The GEO Group Provides Update on U.S. Marshals Service Contract for Western Region Detention Facility in San Diego
September 09 2021 - 4:30PM
Business Wire
As has been previously disclosed, The GEO Group (NYSE:
GEO) (“GEO”) has three direct contracts with the U.S. Marshals
Service (“USMS”). One of these direct contracts involves the
770-bed Western Region Detention Facility in San Diego,
California.
GEO’s Western Region Detention Facility contract with the USMS
extends through September 30, 2027, inclusive of option periods,
and is currently operating under a two-year option period which is
scheduled to end on September 30, 2021. GEO has not been notified
by the USMS of its intent to exercise its next two-year option
period under the current contract. Given the need to comply with
the January 2021 Presidential Executive Order to discontinue U.S.
Department of Justice contracts with privately-operated criminal
detention facilities (the “Executive Order”), GEO has proposed
various alternative contracting structures to the USMS that would
allow the Western Region Detention Facility to remain in operation
in compliance with the Executive Order.
The Western Region Detention Facility has provided federal
detention capacity and transportation services on behalf of the
USMS for over 20 years and we believe is ideally suited to provide
these essential services for individuals facing federal criminal
charges due to its close proximity to the U.S. District Courthouse
for the Southern District of California in downtown San Diego. Any
alternative to the San Diego location of the USMS detention
facility is likely to be in Central or Northern California. Such a
distant alternative location will impact the timely access by
friends, relatives, and legal representatives of individuals
presently housed at the Western Region Detention Facility in San
Diego.
As a result, the efforts to keep the Western Region Detention
Facility in operation have received the support of a diverse group
of bipartisan and non-partisan stakeholders. GEO is hopeful that a
transition to a new alternative contracting structure would allow
the Western Region Detention Facility and its approximately 300
employees and union members to continue to provide high quality
services on behalf of the USMS.
About The GEO Group
The GEO Group (NYSE: GEO) is a fully integrated equity real
estate investment trust specializing in the design, financing,
development, and operation of secure facilities, processing
centers, and community reentry centers in the United States,
Australia, South Africa, and the United Kingdom. GEO is a leading
provider of enhanced in-custody rehabilitation, post-release
support, electronic monitoring, and community-based programs. GEO’s
worldwide operations include the ownership and/or management of 114
facilities totaling approximately 90,000 beds, including idle
facilities and projects under development, with a workforce of up
to approximately 20,000 professionals.
Safe-Harbor Statement
This press release contains forward-looking statements regarding
future events and future performance of GEO that involve risks and
uncertainties that could materially affect actual results,
including statements regarding GEO’s current contract with the USMS
for the 770-bed Western Region Detention Facility in San Diego,
California, which is currently operating under a two-year option
period that is scheduled to end on September 30, 2021, and the
potential transition to a new alternative contracting structure
that would allow the Western Region Detention Facility to remain in
operation in compliance with the Executive Order. Risks and
uncertainties that could cause actual results to vary from current
expectations and forward-looking statements contained in this press
release include, but are not limited to: (1) GEO’s ability to
transition to a new alternative contracting structure acceptable to
the USMS that would allow the Western Region Detention Facility to
remain in operation in compliance with the Executive Order; (2)
GEO’s ability to meet its financial guidance for 2021 given the
current two-year option period for the Western Region Detention
Facility contract with the USMS is scheduled to end on September
30, 2021 and the various risks to which its business is exposed;
(3) GEO’s ability to deleverage and repay, refinance or otherwise
address its debt maturities in an amount or on the timeline it
expects, or at all; (4) changes in federal and state government
policy, orders, directives, legislation and regulations that affect
public-private partnerships with respect to secure correctional and
detention facilities, processing centers, and reentry centers,
including the timing and scope of implementation of the Executive
Order; (5) changes in federal immigration policy; (6) public and
political opposition to the use of public-private partnerships with
respect to secure correctional and detention facilities, processing
centers and reentry centers; (7) the magnitude, severity, and
duration of the current COVID-19 global pandemic, its impact on
GEO, GEO's ability to mitigate the risks associated with COVID-19,
and the efficacy and distribution of COVID-19 vaccines; (8) GEO’s
ability to sustain or improve company-wide occupancy rates at its
facilities in light of the COVID-19 global pandemic and policy and
contract announcements impacting GEO’s federal facilities in the
United States; (9) fluctuations in our operating results, including
as a result of contract terminations, contract renegotiations,
changes in occupancy levels and increases in our operating costs;
(10) general economic and market conditions, including changes to
governmental budgets and its impact on new contract terms, contract
renewals, renegotiations, per diem rates, fixed payment provisions,
and occupancy levels; (11) GEO’s ability to timely open facilities
as planned, profitably manage such facilities and successfully
integrate such facilities into GEO’s operations without substantial
costs; (12) GEO’s ability to win management contracts for which it
has submitted proposals and to retain existing management
contracts; (13) risks associated with GEO’s ability to control
operating costs associated with contract start-ups; (14) GEO’s
ability to successfully pursue growth and continue to create
shareholder value; (15) GEO’s ability to obtain financing or access
the capital markets in the future on acceptable terms or at all;
(16) other factors contained in GEO’s Securities and Exchange
Commission periodic filings, including its Form 10-K, 10-Q and 8-K
reports.
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version on businesswire.com: https://www.businesswire.com/news/home/20210909006094/en/
Pablo E. Paez (866) 301 4436 Executive Vice President, Corporate
Relations
Geo (NYSE:GEO)
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