Tag Archives: New Hampshire

State of New Hampshire – State Agency Decision-Making Practices: Employees Versus Contractors

Source: State of New Hampshire, Office of Legislative Budget Assistant, Performance Audit Report, March 2013

We were asked to examine if State agencies determined whether it was more cost-effective to hire personnel or contract for services during State fiscal year (SFY) 2012. The State agencies we examined usually did not determine whether it was more cost-effective to contract-out or provide a service in-house using existing or new State employees. Instead, agencies often reported their budgets set the number and type of employees available. This, in turn, drove contracting because remaining service needs could only be met with contractors. Some agencies did not analyze whether it would be more cost-effective to contract-out or perform a service inhouse. When analysis was undertaken, agency decision-making was usually informal or ad hoc, and agencies inconsistently considered cost, effectiveness, and risk during these analyses. No statewide law, rule, or policy required agencies conduct comparative analyses. No oversight body consistently requested agencies to report on comparative analyses.

Some governments at the state, federal, and local levels regulate their agencies’ decision-making processes when they choose between contracting-out or performing a service in-house with public employees. Efficiency and effectiveness were often the focus of these efforts. These processes often relied on structured competition to help produce cost savings and improve service quality, regardless of whether a public or a private entity was selected. Formal plans demonstrating the costs and benefits of proposed options were integral to these processes and helped ensure alternatives were considered uniformly and transparently. We compared State agency processes against these observed practices.

The 21 agencies we examined contractually obligated approximately $3.5 billion in SFY 2012 through 986 multi-year service contracts. In SFY 2012, these agencies were budgeted for approximately $754 million in personnel-related expenditures. The vast majority of these commitments were entered into without the benefit of a comparative analysis to determine which was in the State’s best interest.

We recommend the Legislature consider defining inherently governmental functions and commercial services, and provide guidance on when agencies must: 1) provide a service using State employees, 2) provide a service using contractors, and 3) conduct analyses to determine which method is in the State’s best interest. We also recommend the Legislature consider to what extent it may wish to structure State agency decision-making processes when agency managers are required to consider whether to contract-out or provide a service using State employees. The Legislature might simply require comparisons be completed, or provide more guidance, specifying how analyses are to be completed, what analyses must include, and what oversight of decisions is required. Changes to State budget law may provide a suitable means to provide this guidance, and there may also be a need to provide a way for agencies to submit changes resulting from comparative analysis to their budget outside the normal budget cycle.

This audit did not focus on individual contracts or contracting at any one agency. We requested a response to the audit from the Department of Administrative Services in its capacity as the conduit for service contracting in the Executive Branch.

Corrections chief seeks to avoid banning privatized prisons

Source: Union Leader, April 9, 2013

Less than a week after the state corrections department cancelled the bidding process for privatizing state prisons because of alleged low-quality proposals, the department’s chief asked lawmakers Tuesday not to take the further step of banning privatization through state law. Commissioner William Wrenn testified before the state Senate Finance Committee in opposition to House Bill 443, which would prohibit the corrections department from transferring New Hampshire prisoners to a correctional facility operated by a private or for-profit entity. That would include any in-state arrangement or transfer out-of-state. An exception in the bill would allow transfers to privately-run facilities when the governor declares by executive order that a “corrections emergency” exists….
New Hampshire drops bid to privatize state’s prisons
Source: Annmarie Timmins, Concord Monitor, April 4, 2013

The state announced yesterday that it has dropped its bid to privatize the state’s prisons because none of the four companies that wanted the job showed they could meet court-ordered requirements for inmate care. The private prison companies also proposed wages and benefits that are half what security staff at the prisons earn now, according to two reports on the bids released yesterday by the state Department of Administrative Services and Department of Corrections….

Report on Review of Correctional Facility RFPs 1356-12,1380-12 and 1387-12
Source: State Of New Hampshire, Department of Corrections and Department of Administrative Services, April 2013

Final Report: Correctional Facility RFP Evaluations

Source: State Of New Hampshire, Department of Corrections and Department of Administrative Services, prepared by MGT of America, March 2013

Privatizing N.H. prisons in for a cooler reception
Source: Annmarie Timmins, Concord Monitor, December 5, 2012

The Executive Council voted yesterday to continue studying privatizing the state’s prisons, but going private has lost its biggest supporters at the State House. Incoming governor Maggie Hassan opposes putting inmate care in private hands, as does a majority of the next Executive Council. And Democrats, who have taken control of the House, haven’t shared their Republican counterparts’ appetite for privatization. But partial privatization – allowing a private company to build a prison the state would run – may have support in at least the corner office.

New Hampshire Lawmakers Are Pushing To Privatize The State’s Entire Prison System
Source: Christopher Petrella, Business Insider, August 18, 2012

N.H. seeks ‘over the shoulder’ consultant in prison privatization decision
Source: Bob Sanders, New Hampshire Business Review, June 13, 2012

The state of New Hampshire may not only be moving toward privatizing its entire prison system, but it is also partially privatizing the process involved in making the decision.

June 5 was the deadline for a private prison consulting firm to respond to a request for proposal for a firm that can look “over the shoulder” (in the RFP’s words) of state officials from two departments as they sift through as many as 20 binders of documents and some 900 drawings submitted by four vendors who are seeking to operate the state’s prison system. That weeding-out process should take from July 11 to Sept. 30….

…The four potential operators- Corrections Corporation of America (CCA), Management & Training Corporation (MTC), The Geo Group Inc. and the Hunt Companies — earlier this year responded to RFPs to build and operate a new private prison (one for men only as well as a hybrid facility) that would handle all of the state’s inmate population as well as prisoners from other states….

A Plan to Privatize a State’s Entire Male Prison System
Source: Abby Rapoport, American Prospect, May 21, 2012

Editorial – A proposal to privatize New Hampshire’s prisons raises concerns
Source: Editorial, Sentinel, May 11, 2012

N.H. officials mull private prison bids / Some have doubts over cost savings

Source: Annmarie Timmins, Concord Monitor, April 8, 2012
With four companies interested in the job, state officials are again deciding whether putting the state’s prisons in private hands is a way to cut corrections costs. The idea may have more political support now than it did last time, in 2004, but serious doubts about cost savings and inmate security are as strong as ever….Three of the four companies that recently submitted bids to take over the state’s prisons have two or more lobbyists in the state. And their 2011 profit margins – one bidder saw a $167 million profit, the other a $77 million profit – illustrates Lacey’s main concern about privatization.

Corporate Prison Leaders Tell the Truth about Themselves – Form 10-K is a Treasure Trove of Information

Source: Arnie Alpert, InZaneTimes blog, March 17, 2013

Maggie Hassan made it pretty clear during her successful campaign for governor that she has no interest in turning over control of New Hampshire’s prisons to for-profit corporations. The majority of Executive Councilors elected in November feel the same. While the State is still formally reviewing proposals from four private companies to build and operate its prisons, the chance that a contract for prison operation would be drawn up in the next two years is about as close to zero as it can get. So why at least two of the companies (CCA and MTC) bothered to invest in lobbying services to defeat HB 443, a bill which would ban private prisons in New Hampshire?

For insight into this and other questions, the companies’ Form 10-Ks, filed annually with the Securities and Exchange Commission (SEC), are worth a read….
Form 10-K for the Corrections Corporation of America
Form 10-K for the GEO Group

…While CCA’s 10-K sates, “Our policy prohibits us from engaging in lobbying or advocacy efforts that would influence enforcement efforts, parole standards, criminal laws, and sentencing policies,” CNN notes “Corrections Corporation of America, which builds detention facilities to house illegal immigrants, [has] contributed heavily to the campaigns of lawmakers who take tough stances on the issue.” …

…GEO makes another interesting point in its 10-K (page 31 if you want to look it up): “State budgetary constraints may have a material adverse impact on us,” they say. This is a curious observation given the fact that the private prison companies insist they save money for taxpayers. Yet, GEO says, “budgetary constraints in states that are not our current customers could prevent those states from outsourcing correctional, detention or community based service opportunities that we otherwise could have pursued.” In other words, GEO appears to acknowledge that private prisons aren’t less expensive after all.

There’s plenty of other data in these reports. There are lists of their prison facilities. CCA reports that only 785 of its 17,000 employees are unionized, while GEO says 21% of its workforce is covered by collective bargaining agreements. Both companies see union organizing as a risk. Both companies provide extensive details about their creation of Real Estate Investment Trusts. Enjoy your reading, with awareness that if you are working for immigration reform, reduced incarceration, and the shut-down of the private prison industry, someone in GEO’s and CCA’s corporate offices sees you as an element of their risk profile….
Tech giants, private prisons big players on immigration reform
Source: Halimah Abdullah, CNN, March 11, 2013

New York announces $2.4 million settlement in overcharging scheme / Company will reimburse hundreds of state and local government entities

Source: Larry Conley, American City and County, January 18, 2013

Nearly 1,000 New York government entities will receive a check for overcharges as part of a $2.4 million settlement with one of the nation’s largest medical waste disposal companies. Under the agreement, Stericycle, Inc., will fully reimburse New York police and fire departments, schools, hospitals, prisons and other entities for a scheme to charge automated price increases without notice and in violation of contract terms. … Government entities affected by the overcharges are located throughout New York. Some entities receiving the largest compensation include the WF Bruen Rescue Squad, Rensselaer, $26, 671.16; Albany Sheriff’s Correctional, $22,160.28; Broome Community College, Binghamton, $13,966.86; Clinton Correctional Facility, Dannemora, $21,094.35; and Cornell University College of Veterinary Medicine, Ithaca, $9,409.46. …
Lawsuit: Stericycle systematically overcharged governmental agencies
Source: Jeremy Carroll, Waste & Recycling News, January 8, 2013

Stericycle Inc. systematically overcharged governmental agencies throughout the country, including the federal government, a whistleblower lawsuit alleges. The suit, first filed in 2008 in Illinois, was unsealed Jan. 8. Former employee Jennifer Perez is named as a plaintiff, along with 14 states, the federal government and the District of Columbia. New York Attorney General Eric Schneiderman alluded to the lawsuit after he announced a $2.4 million settlement against the Lake Forest, Ill.-based medical waste giant Jan. 8. …

From the lawsuit:
Stericycle is a company that collects and disposes of medical waste throughout the United States. Stericycle has defrauded federal, state and local governments by knowingly or recklessly overcharging its governmental customers and by withholding accurate pricing data from its customers when it agrees to pick up medical waste. Stericycle tails to inform its customers that despite the contract price it has agreed to, Stericycle intends to and adds unallowable surcharges to each bill, in addition to an undisclosed 18% across the board increase every 9 months. Stericycle conceals its intent to add these increases to each bill because it knows governmental customers would never agree to them if disclosed in advance.

Student Transportation wins 4 new contracts

Source: School Bus Fleet, March 26, 2012

Student Transportation Inc. and its subsidiary Student Transportation of America Inc. (STA) have been awarded four new contracts that will start with the upcoming school year. Two of the contracts are for operations in Connecticut and will reportedly add over $4.6 million in annualized revenues. STA will purchase a new fleet of 80 vehicles as part of the agreement.

The Connecticut contracts, which are both for five years, allow for extensions following the initial term. In addition, both include 100-percent customer-paid fuel clauses.

Officials said STA currently has several longstanding operating locations in Connecticut and the new contracts will integrate well into the existing regional structure…The other two contracts are for operations in New Hampshire, and they are also five-year agreements. Officials said they include extensions and will add approximately $4.3 million in annualized revenues for the next fiscal year.

Private Prison Corporation Offers Cash In Exchange For State Prisons

Source: Chris Kirkham, Huffington Post, February 14, 2012

As state governments wrestle with massive budget shortfalls, a Wall Street giant is offering a solution: cash in exchange for state property. Prisons, to be exact.

Corrections Corporation of America, the nation’s largest operator of for-profit prisons, has sent letters recently to 48 states offering to buy up their prisons as a remedy for “challenging corrections budgets.” In exchange, the company is asking for a 20-year management contract, plus an assurance that the prison would remain at least 90 percent full, according to a copy of the letter obtained by The Huffington Post.
See also:
America’s Gulag: The Money (in Politics) Behind Prison Privatization
Source: Nick Penniman, Huffington Post, February 15, 2012
CCA’s False Advertising
Source: Mike Brickner, ACLU Blog of Rights, March 2, 2012
Private purchasing of prisons locks in occupancy rates
Source: Kevin Johnson, USA Today, March 1, 2012
Proposal to buy prisons raises ethical concerns
Source: Kevin Johnson, USA Today, March 7, 2012
Corrections firm offers states cash for prisons
Source: Greg Bluestein, Associated Press, March 9, 2012

Nashua officials have mixed views on publicizing Pennichuck salaries

Source: Albert McKeon, Nashua Telegraph, February 3, 2012

Given the city is the sole shareholder of Pennichuck Corp. stock, bought and paid for with the sale of municipal bonds, Mayor Donnalee Lozeau and several aldermen said they don’t object to the public release of names and salaries of Pennichuck employees….Their varied opinions about transparency and privacy underscored the tension behind the city taking ownership of a for-profit water utility that is governed by a separate board of directors, while falling under state regulation….After the city’s $200 million purchase of the company became official Jan. 25, operations at the company proceeded without a hiccup, Lozeau and others have said. With the exception of two Pennichuck executives leaving the company last week with $1.16 million in publicly-funded severance pay, the utilities, by all measures, continued providing water as they had under private ownership.

Medicaid computer system delays again raise hackles

Source: Bob Sanders, New Hampshire Business Review, September 27, 2011

The state Legislative Fiscal Committee wants New Hampshire Attorney General Michael Delaney to be more “proactive” in dealing with repeated delays by Affiliated Computer Systems to implement a new computer information system to handle the massive Medicaid program. ACS is now shooting to implement the system by July 2012, Health and Human Services Commissioner Nick Toumpas told NHBR. The system was originally supposed to be completed by November 2007.

Accord reached on corrections / Privatization effort is next discussion

Source: Matthew Spolar, Concord Monitor, June 14, 2011

Budget negotiators in the House and Senate tentatively agreed yesterday to cut $13 million from the governor’s proposal for the state Corrections Department over the next biennium, setting the stage for privatization efforts within the department.

The cut was proposed by the Senate, which had hoped to use the money to add back 38 troopers to the state police force that would be cut under the House plan…Even with the cut, the Corrections Department’s $102 million annual appropriation would be a 2 percent increase over the current year during a tough budget cycle. Kurk said a study committee will convene this fall to look at privatization measures that could save money within the department. One idea has been to move 600 inmates from the aging state prison in Concord to an out-of-state facility.
Private prison interest strong for New Hampshire
Source: Ted Siefer, New Hampshire Union Leader, January 30, 2012
…Among the companies that have dispatched teams to New Hampshire are the three largest private prison operators in the world: the Corrections Corporation of America, the Geo Group, and the Management and Training Corp….Among the companies that have dispatched teams to New Hampshire are the three largest private prison operators in the world: the Corrections Corporation of America, the Geo Group, and the Management and Training Corp.
Prisons: Real costs to privatization – letter to editor
Source: Marco A. Mura, Concord Monitor, January 30, 2012
Prison privatization plan has opponents
Source: Ted Siefer, New Hampshire Union Leader, February 22, 2012
N.H. officials mull private prison bids / Some have doubts over cost savings
Source: Annmarie Timmins, Concord Monitor, April 8, 2012

Privatization would ship prisoners out

Source: Karen Langley, Concord Monitor, May 4, 2011

The Concord state prison would lose as many as 600 inmates to private facilities under a cost-cutting proposal headed for a vote today in the state Senate. The legislation requires the Department of Corrections to contract with private correctional facilities to house the inmates and counts on it doing so at a savings: The same amendment would cut $10.5 million from the department’s budget over the next two years.