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June 06, 2008
Federal Prisons Cost Soars to 62% above estimates
Mendota prison project scaled back
Costs affect the plans; communication was lacking, auditors say.
By Michael Doyle / Bee Washington Bureau
05/29/08 23:30:25
WASHINGTON -- The cost of a long-delayed federal prison in the San Joaquin Valley town of Mendota has soared 45% beyond original estimates even as the project itself has shrunk, dismayed auditors say in a new report.
Vexed by stop-and-start funding and higher oil and steel prices, among other problems, the anticipated price tag for Federal Correctional Institution Mendota now tops $231 million. Seven years ago, federal officials figured a Mendota prison would cost $158 million.
"Cost estimates are imprecise and should be expected to vary," Government Accountability Office auditors noted Thursday, "but Congress and other stakeholders were not informed about the extent to which costs might vary from the initial estimates."
The Mendota facility was one of three federal prisons examined by the congressional watchdog agency. All told, the auditors found construction costs for the prisons in California, West Virginia and New Hampshire have increased 62% beyond initial estimates.
The rising costs drove federal officials to curtail some construction plans to meet their budgets. The result: smaller prisons than anyone anticipated.
"This is an example of problems within the federal Bureau of Prisons," Rep. Jim Costa, D-Fresno, said in an interview Thursday evening. "They don't keep their eye on the ball."
The original Mendota prison plan called for a high-security penitentiary. That changed in 2002 to a medium-security prison and a minimum-security camp. An adjoining Federal Prison Industries facility would have employed and trained inmates.
Last year, GAO auditors reported, officials quietly eliminated both the minimum-security camp and the prison-industry facility from the 960-acre Mendota complex. Officials also shrunk a planned prison-industry facility at the Berlin, N.H., prison.
"Although intended to reduce costs, these changes also reduced the functionality of the prisons and deviated from what the [Bureau of Prisons] planned and requested funding for," auditors stated.
Auditors further noted that the Bureau of Prisons "did not clearly communicate" to Congress" that the Mendota project had shrunk. The only indication that the minimum security camp was eliminated came in the omission of the phrase "with camp" in official references to FCI Mendota.
"Their communication with our office has not been adequate," Costa said.
Bureau of Prisons officials, in their official response, stated that the elimination of the minimum-security camp was "clearly" indicated on a construction status report that "went to all shareholders." Bureau officials did not dispute much of the report and agreed to improve cost reporting.
Mendota city officials could not be reached to comment Thursday.
The initial Mendota prison plans anticipated a minimum-security camp housing about 128 inmates. The medium-security facility will house about 1,152 inmates.
The entire project was alluring for the Mendota community, which saw the new prison complex as a source of employment. The more inmates are housed, the more workers are needed. When local officials broke ground in August 2005, they spoke of $20 million flowing into the area's economy.
"Good things will happen for Mendota and the west side," Costa declared at the symbolic groundbreaking ceremony.
Within a year, though, federal officials said they had run out of money to complete the work. The Bureau of Prisons said funding had to be diverted to pay for the Iraq war and Hurricane Katrina cleanup, among other priorities.
Bureau of Prisons officials further told auditors that "problems associated with selecting sites" had increased costs. Steel prices had increased 60% and oil prices by 150% since 2003.
In May 2007, under pressure from Costa, Rep. Dennis Cardoza, D-Merced, and other lawmakers, the Bush administration again came up with the necessary funding. Officials now believe the half-built prison won't be finished until 2010, about two years late.
http://www.fresnobee.com/263/story/634868.html
Posted by lois at June 6, 2008 10:00 AM