Mich. won't send inmates to privately run prison

LANSING (AP) -- Michigan won't transfer inmates to a privately run prison because two private companies that bid on the work submitted prices higher than what the Department of Corrections currently spends, an official says.

It costs the state about $12.9 million to house 968 prisoners that would be involved in the change, and the lowest private bid was $18.6 million, said Kurt Weiss, a spokesman for the Michigan Department of Technology, Management and Budget.

"In fact, both bids cost substantially more than the current direct costs for (the Michigan Department of Corrections) to provide the services," Weiss told the Detroit Free Press. "Great care was taken to ensure that the numbers in the price analysis were accurate."

Companies were given the option to use the state's Standish prison, which closed in 2009, or use a private prison anywhere in Michigan, Weiss said. He said the lowest bid using Standish was $20.1 million in the first year and the lowest using a private prison was $18.6 million in the first year.

"Our internal auditor reviewed the numbers and confirmed them. Because the required cost savings were not achieved, the state will not be pursuing either of the bids," Weiss said.

The bids came from the Florida-based GEO Group Inc. and the Utah-based Management and Training Corp. The newspaper said neither company immediately responded to requests for comment.

Last Monday, a state board approved a three-year, $145-million prison food service contract with Aramark Correctional Services of Philadelphia. State officials have said they expect the company to take over full food service by Dec. 1, resulting in the layoff of 370 state employees.

Mel Grieshaber, executive director of the Michigan Corrections Organization that represents prison employees, said the private prison bid results are "a win for the taxpayers," and "a win for correctional officers."

"This was a good decision," he said. "It sounds like ... the state was evaluating it in the way that they should have."

State Rep. Joe Haveman, R-Holland, said the announcement is "positive news for taxpayers, as it is an indication that the Department of Corrections has worked to make numerous cost-cutting changes during the past year and a half to bring down the costs of incarceration.

"They have trimmed their budget as we asked. The goal here was never to privatize; the goal was to save money."

Published: Mon, Oct 7, 2013