Tab_5_-_Fee_Schedule_BAFO.pdf

Proposal Submitted to:

Arizona Department of Corrections

Request for Best and Final Offer (BAFO):

750 Minimum and Low Custody Contract Beds Solicitation Number BPM004542 August 30, 2022

Jennifer Houston 4955 Technology Way Boca Raton, Florida 33431 Tel: 866.301.4436/561.893.0101 jhouston@geogroup.com

R

TAB 5

Florence West Correctional & Rehabilitation Facility

Fee Schedule

TAB 5

Fee Schedule

Title Page Table of Contents

1. Fee Schedule Introduction Fee Schedule

Proposal Submitted to:

Arizona Department of Corrections

Request for Best and Final Offer (BAFO):

750 Minimum and Low Custody Contract Beds Solicitation Number: BPM004542 August 30, 2022

BAFO - August 30, 2022 750 Minimum and Low Custody Contract Beds – Solicitation BPM004542

Tab 5 – Fee Schedule page 1 of 5

Tab 5. Fee Schedule

1. Fee Schedule Introduction

GEO Secure Services LLC (GEO) has developed the proposed pricing for the Florence West Facility based on the requirements of the RFP, as well as our extensive experience operating the Facility. GEO has completed the required Fee Schedule and provided it as an attachment immediately following this section.

See completed Fee Schedule (RFP Attachment 9)

Our proposed pricing includes all the services described in our proposal and takes into account current market conditions reflected in an increasingly tight labor market, rising health care costs, ever-changing pandemic guidelines, and supply chain disruptions.

GEO’s Proposed Price is based on the following Key Assumptions:

90% Occupancy Guarantee – Our pricing assumes the 90% minimum guarantee is effective on Day One of the contract.

Staff Wages – Similar to correctional jurisdictions around the country, including the Arizona Department of Corrections, Rehabilitation & Reentry, the Florence West Facility has faced increasing staffing challenges. To improve recruitment and retention, pay increases have been priced for all staff, with increased starting wages for Correctional Officers to be effective on the first day of the new contract. For example, starting wages for Correctional Officers have increased from $22.18 to per hour.

Health Care Services – Health services have been priced based on 24/7 registered nursing coverage, increased mental health staff, increased health care staff wages, enhanced treatment protocols, and rising pharmaceutical costs.

Electronic Health Record System – In accordance with Amendment 2, GEO acknowledges that the State’s new inmate correctional health care provider, NaphCare, will cover costs for the new Electronic Health Records (EHR) at the Florence West Facility, to include costs associated with equipment, installation, and user/seat licensing.

Physical Plant Maintenance & Repair – According to the State’s response to Questions #30 in Amendment 2, the State will prospectively determine the optional $25,000 cap for capital repair expenditures on a case-by-case basis. Although the State will own the Florence West Facility under the new contract, the RFP requires the Contractor to provide full maintenance. GEO has priced maintenance costs with consideration for the age of the Facility and current operating equipment.

Tab 5 – Fee Schedule page 2 of 5

Property Taxes – Based on the State’s responses to vendor questions in Amendment 2, GEO has not included property taxes in our pricing.

In addition to the foregoing, GEO is providing further context for its proposed per diem increases, which are being driven primarily by nationwide wage inflation and rising health care costs. Below is additional background information on each of these areas.

Nationwide Labor Shortages & Increased Costs Across the country, employers are struggling to fill jobs with qualified candidates. It has been reported that approximately 11.5 million jobs are available, with only 6 million candidates to fill them. Many positions are now operating in a hybrid mode, with a mixture of in-person and remote work available to candidates. This new work setting is drawing many desirable candidates away from positions in traditionally hard-to-recruit industries such as corrections. For those remaining candidates willing to fill in-person positions, these industries are often competing directly with transportation/logistics companies, many offering starting wages of $32.00 an hour.

Correctional & Detention Facilities within 25 Miles of Florence West

Tab 5 – Fee Schedule page 3 of 5

Similar to correctional jurisdictions around the country, including the Arizona Department of Corrections, Rehabilitation and Reentry, the Florence West Facility has faced increasing staffing challenges. Further exacerbating this situation is the fact that the Facility must compete with thirteen other correctional and detention facilities within a 25-mile radius.

Eight (8) of these 13 correctional and detention facilities are located less than five (5) miles from the Florence West Facility, and house Federal, State, and County inmates and detainees. The Wage Determination rate for officers working at Federal facilities in Pinal County is $24.12 per hour, plus health and welfare of $4.41 per hour, for an equivalent rate of $28.53 per hour.

Correctional and Detention Facilities within 5 Miles of Florence West

The starting Correctional Officer hourly rate at Florence West prior to July 1, 2022, was $18.48 for certified officers. In addition, the correctional officers received a temporary 20% stipend provided by the State between January and July 2022. This temporary stipend was discontinued in July, replaced with a 20% rate increase provided by the State, equating to the same rates as prior to July 1, 2022, but providing continuous funding for the wages.

Tab 5 – Fee Schedule page 4 of 5

Despite these efforts, the Florence West Facility is still experiencing an overall staff vacancy rate of approximately 22%, and a correctional officer vacancy rate of 42%. To further improve recruitment and retention, pay increases have been priced in our Proposal for all staff, with a starting wage increase to per hour for Correctional Officers. This starting rate would become effective upon the commencement of the new contract.

GEO believes it is critically important to get the Officer wages “right” to avoid the consequences of low wage rates – high staff turnover, low morale, and potentially unstable operations.

Health Care Service Trends & Increased Costs Since the current contract was executed in 2002, there have been significant changes in health care treatment and costs. Many of these changes were driven by:

Nationwide shortages of qualified health care staff, particularly nurses In Arizona, hospitals and correctional facilities are experiencing a shortage in the number of nurses available to work around the clock to care for COVID-19 patients and those with other chronic conditions. Given the current nurse shortage, the demand for increased wages is a predominant factor in recruitment and retention of medical staff.

Health care litigation Health care lawsuits such as Jensen v. Shinn and Parsons v. Shinn have had an overall impact on ADCRR’s health care directives and treatment protocols over the last few years and necessitated the need for additional staffing to ensure compliance.

The Parsons v. Shinn settlement agreement required ADCRR to improve its health care system and satisfy more than 100 health care performance measures, including medical care, mental health care, and dental care. Although only those inmates housed in state-run prisons are members of the Parsons class, there has been a general focus on both staffing levels and policies with the goal of improving the quality of mental health care throughout ADCRR.

Changes in treatment protocols (i.e., HIV, Hepatitis C) In recent years Arizona adopted the Federal Bureau of Prisons (BOP) Hepatitis C clinical guidelines which were not in place during the initial contract period. The BOP Hepatitis C guidelines require extensive evaluation (lab, gastro specialty consults, and practitioner time) that incorporates a tiered level system for staging and treatment.

The number of Hepatitis C patients have increased on a state and national level and requires more staff to appropriately treat, track, and follow-up on all aspects of care pre and post treatment. Due in part to lifestyle, drug use, and a lack of information, inmates have a much higher chance of being infected with communicable diseases

Tab 5 – Fee Schedule page 5 of 5 than other populations. The increase in Hepatitis C cases with significant pharmaceutical costs is present in every correctional setting. Hepatitis C treatment costs range from $18,000 to $28,000 per inmate, per month.

Rising pharmaceutical costs Pharmaceutical costs continue to rise with increasing inflation and newer and enhanced treatment protocols. In addition, some diseases such as asthma, cancers, and diabetes, or autoimmune disorders, such as inflammatory bowel disease, rheumatoid arthritis, and psoriatic arthritis, may require the use of higher cost biologic-based medications, in addition to the lower cost traditional chemical-based agents, when traditional treatments alone are not effective.

COVID-19 pandemic COVID-19 has significantly increased hospital admissions and post discharge aftercare needs. Additional staffing needs are required 24/7 to ensure aftercare is provided at the facility. The necessity for medical observation for those inmates stricken with COVID-19 necessitates the enhancement of medical staff.

$ 74.50 Per Diem Per Inmate

Type the per diem rate in the space provided below. Each expense item’s relative daily cost, per inmate, per day, must be within the proposed per diem rate. If an expense item on the Fee Schedule is not applicable, put N/A in the space provided under “Relative Daily

Cost” and explain the reason why it is not applicable. All expenses must be identified within the structure of this Fee Schedule. Complete the Budget Narrative sheets for EACH expense item to provide supporting detail. The Budget Narrative sheets follow the Fee Schedule.

State of Arizona

Department of Corrections, Rehabilitation & Reentry

Procurement Services

1645 W Jefferson Street

Phoenix, AZ 85007

FEE SCHEDULE

Solicitation No. BPM004542

750 Minimum and Low Custody Contract Beds

Offerors are required to provide a per diem rate per inmate that will cover provision of ALL services requested as it pertains to the entire inmate population. The identified rate must include amortized costs as identified and requested herein. A separate Fee Schedule, Per

Diem Rate Schedule and Budget Narrative shall be provided.

Attachment 9

ADCRR Tracking No. 22-173-27 Page 1 of 3

Relative Daily Cost

No. Title

1.1 Wages $27.309

1.2 Overtime $1.998

2.1 Uniform Allowance/expense $0.062

2.2 FICA/FUTA/SUTA $2.430

2.3 Worker's Compensation and Employers Liability $0.456

2.4 Medical and Dental Insurance $2.735

2.5 Employee Benefits (Life, Disability, 401K) $0.432

2.6 Other (Holiday Premium, Turnover Training Wages, Recruiting/Retention) $3.743

3.1 Medical and Hospital $5.866

3.2 Preventative Maintenance $0.556

3.3 Education - Career & Technical Education (CTE) $0.438

3.4 Education - Literacy $0.024

3.5 Education - GED $0.024

3.6 Recreation $0.000

3.7 Religious Services $0.007

3.8 Substance Abuse $0.000

3.9 Mental Health $0.000

3.10 Other (Specify) $0.000

4.1 Food and Labor $3.559

5.1 Depreciation Expense - Equipment $1.246

5.2 Postage $0.033

5.3 Telecommunications $0.237

Breakdown of relative daily costs included in the per diem rate:

State of Arizona

Department of Corrections, Rehabilitation & Reentry

Procurement Services

1645 W Jefferson Street

Phoenix, AZ 85007

FEE SCHEDULE

Solicitation No. BPM004542

750 Minimum and Low Custody Contract Beds

Employee Personal Service

Employer Related Expenses for Employees

Inmate Related Professional and Outside Services

Inmate Related Food Costs

Operating Expenses

ADCRR Tracking No. 22-173-27 Page 2 of 3

State of Arizona

Department of Corrections, Rehabilitation & Reentry

Procurement Services

1645 W Jefferson Street

Phoenix, AZ 85007

FEE SCHEDULE

Solicitation No. BPM004542

750 Minimum and Low Custody Contract Beds

5.4 Operating Supplies $0.660

5.5 Repair/Maintenance (equipment, building, vehicles, etc.) $0.530

5.6 Utilities & Related Expenditures $2.528

5.7 Education/Training, etc. $0.037

5.8 Interest Expense $0.289

5.9 Travel $0.025

5.10 Inmate Clothing $0.411

5.11 Other (Property Insurance, Property/Sales & Use Taxes) $0.512

5.11 Other $1.883

6.1 Commercial General Liability $0.773

6.2 Business Automobile Liability N/A

6.3 Umbrella Liability N/A

6.4 Professional Liability N/A

7 Land N/A

8 Buildings N/A

9 Improvements Other Than Buildings, i.e., easement (Specify) $2.678

10.1 Data Processing Equipment N/A

10.2 Software $0.000

10.3 Motorized Vehicles $0.195

10.4 Other Machinery & Equipment $0.146

11 Other Capital Outlay $0.000

12 General and Administrative Fee $4.846

13 Overhead Fee $6.265

14 Performance and Payment Bond Fee $1.565

TOTAL PER DIEM PER BED $74.5000

Machinery and Equipment, if applicable.

Insurance

ADCRR Tracking No. 22-173-27 Page 3 of 3