47-803.

Department of Correctional Services; contractor criteria; contract; requirements.

(1) The Department of Correctional Services shall develop criteria for the process by which a contractor for the construction or operation, or both, of a private prison is to be awarded a contract. The criteria shall be subject to approval by the Director of Correctional Services. The criteria for selection of a site for a proposed facility to be constructed or operated, or both, by a private prison contractor shall include, but shall not be limited to, the availability of medical services, support services, and transportation services and the availability of potential employees who would be qualified to perform required functions at a state correctional facility.

(2) Any contract between the department and a private prison contractor pursuant to which the private prison contractor provides for the housing, care, and control of inmates in a nondepartmental facility operated by the private prison contractor shall contain, in addition to other provisions, the following terms and conditions:

(a) Requiring the private prison contractor to provide such services in a facility which meets accreditation standards established by the American Correctional Association;

(b) Requiring the contractor to receive and maintain accreditation for the facility from the American Correctional Association within two years after commencement of operations of the facility;

(c) Requiring the Department of Correctional Services to determine where the facility is to be located and to obtain written authorization from the appropriate municipality or the county board of the county in which the facility is to be located; and

(d) Granting the department the option at the beginning of each fiscal year, pursuant to an agreement, to purchase any such facility, with or without inventory or other personal property, at a predetermined price which shall be negotiated and included in a schedule or a formula to be contained in the original agreement.

(3) A private prison contractor proposing to enter a contract with the department for construction or operation, or both, of a correctional facility pursuant to this section shall demonstrate:

(a) The qualifications and the operations and management experience to carry out the terms of the contract; and

(b) The ability to comply with the standards of the American Correctional Association and with specific court orders.

(4) In addition to meeting the requirements specified in the request for proposals, a proposal for the construction and operation of a correctional facility shall:

(a) Provide for regular, onsite monitoring by the department;

(b) Acknowledge that payment by the state is subject to the availability of appropriations;

(c) Provide for payment of a maximum amount per fiscal year;

(d) Provide for meeting performance criteria or be subject to penalties;

(e) Demonstrate a cost benefit to the State of Nebraska when compared to the level and quality of programs provided by state correctional facilities that have similar types of inmates at an operational cost not more than the cost of housing inmates in similar facilities and providing similar programs to those types of inmates in state-operated facilities. The department shall be responsible for determining the costs and benefits of the proposal;

(f) Permit the state to terminate the contract for cause;

(g) Contain a per diem operational cost per inmate for the initial year of operations;

(h) Subject to appropriations, provide that cost adjustments may be made only once each fiscal year, to take effect at the beginning of the next fiscal year using as the maximum percentage increase, if any, an increase not to exceed the previous year's Consumer Price Index for All Urban Consumers as prepared by the United States Department of Labor, Bureau of Labor Statistics;

(i) Have an initial contract term of not more than two years, with an option to renew;

(j) If the proposal includes construction of a facility, contain necessary bonds and performance conditions approved by the department that are adequate and appropriate for the proposed contract;

(k) Provide for assumption of liability by the private prison contractor for all claims arising from the services performed under the contract by the private prison contractor;

(l) Provide for an adequate plan of insurance for the private prison contractor and its officers, employees, and agents against all claims, including claims based on violations of civil rights arising from the services performed under the contract by the private prison contractor;

(m) Provide for an adequate plan of insurance to protect the state against all claims arising from the services performed under the contract by the private prison contractor and to protect the state from actions by a third party against the private prison contractor, its officers, employees, and agents as a result of the contract;

(n) Provide plans for the purchase and assumption of operations by the state in the event of the bankruptcy of the private prison contractor; and

(o) Contain comprehensive standards for conditions of confinement.

(5) At the end of each fiscal year, the department shall determine the average daily cost per inmate for the operational costs at each major category of correctional facility. There shall be a separate computation of the average daily rate for medium security, minimum security, and community corrections facilities.

(6) If no proposals conform to the established criteria, the department shall prepare an additional request for proposals. The department shall evaluate the proposals within thirty days after receipt from the prospective private prison contractors. The department shall specifically determine whether a proposal meets the requirements of subdivision (4)(e) of this section by comparing the daily rate for housing and care of inmates pursuant to any proposed contract with a private prison contractor to the daily rate for housing and care of inmates at the comparable type of facility operated by the department. The department shall evaluate proposals taking into account any direct or indirect costs that would continue to be paid by the department, including, but not limited to, transportation, records management, discipline, general administration, management of inmate trust funds, and major medical coverage. Such costs shall be added to the proposed per diem of the private prison contractor when comparing the total per diem costs of facilities operated by the state.

(7) If the department proposes to enter into a contract for the construction or the operation, or both, of a private prison, the department shall compare both the capital costs and the operating costs for the facility to the imputed capital costs and the projected operating costs of a comparable facility constructed and operated by the department.

(8) A selection committee shall be established and shall deliver to the Director of Correctional Services a list containing the top three qualified prospective private prison contractors identified pursuant to this section together with the information reviewed and analyzed by the department during analysis of the proposals as required by this section. The director shall evaluate the information provided and shall make a final decision selecting the contractor within thirty days after receipt of the list and the information.

(9) Any contract subject to this section entered into by the Department of Correctional Services shall be subject to the approval of the Governor.