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Privatization of state prisons by emanuel baisire

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The study examined the rationale and the emergence of privately managed prisons in the United States. The analyses measured the extent to which privately operated prisons solves the problem of crowded …

The study examined the rationale and the emergence of privately managed prisons in the United States. The analyses measured the extent to which privately operated prisons solves the problem of crowded prisons and state’s ability to reduce expenditure without undermining inmate’s welfare and rights. The study considered the case of Texas prisons. Texas being a state with the second largest prison system in the U.S.A. was ideal for analysis. Recent growth in the size of Texas' prison system has been increasingly costly and beyond the capacity of Texas department of criminal justice. The paper analyzed the extent to which private contractors were more efficient and their ability to secure private funds to construct more prisons than state governments. The paper also tested the notion of privatized organization’s capacity to save taxpayers money by introducing new management techniques and flexible employment policies.

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  • 1. Emanuel Baisire Case Study: Privatization as a cutting cost tool in state prisons:
  • 2. Abstract: The study examined the rationale and the emergence of privately managed prisons in the United States. The analyses measured the extent to which privately operated prisons solves the problem of crowded prisons and state’s ability to reduce expenditure without undermining inmate’s welfare and rights. The study considered the case of Texas prisons. Texas being a state with the second largest prison system in the U.S.A. was ideal for analysis. Recent growth in the size of Texas' prison system has been increasingly costly and beyond the capacity of Texas department of criminal justice. The paper analyzed the extent to which private contractors were more efficient and their ability to secure private funds to construct more prisons than state governments. The paper also tested the notion of privatized organization’s capacity to save taxpayers money by introducing new management techniques and flexible employment policies. Case Study: Privatization as a cutting cost tool in state prisons: Introduction: There is a continuing debate about the need for privatization of state owned institutions. Politicians, academicians and economists have tried to provide a case that instills market forces in the way government operations are handled. There has always been a disagreement on the extent to which delivery of public services should be placed under the control of private sector. Opponents of privatization have often argued that private sector firms are simply motivated by profits and are mostly likely to compromise the well-being of the public in to enrich themselves. On the other side, supporters of privatization have long argued that private sector firms both operate cheaply and with an elevated level of sophistication and higher performance. It is argued that innovation and market pressures enable private sector firms to seek alternatives that translate into cheaper and better services compared to the public sector which has no motivation to change in the way they deliver services to the public. In the analysis, I attempted to argue the case for the two diverging views to understand why traditional government responsibilities like public safety, correctional services, schools, waste management etc are being transferred under the management of private sector firms. Special attention is focus on the privatization process of correction services in the state of Texas. The state was motivated to pursue privatization of correctional facilities in the attempt to reduce costs and provide better services to the prison population. The analyses measured the extent to which privately operated prisons solves the problem of crowded prisons and state’s ability to reduce expenditure without undermining inmate’s welfare and rights. The study considered the case of Texas prisons. Texas being a state with the second largest prison system in the U.S.A. was ideal for analysis. Recent growth in the size of Texas' prison system has been increasingly costly and beyond the capacity of Texas department of criminal justice. According to Criminal Justice policy, Texas has an annual correction budget of $ 2.4 billion (2004) and 98% of its prison space is occupied. 1
  • 3. Faced with budget shortfalls and limited prison space, Texas considered privatization of prisons as an alternative to raise funds to build new prison facilities and increase efficiency. In this context, privatization will refer to the transfer of public responsibility to manage or operate correction facilities to private contractors (Sclar, 2000). The paper analyzed the extent to which private contractors were more efficient and their ability to secure private funds to construct more prisons than state governments. The paper also tested the notion of privatized organization’s capacity to save taxpayers money by introducing new management techniques and flexible employment policies. Private sector argument to provide better management practices than public facilities. The paper also discusses financial implications of each program to the state government. In order to fully understand the extent of savings associated with privatization, the paper compared the cost-benefit analysis of publicly managed correction facilities against privately managed facilities in Texas. Literature Review: Privatization can be referred to as the process by which government transfers its assets and function to the private sector. Privatization can be in form of complete or partial divestiture of a state-owned enterprise to the hands of private management1. According to Sozzani (2003), Privatization can either be a temporal or permanent transfer of ownership or management of a government entity to the private sector. Due to managerial efficiency, virtually every public service is threatened by privatization2. According to Sclar (2005), public service institutions like schools, public hospitals, social services, correctional facilities, police and fire department and mass transit system stand a chance of being privatized if politician believe there are not meeting set objectives. Privatization advocates believe that government should spend more time governing and less time delivering service and producing goods3. According to Sozzani (2003), the following are the mostly used types of Privatization: 1. Trade Sales: This involves partial or full sale of a public owned enterprise. The commonly used methods of trade sales are competitive bidding, negotiated sales, Management/Employee Buyouts (MEBO) and placement with preferred investor groups. 2. Outsourcing: This allows private sector organizations to provide a needed services within a government owned institution. A Public sector entity enters into an 1 Sozzani, “Privatization in the United States and Australia” (2003) P.141. 2 Sclar, , L. (2000). You Don’t Always Get What You Pay: Economics of Privatization. Ithaca Newyork: Cornell University Press. 3 Logan, C. (1991). Well Kept: Comparing Confinement in Private and Public Prisons.The Journal of Criminal Law and Criminology 83(3) 577-613. 2
  • 4. agreement with a private sector business to provide it with a service at a competitive price. This is the commonly used method of privatization in the correction services. 3. Management Contracts: The parties enter into a contract where management and operation of the organization is taken over by the private sector. Private management contractor manages the organization on behalf of the public. 4. Public-Private Competition: This form of privatization is aimed at exerting pressure on public organization to compete with the private sector in service delivery. It allows private firms to compete with public organizations in providing services to the public. This method is commonly referred to as market testing. Government uses it to test the efficiency of the market in providing a particular public service. 5. Build-Operate-Transfer Arrangements (BOT): This form of privatization is often referred to as a private infrastructure development and operation contract. It allows the private sector to enter into a contact with a public organization to provide finance for constructing a facility and operating it for a given period of time. At the expiry of the agreed period, private entity transfers ownership and operation of the facility to the public organization. 6. Build –Own-Operate Arrangement (BOO): In this case, a private sector company is responsible for building and operating a public facility while maintaining full ownership of the otherwise government mandated operations. The contractual obligations mandate the government to guarantee business to the private sector entity. The evolution and scope of private prisons in the United States dates back to the eighteenth century to those infamous prisons where private contractors worked inmates to death 4. The Percy Amendment of 1979 legalized private prisons and was a cornerstone for the renewal of private prisons in the United States5. The emergence of modern private prisons in the United States was revitalized by the U.S. Immigration Services decision to detain illegal immigrants in private detention facilities managed by Corrections Corporation of America6. Due to the need for more beds to house illegal immigrants, U.S. Immigration Services decided to contract private firms to design, construct and manage detention facilities. The rationale to their decision was that it was easy and quick to use allocated funds for detention operations instead of waiting for years for budget allocation to build new detention facilities. Texas became the first state to privatize its prison facilities. Currently, there are over 158 private correction facilities in 35 states, Puerto Rico and the District of Columbia. The momentum to privatize correction facilities in the United States is attributed to increased 4 S Borna, “ Free Enterprise Goes To Prison” (1986) 26 (4) British Journal of Criminology 326 Miller & Jensen, “Reform of Federal Prison Industries” (1974) 1(1) Justice System Journal, 1-27 6 McFarland e.t. all, “Prison, Privatization and Public Values” (2002) P.2 5 3
  • 5. growth in prison population and the Reagan era of free- market solution to government inefficiency7. According to the Bureau of Justice (2005), the total United State’s inmate’s population dropped is estimated at 2.26 million persons of which 101, 228 are confined in privately managed prisons. The rationale to privatize public prisons is attributed to political ideologies and a shift towards market forces. Proponents of prison privatization argue that private prisons operate more cheaply and with quality performance compared to public prisons (Camp, 2005). Proponents of privatization of state prison argue that the markets are more efficient in the delivery of service than public agencies. The claim is based on the following assumptions: Managers in private sector firms are not faced with “ red tape” and are able to procure needed goods and services much faster than public agencies; Private firms have the flexibility to allocate human resources by recruiting capable staff and firing without worrying about organized labor unions and government staffing regulations; Private sector managers are keen about financial risks than public managers which makes them to pay more attention to costs and better service delivery; Competition in the private sector provides the incentives for cost effectiveness and profit maximization8. According to Segal and More (2002), privatization of correctional facilities results into significant cost reduction. However, critics argue that comparing cost of private and public correctional facilities might be problematic due to different accounting and cost analysis procedures. According to Camp (2005), proponents of privatization have failed to indicate the mechanisms to which private prisons are presumed cheaper and well managed. The debate to privatize is mainly focused on cost saving. Studies on privatization indicate a mixed reaction about cost savings to the public. Private firms build prisons more cheaply and operate efficiently due to their flexibility to procure needed resources without adhering to strict purchasing requirements applicable to state agencies. It is also argued that private prisons have been able to fulfill their promise to provide cost savings of 10-15% to state governments in Texas, Tennessee, California and Florida9. According to More (2002) states with private prisons saved more than 9 % of their correction budget compared to states without privatized prisons. However, other studies have challenged the basis of privatized prison’s ability to realize significant cost savings to the public. Cost saving comparison in private and public correction facilities is 7 Ibid. McDonald et.al, (1998). Private Prisons in the United States: An Assessment of Current Practices. ABT Study, 40-42.. 9 Segal and More, (2002). Weighing the watchmen: Evaluating the cost and benefit of outsourcing correctional services. Policy Study .290.p.6. 8 4
  • 6. not realistic due to significant differences in both systems. For example state prisons may not have the same kind of inmates like those housed in private prisons i.e. .high risk inmates vs. low risk inmates. Custody needs of high risky inmates in state prisons is different from those housed in private prisons, medical needs and other social programs make state prisons to appear more expensive than privately run prisons.10 According to the General Accounting office, there is no conclusive and scientific evidence to suggest that private prisons have a unique edge in the general operations of their facilities compared to publicly managed prisons. According to the study commissioned by the Urban Institute (1989), to compare private prisons and public prisons in Kentucky and Massachusetts, found that there were no differences in operation efficiency of both systems. It is also argued that it is hard to compute prison costs due to differences in correctional systems and the diverse background of inmate population. Sclar (2000), asserts that it is too complicated to determine the difference between site – specific and system wide costs. He states that it is “impossible to say with any degree of certainty if the privatization of corrections produces substantial cost saving” (P.7). Despite criticism labeled against privatization of state prisons, most governments are convinced that privatization is the most efficient way to deliver public services11. Private sector entities are cost conscious and profit motivated thus motivated to apply modern business practices to minimize costs. However, despite the general mood to save costs, there is often other reason why a state government decides to privatize its correction facilities. According to the Abt Associates study (1997), most states privatized public prisons in an attempt to reduce overcrowding in correction facilities, the need to acquire new beds faster than dealing with cumbersome state’s procurement procedures, gain operational flexibility, operational cost savings, construction cost savings and improving caliber of services in state correction system. The most cited reason to privatize is cost savings. However, due to differences in budgeting and accounting procedures in the public and private organizations, it is difficult to make accurate cost comparison. Unlike private accounting systems, public accounting methods are not aimed at identifying costs but rather control misuse of public funds.12 Private sector’s accounting systems tend to spread expenditures for capital assets for the entire “useful life” of the business and the cost is reflected on a year to year basis while in the public sector capital expenditure is reflected on that specific year the project was undertaken. This explains why public sector costs may seem higher in the fiscal year a project was undertaken compared to the private sector costs that are spread annually. 10 GAO. (1997). Privatization: Lessons learned by States and Local Governments. Washington, DC: U.S. General Accounting Office. 11 Ibid Herman B. Leonard, Checks Unbalanced: The Quiet Side of Public Spending (New York, NY: Basic Books, 1986) 12 5
  • 7. It is also common for private prison’s contractor not to incur all the cost related to housing inmates even when the facility belongs to them. According to a survey by the Bureau of Justice (1998), public officials responsible for overseeing contracts with privately contracted facilities acknowledged that some private facilities transferred their costs to the government. According to the author, the most common activities paid for by the government and not indicated in the cost analysis of private prisons include: 1. Contract monitoring and oversight: The cost to monitor private prisons is often transferred to the public correctional sector and it is not recorded as a cost to the private sector facility 2. Inspection and licensing: Before a private prison is commissioned by the state to house inmates, it has to undergo a series of inspection and certification to meet state and federal requirements. These associated costs are reflected in the public correctional institutions budget making their operations more expensive than private institutions. 3. Personnel training: Training of warden in private prisons is sometimes undertaken by public sector to ensure the safety of inmates and the public 4. Medical and Dental care: Private contractors often limit their obligation for inmate’s medical care to avoid costs. 5. Inmate transportation: In some private sector facilities, their responsibility in to only house inmates and it is state responsibility to transport inmates to attend their Court hearings 6. Inmate case management: Due to vast experience of public correction facilities, counseling services of inmates is state responsibility and the private prisons do not incur costs related to providing such social services. 7. Background checks for visitors and volunteers 8. Correctional industries programming 9. Disciplinary and grievance processes 10. Response teams for emergencies: In case of prison riots and other emergencies, most states retain the responsibility to react to such situations. It is therefore necessary for public correction agencies to examine all these elements and making sure that such costs are considered as contracting costs to the government and should not be reflected as operation costs. According to the National Institute of 6
  • 8. Corrections, a great percentage of reported cost savings at privately managed prisons is attributed to differences in per-inmate medical expenditures and state overhead costs. U.S. General Accounting Office (1996), some studies reflect that private prisons tend to be cheaper but when in reality medical and health costs of inmates are not computed in the cost analysis. Framework for cost comparisons in public agencies: In order harmonize privatization in the correctional services; the Department of Justice requires all state governments to adhere with cost comparison procedures as prescribed in the Officer of Management and Budget’s Circular A-76.13 The circular was designed in 1966 and revised twice in 1983 by President Reagan and in 2003 by the Bush Administration. Circular A-76 establishes federal policy for the competition of commercial activities. The general guidelines of A-76 circular involve six main elements: 1. Developing a performance work statement and quality assurance surveillance plan. These are generally initiated by the concerned government agency; 2. A management study to determine the government’s Most Efficient Organization (MOE) for delivering the service directly. The exercise leads to the development of a management plan showing how a government agency is capable of providing the service instead of contracting to private sector firms. It identifies the structure of the organization, staffing and operational procedures to guarantee that the in-house activity is done cost effectively; 3. Estimating the cost of government delivering the service by means of this Most Efficient Organization (MOE). It takes into account the cost related to the performance of the MOE; 4. Review and Certification: The circular requires and independent review of the agency by an independent government agency to determine the accuracy of cost evaluation and to justify that all calculations were conducted in accordance to stipulated rules and regulations; 5. Issuing a request for proposal or invitation for bids; 6. Comparing the estimated cost of direct government provision with bidder’s proposed price Finally, when all these requirements are fulfilled, an administrative appeal process is initiated. The goal is to ensure that all projected costs and value are conducted fairly, 13 Bureau of Justice Assistance. (2001). Emerging Issues on Privatized Prisons. Washington, DC: U.S. Department of Justice, Office of Justice Program. 7
  • 9. accurately and calculations based on outlined guidelines of Circular A-76.14 State officials are faced with a challenge to determine the benefits of their decisions compared to the costs of investing in a particular program. To overcome this challenge, State officials can apply the Benefit-Cost analysis. Benefit-Cost Analysis is an economic analysis that put into account all relevant benefits of a proposed or existing program in comparison to all relevant costs in dollar terms15. The analysis is important because it allows policy-makers to determine whether investing in a particular project is the most effective allocation of government resources. According to Lawrence and Mears (2006), policy-makers should adhere to the following steps in formulating a Benefit-Cost analysis of any program; clearly state the question under consideration, determine the perspective, identify benefits and costs, assign values to benefit and cost items, compare total benefits and total costs, address issues of uncertainty using sensitive analysis, incorporate a time dimension and discounting into the analysis and articulate the limitations of the methodology and the analysis 16. The main purpose of conducting a benefit –cost analysis is to assist public officials reach a decision of whether to fund a particular program, stop funding an existing program or revise the current program to meet its initial objective. Benefit-Cost analysis measures the net difference between benefits and costs (total benefits minus total costs) and the benefit-cost ration (total benefits divided by total costs). When the total difference is positive then the benefits are greater than total costs and if benefit cost ratio is greater than 1.0, the program is cost-beneficial and the reverse is the same when the cost-benefit is less than 1.0 then the costs are greater than benefits. Discussions and Results: The analysis measured the extent to which privately operated prisons solved the problem of crowded prisons in Texas and their ability to protect constitutional rights of inmates. Texas has the second largest prison system in the U.S.A with a population of 654,232 supervised by Texas criminal justice system (Texas Department of Justice, 2004). However, only 151,553 are serving time in prisons and the rest are either under parole or probation. 1 out of 20 Texas adults population is either in prison, jail or under probation. Critics believe TDJ figures are underestimated, according to the Justice Policy Institute (2003), there are more people under Texas criminal justice system (740,905) than state population of Vermont (619,000), or the City of Austin (656,562). Recent growth in the size of Texas' prison system has been increasingly costly and beyond the capacity of Texas department of criminal justice. According to Criminal Justice policy, Texas has an annual correction budget of $ 2.4 billion (2004) and 98% of its prison space is occupied. Faced with budget shortfalls and limited prison space, Texas considered privatization of prisons as an alternative to raise funds to build new prison facilities and increase efficiency. In this context, privatization will refer to the transfer of public responsibility 14 www.whitehouse.org/omb 15 Lawrence and Mears. (2006). Benefit-Cost Analysis of Supermax Prisons: Critical steps and Considerations. Washington, DC: Department of Justice. 16 Ibid 8
  • 10. to manage or operate correction facilities to private contractors (Sclar, 2000). In 1987, Texas legislative body mandated the Texas department of justice to contract with private business organizations to construct, finance, operate and manage prison facilities (Texas Sunset Advisory Commission, 1991).Texas Department of Justice was authorized to contract with private vendors to construct or operate correctional facilities as long as the vendors provided a 10% saving or more than a state managed facility. This law attracted several private correction companies to bid for contracts to manage or operate prison facilities. Among the major private correction firms operating in Texas are Correction Corporation of America, Wackenhut and Pricor. Texas has the most privatized correction facilities in U.S. (43 facilities) with the capacity of 22, 000 beds (U.S. Department of Justice, 2001). Supporters of privatization in Texas argued that private contractors are more efficient and have access to financial resources to construct more prisons than state government. A case in point, Correction Corporation of America was able to construct a 350- bed facility in Houston, TX, for a period of 5 month at a cost and time half than what had been planned for by the government (U.S. Department of Justice, 2001). According to Kicenski (2002), contracting enable private firms to construct prisons much faster due to their flexibility and ease to mobilize capital and technology. Thus, private prisons are free from bureaucratic constraints that would otherwise undermine their efficiency and motivation (Gormley & Balla, 2004). Private prisons operate with no “red tape”, thus providing private companies with an edge to deploy their work force more productively. Private operators were more likely to achieve efficiency by introducing new management techniques or restructuring nonperforming departments. Privately managed prisons in Texas were capable of saving taxpayer’s money through reduced labor cost. Labor costs were minimized by reducing: (1) number of staff, (2) Wages, (3) Fringe benefits (U.S. Department of Justice, 2001). Flexible employment policies allowed private vendors to hire, fire, set salaries depending on the prevailing needs unlike public agencies where it was difficult to make significant changes (Kicenski, 2002). The private sector prisons succeeded in developing a better working culture amongst staff which resulted into better prison management. Privatization increases accountability and competition in Texas correctional facilities. Texas department of correctional services had to devise monitoring guidelines to ensure that privately contracted prisons provided sufficient and quality services to inmates (McDonald, 1994). It is also argued that market mechanism through competition forced private vendors to become innovative and were motivated to provide superior services for fear of losing their contract to competitors. It is believed that competition encouraged private contractors to monitor themselves, adding more control mechanism. 9
  • 11. Graphic presentation associated with the costs of constructing and maintaining a prison facility: Land Facility utilities: water, electricity, and telephone services Security Operating costs such as alarm systems and surveillance camera Construction: Including labor & supplies Personnel, including hiring, training, salaries and benefits Food for prisoners and medical costs However, critics of private prisons in Texas challenged the competence of private firms in managing the prison industry. Opponents of privatizing Texas state prisons argued that it was the responsibility of state officials to manage state prison and that there was no strong basis for the facilities to be transferred to private sector firms. Critics of privatized prisons argued that private firms tend to compromise services in the attempt to saving costs. Their argument was based on the following reasons: 1- Cost savings advocated for by private prisons undermined the quality of services provided to inmates. Private prisons attempted to minimize labor cost by offering 10
  • 12. Benefits Measurement Number of Units Estimated Costs lower wages and limited fringe benefits which resulted to the hiring of inexperienced guards; 2- It was common for private prisons to apply a “Low –balling” technique to win government contracts. Low-balling technique is commonly used by private contractors to enable them win government contracts. It is a method in which a low bid is forwarded to win a first contract and losses are later recovered by inflating subsequent contracts; 3- Another argument along these lines is that private operators exploited inmate labor, in terms of wages and working conditions which resulted into infamous prison riots in the early 1990’s; 4- Private operators were more likely to enforce decisions that favored lengthy stay of inmates to maximize company profit .Critics claimed that contracting reduced accountability. Privately managed prison facilities weakened public control of correctional facilities. Private operators turned into monopoly and developed a strong lobbying group in Texas local politics. Private prison’s lobbyist influenced state politicians and advocated for lengthy inmate sentences and highimprisonment policies. The table on the next page indicates Possible Benefit and Cost Measurement in the prison system: 11
  • 13. Reduced violence among prisoners 150 $ 1, 200 per assault 50 $ 1200 per assault 40 $ 2,500 per hospitalization 200 $ 500 per grievance Number of reported violent incidents among prisoners in one year Reduced violence between prisoners and correctional officers Number of reported violent incidents between prisoners and staff in one year Fewer violent incidents that require medical attention Number of hospitalization in one year Less stress living conditions for the general population Number of prisoner grievances filled in one year Less stressful working conditions for Number of sick leave days and personal days used by officers the correctional staff 280 $ 800 per day TOTAL BENEFITS: 640,000 Source: Texas Department of Justice In summary, the total benefits of upgrading an existing prison facility to house inmates Associated Costs Measurement Construction to upgrade an existing building, including labor and materials Total construction-related to upgrade costs Purchasing and installing surveillance and control technologies Number of Units Estimated Costs Total purchase and installation costs $ 1,000,000 $ 25,000 Correctional office training Average hourly wage Correctional officers salaries and benefits Average Hourly wage 80 $ 20 per hour 80 $ 30 per hour Monthly Utility expenses 12 $ 4000 per month Monthly electric, heat and TOTAL COSTS: $ 886, 600 water bills in the Texas correctional system is estimated at $ 640, 000 and the total costs associated with it is estimated at $ 886, 000. Therefore, net (benefit-cost) is $ 246, 000 and the ratio (benefits divided by costs) is 0.72 Conclusion: 12
  • 14. For above reasons it may be concluded that it is not in the interest of the public to entrust the management of prisons to private operators who rather than being motivated to administer justice or serve the public interest, are motivated solely to make profits. Several studies have failed to show any evidence linking significant cost savings to the public by contracting state correction facilities to private prison providers. It is argued that privately operated prisons are driven by financial incentives and are responsible for cutting back on inmate’s medical service and rehabilitation programs. Finally, it is the constitutional obligation for State governments to provide public safety and preserve constitution rights of inmates. References 13
  • 15. Borna, “ Free Enterprise Goes To Prison” (1986) 26 (4) British Journal of Criminology 326. Bureau of Justice Assistance. (2001). Emerging Issues on Privatized Prisons. Washington, DC: U.S. Department of Justice, Office of Justice Program. GAO. (1997). Privatization: Lessons learned by States and Local Governments. Washington, DC: U.S. General Accounting Office. Gormley, W.T, & Balla, S.J. (2004). Bureaucracy and Democracy. Washington: CQ Press. Herman B. Leonard, Checks Unbalanced: The Quiet Side of Public Spending (New York, NY: Basic Books, 1986). Justice Policy Institute. (2003). Texas Tough: Three Years Later. Washington, DC: Schiraldi, V. & Ziedenberg, J. Kicenski, K.L. (2002).The Corporate Prison: The Production of Crime and Sale of Disclipline contracting. A proposal to study the Drive to privatize the Prison System in the State of California. George Mason University. Lawrence and Mears. (2006). Benefit-Cost Analysis of Supermax Prisons: Critical steps and Considerations. Washington, DC: Department of Justice. Logan, C. (1991). Well Kept: Comparing Confinement in Private and Public Prisons. The McFarland e.t. all, “Prison, Privatization and Public Values” (2002) P.2. McDonald, D.C. (1994). Public Prisons by Private Means, The Re-emergence of Private Prisons and Jails in the United State, the United Kingdom and Australia. British Journal of Criminology 34: 29-48. Miller & Jensen, “Reform of Federal Prison Industries” (1974) 1(1) Justice System Journal, 1-27. Pfiffner, J. (1997). The National Performance Review in Perspective. International Journal of Public Administration 20(1) 41-70. Segal and More, (2002). Weighing the watchmen: Evaluating the cost and benefit of outsourcing correctional services. Policy Study .290.p.6. Sclar, L. (2000). You Don’t Always Get What You Pay: Economics of Privatization. Ithaca Newyork: Cornell University Press. Sozzani, “Privatization in the United States and Australia” (2003) P.141. Texas Department of Justice. (2004). Fiscal Year 2004 Statistical Report. Austin, Texas. Texas Sunset Advisory Commission. (1991). Information Report on Contracts for Correction Facilities and Services. Austin, Texas. www.whitehouse.org/omb 14