DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Review of Immigration and Customs Enforcement 
 

Detainee Telephone Services Contract 
 

OIG-08-54 MAY 2008 
contraCt

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 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. 
service;

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 andGAOreportsidentified problems with detainee telephone access and 

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 notentitled toa recovery stemming from this no costcontract. 

The government cannot withhold payment,because the government is notpaying the 

contractor. Likewise, prior payments do not exist against which the government could 

I OIG,Treatmentoflmmigration Detainees Housed atImmigration 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 contractdoes 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 detaineesor 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 ofthese 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 currentcontract. 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 paymentuntil a contractor improves. By contrast, 

because DTS-IV is no cost to the government, ICE has no measures at its disposal to 

deterpoor 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 byOIG and GAO, including failuresto connect pro bono calls, 

out ofservice equipment, anduntimely resolution ofservice and rate complaints. For 

example, the October 2007 status report shows that 82% ofthe 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 

informationthan it nowhas 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 ofunused. 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 specifiedtime 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 ofuntil 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 contractorto 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 ofthe 

24 fieldoffice 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 oftime, 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 Secretaryfor 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: 

• 	 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, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.