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Prison Construction: Clear Communication on the Accuracy of Cost Estimates and Project Changes is Needed

GAO-08-634 Published: May 29, 2008. Publicly Released: May 29, 2008.
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The federal Bureau of Prisons (BOP) is responsible for the custody and care of more than 201,000 federal offenders. To provide housing for the federal prison population, BOP manages the construction and maintenance of its prison facilities and oversees contract facilities. GAO was asked to look into recent increases in estimated costs for Federal Correctional Institution (FCI) construction projects located in Mendota, CA; Berlin, NH; and McDowell, WV, which have led to almost $278 million or 62 percent more being provided in funding than initially estimated. This report addresses (1) the reasons for the changes to the estimated costs and (2) the actions BOP has taken--or plans to take--to control future cost increases and delays. GAO reviewed and analyzed BOP's fiscal years 2001 to 2009 budget documents, files for these three projects, and project management guidance. GAO also reviewed government and industry guidance on project management and met with BOP officials.


Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Justice To improve accountability and transparency, the Attorney General of the United States should instruct the Director of BOP to clearly communicate to Congress and other stakeholders in the Department of Justice's (DOJ) annual congressional budget submission, in which BOP provides its requests for funding and reports on the status of construction project: (1) the extent to which project costs may vary from initial estimates, and (2) changes that may impact the functionality of projects.
Closed – Implemented
In 2008, GAO found that the Bureau of Prisons (BOP) estimates initial construction project costs early in the planning process, generally before an actual prison location is selected. Therefore, variance from the initial estimates would be expected to some extent, even if no changes were made to the project schedule. However, BOP did not communicate how much it expects costs may vary from its estimates in its budget documents. Without such information, Congress and other stakeholders do not know the extent to which additional funding may be required to complete the project, even absent any project changes. GAO recommended that BOP clearly communicate to Congress and other stakeholders in the Department of Justice (DOJ) annual congressional budget submission, the extent to which project costs may vary from initial estimates. In response, since the fiscal year 2010 submission, BOP has provided information on the preliminary nature of the cost estimates and the extent to which costs have historically increased annually until the construction contracts are awarded in DOJ's annual congressional budget submissions. As a result, when BOP asks Congress or other stakeholders to fund or support projects, they are aware of the extent to which actual project costs may vary from the initial estimate. Further, BOP has established more accountability and transparency to its stakeholders.

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Budget outlaysConstruction contractsConstruction costsCorrectional facilitiesCost analysisCost controlCost effectiveness analysisCost overrunsFacility constructionFacility maintenanceFacility managementFederal facilitiesMaintenance (upkeep)Policy evaluationPrisonersProgram evaluationProgram managementSchedule slippagesSite selectionCost estimatesPolicies and proceduresProgram costs