CCA Issues Response to Announcement of Resolution With Former California City Correctional Center Employees

CCA Issues Response to Announcement of Resolution With Former
California City Correctional Center Employees 
NASHVILLE, TN -- (Marketwired) -- 08/20/14 --   Corrections
Corporation of America (CCA), America's largest owner of partnership
correctional and detention facilities, issued the following response
to media reports that CCA violated Federal Service Contract Laws at
the California City Correctional Center (CCCC). 
Steve Owen, senior director of public affairs for CCA said, "Any
suggestion that we were in violation of contract requirements in this
case is incorrect. Our company was in full compliance with the
original contract that was in place at CCCC."  
From October 2010 to December 2013, the federal government and the
city of California City were parties to an Inter-Governmental
Services Agreement (IGA) for detention services. In turn, the
government of Cal
ifornia City contracted with CCA to provide
detention services at CCCC. Neither the original IGA nor the
subcontract included provisions requiring wages and benefits to be
paid based on the Service Contract Act Area Wage Determination.  
In 2012, the U.S. Department of Labor (DOL) began a routine
compliance review at CCCC. In the course of that review, the DOL
concluded that the Service Contract Act Area Wage Determination
should have been incorporated when services commenced. Shortly after
the DOL reached that conclusion, the federal government issued a
retroactive contract modification. That retroactive contract
modification required the parties to pay employees at CCCC based on
the Service Contract Act Area Wage Determination from the
commencement of services in October 2010 to the conclusion of
services in December 2013.  
"Once the retroactive contract modification was incorporated, we
worked cooperatively and diligently with the DOL to identify the
former CCCC employees entitled to back pay," said Owen. "At this
time, other than three employees who we have not been able to locate,
all employees have been paid in full." 
In accordance with the process provided for under the Service
Contract Act, a request for an equitable adjustment has been
submitted to the federal government. In keeping with the Service
Contract Act and CCA's prior course of dealing with its federal and
local government partn
ers, CCA anticipates that the contract price
will be adjusted as a result of the retroactive contract
modification, since those costs were not known or considered as part
of the original contract pricing. The financial impact of the
retroactive contract modifications were initially reflected in CCA's
financial statements during the fourth quarter of 2013, as previously
disclosed in its earnings press release issued in February 2014, and
in filings with the Securities and Exchange Commission. 
"We greatly value our employees and the important work that they do
to keep our communities safe and secure," said Owen. "We've worked in
good faith throughout this process to make sure the retroactive
modification incorporating Service Contract Act rates, which was not
in the original contract all parties agreed to, was implemented." 
About CCA  
CCA, a publicly traded real estate investment trust (REIT), is the
nation's largest owner of partnership correction and detention
facilities and one of the largest prison operators in the United
States, behind only the federal government and three states. We
currently own or control 52 correctional and detention facilities and
manage 12 additional facilities owned by our government partners,
with a total design capacity of approximately 84,500 beds in 19
states and the District of Columbia. CCA specializes in owning,
operating and managing prisons and other correctional facilities and
providing inmate residential, community re-entry and prisoner
transportation services for governmental agencies. In addition to
providing the fundamental residential services relating to inmates,
our facilities offer a variety of rehabilitation and educational
programs, including basic education, faith-based services, life
skills and employment training and substance abuse treatment.  
Forward-Looking Statements  
This press release contains statements as to the Company's beliefs
and expectations of the outcome of future events that are
forward-looking statements as defined within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the
statements made. These include, but are not limited to, the risks and
uncertainties associated with: (i) our ability to meet and maintain
REIT qualification tests; (ii) general economic and market
conditions, including the impact governmental budgets can have on our
per diem rates, occupancy and overall utilization; (iii) the
availability of debt and equity financing on terms that are favorable
to us; (iv) fluctuations in our operating results because of, among
other things, changes in occupancy levels, competition, increases in
cost of operations, fluctuations in interest rates and risks of
operations; (v) our ability to obtain and maintain correctional
facility management contracts, including as a result of sufficient
governmental appropriations and as a result of inmate disturbances;
(vi) changes in the privatization of the corrections and detention
industry, the public acceptance of our services, the timing of the
opening of and demand for new prison facilities and the commencement
of new management contracts; (vii) changes in government policy and
in legislation and regulation of the corrections and detention
industry, which may adversely affect our business, including the
impact of the Budget Control Act of 2011 on federal corrections
budgets, California's utilization of out of state private
correctional capacity, and the impact of any changes to immigration
reform laws; and (viii) increases in costs to construct or expand
correctional facilities that exceed original estimates, or the
inability to complete such projects on schedule as a result of
various factors, many of which are beyond our control, such as
weather, labor conditions and material shortages, resulting in
increased construction costs. 
CCA takes no responsibility for updating the information contained in
this press release following the date hereof to reflect events or
circumstances occurring after the date hereof or the occurrence of
unanticipated events or for any changes or modifications made to this
press release. 
Contact:
Steve Owen
CCA
(615) 263-3107 
 
 
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