STATE OF NEW HAMPSHIRE
Department of Corrections and
Department of Administrative Services

Report on Review of Correctional Facility RFPs 1356-12, 1380-12 and
1387-12

April 2013

1

I.

Release of RFPs

Chapter Law 224 of the 2011 legislative session directed the New Hampshire Department of
Administrative Services, in conjunction with the New Hampshire Department of Corrections (the
"Departments"), to issue a series of request for proposals ("RFPs") related to the construction,
operation and potential privatization of certain of the State 's correctional facilities . In accordance
with this directive, the Departments issued a series of RFPs in late 2011. More specifically:
•
•
•

RFP #1356-12 for Male Facility - Released 11 /1 5/ 2011 , Responses Due 3/ 9/ 2012
RFP #1380-12 for Female Facility - Released 12/ 2/ 2011 , Responses Due 3/ 1/ 2012
RFP #1387-12 for Hybrid Facility - Released 12/ 19/ 2011 , Responses Due 4/ 2/ 2012

In response to these solicitations the Departments received proposals for the RFP for a Male Facility
and the RFP for a Hybrid Facility from four vendors (there were no proposals submitted in response to
the RFP for a Female Facility) . There were four different options for the male and hybrid facility . They
were as follows :
Option # 1 Contractor builds and operates new correctional facility
Option # 2 Contractor builds and the State operates new correctional facility
Option # 3 Contractor renovates existing facility and builds or adds onto existing facility and
Contractor operates the renovated and or new correctional facility
Option #4 Contractor renovates existing facility and builds or adds onto existing facility and the State
operates the renovated and or new correctional facility
The Department received proposals as follows:
Description
Option
Option
Option
Option

II.

# I Male
#2 Male
#3 Male
#4 Male

Facility
Facility
Facility
Facility

Number of
Proposals

5
0
2
I

Description
Option
Option
Option
Option

#I
#2
#3
#4

Hybrid
Hybrid
Hybrid
Hybrid

Facility
Facility
Facility
Facility

Number of
Proposals
6
0
2
I

Review 01 RFPs

Summary of Process
In order to review these responses the Departments organized evaluation teams made up of select
staff. These evaluation teams were put together for purposes of reviewing the proposals against the
requirements set forth within the respective RFPs . More specifically the Departments organized :
•

A Design Build Team - Made up of individuals from the Departments with duties related to the
design, maintenance and efficient utilization o f facilities. This team focused on evaluating the
design aspects of the subject proposals;
2

•

•

An Operations Team - Made up of individuals from the Department of Corrections with duties
related to the operation of correctional facilities . This team focused on evaluating the
operational plans submitted as part of the subject proposals; and
A Financial Team - Made up of individuals from the Departments with backgrounds in finance
and accounting . This team focused on evaluating the pricing proposals submitted by the
vendors .

In addition to organizing the above referenced teams, it was determined that it would be beneficial
to hire a consulting firm to assist in the evaluation in relation to the design/build, operational and
financial aspects of the responses . This assistance would include review of the proposals aga inst the
requirements of the RFPs, including review of the associated and underlying court orders, consent
decrees and American Correctional Association (ACA) standards. It should be noted that these
requirements are an area of particular concern as failure to comply with the applicable court orders
and consent decrees could result in significant liability to the State.
The Departments, pursuant to Chapter 145:9, Laws of 2009, requested a transfer of appropriations to
enable the hiring of an independent consultant . This transfer of appropriations, which was granted,
allowed the use of funds to hire a consultant to assist with the review of the various proposals. As a
result. and with the approval of Governor and Executive Council in June of 2012, the Departments
engaged MGT of America, Inc. to review the proposals, particularly as it relates to operational and
financial concerns .
In terms of evaluating the content of the proposals the teams, in general terms, evaluated the
following :
Design / Build Evaluation •

•

•

Experience
o Project Experience General - Did the proposa I exhibit the requisite le vel of
general design / build experience fora firm to ably undertake and deliveron the
project?
o Project Experience Specific - Did the proposal exhibit sig nificant experience in
handling similar projects? Note, at a minimum there must have been one project
of similar requirements in the last ten (I 0) years.
Organization
o Skills and Experience of Design Team Did the proposal show case a Desig n
Team w ith the skills and abilitiesto undertake and deliveron the project?
o Skills and Experience of Construction Team - Did the proposal sho w case a
Construction Team w ith the skillsand abilitiesto undertake and deliveron the
Project?
Development Plan - Did the development pia nsad equately add ressspecific co ncems
related to :
o Fe a sib ility?
o Functionality?
o :?ecurity?
o Location?
o Applicable Sandardsset forth in the IVP/A CA/ Court Orders?
3

•

•

Work Plan - Did the w ork plan ade quately depict tasks, dependencies, schedule ,
milestonesand deliverables? Did the plan reflect a realistic opportunity forsuccessat
completing the project on t ime?
References - Did the references support the proposition that the proposing firm is
capable of undertaking and delivering o n the project?

Operations Evaluation
•

•

•
•

Experience -Did the proposal exh ibit that the proposing finn has directly rele vant
experience in operat ing a facility of sim ilar size and scope of operations? Note, at a
minimum the proposal must have shown that the firm, since 2001, has either
continuously or concurrently operated at least two (2) criminal justice facilities of at
least 400 beds for a minimum of two years, or one (1) criminal justice facility of at least
1200 beds for one year or more.
Organization - Did the pro posa I exhibit the org a niza tions' resources (p rima rily throug h
re view of the prison ' s proposed organizational chart) are sufficient to add ressthe
operational requirementsofthe facility? Did the job descriptions and identified
respon sibilitiesofsaid jobsillustrate an understanding and appreciation of the
operationaltasksto be undertaken?
Staffing - Did the staffing pia n:Jpattems appearfeasible / functional a nd in accord w ith
applicable (RFP/ ACA/ Court Orders) standards?
References - Did the p ro vid ed referen c es sup port the proposition tha t the pro p osi ng
vendor iscapable of underta king the operational obligations of the project?

Price / Financial Evaluation
•
•
•

Attachment C (Per Diem Rates and Cost Breakdown)
Attachment G (Buyout)
Financial stability and wherewithal of organization - Did the proposal exh ibit that the
rele vant finn is sufficiently sound in tennsoffinancesto undertake and deliveron the
Project?

Summary of State 's Findings

Individual team members reviewed the proposals independently and then met with the respective
members of their teams on a weekly basis over the course of several months for purposes of
discussing their findings . In addition to finding that all of the vendors had some areas of noncompliance with the design/build requirements, they also discovered all were non-compliant with
meeting the Department of Corrections' (DOC) legal obligations stemming back to a deliberate
decision the RFPs drafting team made to simply list the requirements of the various court orders and
settlements instead of describing how the DOC currently implements those mandates. The intent
behind making this decision was to give vendors wide-latitude to propose alternative methods of
implementing the mandates. During the selection process however it became apparent that there
were significant issues in evaluating com pliance with t he RFPs' criteria. More specifically, the
proposals exhibited a lack of understanding of the overarching legal reauirements placed upon the
DOC relating to the court orders consent decrees and settlements which, in large part dictate the

4

administration and operation of their correctional facilities and attendant services to the inmate
populations.
These consent decrees and settlements, of which there are four principal cases that impact
operational compliance, are longstanding, iterative and overlapping dating back to the late 1970's
and have evolved over time into robust policies governing the operation of the prison system . A5 a
result their review, assessment and practical implementation, as described in the context of
responding to the RFPs, appeared to be too great a burden for the vendors who did not fully
understand the mandates and did not adequately address them in their responses .
In short, the responses to the RFPs did not provide sufficient detail in this area to ensure compliance
with the RFP. As a result, the Departments determined that it was in the best interest of the State to
cancel the solicitation process. The decision to cancel, after having invested so much time and
consideration, was not made lightly. Rather, it was a decision based upon an appreciation of the
fact that the solicitations did not elicit adequate responses capable of meeting the state's legally
prescribed needs.
Role of the Independent Consultant
A5 noted above, the impetus for engaging an independent Consultant arose from the desire for
independent expertise in evaluating operational and financial aspects of the vendor's responses.
The role of the Consultant was to evaluate how the responses correlated to the requirements of the
RFPs and, furthermore, to provide detailed costing/financial analysis which would facilitate like-to-like
comparison of the proposals to current New Hampshire Department of Corrections ' operations. Said
information is vital in order to make the difficult policy decisions needed to address the aging
architecture of the State 's Concord and Goffstown correctional facilities .
It should be stressed that the Consultant evaluated the responses independently from the State
teams. In addition, the Consultant was not employed for purposes of providing a recommendation .
Rather. their focus was on going through the stated requirements set forth in the RFP, assessing
conformity to said requirements and in providing much needed comparison and assessment
information. In terms of financial analysis, the initial goal was to have the consultant provide a
financial model capa ble of empowering the Departments to engage in worthwhile what-if scenarios
based upon the numbers provided within the responses resulting from the RFPs.
This goal shifted based upon the Departments finding fault within the resultant responses. More
specifically, the Departments determined that comparison of and to the responses would be
confusing as the responses were not in conformity with the State's prescribed needs, as detailed
above. A5 a result, in an effort to provide decision makers with the most useful information possible
from what was received. the Departments worked with the consultant to provide financial analysis
that instead focused on identifying those facility driven costs of current correctional operations,
independent of any comparison to the responses resulting from the RFPs .

5

Summary of Independent Consultant's Report and Underlying Findings

The Consultant, as described in detail above, was tasked with reviewing the responses for
compliance with the RFP and assisting with the formulation of a forward looking financial model. In
completing these tasks the Consultant provided detailed and independent analysis which gave
greater specificity to the general and broad based concerns of the State regarding compliance. In
sum, the Consultant's findings echoed those of the State teams in terms of identifying disconnects
between the RFP requirements (inclusive of Court Orders and Consent Decrees) and the resultant
responses .
The Consultant prepared and provided detailed overviews assessing the subject proposals'
compliance to the requirements of the RFPs . These assessments were in the areas of Design/Build
specifications and Operational aspects (staffing, programming, etc.). In addition to these
assessments, the Consultant worked with the Departments to produce a financial forecasting tool for
purposes of informing decision/policy makers. Lastly, t he Consultant provided a Business Case
Assessment for the potential privatization of State facilities.
Financial Forecasting Tool

The purpose of the revised financial forecasting tool was to project State costs by facility for 20 years
into the future. The State provided the Consultant with the baseline data that included FY2012 costs
and future capital expenditures. Based on this information a revised financial model was developed
and submitted projecting the operating costs by facility for the next 20 years . Additionally, it
developed a Net Cost per Inmate for the total population and is broken down by male and female
offenders. The tables below, which are snapshots taken from the model which is attached to this
report, identify:
•
•
•

Assumptions which were made for purposes of populating and preparing the model;
The Net Cost per Inmate; and
The projected increase in these costs over the next 20 years

6

NEW fw.1F&1f£IFAR1MENT Cf a:mr:nCNSRNANIO\lMIXR
SJMMARYCfASSJMPTlCNS

"".1eS

' 'Ie '.,

ml

"'at.......

,,",u, ,,, ml

of the
I,' """,I, lhe 'ma.,,1 D",.eti."~" bee" ~,ed '" the
act~I'~"'i"g aM
g. imllale
which wo,' then adjusted to estimate a cost struct\lfe for the inrnate ce nsus as of 12/1/12 (note: the ave fY12 ce ns us was 2,460 and the 12/1/12 actual census was 2,6(8). Future
changes In census have not been projected and/or accounted forl'llth ln this model.

rMATEASi.N PIlOOS fOlhe

~S)'j WAOTt As of 12/1/12, the es timated ' Operating Capacity" as defined by the Department of Correcti ons 10' existing facilities was as follows: 2,178 for Men and 179!(If
Women (all secooty cimificdtions). As of 12/1/12, the inmate census per the Department of Cooectio[l'; was as follows : 2,415 Men and 193 Women. Accordingly, the State's 'As Is'
model assumes the additiooal and ACA cOO1pliant capacity needed forthe 12/1/12 censuI. Noll.': The capacity need for men is primarily in the ClIo Security Level (T ra nsitional
Housing/Transitional Woo:; Ce nter)

CAPITALEXPEND ITURES: Based on ttle capacity allals"';s performed as of 12/1/12, it appears that the primarlv capacity need for the male PQlXJlation is Cl/O Security levels (Transitional
Housing/Work Centers). Although the capacity lorthe female population appea rs dose to the cerlSUS, the capital improve ments (newfemale prison) is pr!J!X)Sed to replace the existing
capacity. See Capital E~ penditure Summary vmch included approximately S80M of req ui rements between fY14·fY19.

EXPCNIlnR: GUPSANDIE.ATID .AJ.1..OCt;.ll00 AS3..tA PTlOOSKR ANANICAL Moce.:
OOJ>
EXPCNIlnR: EWA R..ES
DapcYt mMt-Wide Management <YId Admini!iralive (Ms

DapcYtment-Wi de Medical, Denial & Pnar mocy

COO1fI1issioners Office
Financial Services
Human Resources
Security arld Training
Professional Standards
Progra ms
& Others
Medical- Dental
Mental Health

.AJ.1..OCt;.T100 MEIHXl
Assumed to be lOO'Jlo fixed cost allocated to farilies based on the number of
inmates (census)

Assumed 70% varia~e with in mates and 30% fixed costs for staff, etc

Pha~~

Olmmunily Cbrredions - Tr<YI9licnai l1:lusing
9la-ed ~ filvi ce
Facility CW filvice

Facility

Conmunity Corrections
Includes Electronic Medical Records and
Staff Scheduling System Capita l Projects
Facility Specific Debt Service as estimated
by Treasury including existing Debt Service
(as of FYl2)
COfICord Men's Prison Excl SPU!RTU

RTU

Add itional Cb!i Notes l A!aJmptions:

Al located to the Tr.msitional H0U5ing Units (Cl/O) IJased on cerlSUS
Al located to all facilities based on census
Al located to specific facility based 00 capital p;ojects related to the facility.
New p;ojects mumes a fixed coupon of 5%
No allocation utilized I based 00 FY12 actua l expenses incurred as reported
wtihin each Accounting Unit

SPU (I ncltJdes women)
Goffstown
Berlin
North End House
& All Other Facility Cos15 as Reported
A2.5% annual innation factor for all expenses (ml debt service) WilS assumed this rate appears reasona ble based on the
fXior/historica l co5! inc reases reali zed by the Department 01Corrections.
E~ isting Debt Service as of FYl2 'Concord Mens' has all been inclLJded withi n the Concord Men's Facility lnothing alloca ted
to RTU/SPU/Transitionai Hoosing Unit)
The new facilities incremental operating costs were based 00 capi tal expenditure requests as subm'tled by the Department
of Corrections for the roost recent budget.

.. Population figures for the out years of the model are difficult to project since they are so easily affected by outside
influences such as legislative changes. The recent Impacts on population trends under SB500 and SB52 Illustrated wide
swings In the prison population In New Hampshire.

7

Net Cost per Inmate per Year

Male
Female

2012 Baseline

2033 Projected

Increase

$36,435
$37,573

$61,050
$74,631

+68%
+99%

A-obat l o n & Parole)
EKpen d lt u res for M odel - FY1 2Ad u als& ~ I ated CBn sus

= Ave C1':nsus f or FY121 FY13-F'I'33 = 121 1112 C1':nsus
{Of .,ppI IQlt)I .. )

Dept -Wide Mgmt & Administrative
Dept -Wide Medical. Den t al & Pharm acy
Cbmm u nlt y COrred Ions - Trans Hou 9ng
9lar ed Debt service
Debt a:rvlce

In mat e
Department -Wide Mgmt & Adm n
Depart ment -Wide Medical, Den t al, Pharm
Cbm munity COr r edions Tr ans Housin g
91ared Debt service

2,460

2,608

2,608

2,608

245,505

2 91,828

306,602

412,346

12,750,789
16,484,304
1,201,802

0

15,156,681
20,419,863
1,428,565
60,580

15,923,988
21,453,619
1,500,886
56,860

21,415,993
28,852,73 2
2,018,525
27,160

3,043,394

11,836,809

12,152,662

5,105,425

5,183
6,701

5,812
7,830

6,106
8,226

8,212
1 1 ,063

'"
0
1,237

(if a ppl icable)

Dept -Wide Mgmt & Administrative
Dept -Wide Medical . Den t al & Pharmacy
Cbmmuni t y COrrections Trans Hou sing
91 a red Debt service
FacI l it y Debt service

Inmate:
Depart men t-Wide Mgmt & Admn
Depart ment -Wide Medical, Den t al , Ph arm
(l)mmunlt y COrred Ions - Trans Hou9ng
9lared Debt service
FacI lit y Debt service

,os

"

4 ,539

m

"

4,660

no
W
1,958

2,302

2,415

2,415

2,415

245,505

291,828

306,602

412,346

11,931,835
15,500,179
1,039,501
3,005,397

14,035,040
19,031,067
1,282,934
56,097
7,575,965

14,745,564
19,994.515
1 , 368,455
52.652
8,147,443

19,831,144
26,890,400
1,840,419
25,150
3,175,725

5,183
6,733

5,812
7,880

6.106
8,279

8,212
1 1 ,135

'"
"

76'

0

'"
0

1,306

m

"
3 ,137

3.374

W
1,315

8

WOMElliONLY
Pr'12::: Ave Oansusfor FY12 1 FY13-FY33 ::: 121 1( 12 census

158

193

193

193

TOTAL ANNUAL ~UE (If applicable)

0

0

0

0

TOTALANNUALCOSf :
Dept-Wide Mgmt & Administrative

818,953

1,121,641

1,178,424

1,584,849

Dept-Wide Medical, Dent al & Pharmacy
Cbmmunity Cbrrections- TransHousing
S"lared Debt Service

984,125

1,388,796

1,459,104

1,962,333

162,301

145,630

132,431

178,105

0

4,483

4,208

2,010

Facility Debt Service
Facility

37,997

4,260,844

4,005,2 19

3,933,111

6,190,311

6,503,695

1,929,700
8,746,747

Total Department of Cbrred ions Cbst

5,936,488

13,111,705

13,283,081

14,403,744

Department-Wide Mgml & Admn

5,183

5,812

6,106

8,212

Department-Wide Medical, Dental , Alarm

6,229

7,196

7,560

Cbmmunity Cbrrections- TransHousing
S,ared Debt 2ervice
Facility Debt Service

1,027

755

686

0

23

240

22,077

22
20,752

10,168
923
10

Facilitv

24,893

32,074

33,698

45,320

Total Est imated CDs!: Per Inmate

37,S73

67,936

68,824

74,631

Less FStB\IUE Pffi INM A1E
TOTAL NET STATE CDST PER INMATE

0

0

0

0

37,573

67,936

68,824

74,631

$103

$186

$189
83%

$204
99%

TOTAL NET STATE COST
TOTAL ANNUAL SfATE

rusr Per Inmate:

A:!r Diem Cbs!:

%Inaease Vs FY12 Base

81%

9,998

In short, the repurposed model developed and submitted to the State provides a comprehensive 20
year projection of the state's cost of operation broken down by facility and major cost category.
Utilizing the baseline data, the Consultant created a 20 year projection model that adjusts the costs
and revenues by category and facility assuming a 2.5% annual inflation rate. The model also includes
adjustments in the appropriate years for each of the projected capital requirements - including both
the expected debt service payment and increase in operating costs, if any, associated with each
planned project. In the fiscal years that the new facilities are projected to be operational, the inmate
census data was adjusted to correspond with the movement of prisoners between facilities, and for
the increase in the expected number of total prisoners housed .
The projections result in two detailed reports that were provided to the State:
•

•

20 Year Detail: This report shows the operating costs by facility by year for the next 20 years in
the same format that the baseline FY 2012 data was provided . Much of this worksheet is
formula driven and will automatically recalculate if the FY 2012 baseline cost data, ca pita l
requirements, debt payments, or census data is modified. This allows the State to conduct
comparative what-if analysis for different scenarios.
20 Year Summary: This report is a summary of the 20 Year Detail report and displays costs by
category of expense and by gender of inmate. The primary difference between this and the
detailed report is the summary report does not display the cost projections at the facility level.
9

Business Case Assessment
The Consultant 's business case analysis of privatization in the New Hampshire Department of
Corrections (NHDOC) assesses whether it is in the basic interests of the State to privatize a substantial
portion of the operations of the state prison system, as called for in the RFP's issued by the State. The
Consultant's approach to this analysis sought to establish the degree (if any) to which private
operation of correctional facilities may result in less total government spending than the State's
management of the current correctional system, given a specified standard of operational
performance.
This approach represents a modified version of the privatization assessment methodology developed
by the federal Office of Management and Budget (OMB), currently described in OMB Circular A-76.
This methodology works backward from the known costs associated with prison system operations,
comparing the actual costs to government of its current operations with the projected total system
costs of incorporating contracted facilities into its business model.
The A-76 assessment methodology begins first with the definition of current system costs. In order to
establish a baseline for comparison, the Consultant developed the financial model discussed earlier,
which is a comprehensive cost projection for the state correctional system that identifies current
business model expenditures for the next twenty years . The projection makes two key assumptions, 1)
that system costs and revenues will grow over time, consistent with a 2.5% annual cost inflation rate;
and 2) that the correctional system will require significant capital investments to assure the
operational integrity of current state owned facilities and to create new male transitional center and
female correctional center capacity. In total. we project these capital investments, summarized in
the table below will total $79.7 million (approximately 94 percent of this spending goes to build a new
women's correctional facility and four new male transitional centers) .
It is important to note here that in using the financial model of current and future state costs certain
factors must be factored in including:
1. Determination of fixed versus variable cost dictated by a proposed scenario;
2. Determining what costs would be retained by the state in a proposed scenario;
3. Medical costs that would be required of the state under a proposed contract;
4. Travel cost necessitated under a proposed scenario; and
5. Cost for oversight, quality assurance and contract management.
As has been noted in the table on page 7, other than the need for a new prison facility for women
the bulk of the remaining capital costs forecast in the model are for C - l /C-2 transitional housing for
men. These costs are included as a means to avoid significant capital investment on additional
secure housin g for men. Since the state does not often release inmates to other states these
transitional facilities need to be sited in New Hampshire.

10

SmraydCl\ila IIfIJIII'/eIIIlIII R~eds

Rniliia Moda fer NH~rrenl of Ol'rediOl'6

Project TItlefNarre
New 225 B~W,,",n', ~'OO ICl'(5 5ec1li~
New Men's~ led (·111,", HMI ~I f,dli~·1.2
Re~ace Steam U
llel aoo IlIStall Steam Injec\OC ~
Repair Bathroom ROOIl- HallCockB~lding
New Men's&4 Bell C-1 nrilns Housil'(i facility -)of 1
Re~m Roofs in Gym, AuWSOOp, Outside Canteen. arK! Warelloose
Be"" 1"20,001 1,1100 011 7,. 1O. 5.OOI G,1. 01'" l,nI
Re~a(e Access Road · Benin faalit,!
[Ieeme MedealRecords System

Squ,re tstimaied
footage UsefU Ule
~,OOI

50 Years

23,053

so Years

Men's&4 Bed C-1 ~ral\Sitiooal WOO: Center) facility inCco:on:I

Bathrooms · MeN, W
10TIlI5IIMAlID 1AAT1l1lllJ1IM1NlS

~I~~I,

~1 ~~17

~1 &~1 9

) 41,9~,00I

23,05l

~II

) 8,450,001

lOYem
10Years 5

1014
1015

lOll

) 8,450,001
, WO,OOI

SOYears
I~,OOI

10 Years )

5M,00I
10Years ) 500,001
lOVeall
120,001

,

Il,1l7
13,05l

SOYem

) 7,910,001

,
)

SOYears

10Years

S~,007,500

TOTAl.ffiIlMAlIDCAIlTAl.IIDJItiAH'IlSfY14ff19

ilimpillile , ~"
2017

lSYem 5 495,001
10 Years ) 311,500

5"H_ I~5~"m

Men', ~ B~ C·I ~.. , ..IW
.. CenlerlFacili~ ,I NCF

I&1f!1l CAIlTAl.IEf. MDs.mElID TIM ING·.Jriuay 2013

8,450,001
755,001
S~,38IJ,00I S 9,1115,001

1016
1014
1015
2015
1014
1018
1010
1019

2018
2019
2m
2016
2019
2017
2m
2016
2016
2015
1019
1021
20ID

ion

In...oro'''''nu'

lootioo

~'ingili's

HewWOOJen

1,478,124

(..oro
(..oro
(..oro
(..oro
(..oro
(..oro

1,~3,1l9

1,~3,1l9

Berlin
Oe~ .~
Oe~ .~

Berlin
(..oro
(..oro

1,711,877
1,7lI,sn

$79,672,500

It should be noted that in reviewing the Business Case Assessment it is difficult, if not impossible. to
utilize the received proposals for purposes of comparison with existing and forward looking
correctional costs. This difficulty stems from the fact that, as described in general terms above, the
received proposals lacked certain essential components. As an example, the proposals exhibited
insufficiency in the areas of staffing, spacing and their configuration of services and programming.
As a result, a comparison of their costs would not be helpful in that there is the potential that they are
woefully understated to what it would actually cost for a fully compliant facility.

Overview of Construction Costs for Comparison

Construction Cost Benchmarks

As part of their review the Consultant identified benchmarks for prison construction costs. The
Departments requested this information to have a baseline understanding of cost to construct
correctional facilities across the country. To accomplish this, the Consultant polled numerous sources
of prison construction data to identify where facilities were constructed and the type and cost of
construction. The Consultant found limited available data relative to the construction costs for prison
facilities com p leted since the year 2000. The Consultant felt that this is likely due to the fact that after
11

the prison population boom of the 1980's and 1990's had ended few new prison facilities were
constructed by states. In fact, during the last decade several states had begun closing facilities as a
way of reduc ing correctional budgets. As a result, their capital programs have been essentially
maintenance and specific need projects. The exception has been the Federal Bureau of Prisons
(FBOP) which continued their facility expansion initiative.
The Consultant found data on fourteen construction examples that span from 2000 - 2012. This
information is provided in the table which follows. Since much of the data available is aged, inflation
factors, regional construction cost indexes and a conversion factor have been applied to each
project to provide costs as they could be reasonably be for a similar type project located in
Concord, New Hampshire in the year 2012.
The Consultant found wide variance in the average construction cost per bed, even between
facilities that house the same classification of offenders. For example, the cost per bed for a
maximum security facility constructed in Illinois in 2003 was $97,169.62 while the cost per bed for a
Federal Bureau of Prisons (FBOP) maximum security facility constructed in Kentucky was $247,546.57. It
should be noted that little or no data is available relative to programs and program spaces in these
respective institutions. However, the square feet area per bed can be used as a measure of the
probable richness of program activities and space. It is also noted that the costs per square foot tend
to increase with higher square feet per inmate, another indication of probable program richness. In
the example above, the cost per square foot of the Illinois facility was $249.93 while the cost per
square loot of the FBOP lacilitywas nearly 35% higher ($337.45). In total for the fourteen facilities the
average construction cost per square foot (adjusted) was $312.03, as is shown in the table below.

12

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Confidentiality Concerns Related to Substance of Independent Consultant's Work Product
It should be noted that the vast majority of the Consultant's work, or, more particularly, the vast
majority of work product that they provided, are unsuited for public dissemination based upon the
confidentiality requirements which attach when bids are not actually awarded . More specifically,
RSA 21 -1:13-0 (II) provides:
" No information shall be a vailable to the public , the membersofthe general court or its staff,
notwithstanding the provisions of RSA 91-A:4, concerning specific invitations to bid or other
proposals for public bids, from the time the invi tation or proposal is made public until the bid is
actually a warded , in orderto protect the integrity of the public bidding process ."[Emphasis
added]
In this instance, where the solicitation has been cancelled and an award has not been made, and
where the State is still considering its options with regards to soliciting for the same services,
information specific to the proposals resulting from the RFPs cannot be released at this time. It is for
this reason that the work product of the Consultant which contains specific reference to the
substance of the proposals is not available for public disclosure at this time.
III.

Cancellation of RFPs and Suggested Next Steps

The immedia te next step, ta ken in conjunction with the release of this report. is the formal
cancellation of the solicitation process. This decision, based upon the detail provided above, is
made in the best interests of the State. While the released RFPs will not give rise to an executed
contract, the Departments believe that the exercise was far from fruitless . As an initial matter, and as
noted above, it is the Departments ' belief that the financial analysis provided by the Consultant
helps to inform the discussion of where to go next. It aids in the upcoming consideration of the
manner and method by which to tackle the responsibilities of conducting correctional facilities'
operations. In addition to having specific financial information to serve as a foundation for these
discussions, the Departments are in a far better position to identify, and if need be, solicit for, the
facilities driven needs of correctional operations going forward .
More specifically this process has stressed the importance of defining and clearly specifying the
detailed requirements which are associated with constructing and operating a correctional facility
given the array of applicable standards. In short, to the extent that a decision is made to re-issue a
solicitation to secure the subject services (whether it is for construction or operationally related
services). the Departments would recommend specifically spelling out the manner in which
compliance with the relevant court orders and consent decrees is assured. Simply stated, leaving
matters such as this open to the responding vendor's interpretation is inefficient for purposes of
reviewing responses and comparing proposals. In addition, and perhaps more importantly, it is
problematic in that the State risks contracting for services that do not meet the prescribed standards.

14

IV.

Conclusion

Pursuant to legislative direction, the Departments released a series of RFPs related to the
construction, operation and potential privatization of certain of the State's correctional facilities.
Based upon concern over the lack of responses with a clearly articulated understanding of the
requirements set forth in the RFPs, particularly the Court Orders and Consent Decrees, a decision was
made to cancel the solicitation process. In working with an independent Consultant the
Departments harnessed an increased appreciation o f current operational costs . Based upon this
appreciation of facilities driven costs, and an honest assessment of the cancelled RFP process, the
State is in a better position to identify and solicit for its correctional needs, whether operational or
strictly construction related, going forward.

15