Modus Operandi: Conservative | Article

counting penniesBeyond three privatized private prisons in the State of Arizona, the Department of Corrections outsources a substance abuse treatment in several facilities and food services for inmates and staff on a statewide basis. The Department also has contracts with the nursing registry and contracts for refuse collection. “From my perspective,” states Carl Nink, Assistant Director, Administrative Operations for the Arizona Department of Corrections, “I think privatization has worked well in the limited areas where we have approached it.”

Nink explains that Arizona has progressed on a cautious basis with specific prison populations. If the State is able to come to agreement on a current solicitation, the result will be Arizona’s first long-term contract for more than minimum-custody inmates. There is a great deal of success in Arizona’s prison privatization; even so, the agency still permits very little supplier innovation or control. Nink says Arizona has taken “a very conservative approach in an effort to maximize savings to taxpayers. We proceed very slowly and prudently to ensure success.” Thus, Arizona has initiated a policy of high accountability for privatized prison processes.

You can’t fully realize the importance of Arizona’s accountability policies until you realize that few research studies are more recent than 1997. The statute requires only a biennial comparison between public and private prisons for services and costs, and a detailed cost analysis on contracts is required for the legislature only every five years. Nink says the Federal Bureau of Prisons and the US Department of Justice are working toward an evaluation of prison privatization, but it’s probably a year or two away from being conducted. It’s difficult to find study subjects that meet the parameters – same prison design, same number and custody level of inmates, same approach to operations and services, etc.

Apples to Apples

Nink has responsibility for fiscal management of the State’s prison system. He negotiates and administers operations contracts, develops strategic plans and legislative initiatives and develops policy. “We require the private prison contractors to operate in a manner almost identical to the Department of Corrections,” says Nink. “This allows us to move toward a level of accountability.” The RFPs require that suppliers propose services very similar in all respects to how the Department operates. “Because they are operating like we operate, we can make an apples-to-apples comparison of quality and quantity of services.”

In privatization of our food services,” Nink explains, “we started out in a particular prison complex, and those companies that bid were to serve the same menu, the same amounts as the state-operated prisons so that the inmates who were at the prison that was serving food from a private vendor would not know a difference from the public prisons that were state-operated.” Obviously, this approach limits a supplier’s input on innovations to improve business processes. The Department and suppliers take a shared approach to suggestions for process improvement and do sanctioned testing in a pilot situation to see if a suggestion is a best practice that should be applied to all the state’s prisons.

The State uses fixed price contracts with opportunity for cost adjustments to a supplier on an annual basis. If a cost overrun occurs, the State determines the cause of the supplier’s overrun. Are milk or meat prices too high, or is the cost of fuel for transporting products or inmates going up? The answer may cause the State to adjust its numbers as well.

Standing on Standards

Most prisons seek some sort of accreditation or follow various standards-setting agencies to minimize their potential liability from inmate lawsuits. In Arizona, the required standards are applicable equally to private and public prisons. The State is seeking accreditation through the National Commission on Correctional Healthcare, and it also goes a step beyond the minimal standards of the American Correctional Association. ACA subject matter experts are dispatched every two years to institutions where they audit records to determine ACA compliance. Nink says that Arizona has put in place an annual audit of its private prisons. During the week-long audits they observe a function to determine whether or not it is being performed according to policy and procedures in place at the institution and in the Department of Corrections. If there are weaknesses or mistakes, the supplier makes corrections to bring the function up to the standard of operation in the public prisons.

In public prisons, the warden monitors performance. In Arizona’s private prisons, there are four full-time monitors (government employees). There is also a liaison who monitors the food service contract at each of the public prisons. “I believe that full-time monitors is what has helped us to be successful in ensuring ongoing accountability,” says Nink. “Also, if there are deficiencies noted in the annual audit report, a corrective action plan is developed and, and in subsequent years, those items that were identified for correction are specifically monitored to be sure there is not a repeat violation.” There are also unannounced visits from external entities that monitor compliance regarding sanitation levels and other activities in both the private and public prisons.

Nink, who has held a number of key administrative positions in the Department of Corrections for 25 years, states positively that Arizona’s quality of services is the same for public and private prisons. He is proud of the State’s sound concepts, practices, and accountability. With experience on his side, he says “it’s complex, but we have been successful by taking the cautious approach. I believe that the more we can educate government staff in understanding how privatization can be used, we can probably avoid cost to taxpayers and potentially improve services.”

Lessons from the Outsourcing Primer

  • A cautious approach may be best in an effort to ensure success.
  • A high level of accountability begins with a fair and effective audit tool and procedure.
  • For a strong approach to accountability, it may be necessary to include procedures that are above and beyond the minimum standards.
  • Full-time monitors help to ensure ongoing accountability.

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