Prison Phone Justice

6.05 COST PROPOSAL
6.05 COST PROPOSAL
Offerors must submit their proposed cost in a separate sealed envelope marked
"Cost Proposal". The total cost on the cost proposal form will be the figure used in
the calculation to convert cost to points
The proposed rate on the cost proposal (and to include any revisions established
through the negotiation process) will be binding upon the successful offeror for the
full term of the contract including any renewals.

SECURUS Technologies, Inc. through its wholly owned subsidiary, Evercom
Systems, Inc., is pleased to present the following proposed systems,
including rate and commission offers.

RATES
As outlined in RFP Section 5.02, local calls from pre-trial booking phones
must be free and charges will apply to all other local calls.
SECURUS is proposing a flat rate of $2.00 per local call that will not include
a rate per minute. Calls from pre-trial booking phones for calls to attorneys
and bail bond firms will continue to be free. Pricing for long distance calls
will be charged at same rates as existing contract rates (includes surcharge
and per minute rates). See Collect and Prepaid Call Rates chart below.
Also included in RFP Section 5.02, the Alaska Department of Corrections is
requiring successful contractor to obtain all required approvals (including
new local calling tariff) from the Regulatory Commission of Alaska (RCA)
within 60 days of contract award. SECURUS is proposing to use GCI as a
partner to provide local collect calling services. GCI will be obtaining
required regulatory approvals from the RCA for local calling.
Gel (NASDAQ: GNCMA) is an Alaska-based company providing voice, video
and data communication services to residential, commercial and
government customers. Founded in 1979, GCI introduced long-distance
competition to Alaska and has since grown to be one of the nation's premier
Integrated telecommunication providers. The company employs 1,250
Alaskans and has a current run rate of $440 million.
GCI's tariff and regulatory approval process with the RCA may take longer
than 60 days from contract award. As a result, SECURUS will begin
Installation of applicable proposed system, rate and commission package
Immediately following RCA approval or denial of GCI's tariff request for local
calling.
SECURUS has been providing turn-key services to the Alaska Department of
Corrections for many years and under the current contract has been
providing free local collect calling. Without any local collect calling

ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008-2000·7549

PAGE

2

6.05 COST PROPOSAL
revenues, historical gross revenues to SECURUS have averaged $1,500,000
annually.
As detailed in Attachment 11, historical local call volumes show that over a
six month period (Dec 06 to May 07) the volume of free local complete calls
have averaged 194,242 monthly or 2,330,904 calls annually.
Using historical annual call volumes for local complete calls (2,330,904) and
assuming a RCA approved rate of $2.00 per local call, gross incremental
revenues from local calling could add revenues of $4,661 ,808 annually.
Assuming the potential new local call revenue ($4,661,808) is combined with
the historical gross revenues to SECURUS ($1,500,000), the potential gross
revenue amount is $6,161,808 annually.
If the RCA approves a rate of less than $2.00 per call, the potential gross
revenue would naturally be less and a new commission payment schedule
would need to be negotiated.

PROPOSED SYSTEMS
As outlined in RFP Section 5.01, Scope of Work, all costs of equipment,
installation, optimization, training, and ongoing operation of the systems are
the responsibility of the Contractor. This means that SECURUS must Install
and operate a system at no charge to the Alaska Department of Corrections
and pay a commission to the Department of Corrections based upon
projected gross revenues.
If the RCA approves a local call collect calling tariff of $2.00 per call, then
gross revenues will justify the capital expenditure of installing the proposed
SCP solution.
It is not a certainty that the RCA will approve the local calling tariff, however
In the event that the RCA denies a local collect call tariff, SECURUS will be
unable to install the SCP solution. Instead, SECURUS will upgrade the
eXisting system with new phones, workstations and hard drives.
SECURUS will begin Installation of the new SCP proposed systems
immediately follOWing RCA approval of the new local tariff of $2.00 per call.
Alternatively, if the RCA denies a new local collect calling tariff, SECURUS
will immediately begin the upgrade of the existing system.
The rate and commission offer below is based upon the RCA approval of a
$2.00 rate for local calling or disapproval of a rate for local calling.
As outlined in RFP Section 5.02, the successful contractor will pay the State
of Alaska, Department of Corrections (DOC) a guaranteed yearly dollar
payment over the life of the contract. This payment shall be made In
quarterly payments over each year on a schedule subject to approval of the
Contractor and DOC.

ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008·2000·7549

PAGE

3

SECURUS'

6.05 COST PROPOSAL

SECURUS is please to offer a guaranteed yearly payment amount of
$100,000 (paid quarterly) that will be considered as an advance against
future annual commission payments.
The following commission offer is based upon actual annual gross
revenues.

If C~mmissionRate··J
-. _. ;

Annual Revenue
j

i

r'--'~------""-

---._- - - - - -.---,--

---

-

;

~.!

._-.-.,

i, $6,400,000.01
and above:
%
i
-.y--..------- -- .-.....--...-.-- ... ...
.. _..-.. 32.1----------.f----------·-- .-------!--- -------._-~
! $4,700,000.01 to $6,400,000 j
30.8%
I
---~

~

-----~--.:

~-

--~----

·-~--l

r~~-~~'~~~~-~ ~=-=~.-=-~'.~_:' :.'1:' :~'-_'~."--"-. '-----·---1
.._.. j
.__ .----.--.
-----._~

I; .$2,500,000.01
to $4,700,000 I
.- -. ' 1
j
i--

... -.----

-

.--

--.-

----

i $2,200,00~.01 to ~2,500,00~
I.
•
1__. - __ .
I
~

-I-

23.0%

i

!

I
..... _-._._.'_.. _ ._ ......__ ._

..__ ..
.

~

I

15.0%

i

t

.

--- _._-- - -----

I\ $1,000,000.01
to $1,500,000
_ . -_.-- -- .. _----.-_._---.

_

----

7.0%

I

,

_.~--~

I

i ~1,0~0!_~0~ a.~d .be~ow
L. --

-

..."-- -- ------- --_ .... _. __ .j

f .---.-.--.-.--.--- .. - ,------I

·i

."

I

i $1,500,000.01 to $2,200,000
!r·--- ..---.. ---- - --.---. ---....

29.0%

.

--

0.0%

i

i

-'

! * Local Rate of $2.00 or No Local Rate
Commission Calculation and Payment Method:
In the first twelve months, SECURUS will begin paying a commission rate of
15% per month on gross revenues. In month thirteen, the actual gross
revenues for the previous twelve months will be identified and the applicable
commission percentage in the chart above will apply. The difference
between the $100,000 advance payment and actual monthly commission
earnings for the first twelve months will equal the true up or down amount
for the first year.
For all other annual periods, SECURUS will pay a commission rate equal to
the applicable commission rate earned in the previous twelve months (run
rate). For example, at the end of the second contract year (in month twentyfive), the actual gross revenues for the previous twelve months will be
identified and the applicable commission percentage in the chart above will
apply. The difference between the $100,000 advance payment and actual
commission earnings of the previous year will equal the true up or down
amount for the second year and all subsequent years.
ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008·2000·7549

PAGE 4

SECURUS'

6.05 COST PROPOSAL

Example for year one and two (also applicable to all subsequent years):
-

..- ..

---_.---~---

i
!
: Gross Revenue!

Month

- - ' - ' - ' - ' - ' - - --r--------.·------.

- .._-. -..i
-..-. """'-- --·f
..... -1
$125,000.00 i
.._.....-- ---.. -_. - 1- -.. -..- .-- -. --.., t --. -- 15%
<.- •••

I··
i
t· -

-"'-'

2
-

.-

_.

3

.--.... _ ..-- .. - •... --.-

,$125,000.00
-"1"'-

i
.. -1' -

.--

!

7
8

i

.. -.

••• - ' . -

•••

Commission
Earnings

..1 ' - - ' . '••

:

$18,750.00 :

:

$18,750.00 '

·-··-1---·--- -.---...-..

!

-·---·---t .-.-- -.-... -...--. --.---.-1'.------.--.------:

.

$125,000.00 \

- - . -- ..• ----..:-1..

'~

15%

!

$~O~,~O~~O~ ~

I

$200,000.00 I

$18,750.00 I
--..--.--..---!
.-1-- __.. $~~~~.~~!
I

..' ...- --.-..--.--... --.j.-..-..

~~!o_.

i
$26,250.00 ;
---.--... ··---1---·
...--.-.-----,

!
$175,000.00 !
-··-·--r--·
---...
----.-~.-:
$200,000.00 I
i ..-. - - ... _-.----;
-

5
--- •.-_--.-._- ..• ii-'
6
-.-

-

I

15%

!

.,_ ._~_._ _ ___ -.1---- _~~~o,oo~.ooJ._ ._.

L..
I1.-

!

Commission
Percentage

15%
15%

.
'1
_. __ ;

._-

15%
15%

$30,000.00 :
_.-. --... -_. "..
__ ..s3~!0_~«!.00 ;
$30,000.00 :
I

!

t. _ .~._.-=-~~ ~~=~~'-,j-=--=$20~~!~0.oOI~'--:. '.-_i!!~:=~ ~., J' '~~-'~~~30~0 _0~'-0~_!
i
i
i

!l.._ ---__ .---. ..10 .. -.-.--._....._. _ -~$225,000.00
------__ ._~.
i

~

--- .------ 11

._~--

!
$250,000.00 L
...,----.---.-...
-

.--~-

-------~-----

-~-----.

~~.5~,00~.0~J.
$2,225,000.00

--_.-.- i

$33,750.00..,:
$37,500.00 .

~"1--_._-------------:

1~o~.._ ..-._..

J _._,__ ~37!500.00

I

!

I

-- -.. -- ----. ----- ... .!- ---.. _.- --.-.---. .----.

i Actual Annual Revenue Commission Rate Attainment is 23%
.

~--

1

; Revenue
r·----

j

..

-.-------.-.----~~- ---~.~-

! Earned
.----,

.--

---

-

--.'-'._--~

~

..,.

$2,225,000.00 I
---.-.-... -----r-, . .
~_.-.--------_.

!I" Year
True Up Payment
-- - - One
--.-- ---.-..

"'--~--'---'---

I

-,-.... - . . . . - - ..-,-------.-.------- .. - . .

.--~

. _---- . ---. -----: . --.-.. -.
LAdva~ce P.~!"en~_
_.
:-.-_.~

~----

23.0%
----....- ..... ---

! ---- .. --

-_·~t·_·-

.__.. _1.._ ___

. $511,750.00 . ;.

j

--~--+_. ~---_ _-~----_

-- . - -- - - .

~--

l'~-

... __

._.~ ....i

$333,750.00 .

'_·__ r~ "-'~---'-----i

$100.000.00.;
$78,000.00 ;

--.._-- ---- ----..-- -- ..-----.-.-- ---- "1- ------- . --....---...

-~.

, Run
for
12 months
1--__ Rate Commission
.
-- __ next
.
-_. - - --_ ...~ .._- -- -_.---

,..Lt

~

+ __

~,

•

•

• __ •.

•

~

I

.__ . ----.-.- - .. ~-:

; Based on previous year revenue of $2,225,000 new monthly commission is 23.0%
L-.,~

;

i .--_ ....-.--15%
$333,750.00 i
'-'"-"- ----·-r·
-- .- ..-- ---jI- .---------.
_. ;

i
i-'-- ...._. -- -,--...-..-. -..1 ~- -..._- ...-... - ...- .._ ... _."

I

15%

~- --~---.

: __._
~~ _. . _._.1 .
: Year One
i

r'- ..- ...'--- ---.

15%
---.- --- -_. -+---

i

._.

••• _ _ ~

~

.

J

Continued on next page

ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008·2000·7549

PAGES

SECURUS
.-- --.- ----

-----·--··r-- -'---""--"- -.----

-~-.-

!

6.05 COST PROPOSAL
r " ' - - - - -- ----- .. --

... --- --

_.,.--.---~--._

'Commission
Commission
Month
i Gross Revenue!
Percentage
!
Earnings
13";----$240,000:00
23%' .---.~------ $55,200.00:
I

f--'

.

_

.

r'-

[~~-~_-.~ _-=.~i~~~ ~~~·_= !_=-~ . '$~45,-0~~~~O-l~-. _ ~_~~3~o~:~~:~-.~J~~:_~:-j56~35~:~~J
15

i

!

,...---..• ----- - - - - . - .• -.- . - "'-1- - - - - -

i"--_.. -- -*---

i

16

~_~·r

•

.--------~.

---

17

:--

--._-

j

---

---

-._-

~:-.

.. _._.

~

--~-

$250,000.00
-

~

.-

a

!

._._

1- -- - - ::~:~~~::::!
-- -- ..--_. --- "

20

- ---

-..
-----

_~

\__ .,. _. __ ~~

~

!

i

$325.000.00

i

$57,500.00 :

23%
--_ .. _ . -

i
. . . _.

$57,500.00
.
...
.
..

_.

------

~:~

------ ..--,----- ---

i

.. -- -

• __

. - ~ - o .

. f-

-·-$3~255,000.o01
--1_
I

~

_

:

. ~.~~

i Year-Two
True Up Payment
. - -.. - -..
_

_

0

__

_

__

_

_

~

_

~

_

~

.

._

_

j Run Rate Commission for next 12 months

l

__

--..---------

1

i

I

.

_

.

-

:.

.

,. __

~

~

~

__ •

.j

T·--· $9~95o.00-:
~

I

oj

$748,650.00 '.

. _._.~_~_ ·~ ..1-.·-:.= $100~0~O.OO:

-------~-._--.----_._-._... ~._-- ---.--~---

t.

$69,000.00 :

-t

_._.

!
--_.-t-__

- - --,----------••..

__

__

~

~ __..

lt

--_.- --.-- ._...... -~-~-----~--_._-~-

~

L~~~~!1~;~;y~_!lt ..

i

$64,400.00
..

.---------------f--_.---- -------------!

~

~~ . . ~._--

~

! Earned

.

!

-.

1.-_.. _--'~,!O~~~_i

29.0%· --- ..

I... --~ -_. - - - - .-_.. -- --.-- -' - ---t- - . - -----_.- --- - - - - -

-

.. _-j..

t Actual Annual Revenue Commission Rate Attainment is 29%

ii~~e~'u~

$57,500.00
;
.. - -,

~---.----.----+

$69,000.00
- ......
f···-----·--· .. ·---·-!
23%
i
$74.750.00 :
23o/~·--·-··-'-·f$74a,650~00·:

-.-----;--~-

;
.. _'. _ _
.

~

~

~

-~- ---·-·--:~:i:~~::

-~-~----.-----i

23%
- ..------23%

i

._ . •i
, __ •.
.. _ _ •

; ,..

.~3!~ _.. '

---1--$3,255,000.001-----

~-------_._-----~.~----

i

I
• _ _ •••
• __ . _ .

--.-~_

23%

__.

.--.-.. -.... --- .. -;--. -.. --- .... ----j . .

;
24
i-~';r-T;~---"-

_.

- .-

~

!
$300,000.00 !
- ---j-- - .-.. - - - - - - ;

$300,000.00

:

23%

.J.-- __. ~290,000·~_~l
l

23%

..----------- -------+.------.--.----..

.~.--

I
,,$280,000.00
__ .
.__j-.-

.

:
22
, .. _.- - --..- --_.- .. -i
23

r'

!
$250,000.00 :
t -- ...----- - - - - - - . - - ---.--*

:

--------.

:-- -

$250,000.00 :

---------!-.-

._.:....

$95,300.00 •
roo.

,

"--'.-_._--

- . _ - - - - _ ••

_ _ • __•••

1 Based on previous year revenue of $3,255,000 new monthl¥ c~mmissio~ is.29.0%

,

•

__

I

._._-J

.

ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008-2000-7549

PAGE

6

SECURUS

6.05 COST PROPOSAL

Collect & Prepaid Call Rates
-

-. - --... -

---------.....-

-.. - - - - - I . - " "". - ..- , . _ .

_~OCAL ST~T!<?N TO ST~TION
i

.

DAY

--- --- ---- ----t- -- -- -- ._-- . --.---- -_~

-+:

~

.

. .

RATEIMIN :

--.-----+-.-.. -

.., MILEAGE
__ . - -- I

..

~.,

;

0-9999

~y- -------~ .i

-

:

;'.~~'--.=-. _=L.~--~-_--'-

-

-

-

__

.-- .. --=.=

_

•

_.

L~~R~~_A_I!~.E jPer CaU
i

NIGHTIWEEKEND

.~-. - - - --.----- .-. • --;--- -~- --- :----.~--- -------~--l-·---·- -.-"-

__ •

-

_
$0.00

..•. -

L

EVENING

.__.__ i ;
----i---i

..

- .. -.- - -'

-

:

r$ioo

j :

-__ - -

-1 __ -_ .. ~- __ .__

~

~

i

--.... ._.' -- .-.. --'r--

t-- .-

' _..

._-~

' - -..•

-

-

-

:

.,

.. _,_.

1

• __ l

_.~,.

~

+_

__

~_

.' .•

._. - ..-.--..-

./..._--_

-

_

-

.

i;
$0.00
i!
$0.00
-t~ 1-- ----·----.~··-~j··-.l·-~~.--·---------- _.

i

,.

;I INTRALATA and INTERLATA
!
,
!r-- ----.---~.
STATION
TO
STATION
!
!
SURCHARGE
:
$1.55
-~--.----,.___-~. -'-_.~---'---- ---- - ---.-----.'- --~--- ----...-- ---" --,-.- -, -- -- .
I
I
DAY
,EVENING:
NIGHTIWEEKEND
i

- - --r-- -- - -

~--

~

;
.-'-~-'----'-'~.'''''---_

~

-!---- -·----··---·1-

-_.~--

·_..-_ _

- -•• - - - - - - '

.'--

,.:.......

- • • -.

'-"-

-·~'·-----·T---------~-·-----_·---·--·---'- ,---_.~-,--,----

: EACH_ _ ~-L·-;
.. _,_.,--_._-,--_._~----~---_,

EACH
i
I
EACH -_ _ ._.~--+-----~-.-.-~---t-,._._~----_.

I

·_-------,·t·~.

RATE;

INITIAL

i ADD'L

i

INITIAL

: ADD'L;

; MILEAGE ,

PERIOD

: PERIOD!

PERIOD

i PERIOD

INITIAL
i -'- --ADD'L
-----------·1----

!-~- .. ~- .. ,-'-------t--,.~_._-~--,------- --'r---'-~-------t~--·-·_-~----'t--·~-~-"--:

i

r ",-- '0--34
--

35-64!

i

0.3400'----

-- 1-- -- -

~

r' -_._. -·-·---·t·-·

-

-----~

0.3800

.---.---.~--

--

r 0'.1300"
,- - r[--0.2720

i

r

: 0.1700!

..

"--'--1-'-'--'-----'

•

-

---

--'

-

:

PERIOD

----~

PERIOD

-!--0.1040 '-;.
"0.1700- -'1- 0.065-0
-i

~

0.3040

:

-

'_.

-.+,

-+

: 0.1360;

!- ..... ----.j-.. --.--.,~~.

---'

,--,'-

.-

__

1

!
.. ,.... --;

0.1900

-.--,-~

---

--

-,-

0.0850

.. _. .-.- ..- .

: 65-94
0.4200
0.2100:
0.3360
i 0.1680
0.2100
I
0.1050
r-- ----.'-~. ·-------··-t -- --'--,----~------ ._- '.-- '-'-'.- ~~_.,_._----~--------_ .. _- ---t----.-------~---- --~
- ,_.~- : 95-124!
0.4500
I 0.2400:
0.3600
i 0.1920!
0.2250
!
0.1200
~----_.._--.---+ '-- '-~·_-----··-------·,-t--'- ---~- -.!-~-~-- ------t-·--- -~- -~---.- ~-t----- .---------i 125-154 I
0.4800
: 0.2700! 0.3840
! 0.2160:
0.2400
i 0.1350
i - - _.-. -----".'-----.---.--.--- ·-----1------'---i--·------+------t-----·~-·~t-··-·---'-·----1--+·-·-'-·,····--- .---! 155-184 I
0.5100
: 0.3000
f
0.4080
i 0.2400:
0.2550
:
0.1500
1 --;. --. - 1- -----,. - -·i -- ..--.- ... -.!
-- -- .. -~ --- --1 --- -I

J

I

-----t
-+

! 185-214
r

0.5500

j

0.6000

! 0.3400

~1~~274-'j_ _ 0:~800"

i 275-99999
i·

I

--.

.i~o.:i~~o

~-1 ---- -

.;--

i 0.2720:

0.2750

I

0.1700

0.4800! 0.3120;

0.3000

i

0.1950

0.4400

0.4640"j 0.2~60-~ .•• ~..o~~9~()... !.. 0.1~50

0.3900

=l.---.=.---.I.~-.---,--J- .....

:

Ci~!~~S!A~~S~~!~.~~~i.~~!AT~9~N~=.:-~·.T:· ~~__.. _.._L~_n .. l_~~R~!iARGE 1!.. _~9~,

:

!
~-

I

··-~t-RATE
--

..

-- -- '--

t----·----

-

PERIOD

_. -·,f .'---

---.,---.,~

: PERIOD i

-----·~___+---~--#-·~_··--_·_,---···"···-··-i·--·--·---·~·t-~'

: 0-99999!
.,-1. '
•• _ _ ..

'_~

*

0.8900
."~_

..

~

•

·-·-4 .--~---.- ";+ ..
PERIOD i PERIOD :
.

'F','_

.....,~r·~···_~,_·_··t--_·_·

: 0.8900 i._,. 0.8900

.l

~_,

~~

~

I

~

i

----.- -"~-----'--- --

PERIOD

i

0.8900

!

---.-.:-',.--~---.-------t-

0.8900 i
~

_..L....

._ ;

NIGHTIWEEKEND
EACH

'ADDi -r -- INrrIAI..--:-t-

"1 . - -INITIAl-- --:--ADD~L--i- INITIAl.. "

~-.--~

: MILEAGE l
l..-..

DAY
I
EVENING
.
---n-------·!--eACH-~~--···--l-EAcH-r----·

+ _ _~ _ _ •

!

ADO'L
-

PERIOD

----'-~--.--

0.8900

* _ _• _ ••

ALASKA DEPARTMENT OF CORRECTIONS

RFP # 2008·2000·7549

PAGE

7