The first point noted in the Interview was that this isn’t a straightforward matter. “The relationship between private prisons and detention is complicated in that it takes many different forms”, the expert said. The BoP has nine contracts with Geo, one with CoreCivic and one with MTC — and “none of them will renew under the Biden directive”.
So what will happen to private facilities? “I do not expect them [the BoP] to buy any private prisons. In the past, when we needed to expand quickly, there were some private prisons available… and we declined to do that.”
The expert was asked whether the executive order for the Department of Justice not to renew contracts with private prison operators could extend to contracts with the US Marshals Service. “My guess is there’ll be an ongoing negotiation between the Marshals Service and the DoJ leadership, and then the White House, as to how they will implement the desire to move away from private prisons.” Indeed, “ICE doesn’t necessarily have the facilities, and US Marshals has its own dynamics”.
Organisations such as Geo and CoreCivic face an uncertain future. With many private facilities based in remote locations, we’re told providers will have to think creatively about what to do with the infrastructure and land beyond trying to simply replace run-down state prisons. Although last-mile distribution centres are unlucrative, they might be the only option in certain circumstances.
Within six years, the specialist anticipates Geo and CoreCivic will have “zero” business with the BoP. However, this is a longer term issue for ICE, as “there are just no other real options”. Meanwhile, it’s expected that Marshals Service will move away from privates “to some degree”.
In terms of the overall outlook for private prisons, “the devil is in the detail, especially when you look at ICE, because that population is so varied”, the expert said. “It’s been a great run for private prisons, but I do think it’s going to change dramatically, going forward. That federal market in the Bureau of Prisons is going to dry up.”
To access all the human insights in Third Bridge Forum’s The Geo Group & CoreCivic – regulatory outlook under the Biden administration Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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