GEO Group, CCA Net Out-of-State Contracts for California Inmates

The California Department of Corrections and Rehabilitation awarded GEO Group Inc. the contract for nearly 2,600 additional beds in out-of-state facilities, according to the CDCR. Also getting play from California is Corrections Corp. of America, with an offer in the works from CDCR to take on additional beds that are not currently under contract. The total of new beds in the new contracts could surpass 5,000, according to reports.
Nearly 2,600 California inmates contracted to GEO Group will be transferred to the company’s North Lake Correctional Facility in Michigan, according to a company statement. GEO Group expects revenues from the transfers to generate $60 million in annualized revenues and plans renovating and expanding the existing dormitory housing units into cells in order to increase capacity of the facility from 1,748 to 2,580 beds. The Boca Raton, Fla. firm expects to complete the cell conversion in the second quarter of 2011, as well as an expansion of 832 more beds in the fourth quarter.
CDCR renewed its contract with CCA to manage up to 9,588 inmates at four of five CCA facilities currently housing California inmates. CDCR also notified CCA of its intent ot award an additional 3,256 offenders at the firm’s Crowley Correctional Facility in Colorado and the Prairie Correctional Facility in Minnesota. The new contract is subject to approval by the California State Legislature and is for two years beginning in July 2011.
The outsourcing of beds is part of an effort by CDCR to reduce inmate overcrowding and to increase access to rehabilitation, according to a CDCR statement.
CDCR presently has 9,941 inmates housed in contracted out of state facilities with capacity to take on as many as 10,468 inmates, according to official documents. The state prison system has used privately run, out of state facilities since 2006 after an emergency proclamation and the subsequent passage of AB 900, the Public Safety and Offender Rehabilitation Services Act of 2007 provided authority for CDCR to transfer inmates to private facilities in other states.
CDCR also awarded GEO a contract for 650 beds at two in-state Community Correctional Facilities. The contracts have an initial term of five years and include an additional five year renewal option. At full occupancy, the facilities are expected to bring the company $15 million annually. GEO recently reported year-to-year same quarter earnings to have increased by $28.1 million.