WI Legislative Fiscal Bureau Report (January 2001)
In March, 1998, Corrections began contracting with the Corrections Corporation of
America (CCA) for prison beds at two privately-administered facilities in Whiteville,
Tennessee. In June, 1998, CCA's facility in Sayre, Oklahoma, was also included in the
contract. In December, 1999, additional CCA facilities in Mason, Tennessee,
Tallahatchie, Mississippi, and Appleton, Minnesota were included in the contract. The
contract between Corrections and CCA is divided into six sections (articles) with an
introductory clause.
Contract Introduction. The purpose of the contract is stated: to provide housing and care
for Wisconsin inmates. The current contract was approved by the Joint Committee on
Finance in December, 1999, and revised in December, 2000.
Article 1 --Definitions. This article defines the terms of the contract. The terms include:
(a) American Correctional Association (ACA); (b) ACA standards; (c) contract
administrator; (d) facilities; (e) inmate; (f) manday; (g) service commencement date; (h)
state; (i) unforeseen circumstances; and (j) serious medical condition.
The facilities identified are:
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Hardeman Correctional Facility and the Whiteville Correctional Facility in
Whiteville, Tennessee (approximately 45 miles east of Memphis);
Tallahatchie Correctional Facility in Tutwiler, Mississippi (approximately 75
miles south southwest of Memphis);
West Tennessee Detention Facility in Mason, Tennessee (approximately 30
northeast of Memphis);
North Fork Correctional Facility in Sayre, Oklahoma (120 miles west of
Oklahoma City); and
Prairie Correctional Facility in Appleton, Minnesota (120 miles west northwest
of Minneapolis).

Article 2 --Term of the Contract. The contract is effective for one year from the date
both parties sign and may be renewed for two, one-year terms by mutual consent of
Corrections and CCA. Corrections may cancel the contract, in whole or in part, without
penalty if funding is not appropriated or if CCA fails to comply with the contract. The
original contract became effective December 23, 1999, and was extended for one year, to
December 21, 2001, as authorized by the Joint Committee on Finance at its December,
2000, s. 13.10 meeting. In article 6.3 of the contract, it is reiterated that the contract may
not be altered except by mutual constant of all appropriate parties. Even if Corrections
and CCA mutually agree, however, statutes require that the Joint Committee on Finance
approve any modification of the terms of the contract at a s. 13.10 meeting. This approval
includes not only substantive changes, but also the correction of typographical errors or
other minor modifications.
Article 3 --Inmates. Under the CCA contract, as amended in December, 2000, the

company will house up to 4,833 male inmates from Wisconsin in its six facilities
identified in Article 1 at a rate of $44 per day per inmate. The contract further states that
the Department will not transfer inmates to the facilities who have a serious medical
condition. The December, 2000, amendment to the contract specifies that CCA may not
transfer any inmates to a facility not listed without the prior approval of the Joint
Committee on Finance through a modification of the contract.
Article 4 --Employees. The contract specifies that CCA is an independent contractor and,
as such, is not considered an agent of the state. Likewise, state employees are not
considered agents of CCA. In a 1997 U. S. Supreme Court case (Richardson and Walker
v. McKnight), it was held that prison guards in a private contract facility are not entitled
to qualified immunity from a law suit because of the fact that they are guarding state
prisoners.
Article 5 --Contract Compliance. Article 5 addresses breach of contract issues for both
parties to the contract and each individually. The contract indicates that a breach has
occurred if either party:
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fails to perform in accordance with the contract;
partially performs any term or provision of the contract; or
performs any act prohibited or restricted by the contract.

CCA is deemed to be in breach of the contract if any of the following occurs:
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failure to completely and timely perform any term or provision of the contract; or
performance or occurrence of any act or condition prohibited or restricted by the
contract.

In the event of a CCA breach, the Department may exercise any of the following
remedies:
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seek actual damages and any other remedy available at law or equity; and/ or
partially withhold the Department's performance under the contract; and/ or
terminate the contract. Corrections is deemed in breach of contract if CCA is
unable to perform its obligations under the contract because of the persistent or
repeated failure or refusal by the Department to substantially fulfill any of its
obligations, unless
o justified by force majeure (acts beyond either party's control),
o waived by CCA or
o excused by CCA default.

In the event of a breach by the Department, CCA is required to notify the Department in
writing within 30 days after it becomes aware of the breach. The Department is then
allowed a 45-day period in which to effect a cure or in which to take reasonable steps to
effect a cure. If any cure is commenced within the time permitted that will take more than
the time allotted, the Department is allowed the additional time as mutually agreed to by

the parties. In no event, however, does a breach on the part of the Department excuse
CCA from full performance under the contract.
Article 6 --Miscellaneous. The final article of the contract addresses the following
miscellaneous contract provisions:
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invalidity and severability of the contract (the contract is severable);
venue (the contract will be interpreted under Wisconsin law);
release of the Department from further obligation once the contract is concluded;
the amendment of the contract by mutual consent;
the contract incorporates Corrections' August 6, 1999, request for proposals
(RFP), CCA's September 2, 1999, response and all written exchanges between
CCA and Corrections;
force majeure (acts of God);
prohibition on third party beneficiaries;
specification that any successor to the contract is bound by the contract;
specification that the contract does not affect the internal relations of either of the
parties;
the names of the contact persons in Corrections and at CCA;
specification that the contract does not supersede the lawful powers or duties of
either party; and
judicial actions (all judicial actions regarding the contract will be held in Dane
County circuit court; CCA waives the right to a jury trial in connection with any
actions arising from contract disputes; and Corrections will receive copies of all
civil and criminal pleadings by inmates that CCA determines are not frivolous).

The contract specifies that any disputes between the parties as to the meaning of the
agreement between the parties shall be resolved by referring first to the contract and then
to other documents in the following order: (a) the RFP; (b) CCA's response to the RFP;
and (c) other written agreements.
Article 6.4 of the contract indicates that the request for proposal Corrections used to
procure correctional contract beds (# C-519) is considered part of the contract. The RFP
contains the following sections:
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sections 1 and 2 provide general information regarding the proposal and how to
prepare and submit a proposal;
section 3 identifies the evaluation, selection and award process, and includes
sections on the termination of the contract and liquidated damages;
section 4 identifies the requirements of proposals including video conferencing
and inmate phone services;
section 5 identifies technical requirements of the proposal;
section 6 indicates the requirements associated with the cost proposal; and
the attachments to the RFP provide detailed information regarding Corrections'
policies and procedures with which bidders are expected to comply.

The RFP contains the following major provisions:
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If CCA commits a breach of the contract, Corrections will be able to collect
damages (liquidated damages) on a per day basis, based on a formula which
assesses the relative severity of the breach. These amounts will be withheld from
Corrections' payment to the contractor if the contractor does not rectify the cause
of the breach. The liquidated damages are in addition to any amounts the
contractor may owe Corrections as part of the agreement.
If inmate property is damaged during transportation, the contractor is required to
compensate the inmate based on Corrections' standard repayments.
Minimum technical standards are established for video conferencing and visiting.
These standards are intended to provide a uniform format for video
communications between Corrections and CCA.
Inmate telephone services at contracted facilities are specified to require collect
calls billed to third parties at a rate no greater than those paid by called parties
accepting intra-LATA calls originating from Wisconsin prisons. The RFP
indicates that the maximum charges are a call set- up fee of $3 and a per minute
rate of $0.35.
Inmates classified as minimum security may be held and placed in contracted
facilities.
CCA is required to provide residential alcohol and other drug abuse treatment for
inmates. Residential programs are intensive programs targeted to offenders with
specific educational, medical or mental health needs.
With regard to medical records, the RFP requires contractors to keep such records
confidential as required under Wisconsin law. Further, the RFP specifies that:
o inmates may request release of medical records as under Wisconsin law;
o inmates will sign a confidential release of information form;
o inmates do not need to sign a release form if going to a medical provider
as directed by the contractor's health care staff; and
o inmates who review their medical records will do so in the presence of the
proper health care staff.
Inmates in contracted facilities are required to pay a medical co-pay, as are
inmates held in Wisconsin facilities. Under current law, Corrections is required to
collect not less than $2.50 for each inmate-requested medical, dental or nursing
service received. The RFP indicates that the co-pay will be credited to
Corrections, less the CCA's administrative costs.
CCA may seek reimbursement only for hospital charges (not separate physician
or other provider charges) for 60% of costs over $60,000. It is also specifies that
the costs of transplants are included. However, transplant claims are reimbursed
only at the Medicaid rate in the state where the service was provided. Inmates
considered for transplants must be approved by Corrections and the Department
may return such an inmate.
CCA is required to provide a "summary of inmate custody status, grievances
filed/ processed, disciplinary actions, urinalysis results, vocational/ academic
activities, inmate treatment involvement, etc. The number of PRC's [program
review committee evaluations] completed during the quarter is also required to be

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reported. In addition, the report shall contain information regarding overall
institution climate, and any serious and unusual incidents..." CCA is also required
to immediately verbally report any serious and unusual incidents to Corrections.
Inmates in contracted facilities are required to receive the same compensation as
inmates in state correctional facilities. Wisconsin institutions pay inmates from
$0.08 per hour to $0.47 per hour depending on the work or program assignment
and experience.
CCA is required to keep proper and complete books, records and accounts, and
allow for inspection by Corrections, including video tapes of all use of force
incidents. CCA is required to provide a copy of that tape to Corrections.
CCA may use deadly force but only in accordance with federal law and consistent
with Wisconsin Department of Corrections policy.
CCA is required to provide adequate, confidential facilities for attorney/ client
visits and/ or telephone conferences.
CCA may not assign any interest in the agreement to any other party without the
approval of Corrections and no part of the contract or any services associated with
the contract may be subcontracted without the approval of Corrections.
CCA is required to conduct routine, random drug testing on a minimum of 5% of
the inmate population each month.