A Nevada company says it unfairly lost a $15.8 million, one-year contract to manage Arkansas' youth prisons and is now suing state officials.
Rite of Passage's complaint, filed in Pulaski County Circuit Court on April 19, says that state procurement director Edward Armstrong wrongly disqualified the company from the contracting process and based his decision on faulty information from its competitor.
State officials in February announced Rite of Passage as the winning bidder to manage state-run lockups in Dermott, Harrisburg, Lewisville and Mansfield. The company was set to begin managing the sites this summer. The firm already runs Arkansas' largest youth lockup near Alexander, in a separate three-year $34.1 million contract.
Returning the facilities to private control is part of Gov. Asa Hutchinson's promised plan to overhaul the state's often-troubled juvenile justice system. Having all the facilities 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, Hutchinson has said before.
But after receiving a complaint from the only other bidder, Indiana-based Youth Opportunity Investments LLC, Armstrong disqualified Rite of Passage's bid based on problems at a company-run youth lockup near Durango, Colo., last year.
"The losing bidder, in a win-at-all-cost strategy, was allowed to cherry-pick licensing issues in another section of the country to discredit our ability in Arkansas," Michael Cantrell, Rite of Passage's executive director, said. "Our operations there have nothing to do with the operational capabilities in Arkansas."
According to Colorado records, inspectors found that teens were subjected to unsafe conditions, including abusive guards. In turn, Colorado officials summarily suspended Rite of Passage's license to run that facility, a decision that is pending further proceedings.
Youth Opportunity Investments brought these problems to Armstrong's attention in a March protest letter.
Youth Opportunity's letter also noted that Arkansas' request for proposals, a bid solicitation document, required that applicants have no contract terminations due to nonperformance in the last five years.
Armstrong sided with Youth Opportunity and disqualified Rite of Passage.
Rite of Passage's lawsuit argues that Youth Opportunity's protest letter was "intentionally inflammatory and patently untrue" and maintains that what happened at the Durango facility counted as a licensure action and was not a contract termination, as Armstrong ruled.
The Arkansas Democrat-Gazette has asked the Colorado Division of Youth Services to clarify Rite of Passage's status there, but officials hadn't responded by the time of publication.
Gary Sallee, Youth Opportunity's lawyer, said the company didn't have a response to the lawsuit.
"[Youth Opportunity] has worked too hard to develop its stature as one of the best providers of care and treatment for youth in the states where it operates," Sallee wrote in an email. "It will not lower itself, or its stature, to the level of others' rhetoric."
The state's Division of Youth Services nevertheless remains ready to hand over control of the youth prisons to Youth Opportunity by July 1 "unless the courts direct us to do otherwise," agency spokesman Amy Webb said in an interview.
Metro on 05/02/2019