Best practices for phones RFPs

Peter Wagner and Alexi Jones
Last updated: February 7, 2020

To ensure that prison phone companies do not rake in excessive profits at the expense of poor families, a correctional agency must make fairness a requirement in its Request for Proposals from phone providers. Negotiating a jail phone contract that protects consumers can be tricky. However, with proper planning and goal-setting, the outcome can be far more positive.

Below, we list best practices for a correctional agency writing an RFP for telephone services. Our suggestions assume that the agency is expecting people behind bars and their loved ones to shoulder the cost of phone calls. However, these recommendations come with a caveat: The fairest approach for a prison or jail is to simply make phone calls free (otherwise, personal wealth determines which families can stay in touch and which ones cannot).

Agencies that want to make jail phone calls free should probably model their RFPs off of that issued by San Francisco in 2019.1 For agencies that don’t wish to go that far, but do wish to hold their vendors accountable and ensure the fair treatment of customers, we’ve written this best practices guide.

SETTING YOUR GOALS

  • Decide what you think about treating the poorest families in your county as a revenue source. The most important factors that predict the cost of a phone call are the size of the commission you demand from the vendor and how aggressively you hold your vendors accountable. In our experience, when counties pursue contracts with commissions, it creates a revenue dependency on the vendor that blinds the county to the kinds of problems identified elsewhere in this briefing. By contrast, counties that pursue the lowest cost to the consumer often find that they can realize consumer savings far larger than just their commission. (For example, in 2014 in-state calls in Dallas County were 20 cents/minute, of which the county received more than 12 cents in a commission. In 2020, the county refused a commission, negotiated with a goal to get the best price to the consumer, and brought the price down to just over a penny per minute.).
  • Know what kind of contract you want to have. Assuming that you have already decided you don’t want to inflate the cost to the families by demanding a commission on every call, you need to make some other big picture policy decisions before turning this over to the bidders. The first decision is whether you are willing to pay the modest cost to just make the calls free, or if you want this contract entirely funded by consumers. You then need to decide whether the county wants a low-cost system that meets your minimum requirements, at a minimum cost to the families; or if you want additional features that will likely inflate costs for families. These companies are capable of offering a lot of different solutions, but if you don’t describe what you want, you are unlikely to be satisfied.
    See example language

    Dallas County 2019 RFP #2019-064-6828:
    “Dallas County is seeking the lowest overall cost to the inmates/families and will not be seeking commission and will not subsidize any associated fees for services. It is Dallas County’s desire to have a cost neutral program with only the necessary fees to be passed on to the inmate/families for the services being utilized”

    St. Louis County 2019 RFP #2019-54-PR:
    “The County believes in providing fair and affordable services to families and inmates. The goal of this RFP is to achieve the lowest possible costs for services for inmates, called parties and the County, while providing cost recovery to the Vendor. The selected Vendor will receive limited and restricted rights to offer services to end users at rates and fees, which will be identified in the contract. Selected vendor should be aware that the County takes the economic interests of families and inmates seriously and may regard any overcharge as a material breach of the contract.”

SETTING UP A GOOD STRUCTURE

  • Try to avoid a bundled contract that reduces your current and future choice. Bundling together a lot of unrelated services — such as phone calls, video calling, electronic law libraries, and “inmate banking” — into one contract sounds convenient, but it makes it possible for the provider to shift profits from one service to another, thereby hiding the real costs of each service from you. The best way to meet your multiple needs is with multiple RFPs that each solicit the best solution. If you issue a large bundled RFP, you will be ignoring companies with innovative products that meet part of your need and you will make it more difficult for the facility to change vendors in the future, because the facility must now change their phone, email, commissary, and banking systems all at the same time.
    See example language

    Prison Policy Initiative suggestion, 2020:
    Vendors should be aware that the County has separately published RFPs for the other services at [RFP # and description] and separate bids for these other services are welcome.

    Dallas County 2019 RFP #2019-064-6828:
    “Vendors may submit separate responses for the following services: telephone services, video visitation services and/or kiosk services but are encouraged to submit an entire turn-key solution.”

  • Avoid unnecessary experience requirements. All too often, RFPs include requirements that artificially reduce the number of companies that can even bid, which gives you fewer choices to consider in the short run and — if these clauses continue to be common — will ensure that no new companies join the market. For example, many RFPs require a vendor to have served a certain number of facilities as large as yours. A better approach would be to set the threshold for bidding as having served a facility half the size of your facility, or just to make the experience threshold into a preference rather than a strict requirement. (Of course, considering your vendor’s experience is a valid part of the bid review process. But what you don’t want to do is prevent a company with an innovative product and a high likelihood of successful performance from even applying in the first place.)
    See example language

    Dallas County 2019 RFP #2019-064-6828:
    “Vendors with at least three (3) years of business/corporate experience within the last five (5) years specifically providing telephone services through multiple sites in a correctional or other security/law enforcement setting are encouraged to submit proposals. Dallas County recommends but does not require the vendor to have provided these services to a facility at least half the size of Dallas County operations.”

STOPPING COMMON BAD PRACTICES

  • Require the vendor to return unspent funds. When incarcerated people are released, they — or their family members — often have unused balances in their account. Vendors often use “maintenance” or “inactivity” fees to eat away at unused balances in these prepaid accounts, and other vendors just seize the funds. At a minimum, facilities should make sure that contracts with vendors include a binding fee schedule that does not feature any of these abusive fees, and that any unused balances in inactive accounts are turned over to the state’s unclaimed property program. (During bid evaluation, you could give extra points to any bidders who go further than your minimum standard, for example, by proactively issuing refunds to some or all consumers, or who offer to regularly report on the number and size of unused prepaid accounts in your county.)
    See example language

    Dallas County 2019 RFP #2019-064-6828:
    “Provide within the cost response, how unclaimed funds are handled, including any fees charged for inactive accounts, when balances are declared expired, and certification of compliance with the state treasurers unclaimed assets programs.”

    St. Louis County 2019 RFP #2019-54-PR:
    “The Proposer shall provide a detailed policy on unused funds and unclaimed funds with their proposal and shall include, but not be limited to, expiration of balances, charges for inactivity, and how unused funds are handled.”

    Prison Policy Initiative suggestion, 2019:
    1. Require providers to describe their refund and unclaimed fund policies in their tariffs. Providers should describe how unclaimed funds are handled, including any fees charged for inactive accounts, whether they ever declare balances expired, and whether the provider turns over any unused funds to the state unclaimed funds program as required by law. 2. Require bidders to report, in their bids, the total dollar value and the number of accounts transferred that year to the state unclaimed asset program. (Any provider that reports zero transferred assets or whose reported numbers are obviously out of proportion to their share of the market should instantly signal to both the county and the state Treasurer that an investigation may be warranted.) 3. Require successful bidders to report to the county each year the total dollar value and number of accounts associated with this contract that were transferred to the state Treasurer in the previous year.

  • Prohibit vendors from colluding with third parties to inflate the consumer’s costs. One common vendor trick is to steer payments to third party-processors like WesternUnion or MoneyGram, have that third party jack up its prices, and then quietly share extra profit back to the vendor. You can solve this problem by requiring all vendors to show that they have ensured that these third party fees are as low as possible. The simplest way to do that would be require bidders to list the third-party payment companies like WesternUnion, MoneyGram and PayNearMe2 that they accept payments from, along with the amounts charged by those third party companies to make payments to the bidders. If the fee charged by any of those third party payment companies is more than $5.95,3 the bidder should be required to provide a copy of the provider’s contract with the third-party payment transfer service and shall explain in writing and signed by the provider’s Owner, President, or Chief Executive Officer, why it is unable to arrange for payment transfer services with fees that do not exceed $5.95.
    See example language

    Dallas County 2019 RFP #2019-064-6828:
    “Proposers are required to provide a list of third-party payment companies proposed within the solution (i.e.WesternUnion, MoneyGram, etc.). a. The list of third-party agreements should include the cost being charged to the client for the services. If any payment service fees exceed the current Dallas County fee of $5.95, the bidder is required to provide a copy of the provider’s contract with the third-party payment service provider, signed by the owner, chief financial officer or president, explaining why the listed fee is not acceptable for this service contract.”

    Cook County Contract with Edovo:
    “The County recognizes that Contractor might have contracts in place with third-party payment or wire transfer processors (NOT including credit card processors), such as MoneyGram, which permit the third party to impose Third-Party Financial Transaction Fees as part of its agreement with Contractor. Contractor agrees that the County reserves the right to require the awarded Contractor to either prevent the funding of Consumer/Inmate/Detainee accounts through such third parties or, in the alternative, credit Consumer/Inmate/Detainees accounts an amount equivalent to the third-party transaction fee charged.”

  • Limit how long the vendor can retain data, prohibit the vendor from claiming ownership over data, and ensure compliance with the Children’s Online Privacy Act. It appears that some vendors may be building voice-biometric databases of incarcerated people and everyone they are in touch with and may then seek to sell that data. A county could address this problem in several different ways. A county could prohibit the vendor from collecting this data. Alternatively, the county could require bidders to put a dollar value on this data and explicitly pay for a license to use and retain it. Another, even weaker, option is to require bidders to disclose their intentions by asking whether they have any security products for sale that will use data from the county’s phone system, and whether they are prepared to destroy all biometric data derived from the contract at the end of the contract.

    Separately, counties should require providers to promise not to use audio data from the contracting facility in any way that violates the Children’s Online Privacy Protection Act, and to specifically indemnify the county against any claims under the Act. (The Children’s Online Privacy Protection Act prohibits collecting and sharing photographs, video or audio recordings of children without the verifiable consent of parents.)4

OTHER BEST PRACTICES

  • Consider not recording calls of pre-trial detainees. If someone who is arrested comes to jail and is able to afford bail and released, no agency records their personal calls without a warrant. Surprisingly, it has become commonplace to record and monitor, without a warrant, the calls of those who remain in custody, even though they are pre-trial. In order to make important decisions about their case, pre-trial detainees often discuss the details with family members and supporters over non-privileged calls. This creates an unjust disadvantage when those calls can be reviewed freely by prosecutors. Not recording these calls lessens the burden on facility staff, more fully protects privacy and freedoms of non-convicted citizens, and reduces storage needs which can lessen the cost of phone service.
  • Be willing to activate contract clauses to exit relationships with poor vendors. Nearly every contract has a cancellation for convenience clause, so if you discover that your vendor is providing a poor experience or being dishonest, do not hesitate to exercise this clause.
  • Prohibit the vendor from adding new charges that you didn’t approve. The harder of a bargain you strike on behalf of incarcerated people and their families, the more pressure will be on the winning vendor to invent new ways to reach into consumers’ pockets. Your RFP and contract should contain a strict prohibition against adding new fees that you didn’t approve.

See also: Our best practices guides for writing tablet and video calling RFPs.


Footnotes

  1. New York City has also made calls free but they did this through a contract amendment and not a new RFP. Presumably they will have a new RFP in the future.  ↩

  2. We strongly suggest asking companies if they accept PayNearMe because the answer can be telling. PayNearMe offers essentially the same service as Western Union and MoneyGram at a significantly lower cost to consumers, so companies that do not accept the lower cost alternative should be asked why.  ↩

  3. We’ve found that $5.95 is often — but not always — the line between a payment transfer fee that contains a hidden kickback and ones that do not. We’ve seen a few higher fees that we believe to be legitimate, and we note that in January 2020, Securus agreed with Dallas County to arrange for the WesternUnion fee to be $3.95.  ↩

  4. See p. 37-38 of The Company Store and the Literally Captive Market: Consumer Law in Prisons and Jails by Stephen Raher.  ↩



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