Contract Facilities

History

Government contracting with the private sector in the United States dates as far back as 1785 when the nascent federal government contracted with private stagecoach operators to deliver mail and passed subsequent legislation that required the bidding process to be publicly advertised. The U.S. experience with contracting for prisons and correctional facilities dates to the early 19th century. Borrowing from European workhouse models, the earliest American prisons (such as Philadelphia's Walnut Street Jail) contracted out the labor of convicts to private entrepreneurs. While the practice extended well into the 20th century, it became increasingly controversial due to abusive treatment of inmates, insider contracting arrangements, and concerns that prison labor was unfairly depressing wages and cutting into the private sector job market. By 1940, federal and state laws severely restricted the market for prison-made goods.

In the juvenile justice field, contract facilities have been providing services to juvenile delinquents since the early 20th century. Unlike the adult contract system, contracts for juvenile facilities have been primarily with religious, charitable, and other nonprofit agencies rather than for-profit businesses. As a result, the practice of placing juvenile delinquents in privately run facilities has proceeded with far less controversy than has been the case in the [Page 163]adult corrections arena. In the 1970s, the movement to deinstitutionalize status offenders from the youth correctional system created a demand for more contracted services and spawned considerable research on the effectiveness of contract facilities. As adult correctional populations increased during this time, at least 18 states passed “community corrections acts” designed to transfer resources and funding from state departments of correction to local governments and to provide community residential services to offenders. Many jurisdictions turned to private contractors to operate these facilities.

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