New facility could spur competition in private-prison market

Colorado lawmakers eager to avoid another series of ultimatums from the state’s dominant private prison contractor could find some relief after a Texas-based prison firm finishes a 1,250-bed prison near Hudson, northeast of Denver.

Charles Seigel, Cornell Companies’ vice president of public policy, said his company hopes the Colorado Department of Corrections will choose to do business with his company, particularly in light of past budget tussles.

“It certainly is in the state’s interest to have more than one vendor providing this service,” Seigel said.

A contract between Cornell Companies and the state could cut into Corrections Corporation of America’s hold over the majority of Colorado’s privately held prisoners.

According to Colorado Department of Corrections statistics, Corrections Corporation of America houses 4,436, or 82 percent, of the state’s privately held prisoners.

The firm’s corner on private prison contracts contributed to a budget fight last session, when lawmakers said they felt they were being extorted when the prison firm asked for a higher per prisoner, per day reimbursement rate.

In March, the Legislature approved a “compromise” that allowed the private prison company to receive a modest increase in its reimbursement rate.

Sen.-elect Al White, R-Hayden, said Cornell Companies’ plans could lead to competition and lower per prisoner, per day reimbursement rates.

White, who sits on the Joint Budget Committee, said the firm’s new prison could “give the state more leverage in pricing discussion.”

The budget panel is expected to discuss the Colorado Department of Corrections’ budget, including its private prison contracts, Tuesday afternoon.

Seigel said his firm has not entered into any negotiations with the state but hopes to pursue a contract as soon as its new prison is completed in autumn 2009.

Cornell Companies already operates the High Plains Correctional Facility, a women’s prison near Brush, and the South Peaks Regional Treatment Center, a juvenile rehabilitation center near Canon City.


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