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Companies Compete to Build New Alabama Prisons

by David M. Reutter

In the face of a looming federal lawsuit over conditions inside its prison system, Alabama is moving forward with a $900 million plan to build three new men’s facilities. Five companies have submitted a Statement of Qualifications (SOQ) to be considered for the project.

As PLN has reported, the U.S. Department of Justice (DOJ) issued a report in April 2019 that found Alabama prisoners are subject to high levels of violence and sexual assault. [See: PLN, Sept. 2019, p.44]. Under the terms of a separate federal lawsuit, the state Department of Corrections (DOC) has been ordered to add 2,000 guards as part of needed improvements in substandard mental health care. [See: PLN, May 2019, p.50].

DOC Commissioner Jeff Dunn has argued for years that the state’s prisons are too old, too dangerous and too small. Yet except for a small January 2019 hike in the pay for prison guards – which, at an average of $34,050 per year, is still among the lowest in the country – state legislators have balked at taking action, citing excessive costs or concerns about closing prisons in their districts.

In both 2018 and 2017, lawmakers voted against an $800 million plan to build four mega-prisons and close 14 of the state’s 16 maximum-security facilities. In 2017, the state House rejected another version of the prison plan that had been trimmed down to $550 million.

Under the current $900 million proposal, Governor Kay Ivey is seeking to construct three facilities that hold 3,000 to 4,000 prisoners each. Her administration is pursuing a “build-lease” arrangement in which the state will contract with private companies to build the facilities to the DOC’s specifications, then lease them. That plan does not require legislative approval.

The first step was to request SOQs, which by late August 2019 had been received from five bidders. The DOC did not release any information about the five companies other than their names, in order “to protect the integrity of the competitive selection process and to avoid inviting outside influence or legal challenges.”

Based on publicly available information, the firms bidding on the prison construction project include:

• GEO Group, based in Boca Raton, Florida, which with $2.47 billion in annual revenue is the nation’s largest private prison contractor;

• CoreCivic, based in Brentwood, Tennessee, the next-largest U.S. private prison company with annual revenue of $1.8 billion;

• Corvias LLC, based in Rhode Island, which collects about $10 million in annual revenue as a landlord to members of the U.S. military living in 26,000 rental houses and apartments on 13 bases in Maryland, Virginia and North Carolina. Substandard conditions in the company’s properties resulted in congressional scrutiny following widespread reports of flooding, burst pipes, mold, collapsed ceilings, exposed lead paint and brown tap water;

• Corrections Consultants LLC, which has no apparent ongoing business. Its last corporate address is listed at the Nashville home of Doctor R. Crants, a co-founder of Corrections Corporation of America (now CoreCivic), who was ousted in 2001; and

• Alabama Prison Transformation Partners, which also has no apparent ongoing business and isn’t a registered company in the state, but is seemingly a joint venture between Birmingham construction firm B.L. Harbert International and Star America Infrastructure Partners LLC, a New York-based private equity firm.

Governor Ivy’s office said the Alabama Building Commission and the state’s Department of Finance would evaluate the companies and determine which will be allowed to submit bid proposals to build the three prisons under a lease-back arrangement. DOC spokesman Bob Horton said the agency hoped to receive the actual bids by fall 2020. 

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Sources: apnews.com, al.com, alreporter.com, whnt.com, montgomeryadvertiser.com