The state Department of Corrections plans Friday to award a private prison contract for 1,000 medium-security beds for men, citing a lack of beds for violent offenders and a projected increase in the overall inmate population.

Five out-of-state companies are vying for the contract. The value of the deal has not been disclosed while the state reviews the bids, but it likely will be worth millions of dollars annually. Sites being considered are in Coolidge, Eloy, Florence, San Luis and Winslow.

PDF: A look at the bids

The contract comes even though the state's overall prison population is expected to remain flat the next two years and increase only slightly thereafter. State records also show it's more costly for taxpayers to have private businesses run prisons.

According to state records, there currently are about 2,000 empty beds in Arizona's prison system, which houses 39,876 male and female inmates, about 9 percent of Arizona's total population. Critics of the prison expansion point to those empty beds as a key reason why the state doesn't need to spend more money on beds.

State Corrections Director Charles Ryan acknowledged the empty beds but said the state has a shortage of permanent medium-security beds -- an 11-bed deficit as of Friday. Most of the empty beds are in minimum-security or women's facilities, and the populations cannot be mixed.

Ryan said the shortage will get worse by 2016, when the total prison population is projected to increase by about 600 more inmates, to 40,477 prisoners. Ryan said the increased projections are based on historical growth trends from the past five fiscal years. He added that the state doesn't foresee a significant decline in sex offenders or violent criminals, who would be housed in medium-security prisons.

"We need the medium (security) beds," Ryan said. "This is an issue of preparing and planning for the future."

The contract calls for up to 2,000 medium-security beds. The first 500 would come online in January 2014. The next 500 would be in place in January 2015. The Legislature has not determined when, or if, the remaining 1,000 beds would be added, but their decision would be based on increases in the medium-security population.

The state also plans to build a 500-bed maximum-security facility in Buckeye that's scheduled to open July 1, 2015. The cost for that facility is projected at $50 million. The Legislature allocated $20 million toward the new facility this budget year, which began July 1.

Corrections records also show that in fiscal 2011 there were 296 fewer prisoners than the previous year, and this past fiscal year that ended June 30, there were 304 fewer inmates for a total of 39,877.

Ryan attributed the overall decline to fewer parole revocations, fewer illegal immigrants being placed in state custody and an overall downturn in crime, but he still contends the additional beds are needed.

He said 735 of the empty beds are in women's facilities, where men can't be housed. There are another 1,127 empty beds at minimum-security prisons for men, but male inmates at medium-security sites can't be transferred there because the sites are not as secure, and there would be safety risks to other inmates, officers and the public. It would be cost-prohibitive, he said, to retrofit a minimum-security facility for more serious offenders.

"You can't mix and match," Ryan said. "You have to keep them separate."

Ryan said the 15,500-plus medium-security inmates are not allowed to work outside a prison's secured perimeter, and they typically are serving sentences that average 9.7 years. Just more than half of them have been sentenced for violent crimes, including assaults, sex offenses and robbery. The rest are serving time for drug offenses, drunken driving, forgery, theft and burglary, according to Corrections records.

Business model criticized

Records show it's more expensive to have private companies operate prisons.

The most recent information available shows the average daily cost per inmate in a state-run medium-custody facility in 2010 was $48.42, while the average daily cost for an inmate in a similar private facility was $53.02. That translates into a 9.5 percent higher cost per inmate for a private prison.

If the new private 1,000-bed facility operates at just 90 percent capacity, the annual cost for taxpayers would be $17.4 million, based on 2010 figures. A state-run facility, under the same scenario, would cost taxpayers $15.9 million annually.

Ryan countered that Arizona saves up-front construction costs by having a private company build the facility. The coming contract also calls for the state to assume ownership of the facility in 20 years.

Rep. Cecil Ash, R-Mesa, disagrees with Ryan's conclusions.

"Private prisons are the wrong business model," Ash said. "They are in the business for profit. The problem is most legislators just don't pay attention to this issue. Inmates don't vote, and the public doesn't see the inmates. They are out of sight, out of mind."

Ash, who is running for a justice of the peace position and will not return to the 2013 Legislature, is one of the few Republicans who have publicly opposed adding private prison beds, saying they waste taxpayers' money. Other outspoken opponents include the American Civil Liberties Union, the National Association for the Advancement of Colored People and the American Friends Service Committee, a Quaker group and watchdog organization.

"For-profit prison corporations are not accountable to Arizona taxpayers," said Caroline Isaacs, American Friends Service Committee program director.

She also contends they are not subject to the same transparency, reporting or oversight requirements as government agencies, and she believes the for-profit prison industry is getting a contract because it has exercised its political muscle in Arizona by hiring a cadre of lobbyists and made campaign contributions to influential legislators.

At least one of the companies, Corrections Corporation of America, employs one of Gov. Jan Brewer's key advisers as a lobbyist, and former Arizona U.S. Sen. Dennis DeConcini serves on the company's board.

Who's bidding

Arizona got into the private prison business in 1993, with a facility in Marana in southern Arizona.

Today, about 6,500 Arizona inmates or about 16 percent of the inmate population are in private prisons. The state houses roughly 33,000 inmates in 10 complexes across Arizona. The overall Corrections budget is about $1 billion.

Management & Training Corporation and the GEO Group Inc. currently have contracts at five prisons in Phoenix, Florence, Kingman and Marana. Both are bidding for the additional medium-security beds. The other bidders are Corrections Corporation of America, Emerald Correctional Management and LaSalle Corrections. All five are headquartered outside Arizona.

Following steady growth in the inmate population, the Department of Corrections in 2009 sought bids from private prison operators for an additional 5,000 beds in Arizona.

During the bidding process, three inmates escaped July 30, 2010, from Management & Training Corporation's private prison in Kingman. Two of the escapees are accused of murdering an Oklahoma couple who were vacationing in New Mexico.

An Arizona Department of Corrections review of the Kingman facility after the escape found numerous deficiencies with training and equipment, including an alarm system that issued false alarms so frequently that staff members began to ignore them.

The state suspended the bidding process after the escape and revised a bid for 5,000 beds. That bid was canceled and a new request for up to 2,000 beds was issued after the prison population forecast changed. The Legislature most recently authorized funding for 1,000 of the 2,000 beds.

Local debate

While the American Friends Service Committee and ACLU have adamantly opposed the addition of private prison beds, many residents in communities that may house the inmates have been very supportive, Ryan said.

That was the case earlier this month at a public hearing in Florence, known as Arizona's prison capital for its state-operated and private prisons.

Florence's mayor, town officials and the schools superintendent all voiced support for more inmate beds, after they were told by GEO Group that the company's proposal to build a new 1,000-bed prison would create 200 construction jobs, 260 jobs at the facility and a $12 million annual payroll. The company, however, would not say how much the company pays its guards.

"We are proud of our institutions, and proud to have a much-needed service to the state," Florence Mayor Tom Rankin said during the hearing. "It will create more jobs, and more jobs means more people will shop here."

Rankin also took a shot at critics of the proposed prison, saying they didn't live in his community and shouldn't try to derail a jobs creator.

But opponents, including Isaacs, countered that any new prison was a waste of money for all Arizona taxpayers.

A GEO executive had to correct himself during the hearing for saying the company had never had an escape at one of its facilities after an opponent pointed out that an escape had occurred in 2006 at a GEO facility in Florence. Last year, when The Republic was examining the bidders for new private prisons, the newspaper found that at least 27 escapes have been reported from GEO facilities over the previous seven years, including one in Texas that led to a murder.

Pablo Paez, a GEO spokesman, said the Florence escape occurred at a low-security DUI-offender facility shortly after the company took over from a prior operator. He added the other escapes predominantly occurred at low-security facilities, such as halfway houses where offenders are placed in the months nearing their release.

During other questions from opponents, GEO officials at least twice attempted to take control of the meeting from Corrections Director Ryan by telling the critics that their allotted time to speak had ended, when it had not. Ryan allowed the critics to continue.

"It was evident that the representatives from the local community are very supportive of the proposed facility," Paez later said. "Unfortunately, during any public hearing, outside interest groups which are not related to the local community can at times overtake a meeting and bring up issues that are not related to the community's views on the proposed project. This can lead to spontaneous exchanges which unfortunately can take away from the central purpose of these public hearings, which should be for the local community to express its views on the proposed project."

GEO officials did not attempt to cut short comments from supporters of its proposal.

Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478.