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Correctional Facilities

Industry Report

May 8, 2017

Prepared by Samantha Vodanovich

Correctional facilities are a growing industry in the United States. This industry report will
provide information on correctional facilities regarding their services, target markets, industry
challenges, and an overview of major companies in this industry. Correctional facilities serve a
great purpose in todays society since they are an industry that will always be necessary and
never seize business.

Industry Overview
Whether it be a correctional facility, jail, detention center, they all have one thing in common,
which is detainment of criminals. The point of these facilities is to detain people for whatever
act they have committed and serve their time in these institutions. According to OHollaren, a
couple of the main services provided by correctional facilities are private janitorial,
maintenance, trash disposal, guard and security, mail routing reception, laundry and other
(OHollaren, 2016). There are 403 businesses in this industry and it is growing at a rate of 1.5%
A booming industry like this one is making a revenue of $5.3 billion (OHollaren, 2016). An
industry as important as this one has a large amount of different aspects, but in this industry
report I will be covering the larger general topics.

There are different levels of security that are provided in this industry, which consist of
minimum, medium, and maximum security. Each level has its restrictions and freedoms
depending on the type of crime committed. As of 2016, medium security is the largest segment
at 63.6%, which you can see below in the pie chart provided by IBISWorld (OHollaren, 2016).

Minimum Security
Minimum security consists of dormitory housing, a low staff to inmate ratio and limited
perimeter fencing. Since it is minimum security the facilities try to implement many work and
program opportunities. The goal is to make the facility rehab-oriented and keep it about
bettering themselves while still being denied certain freedoms (OHollaren, 2016).

Medium Security
Medium security is known to have more security than minimum. This consists of double fences,
tall concrete walls, and even electronic or barbwire fencing. Another way this security differs
from minimum is that they have cells to live in, instead of dormitory-like housing. Although, due
to an issue of overcrowding, which I discuss later in this report, some facilities have had to
resort to dorm-style housing instead of cells. Inmates are never allowed to leave the facility, but
there is still work and recovery programs available to them. They also have a higher staff to
inmate ratio (OHollaren, 2016).

Maximum Security
Maximum security is the ultimate measure of containment. Not only are inmates required to
live in cells, but it is usually a cell by themselves or with fewer occupants. These cells do lock at
night and for most of their day since they are not allowed much freedom outside of their
designated cell. In these facilities, they have the highest staff to inmate ratio compared to
minimum and medium security. Inmates are never allowed to leave their correctional facility if
they are under maximum security (OHollaren, 2016).

Source: OHollaren, 2016

Services to Inmates
The people who reside in these facilities still are required to have a sense of normal daily life in
order to make the most of their time locked up. Inmates receive services such as dentists,
doctors, healthcare, jobs, learning opportunities and much more. Depending on the type of
security, inmates are able to work jobs and better themselves through rehabilitation programs
as well. My main focus is going to be on the healthcare of this industry since it has been in
recent news and continues to be a popular topic of interest when researching this industry.

Healthcare has grown to be a big service in correctional facilities due to lack of sanitation or
lack of personal hygiene within the inmate population. For example, a recent issue they have
been coming across in correctional facilities is the spread of Tuberculosis. According to Lambert
(2016), handling the tuberculosis problem in jails and prisons is complicated by different case-
finding procedures throughout different settings, large amounts of inmate transfers, uncertain
lengths of stay, high rates of relapse, and challenges of maintaining care after release. This is
just a small example of reasons why inmates receive some of the same freedoms we do.
Barksey (2016) introduced a fact in his research stating that by the end of 2010, there was
diagnosis of HIV infection in 1.5% of state and federal prisons. Serious diseases like these are
especially hard in these facilities due to large amounts of people being secluded in such
confined areas. Depending on the type of security, some inmates receive more freedom then
others when it comes to interacting with other inmates.

Target Markets
Correctional facilities do not have the same type of market like other industries. Their market is
technically inmates who are forced to attend these institutions. Chang and Thompkins (2002)
wrote that, Criminologists have found that increases in the unemployment rate, poverty,
income inequality, racial conflict and political conservatism contribute to an increase in the
incarceration rate (p.47). These are social issues that continue to grow across the United
States, which means that this business will always be growing in one way or another.

On the business side of this industry, the target markets consist of federal customers. As of
2016, these customers are organizations such as state and local governments, Bureau of
Prisons, US Marshals Service, and Immigrations and Customs Enforcement (OHollaren, 2016).
Major companies involved in this unique industry are The GEO Group Incorporation, based out
of Florida, and Corrections Corporations of America, which is based out of Tennessee. The GEO
group owns 27.1% of markets shares of correctional facilities. On the other hand, Corrections
Corporations of America owns 34.9% of market shares (OHollaren, 2016).

The GEO Group

The GEO group is a leading company in market shares for correctional facilities in California,
Florida and Texas. This company is divided up into four business segments which are US
corrections and detention, Geo Care, international services and facility construction and design.
GEO controls over 60 correctional facilities in several different states. A few of GEOs main
customers are federal agencies that I mentioned earlier, which consist of the Bureau of Prisons,
the United States Marshals Service and the Bureau of Immigration and Customs Enforcement
(OHollaren, 2016).

Corrections Corporations of America

The Corrections Corporations of America is the largest owner of privatized correctional
facilities. This company is known for managing prisons and providing inmate residential and
transportation services for government agencies. Just like GEO, they own over 60 correctional
facilities and manage 11. In addition to owning and operating these facilities, CCA also provides
services such as rehabilitation programs, education, religious services and much more. CCAs
customers consist of federal and state correctional and detention authorities (OHollaren,

Source: OHollaren, 2016

Industry Challenges
Crime rates increase year by year and a main issue that correctional facilities must deal with is
overcrowding. IBIS world found that California, which contains prisons operating at 144.0%
capacity, was given until early 2016 to reduce its prison population (OHollaren, 2016). A couple
of ways to deal with the problem of overcrowding is to create more facilities or to let inmates
with smaller and less severe sentences go. The issue with creating more facilities is that it is
very costly. Creating a whole new institution requires building it, employees, supplies, services
and more. On the other hand, letting criminals just go due to overcrowding is a serious danger
to the common good.

Smuggling is a major issue within todays facilities and is something that continues to grow. To
define smuggling it is when something illegal is being snuck into a correctional facility in this
case. Some examples of objects being snuck in are drugs, money, cellphones, information and
so on. Correctional facilities are supposed to be the safest and most protected places, but in
certain cases it is the guards who are doing the smuggling. Clarke explained that sometimes the
guards are motivated to break these rules due to bribes from the inmates or outside sources
(Clarke, 2013).

Correctional facilities are a booming industry due to the never-ending acts of crime across the
United States. Like any other industry, they have services that are growing, target markets that
are expanding and industry threats that continue to flourish. Hopefully this report provided you
with the information required to gain a general understanding of correctional facilities and how
they function in todays society.

Barskey, A. E., Surendera Babu, A., Hernandez, A., & Espinoza, L. (2016). Patterns and trends of
newly diagnosed HIV infections among adults and adolescents in correctional and
noncorrectional facilities, United States, 2008-2011. American Journal of Public
Health, 106(1), 103-109. Retrieved from EBSCOhost.
Chang, F., & Thompkins, D. (2002) Corporations go to prisons. SAGE journals, 27 (1). Retrieved
Choma, R. (2016). Private prison company bankrolls pro-Trump super-pac. The Greanville Post.
Retrieved from
Clarke, M. (2013). Contraband smuggling a problem at prisons and jails nationwide. Prison Legal
News. Retrieved from
Fuehrlein, B. S., Jha, M. K., Brenner, A. M., & North, C. S. (2014). Availability and attitudes
toward correctional psychiatry training. The Journal of Behavioral Health Services &
Research, 41(2), 244-50. Retrieved from ProQuest.
Lambert, L. A., Armstrong, L. R., Lobato, M. N., Ho, C., France, A. M., & Haddad, M. B. (2016).
Tuberculosis in jails and prisons: United States, 2002-2013. American Journal Of Public
Health, 106(12), 2231-2237. Retrieved from EBSCOhost.
OHollaren, K. (2016, November). IBISWorld Industry Report 56121. correctional facilities in the
US. Retrieved from IBISWorld database.
The GEO Group, Inc. (2016). 1-20. Retrieved from EBSCOhost.
Venters, H. A Three-Dimensional action plan to raise the quality of care of US correctional
health and promote alternatives to incarceration. American Journal of Public Health.
106, 4, 613-614, Apr. 2016. Retrieved from EBSCOhost.