Prison Phone Justice

DEPARTMENT OF HOMELAND SECURITY

Office of Inspector General

Review of Immigration and Customs Enforcement 

Detainee Telephone Services Contract 


OIG-08-54

MAY 2008

Office ofInspector General

U.S. Department of Homeland Security
Washington, DC 20528

Homeland

Security

MAY 1 2 2008

MEMORANDUM FOR:

The Honorable Julie L. Myers
Assistant Secretary
Immigration and Customs Enforcement

FROM:
Inspector General

SUBJECT:

Review ofImmigration and Customs Enforcement
Detainee Telephone Services Contract

Based on U.S. Government Accountability Office (GAO) and Immigration and Customs
Enforcement (ICE) concerns that the contractor, Public Communications Services, Inc.
(PCS), was not complying with the terms and conditions of its contract, you asked us to
conduct an audit of the detainee telephone services contract (Attachment 2). You had
questions about three main issues: services that ICE contracted for compared with
services the contractor provided; technical issues, including call routing, excess fees, call
volume, connectivity rates, and telephone maintenance; and the sale, use, and rates of
debit calling cards. This letter summarizes observations from our preliminary work and
provides information about the strengths and weaknesses of ICE's solicitation for a
replacement contract. We make three recommendations that when implemented will
strengthen the detainee telephone services contract and ICE management controls.
Attachment I provides information about our purpose, scope, and methodology.
We did not determine the full extent of PCS' s compliance with the terms and conditions
of its contraCt with ICE. Data elements required for a thorough analysis are not
maintained by the program office and might not be readily available from the contractor.
Also, the contract does not provide for financial or other penalties against the contractor
for inadequate connectivity, excessive fees, or other improprieties. Finally, the structure
of the contract does not provide a mechanism for the government to withhold payment
from the contractor. ICE will soon award a replacement contract on the recently closed
solicitation for a new detainee telephone services provider. Based on the likelihood that a
full audit would not result in a material recovery to the government or detainees and
ICE's ongoing actions to replace and improve the contract, we do not plan to conduct
additional audit work on PCS's performance.

Background
ICE standards for detainee treatment specify that all detainees be entitled to "reasonable
and equitable access" to telephones. Moreover, detainees are entitled to call legal
services, consulates, and the Office of Inspector General (OIG)hotline at no charge to the
detainee or the receiving party. To provide this fee call and pro bono detainee telephone
service, ICE awardedano-cost to the government contract, known asDTS-IV (the fourth
detainee telephone services contract). The contractor provides detainees with pro bono
telephone service in exchange for the exclusive right to sell debit calling cards to
detainees and to charge fees for collect calls. The contractor is also responsible for
installing, maintaining,andrepairing the telephone system; and connecting calls to the
pro bono network. DTS-IV governs service for the 15 primary ICE detention facilities
and almost200 secondary detention facilities, called intergovernmental service
agreement facilities (IGSAs). ICE extended the current contract through July 2008, while
ICE conducts a competition and awards areplacement contract.
Prior OIG andGAO reports identified problems with detainee telephone access and
service; According to our December 2006, we were unable to connect with 50 of 63
consulate telephone numbers (79%) that we tested at anIGSA in Paterson, New Jersey. 1
We also tested 12 pro bono legal service telephone numbers and were unable to connect
with any of them. In its July 2007 report,. GAO identified systemic pro bono telephone
system problems and made 6 related recommendations} Issues GAO reported on
included lack of contract oversight, posting ofincorrect consular and legal servicesphone
numbers, and inadequate inspections of telephone service functionality. The ICE
contracting officer also documented in May 2007 access and maintenance problems.

Data on Compliance Not Readily Available; Recovery Unlikely
An accounting ofthe full extent ofcontractor compliance cannot be determined in the
near term. Such a determination would require analyzing millions of call minutes and
rate charges- an enormous audit undertaking for which data is not readily available. The
information neededincludes actual data on debit cards sold, collect call rates and
surcharges, commission payments, and data related to the routing of calls and subsequent
fees. Most, if not all,of this needed informationis under PCS control, due to the contract
structure. While the current contractinc1udes reporting requirements on call volumes and
maintenance, it does not require reporting on contractor revenue. At present, PCS
provides information to ICE about minutes used, but not associated charges.
The government is likely not entitled toa recovery stemming from this no costcontract.
The government cannot withhold payment,because the government is not paying the
contractor. Likewise, prior payments do not exist against which the government could

I OIG,Treatmentoflmmigration Detainees Housed at Immigration and Customs Enforcement Facilities,

OIG-07-01,December 2006.

2 GAO, Alien Detention Standards: Telephone Access Problems Were Pervasive at DetentionFacilities;

Other DejicienciesDid Not Show aPattern ofNoncompliance, GAO-07-875, July 2007.


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recoup funds. Moreover, the contract does not provide for financial or other penalties
against the contractor for inadequate connectivity, excessive fees, or other improprieties.
In the eventwe were able to identify precisely the extent of contractor improprieties that
necessitated refunds, returning moneyto detainees or collect call recipients would
involve locating thousands of individuals. Immigration detainees and their contacts pay
the ICE contractor through debit card sales and collect call surcharges. Large
percentages of these individuals have likely been deported or are detainee relatives who
were never in the United States.··Moreover,.the current contract.does not address
refunding detainees for unused debit calling cards or incorrect charges.

Stronger Requirements and Opportunities to Strengthen New Contract
The existing contract, DTS-IV, expires July 21,2008, at which time ICE will implement
anew, stronger contract. In designing the new solicitation, ICE corrected many
weaknesses in the current contract. For example, the solicitation statement of objectives
includes specific call rates, realistic volumes expected across call types, a rebate and
refund plan requirement,· and a strengthened quality assurance surveillance plan. Each of
these provisions improves service or oversight compared to the current contract.
ICE can further strengthen its forthcoming contract by addressing the additional issues
we identified in the current contract.

Remedies for Poor Performance. The current contract has no measures with which ICE
can compel improved contractor performance. Moreover, DTS-IV does not provide
incentives for excellent contractor performance or innovation. Under a typical contract,
the government can withhold partial payment until a contractor improves. By contrast,
because DTS-IV is no cost to the government, ICE has no measures at its disposal to
deter poor contractor performance. For the new contract, ICE should develop and
implement a plan to reward the contractor for exceeding performance benchmarks and
penalize the contractor formissing them, e.g., an award pool and performance bond.
Telephone Service. Contractor status reports continue to indicate problems similar to
those previously reported by OIG and GAO, including failures to connect pro bono calls,
out of service equipment, anduntimely resolution of service and rate complaints. For
example, the October 2007 status report shows that 82% of the unresolved telephone
issues involved incorrect phone numbers on the pro bono system. A stronger contract
would establish performance benchmarks, such as pro bono connectivity and fee
accuracy rates and complaint response and resolution times. ICE should then vigorously
monitor contractor performance compared to the established benchmarks and respond
appropriately.
Charges andRevenues. More comprehensive reporting requirements would strengthen
ICE's ability to oversee and manage detainee telephoneservices. ICE needs more
information than it now has to price the new contract and ensure thatdetaineespay
competitive charges in the volatile telecommunications market. At present, the

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government is not receiving any information regarding charges to recipients of detainee
collect calls. Collect calling is particularly vulnerable to abuse, because the rates are not
specified in the contract and the call recipient might not immediately know how much the
call costs. ICE should require that the contractor report revenues related to the dollar
value of collect call charges and debit card sales. The contractor should also provide
information about outstanding balances of unused. cards to reveal. the potential for
refunds.

Refunds for Debit CardBalancesand Incorrect Charges. DTS-IVdoes not address
refunding detainees for unused debit calling cards or incorrect charges. The new
solicitation requests that bidders submit refund plans. To strengthen the contract, ICE
should require that the successful bidder's refund plan provide an efficient process to
expedite refunds to detainees within specified time frames and to account fully for
refunds due to detainees who cannot be located. To prevent the contractor from earning
excess profits, ICE should determine the disposition of refunds for detainees who cannot
be located. ICE·should receive regular reports on the status ofrefunds.
Commissions and Revenue Sharing. ICE officials told us that some ICE detention
facilities receive revenue sharing and commission payments from PCS under agreements
about which neither the contracting officer nor contracting officer's technical
representative were aware of until May 2007. For example, PCS has revenue sharing
agreements with at least 7 facility operators, wherein PCS pays the operators a percentage
of debit cards sold at their facilities. In some cases, a facility operator is in the detention
center pursuant to a government contract; the operator should disclose such revenues to
the government as an offset to incurred costs, a practice not currently happening.
As the steward of the detainee population, ICE should be aware of all third-party
arrangements the contractor has related to telephone service. Revenue sharing and
commission arrangements create an environment vulnerable to fraud; management
controls are not in place to determine whether the payments are legal, proper, and
documented. To ensure the propriety of the relationships and flow of funds, ICE needs to
be knowledgeable about the specifics of these arrangements. ICE should require the
follow-on contractor to disclose fully all revenue sharing agreements and commission
payments. ICE needs to research the legality of these payments .. If legal, ICE should
require the contractor to obtain approval for each agreement and the facilities need to be
accountable for payments received. If the payments are not legal or the contractor and
detention facilities cannot properly account for them, the arrangements should be
prohibited.
Recommendation #1: We recommend thatyou include provisions in the detainee
telephone services contract to establish and implement
(a) Remedies for poor contractor performance, such as an award pool and
performance bond.

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(b) Perfonnance benchmarks, including pro bono connectivity and fee accuracy
rates and complaint response and resolution times.
(c) Reportingrequirements related to collect call charges and debit card sales and
unused balances.
(d). An efficient refund process that specifies time frames and requires accounting
ofrefunds for detainees who cannot be located.
Recommendation #2: Withrespect to third-party commission and revenue sharing
arrangements, we recommend that you
(a) Require the detainee telephone services contractor to disclose all third-party
commission and revenue sharing arrangements.
(b) Detennine whether such arrangements are legal.
(c)	 If the arrangements are legal, require the contractor to obtain ICE approval for
each agreement and detention facilities to account for payments received.
(d) If the arrangements are illegal or the contractor or detention facilities cannot
properly account for the payments, prohibit such arrangements.

Better Management Controls Will Improve ICE's Ability to Ensure
Telephone Service Consistent with Standards
We identified opportunities for ICE to develop its management controls related to
overseeing and managing detainee telephone service provision. Taking advantage of
these opportunities would improve ICE's ability to ensure that telephone service is
consistent with applicable standards.
Field Office Participation and Support. ICE headquarters procures detainee telephone
services that are then delivered in field locations. Successful monitoring and oversight of
contractor perfonnance requires the active participation of field staff. The contracting
officer and contracting officer's technical representative told us that, to date, 12 of the
24 field office directors have reported to headquarters on their required weekly telephone
serviceability tests and random probono programmed number verification.

Under the current contract, the contracting officer and contracting officer's technical
representativehave to work through a cumbersome Detention and Removal Operations
management structure to monitor contractor perfonnance. In effect, the contracting
officer and contracting officer's technical representative have the responsibility for
detainee telephone service, but no authority over ICE field staff who have an essential
role. A more effective internal control program would betterintegrate the headquarters
and field roles in ensuring proper telephone service to detainees. For example,
perfonnance of oversight responsibilities should be an element for consideration in field

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staff annual appraisals. Moreover, the ICE facility inspection program should include a
more substantial regimen to evaluate telephone service provision.

No-Cost to the Government Contract Structure. To moderate the influence of incentives
in the no cost structure, ICE needs strong management controls to ensure service quality
and fairness, such as performance standards, incentives, and field office participation.
For example, the contractor has an incentive to focus on increasing its revenue through
debit card sales and collect call surcharges, rather than providing and maintaining high
quality pro bono service that would likely increase contractor costs. When the pro bono
network is not working properly or easily, some detainees might resort to fee calls,
thereby generating revenue and decreasing costs for the contractor.
Recommendation #3: We recommend that you develop better management controls to
improve ICE's ability to ensure telephone service consistent with standards, such as
(a) Integrating headquarters and field office oversight roles.
(b) Including a more substantial evaluation in the facility inspection program.
(c) Moderating the influence of incentives in the no-cost contract structure.

Conclusions
ICE is already improving its ability to ensure adequate detainee telephone services. First,
ICE decided to end the current contract in July 2008. Also, ICE strengthened
requirements for the succeeding contract. We identify further opportunities for contract
improvements above. Stronger ICE management controls will extend the improvements
ICE already has underway to fulfill its inherent responsibility to provide both quality pro
bono and fairly priced fee telephone service to detainees in its custody.
Neither the government nor detainees are likely entitled to a recovery stemming from the
current no cost contract. The government cannot withhold payment and prior payments
do not exist against which the government could recoup funds. Moreover, the contract
does not provide for financial or other penalties. The amount of time, cost, and resources
necessary for a comprehensive accounting of contractor compliance would likely exceed
any recovery to the government or detainees.
Consistent with our responsibility under the Inspector General Act, we are providing
copies of our report to appropriate congressional committees with oversight and
appropriation responsibility over DRS. In addition, we will post a copy ofthe report on
our website for public dissemination. Please advise our office within 90 days of the date
of this memorandum on your progress in implementing the recommendations and the
date by which each recommendation will be fully implemented.
Should you have any questions, please call me, or your staff may contact Anne L.
Richards, Assistant Inspector General for Audits, at (202) 254-4100.

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Attachment 1
Objective, Scope, and Methodology

Our original objective was to conduct the financial audit the Assistant Secretary, ICE,
requested (Attachment 2). To prepare for the audit, we conducted preliminary work to
understand the issues, data sources, and audit requirements. As we proceeded with this
activity, we realized that the program office was preparing to award a replacement
contract. We decided to provide timely support to ICE's effort to improve the contract,
its oversight, and telephone service provision, and, therefore, we did not conduct
additional audit work on PCS's performance.
The work we conducted focused on detainee pro bono and fee telephone services
pursuant to ICE contracts with Public Communications Services, Inc. These contracts
covered 15 primary ICE facilities and about 200 secondary IGSA facilities, an increase
from 168 IGSAs when ICE awarded DTS-IV. We obtained, indexed, and analyzed ICE
contract files for the DTS-I, DTS-II, DTS-III, and DTS-IV contracts, including a
comparative analysis of the contract provisions. We obtained additional information
from knowledgeable individuals such as the contracting officer, COTR, OIG Counsel,
and the GAO staff involved with the July 2007 GAO report.
We conducted our work between September 2007 and January 2008 under the authority
ofthe Inspector General Act of 1978, as amended. We did not perform this review in
accordance with generally accepted government auditing standards.

Major Contributors to this Report

Rosalyn G. Millman, Director

Frank Parrott, Audit Manager

Jeffrey Wilson, Team Leader

Christopher Byerly, Team Member

Gwendolyn Priestman, Team Member


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Attachment 3
Report Distribution

Department of Homeland Security
Secretary
Deputy Secretary
Chief of Staff
Deputy Chief of Staff
General Counsel
Executive Secretary
Under Secretary, Management
Assistant Secretary for Policy
Assistant Secretary for Public Affairs
Assistant Secretary for Legislative and Intergovernmental Affairs
Chief Information Officer, DHS
Chief Information Security Officer, DHS
DHS Audit Liaison
Immigration and Customs Enforcement Audit Liaison

Office of Management and Budget
Chief, Homeland Security Branch
DHS OIG Budget Examiner

Congress
Congressional Oversight and Appropriations Committees

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Additional Information and Copies
To obtain additional copies of this report, call the Office of Inspector General (OIG) at
(202) 254-4199, fax your request to (202) 254-4305, or visit the OIG web site at
www.dhs.gov/oig.

OIG Hotline
To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal
or noncriminal misconduct relative to department programs or operations:
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Call our Hotline at 1-800-323-8603;
Fax the complaint directly to us at (202) 254-4292;
Email us at DHSOIGHOTLINE@dhs.gov; or
Write to us at:
DHS Office of Inspector General/MAIL STOP 2600, Attention:
Office of Investigations - Hotline, 245 Murray Drive, SW, Building 410,
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The OIG seeks to protect the identity of each writer and caller.