Tab_5_-_Fee_Schedule.pdf

Proposal Submitted to:

Arizona Department of Corrections

Request for:

750 Minimum and Low Custody Contract Beds Solicitation Number BPM004542 August 03, 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 Schedules

TAB 5

Fee Schedule

Title Page Table of Contents

1. Fee Schedule Introduction Fee Schedule

Proposal Submitted to:

Arizona Department of Corrections

Request for:

750 Minimum and Low Custody Contract Beds Solicitation Number: BPM004542 August 03, 2022

August 3, 2022

750 Minimum and Low Custody Contract Beds – Solicitation BPM004542

Tab 5 – Fee Schedule page 1 of 3

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.

This proposal is proprietary and confidential and not subject to disclosure under Arizona Procurement Code, Chapter 23, R2-7-103, Confidential Information, the Arizona Constitution or other authority.

Tab 5 – Fee Schedule page 2 of 3

• 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.

Our Proposal includes increases for all positions, with a starting wage increase to per hour for Correctional Officers. This starting rate would become effective upon the commencement of the new contract.

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.

This proposal is proprietary and confidential and not subject to disclosure under Arizona Procurement Code, Tab 5 – Fee Schedule page 3 of 3

• 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 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.

This proposal is proprietary and confidential and not subject to disclosure under Arizona Procurement Code, $ 76.95 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

Employee Personal Service

Employer Related Expenses for Employees

Inmate Related Professional and Outside Services

Inmate Related Food Costs

Operating Expenses

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

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 $8.664

14 Performance and Payment Bond Fee $1.616

TOTAL PER DIEM PER BED $76.9500

Machinery and Equipment, if applicable.

Insurance

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