/35/3/223 Private Corrections Institute, Inc. (2012). Correctional privatization in Florida: a brief history and timeline. Retrieved from http://www.privateci.org/private_pics/PCI%20policy%20brief%20on%20Florida%20private%20prison%20history%202012.pdf Segal, G. F., & Moore, A.T. (2002). Weighing the watchman: evaluating the costs and benefits of outsourcing correctional services. RPPI. 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