<PAGE>

                                                                   Exhibit 10(i)

                      OKLAHOMA DEPARTMENT OF CORRECTIONS
                    HALFWAY HOUSE EXPANDED SERVICE CONTRACT
                           (Based on Fixed Rate Fee)

                                Revised 6/28/99

     This contract made and entered into this 1/st/ day of July, 1999, by and
between the Oklahoma Department of Corrections, Chief of Population Management
and Fiscal Operations, hereinafter "DOC", acting pursuant to the provisions of
57 O.S. 1991, Section 561 as amended, and Southern Corrections Systems, Inc.,
hereinafter, Contractor.

                              W I T N E S S E T H

     Whereas, DOC desired to purchase the services of the Contractor for those
purposes and duties hereinafter enumerated on paragraphs numbed 1 and 2 below,
and;

     Whereas, the Contractor is willing to provide such services under the terms
and conditions hereinafter set forth.

     Now, therefore, in consideration of the mutual covenants and promises
hereinafter set forth, the parties agree as follows:

1.   Facility Location:
     ------------------

     1.1   Contractor agrees to house the inmates assigned under this contract
           in the facilities located at Avalon Correctional Center, 320 West
           Archer, Tulsa, OK 74103; Carver Correctional Center, 2801 Southwest
           3rd, Oklahoma City, OK 73108; and Turley Correctional Center, 6101
           North Cincinnati, Tulsa, OK 74126.

     1.2   The Contractor shall not be allowed to house any inmates at another
           location or building under this contract without first receiving
           written permission from the DOC contract monitor.

2.   Contractor's Conditions and Services:
     -------------------------------------

     2.1   Shall provide three nutritionally balanced meals, according to a menu
           approved by a licensed dietician, daily per correctional inmate.
           Additionally, religious and special diets shall be prepared as
           required.

     2.2   Shall provide at least one on duty alert staff for each forty- ( 40)
           inmates for supervision and assistance to correctional inmates at all
           times. One individual shall be a roving patrol when all other staff
           is absent. In the alternative, the contractor may submit a written
           staffing plan for its

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<PAGE>

           location(s) which if accepted by DOC shall be attached hereto and
           incorporated by reference.

     2.3   Shall only provide occupancy that does not exceed the State Fire
           Marshall occupancy rating. Shall maintain clean, safe and healthy
           living areas and grounds.

     2.4   Shall provide indoor and outdoor recreational activities for inmates.

     2.5   Shall provide procedures to maintain all inmate information in strict
           confidence and shall not release such information pertinent to a
           presently or previously assigned inmate in accordance with Department
           of Corrections policy. One exception being DOC host facility or
           contracting office employees, after showing proper identification,
           shall have access to the facility and inmate records at all times in
           accordance with OP-0602l2.

     2.6   Shall maintain facilities in such condition so as to comply with all
           applicable local and state fire and health codes, as well as
           compliance with the Life Safety Codes. Copies of each inspection
           shall be provided to the local district office/contract monitor
           office and within seven (7) days of occurrence with a plan of
           corrective action to address deficiencies attached.

     2.7   Shall maintain the facility in compliance with the standards of this
           contract and the American Correctional Association Standards for
           Adult Community Residential Services. The contractor must establish
           files which contain information to demonstrate compliance with 100
           percent of the mandatory standards and 90 percent of the non-
           mandatory standards at the time of the initial audit. The Contractor
           shall conduct an internal audit of the standards in the first quarter
           of the fiscal year. A copy of this audit shall be forwarded to the
           contract monitor's office and the host facility. Written corrective
           action plans by the contractor shall be forwarded to the contract
           office within 5 days of the contractor's audit.

     2.8   Shall provide such additional services as DOC may reasonably require
           which are necessary to maintain the health and safety of the
           inmate(s) serviced under this contract.

     2.9   The Contractor shall attend and participate in an annual meeting/
           training session with the Department of Corrections district
           office/contract office staff in order to maximize contract
           performance.

     2.10  The facility shall employ one case manager, trained by the district
           office, who also provides guidance and makes appropriate community
           referrals for employment and budgeting services.

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<PAGE>

     2.11  Shall insure a case manager/counselor, maintains individual
           chronological files documenting each inmate's program goals, crew
           assignment, evaluations, compliance with DOC policies governing
           classification status, earned credit level, parole board summaries,
           individual case plans, budgeting, release preparation, place of
           employment verification checks, programmatic leaves, and any other
           significant events. This information shall be submitted in a timely
           manner to the district office for review to ensure accuracy and
           timeliness of information.

     2.12  Classification actions as a result of programmatic failure or
           disciplinary action to higher security shall be prepared by the
           contractor, and forwarded to the district office/host facility
           within two working days.

     2.13  Shall ensure in accordance with DOC policies that each inmate budgets
           earned income, OP-120230 ensures jobs are monitored and that time
           credits OP-0602l3 are submitted monthly to the local district office
           on each inmate in a timely manner.

     2.14  Shall provide all transportation and supervision in accordance with
           DOC policy OP-040l1l to medical/counseling appointments for all
           inmates at University Hospital, Oklahoma City and Griffin Hospital in
           Norman, as well as appointments scheduled at local medical facilities
           and doctor's offices; also transportation of all inmates scheduled to
           appear at the monthly parole board meeting when scheduled,
           transportation for program, employment, emergency leaves, to and from
           the district office and all other activities except from one
           Department of Corrections facility to another. If the destination
           point for transported inmates exceeds 50 map miles, one way, the
           contractor shall be paid an additional fifteen dollars per hour per
           employee required for transport. Separate billings must be submitted
           for the travel charges under this section. If the contractor charges
           for more than one employee per trip, the billing must adequately
           describe the reason more than one employee was necessary.

     2.15  Contractor shall require inmates to clean their respective living
           areas to include sweeping, mopping, washing windows, etc: as well as
           communal group programs such as visiting rooms, group rooms, etc.
           Inmates may also be used for lawn mowing, trash dumping and minor
           maintenance of the facility. Nothing contained herein shall prohibit
           the use of trustees as provided for by law and the payment of inmate
           pay. Prior to assigning inmates on trustee status to the contractor,
           the DOC host facility must approve the assignment. The intent is that
           inmates will not be used in lieu of paid workers

     2.16  Shall provide information to DOC staff of the arrest of any employee
           of the halfway house. All of the Contractor's employees who perform
           regular work at the facility shall be finger printed and a background
           check

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           conducted by the Oklahoma State Bureau of Investigation at the
           expense of the Contractor. This check shall occur when an employee is
           initially hired or upon the effective date of this contract if the
           facility is operating.

     2.17  The contractor will not employ any individual who is under
           supervision or jurisdiction of any parole, probation, or correctional
           authority. Persons with previous criminal convictions, but who are
           not under supervision, may be considered for employment as treatment
           coaches or counselors; however, the Department of Corrections
           reserves the right of approval in such cases. Consideration will be
           given to such factors as criminal history, time elapsed since
           conviction(s) must be a minimum of six months, and subsequent
           adjustment in the community.

     2.18  At a minimum, the facility shall continuously maintain accredited
           status for American Correctional Association Standards for Adult
           Community Residential Services, Third Edition. Accreditation shall be
           continuously maintained for the term of this contract and any
           extensions thereof. Failure to comply shall result in termination of
           this contract.

     2.19  The facility shall operate in accordance with and keep Sections 3, 6,
           9 and 12 of the Department of Corrections Operations Policies updated
           as they are issued:

           2.19.1  Specifically, Section 3 policies as listed:

                   OP-030 111--Inmate Pass Program
                   OP-030134---Chemical Abuse Testing
                   OP-031001---Inmate Escorted Leave Program

          2.19.2   Section 6 Policies as listed:

                   OP-060103---Custody Assessment procedures
                   OP-060104---Community Corrections Assessment
                   OP-060105---C1assification Assessment Reviews
                   OP-060125---Disciplinary Procedures
                   OP-060204---Inmate Transportation
                   OP-060205---Pre-Parole Procedures
                   OP-060213---Earned Credit Classes

          2.19.3   Section 9 Policies as listed:

                   OP-090106---Assignment of Inmates to Public Works Programs
                   OP-090124---Inmate/Offender Grievance Process
                   OP-090129---Reintegration
                   OP-090131---0ffender Financial Responsibility Program

                                       4
<PAGE>

           2.19.4  Section 12 Policies as listed:

                   OP-120202---Inmate Pay Program
                   OP-120230---Inmate Trust Fund

     2.20  The Contractor shall be responsible for the costs of DOC required
           forms.

     2.21  The facility shall provide office space and equipment-furnishings for
           the district office/contract monitor staff in close proximity to
           other administrative offices and reasonably comparable. The office
           shall have a lock, which is not master keyed and shall be provided
           with a desk, chairs, access to telephone/fax/computer lines.

     2.22  All Inmates shall undergo routine, random, and suspect drug and
           alcohol testing. At least 5 percent shall be tested monthly and a
           summary of the results furnished to the contract monitor, District
           Supervisor and Programs Administrator according to Department policy
           OP-030134. Suspect drug and alcohol testing shall be in addition to
           the random 5 percent testing.

     2.23  The facility shall provide restrictive housing (RHU) space for those
           offenders, in its facility. This space is to be provided within the
           halfway house by construction of a unit or through the payment to the
           local city/county jail for the housing of the offender(s). If an
           inmate, who the contractor deems inappropriate, is placed in RHU, the
           contractor shall notify the district office and the contract monitor
           the first working day after the inmate is placed in RHU. If an inmate
           is found to be inappropriate for remaining at the HWH, then the
           district and the contract monitor will be notified the same working
           day. DOC will become responsible for the inmate (including RHU
           contract costs) if he is not transferred within 7 days of the
           district office's approval of the transfer.

     2.24  Inmates shall enter halfway house status only from the public works
           center population with the following three exceptions (the offender
           has a parole board stipulation, is ineligible for PPWP or has
           completed a vo-tech program at another facility).

     2.25  The contractor shall notify the Department regarding use of force and
           serious incidents in accordance with Departmental Operations Policy
           050108. The facility will notify both the local district office and
           contract monitor according to policy by telephone of all serious
           incidents and will fax copies of all reports prepared within 24 hours
           to the district office and contract office on the forms provided.
           After business hours, the local district office/contract office will
           receive the notice and reports.

     2.26  Shall provide services for a program to operate a inmate residential
           center as authorized in 57 O.S. 1991, Section 563 as amended.
           Additionally the

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<PAGE>

           Contractor shall be responsible for acquiring the necessary Public
           Works Contracts to fulfill the needs and requirements of its Public
           Works inmates. Preference shall always be given to honor State Agency
           contracts first. All Public Works Contracts entered into by the
           contractor must be approved in writing by DOC.

     2.27  Shall provide public works inmates transportation in staff driven
           vehicles or ensure transportation by crew supervisors to and from
           work site location(s) or a common drop off/pick up site as may be
           agreed upon by the parties and approved by the district office. Shall
           provide transportation of halfway house inmates in staff driven
           vehicles, bus tokens or arrangements with employers as agreed by all
           parties.

     2.28  Shall provide regular and periodic work site inspections and document
           such inspections in a permanent log.

     2.29  The Contractor shall provide the public works inmates three sets of
           work clothes, to include a coat, work shoes/boots, caps and gloves.
           The Contractor shall have 90 days from the effective date of this
           contract to comply with this sub-section and clothe inmates in
           compliance with the Departments community work centers and community
           corrections centers.

     2.30  The Contractor shall provide all inmates on site for the public works
           program and those trustees utilized on site for maintenance and food
           service, monthly pay in accordance with OP-120202, 20% of which must
           be placed in the inmate's mandatory savings. The Contractor is
           responsible for negotiating contracts for all Prisoner Public Works
           crews being maintained by the Halfway House.

     2.31  The Contractor will afford inmates access to reasonable, impartial
           and non-discriminatory grievance and misconduct procedures addressed
           in the Departments Operations Policies, including a final level of
           appeal as provided in this section. Misconduct procedures and
           penalties must reflect the department's, since it affects security
           level and classification.

           2.31.1  The facility is responsible to respond to grievances and
                   appeals on matters occurring during the inmate's
                   incarceration in the facility, except sentence administration
                   issues and classification to lower or higher security status
                   in accordance with DOC policy.

           2.31.2  Complete, accurate, detailed reports of the disciplinary
                   actions against inmates are provided to the local district
                   office within seven (7) working days of the date the action
                   is finalized or the punishments administered. Administration
                   of the disciplinary sanction which affects time calculation
                   or sentence length must be in accordance with Departmental
                   policy OP-060125 and approved

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<PAGE>

                   by the local district office supervisor/designee. Loss of
                   earned credits must be approved by the department and may be
                   adjusted.

     2.32  Contractor agrees to maintain general liability insurance and workers
           compensation insurance in an amount acceptable to DOC for all
           employees and activities performed under this contract. A certificate
           of insurance acceptable to DOC will be furnished within 15 days of
           the execution of this agreement.

     2.33  Inmate Programs. All programs will be approved by the Department
           Programs Administrator and Contract Monitor. All
           habilitation/rehabilitation programs i.e., substance abuse, self-
           help, cognitive/behavioral, etc. will target criminogenic needs and
           the reduction of criminal risk of the inmate. Program participation
           will be recorded on all participants and submitted monthly per
           operating standards. Programs, except for education and vo-tech, will
           be assessed and evaluated by Department staff according to the
           Correctional Programs Assessment Instrument (CPAI). Programs must be
           assessed as "satisfactory" or above to be an approved program.
           Corrective action plans must be submitted to the Contract Monitor on
           programs assessed as less than satisfactory and/or have noted
           deficiencies. Programs with deficiencies will be reassessed upon
           completion of the tasks in the corrective action plan, but no later
           than one year from the date of the corrective action plan for
           programs with major deficiencies.

3.   Areas of Performance:
     --------------------

     The general operations of the contractor shall be overseen by the local
     district office supervisor/designee to include review of classification
     paperwork, disciplinary actions, attendance of staff meetings, review of
     policy changes, review of both incoming and outgoing transfer requests and
     changes in a inmates status on center. The services of the Contractor shall
     be performed under the general administration of David C. Miller, Chief of
     Population Management and Fiscal Operations, Oklahoma Department of
     Corrections. The Contractor will be inspected quarterly and audited
     annually to ensure the conditions and services are being adequately
     provided.

4.   Medical Responsibilities:
     --------------------------

     4.1   DOC shall provide all medical, mental health and/or dental services
           unless DOC approves alternate services or such services are as a
           result of a medical and/or dental emergency.

           4.1.1.  Medical emergency shall be defined as danger or threat of the
                   loss of life or extremity.

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<PAGE>

          4.1.2.   Dental emergency shall be defined as acute problems in the
                   mouth exhibiting symptoms of pain, swelling, bleeding and/or
                   elevation of temperature.

     4.2   The Contractor shall notify DOC as prescribed in section 2.25 and the
           DOC CHSA of any medical/dental emergency immediately after such
           emergency or within the first working day after said emergency
           occurs.

5.   Payment for Services:
     ----------------------

     5.1.  The State agrees to pay as compensation for the services provided
           hereunder a fixed rate of $31.75 times the number of inmate days,
           excluding date of arrival, in a single monthly payment which may be
           adjusted in accordance herewith.

     5.2.  Pursuant to statute and any amendments thereto, any increase shall
           not exceed the previous years Consumer Price Index for all Urban
           Consumers (CPI-U) as prepared by the United States Bureau of Labor
           Statistics or as otherwise may be provided by State law.

     5.3.  DOC shall not be liable for and shall not pay the Contractor for any
           expenses not herein expressly provided for.

     5.4.  The contractor has agreed to a minimum number of 160 inmates for
           Carver Correctional Center, 150 inmates for Avalon Correctional
           Center, and 135 for Turley Correctional Center, that it will accept.
           Should the number of inmates fall below this number and remain at
           that level for more than 30 days, the Contractor may at his option,
           waive the minimum number or give notice of his intent to terminate
           the contract pursuant to paragraph 6 below.

     5.5.  This contract is for an indefinite number of inmates and days. DOC
           makes no representations or guarantee that the Contractor will house
           any number of inmates for any amount of time. The State will not pay
           for any unused beds.

6.   Liquidated Damages Non-Performance Penalties:
     ----------------------------------------------

     6.1   In the event of non-compliance by the contractor, the State may
           withhold as liquidated damages the amounts designated in Attachment B
           from any amounts owed to the contractor. The parties agree that due
           to the complicated nature of the contractors obligations under this
           contract it would be difficult to specifically designate a monetary
           amount for the Breach by the contractor designated in Attachment B as
           said amounts are likely to be uncertain and not easily proven.

                                       8
<PAGE>

     6.2   The State shall notify the contractor in writing of the Breach and
           afford 30 days time to cure the breach unless the matter is so
           serious that immediate correction is needed or unless a longer time
           period is mutually agreed upon.

     6.3   After the time to cure has passed and the breach continues or remains
           uncured, the State shall notify the contractor in writing of the
           amounts to be withheld as liquidated damages.

     6.4   Liquidated damages shall be assessed for each day the Breach remains
           uncured.

     6.5   The State is not obligated to assess liquidated damages before
           availing itself of any other remedy.

     6.6   The State may choose to discontinue liquidated damages and avail
           itself of any other remedy available under this contract or at law or
           in equity.

7.   Termination of Convenience:
     --------------------------

     Either party may terminate this agreement at any time by giving written
     notice to the other party of such termination and specifying the effective
     date thereof at least 30 days prior to the effective date of such
     termination. Such written notice shall be by registered mail to DOC in care
     of David C. Miller, Chief of Population Management and Fiscal Operations,
     Oklahoma Department of Corrections, Private Prison Unit 2200 Classen Blvd,
     Suite 1200, Oklahoma City, OK 73106 and to the Contractor at PO Box 57012,
     Oklahoma City, OK 73157. Notice given pursuant to the provisions of this
     paragraph shall be deemed sufficient for all purposes.

8.   Duration of Agreement:
     -----------------------

     This contractual Agreement shall be in effect through June 30, 2000, the
     end of the fiscal year for the State of Oklahoma.

9.   Regulations:
     -------------

     9.1.  This Agreement and all rights and duties arising thereunder shall be
           governed interpreted and construed according to the provisions of and
           under the laws of the State of Oklahoma.

     9.2.  This document represents the entire agreement between the parties.
           Any modification, amendment or addition thereto must be in writing,
           executed by the parties and specifically referencing this Agreement.

                                       9
<PAGE>

     9.3.  In accepting this contract the Contractor agrees that their books,
           records, documents, accounting procedures or any other items relevant
           to this contract are subject to examination by the other party and
           the State Auditor and Inspector.

     9.4.  The contractor shall perform all the duties herein through its own
           employees. None of the duties required by this agreement, including
           restrictive housing space, shall be performed by another contractor
           or sub-contractor unless the agreement has been first approved in
           writing by the DOC.

     In Witness Thereof, the parties have executed this Agreement in triplicate
on the 30/th/ day June, 1999.


Oklahoma Department of Corrections            Contractor



/s/ DAVID C. MILLER,                          /s/ JERRY SUNDERLAND
------------------------------------          ----------------------------------
David C. Miller, Chief of Population
Management and Fiscal Operations


Approved as to form:


/s/ ROSS N. JOHNSON
-------------------------------------
Ross N. Johnson
Assistant General

                                       10
<PAGE>

                          Affidavit of Non Collusion

STATE OF OKLAHOMA     )
                      ) SS
COUNTY OF OKLAHOMA    )

JERRY SUNDERLAND of lawful age, being first duly sworn, on oath says:

1.   (s)he is the duly authorized agent of Southern Correction the Contractor
under the contract which is attached to this statement, for the purpose of
certifying the facts pertaining to the giving of things of value to government
personnel in order to procure said contract;

2.   (s)he is fully aware of the facts and circumstances surrounding the making
of the contract to which this statement is attached and has been personally and
directly involved in the proceedings leading to the procurement of said
contract; and

3.   neither the Contractor nor anyone subject to the Contractor's direction or
control has paid, given or donated or agreed to pay, give or donate to any
officer or employee of the State of Oklahoma any money or other thing of value,
either directly or indirectly, in procuring the contract to which this statement
is attached.

                                       /s/ Jerry Sunderland, President
                                       --------------------------------------

Subscribed and sworn to before me this 30/th/ day of June, 1999.


                                       /s/ LINDA EASLEY
                                       ---------------------------------------
                                       Notary Public (or clerk or Judge)
(Seal)

                                       11
<PAGE>

                                  APPENDIX B

                              LIQUIDATED DAMAGES

Liquidated damages for each day of a breach will be calculated as follows:

                              V x B x $15.00 when

                      V = Relative value of Service Area
                       B = Relative value of the Breach

Service Area 1: Value = 5: Security and Control, ACA Accreditation, Health
Services, Use of Force, Escapes, Contract Monitoring,

<TABLE>
<S>                                                   <C>
--------------------------------------------------
Operator Breach                                       B
----------------------------------------------------------
Failure to Provide Service                            5
----------------------------------------------------------
Failure to Document                                   2
----------------------------------------------------------
Failure to Report                                     2
----------------------------------------------------------
Failure to Comply with Other                          5
  Applicable Requirements
</TABLE>

Service Area 2: Value = 4: Sanitation and Hygiene, Food Service, Mail, Religion,
Access to Court, Inmate Discipline, Grievance, Visitation, Records and Reports,
Employee Qualifications & Training

<TABLE>
<S>                             <C>
--------------------------------------------------
Operator Breach                                       B
----------------------------------------------------------
Failure to Provide Service                            4
----------------------------------------------------------
Failure to Document                                   2
----------------------------------------------------------
Failure to Report                                     2
----------------------------------------------------------
Failure to Comply with Other                          4
  Applicable Requirements
----------------------------------------------------------
</TABLE>

Service Area 3: Value = 3: Operating Standards, Transportation, Maintenance,
Repairs and Replacements, Inmate Work, Academic & Vocational Training, Sentence
Computation Data, Classification & Case Management, Commissary,
Policies/Procedures/Post Orders, Inmate Management Fund/Bank Accounts
<TABLE>
<S>                                                   <C>
-------------------------------------------------
Operator Breach                                       B
----------------------------------------------------------
Failure to Provide Service                            3
----------------------------------------------------------
Failure to Document                                   1
----------------------------------------------------------
Failure to Report                                     1
----------------------------------------------------------
Failure to Comply with Other                          3
  Applicable Requirements
----------------------------------------------------------
</TABLE>

                                       12
<PAGE>

                            APPENDIX B (continued)


Service Area 4: Value = 2: Laundry and Inmate Clothing, Telecommunications,
Supplies/Perishables, Recreation ;

<TABLE>
<S>                                                   <C>
--------------------------------------------------
Operator Breach                                       B
----------------------------------------------------------
Failure to Provide Service                            3
----------------------------------------------------------
Failure to Document                                   1
----------------------------------------------------------
Failure to Report                                     1
----------------------------------------------------------
Failure to Comply with Other                          3
  Applicable Requirements
----------------------------------------------------------
</TABLE>

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