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An Indiana-based company on Wednesday challenged the state's decision to give a $15.8 million contract to a competitor to run Arkansas' youth prisons.

In a protest letter to the state, representatives for Youth Opportunity Investment LLC of Carmel, Ind., said its rival for the contract, Nevada-based Rite of Passage, has a troubled history -- having exposed child inmates to unsafe conditions and abusive guards.

Rite of Passage already manages the state's largest juvenile lockup, which is located near Alexander.

In its letter, Youth Opportunity says that "Rite of Passage is not a qualified bidder because it failed to meet the minimum qualifications" in the state's request for proposals.

"Rite of Passage made several intentional and egregious misstatements in its response that are so manifestly untrue that the only possible explanation is the company sought to defraud the state," the letter by Little Rock attorney Sylvester Smith reads.

Youth Opportunity's 11-page protest letter, which has more than 600 pages of attachments, claims that Rite of Passage failed to note contract terminations that occurred in Colorado and Nevada as well as previous "deficiencies" found by Arkansas inspectors during recent audits.

The letter listed additional concerns that officials from Arkansas and other states found with Rite of Passage's management of juvenile lockups, including physical and sexual abuse by staff, illegal drug use, hiring convicted felons to provide treatment, staffing shortages, the needless restraining of youths, poor documentation of medical treatment, and escapes.

The Department of Human Services in January formally sought proposals from companies to manage the state-run lockups in Harrisburg, Lewisville, Dermott and Mansfield.

Officials awarded the contract to Rite of Passage. Pending the outcome of Youth Opportunity's challenge, the agreement should begin this summer, Human Services Department officials have said.

Arkansas' Office of State Procurement has five days to respond to Youth Opportunity's letter, according to state law.

The new contract awarded to Rite of Passage raises the daily bed rate of the youth lockups to $235, state procurement records show. Youth Opportunity's proposal was $236 per day per youth.

Before the state took over the lockups in January 2017, the Division of Youth Services paid two Arkansas nonprofits that managed the sites about $145 a day per youth for more than a decade.

Rite of Passage has been running the 120-bed Arkansas Juvenile Assessment and Treatment Center near Alexander since 2016 under under a $34.1 million, three-year contract.

Youth Opportunity nearly won a similar contract to run Arkansas' youth prisons in 2016 -- beating out the two in-state nonprofits. But legislators didn't approve that contract, and Gov. Asa Hutchinson ordered the Human Services Department to take over management of the lockups.

Hutchinson spokesman J.R. Davis said Wednesday that "the legislative review process has been smoothed over since the 2016 situation" and "the governor is confident in the process that ultimately led to this selection."

Arkansas' youth prisons have been the focus of criticism for more than a decade from watchdogs who cited inadequate behavioral health treatment, sexual assault and substandard facilities. Federal investigators have cited similar problems.

Instances of abuse and neglect have continued in the past two years, according to Disability Rights Arkansas, a nonprofit with federal authority to monitor the juvenile prisons.

State officials previously said that returning the facilities to private control, under a single provider, will ensure that youths receive consistent and quality services, no matter where they're jailed, and will help them reintegrate in their communities after their release.

In the letter, Sylvester questioned how the proposals were scored.

For instance, in the safety category, reviewers gave Rite of Passage a 163 and Youth Opportunity 160, even though Rite of Passage's Alexander facility had four escapes this year, Sylvester said in the letter.

Overall, Rite of Passage earned an averaged score of 570 -- above Youth Opportunity's 534 -- with higher marks in the categories of education, safety and "general information," which weighs a provider's experience working in juvenile justice.

The letter also asserts that Rite of Passage didn't meet the state's bid solicitation document requirements, which asked providers to have no contract terminations "due to non-performance" in the last five years and for a history of clean audits, with fewer than 12 "citings of deficiency."

In 2018, Colorado ended two contracts with the company -- one to run a Denver youth lockup, the other facility in Durango.

"The State has determined that the health, safety, or welfare of persons receiving services may be in jeopardy," Anders Jacobson, Colorado's Division of Youth Services director, wrote to the company regarding the decision.

An audit from April 2017 shows that Arkansas officials cited Rite of Passage 18 times for deficiencies, including failure to conduct monthly building inspections and not keeping accurate school grades and quarterly student progress reports.

Marlon Morrow, who directs Rite of Passage's program at the Alexander facility, said that the protest letter ignores his company's good work.

Rite of Passage made more than $300,000 in facility improvements and has robust programs for special education students and youths with more serious offenses, like sexual offenders, Morrow said.

Rite of Passage added new experiences for youths, he said, including high school graduation ceremonies, spelling bees, community service projects at local schools, participation in statewide poetry contests and sports teams with the Boys & Girls Club.

Rite of Passage also has 12 therapists, resulting in lower caseloads and more individual attention for kids, he said.

State data show that the facility reported fewer serious incidents, such as assaults, sexual abuse, injuries, escape attempts and neglect, in 2018 than the year before. In 2017, officials reported 317 incidents; that tally decreased to 260 last year.

Morrow also said that the facility corrected past audit findings within two days and that the latest state inspection, dated Oct. 19, showed the facility had no deficiencies.

"We've done an outstanding job with positive youth development" and have a "pro-social environment," he said. "We worked diligently to ensure we're up to standards."

Metro on 03/14/2019

Print Headline: Rival for lockups protests contract

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