Guest post from Gravel and Grit, a 501(c)4 org dedicated to opposing the Franklin County prison and advocating for rural communities in Arkansas. You can read the original post on their Substack here, follow their Facebook, and their Twitter/X.
Can the people of Arkansas and their elected representatives trust the statements and work produced by Vanir Construction Management (“Vanir”), the California-based Owner’s Representative hired by the Department of Corrections to handle the building of the prison in Franklin County?
In this article, we’ll present evidence that relying on Vanir’s words and numbers is a huge mistake that will cost Arkansans for years to come. We hope you’ll share this information with your colleagues, neighbors, and friends. We titled this article “Character Witness” because, in a court of law, the jury is permitted to hear supporting or detracting testimony from persons with knowledge of the witness to help determine the veracity and reliability of their testimony. So, jurors, read on…
The Examination.
We recently penned an article breaking down the numbers surrounding the proposed prison in Franklin County. In it, we referenced a letter from Mike Beaber, the Project Director with Vanir for Franklin County.
In case you missed it:
On Monday, March 3rd, [Vanir] issued a one-page, caveat laden attempt at establishing a new, preliminary budget for the facility’s construction. While this appears to be an attempt at addressing the questions posed by inquiring members of the [Joint Budget Committee], we would contend it does little to satisfy any of the underlying concerns with the project. Not to mention that the price tag alone should be enough to give the fiscally concerned members of our legislature considerable pause.
While we don’t believe the substance of the “Preliminary Budget” (projecting $825m as the total prison construction cost) reflects the true cost, we’re aware that the intent of offering the letter is to give lawmakers something to lean on as sufficient backup for the dollars being sought by the Department of Corrections.
Now, with costs hurtling toward north of $1b, we wanted to put together some information about Vanir, how it came to be doing business in Arkansas, it ties to former Department of Corrections Secretary/current Senior Advisor to the Governor, Joe Profiri, and whether the facts support the veracity of a proposed budget generated by Vanir.
The Players.
Bear with us for a bit as we introduce the cast. Understanding the characters playing the game is vital to understanding how we came to have a prison construction company from Sacramento, CA moving a sizeable contingent of employees to rural Franklin County in hopes of constructing a mega prison on the side of a mountain.
Vanir Construction Management.
The ALC-Review subcommittee of the Arkansas Legislative Council approved Vanir’s contract with the Department of Corrections under false pretenses on October 14, 2024 (discussion starts around 1:48:55)—mere days prior to the Arkansas Development Finance Authority’s closing on the Franklin County property. It has little to do with the content of this post but here’s Anne Laidlaw, Director of Division of Building Authority testifying in response to Rep. Joy Springer (D)-Little Rock, noting three times that the state does not yet have a location for the new prison (it had been under contract since July 29, 2024, and the transaction closed 16 days after this testimony):
The “not-to-exceed” cost of said contract is $16,542,242.00 ($15,860,116.00 in fees and $682,308.00 in reimbursable expenses)—based on a percentage fee of the total project cost.
Hold up. They had a total project cost in October of 2024?
Well, no. As Rep. Frances Cavenaugh (R)-Walnut Ridge astutely pointed out immediately preceding Rep. Springer’s questions above, we can’t base a fee on a percentage of costs if the costs are unknown. Ms. Laidlaw clarifies that the calculation is based on the “budget,” not the actual cost.1 So, we’re looking at 3.37% of $470,000,000.00 plus reimbursable expenses. Clear as mud? Good, that’s how they like it.
We say all this to say, Vanir stands to make a pretty penny from its work in Franklin County—assuming it goes forward. And we think we can all agree that money is a fairly strong motivator to engage in underhanded tactics. More on that later.
Joe Profiri.
Ah, everyone’s favorite Deputy Director of AZ DOC, AR DOC Secretary, Senior Advisor to Gov. Sarah Huckabee Sanders. Mr. Profiri comes to Arkansas from his prior post as Deputy Director of Arizona’s oft maligned prison system, where he was passed over for the directorship after a series of blunders left the higher ups weary of giving him any more authority. Regrettably, Gov. Sanders didn’t heed the warnings from his former colleagues and, apparently eager to glom onto another state’s cast offs, promptly appointed him as Department of Corrections Secretary. A decision not exactly met with excitement from within the Department of Corrections:
A mess, indeed, Tamara. Subsequent to his confirmation, Gov. Sanders and Sec. Profiri began a rampant push to open additional prison bed space across the state. Eventually, these demands became too much—after all, expanding space without proper consideration is dangerous both for inmates and prison staff. The Board of Corrections had to put its foot down. On January 10th, 2024, it did just that and fired Sec. Mr. Profiri—a decision of which both its substance and methodology are the subject of ongoing litigation between the Board of Corrections and the administration. So long Joe!
But is it ever really “goodbye” for good? Not with Joe Profiri, it seems. Almost immediately after his dismissal as Department of Corrections Secretary, Gov. Sanders rehired him as Senior Advisor in her office. Notably, at a salary of $201,699.69, just $0.31 shy of the amount requiring approval from the full legislature. What’s he do for her? Advise, obviously. In truth, no one really knows. But we sure do pay him a lot of money to do whatever it is that he does, and the Governor’s Office loves to claim he’s fully insulated from the FOIA because he is her direct employee.
Matt Cate and Mosaic Solutions & Advocacy
If you’ve been closely paying attention to our other social media channels throughout this boondoggle, you may recall seeing these names in passing a few months ago. Matt Cate is the former Agency Secretary for the California Department of Corrections and Rehabilitation—basically the Joe Profiri of California. During his tenure in that role, and over the past 15 years, California’s exclusively contracted Owner’s Representative was none other than Vanir Construction Management.
After leaving California’s Department of Corrections, Mr. Cate bounced around a few roles, finally landing as the Founding Partner of Mosaic Solutions & Advocacy—a fancy name for a basic consulting firm. And who does Mosaic represent? Vanir.
So, who cares if this random Sacramento consulting company headed by California’s Department of Corrections’ former Secretary represents Vanir? Well, when Mr. Cate and Mr. Profiri are old friends, we start to become concerned.
We become even more concerned when we see that Mr. Cate introduced Vanir to Arkansas’ Department of Corrections and Division of Building Authority prior to the start of procurement process for an Owner’s Representative. In fact, they had several meetings prior to Division of Building Authority publishing the Request for Qualifications.
Most concerning: the form of the Request for Qualifications published by Division of Building Authority was “customized” based on sample Requests for Qualifications provided by Vanir.
Let’s repeat that:
Vanir provided the sample requests for qualifications used by Division of Building Authority to customize the Request for Qualification by which Vanir was ultimately awarded the Owner’s Representative contract.
We hear the Arkansas legislature is, historically, extremely sensitive to procurement law violations—it would seem to us that this fact, even separate from the rest of the shenanigans and incompetence surrounding the Franklin Co. prison project, would warrant a thorough investigation prior to moving forward with the project. Especially before moving forward with Vanir’s involvement.
The Endgame.
We promise we’re still talking about the prison budget—thanks for the patience. Now that we understand how Vanir, Joe Profiri, and Matt Cate all fit into the picture, “following the money” becomes somewhat of a more straightforward task. As referenced above, the money involved here is 3.37% of the total cost of the prison project. That is a significant amount of money at any of the many projected costs of this project—and any for profit company would have a responsibility to its shareholders to maximize its profits.
How does that happens?
- Vanir’s consultant, Matt Cate, reaches out to his pal, Joe Profiri, who we know has significant influence over corrections projects in Arkansas.
- Mr. Cate leverages his relationship with Mr. Profiri to cement Vanir’s position as the Owner’s Representative before bid submission (at least raising questions about skirting procurement laws).
- Vanir secures the contract then sells its services as percentage of the state’s lowball cost estimate in negotiating the contract.
- Costs begin increasing once Vanir digs into the project ($470m to $825m to $1b…).
We anticipate the next move, securing the profits from the inflated costs, will be for Vanir to renegotiate its “cost not to exceed” contract because, surely, it’s not fair for it to work “for free” above and beyond the percentage payment based on the original, lowball estimate. And that renegotiation could happen years down the road, once all of these facts are out of the public and the legislature’s minds.
Starting to see how this works?
The only public record of payment is from the State of Arkansas to Vanir. Everything else that may happen (Vanir to Mosaic, Mosaic to Mr. Cate, Mr. Cate to Mr. Profiri, etc.) would be behind closed doors and not publicized—but everyone makes their money somehow, starting with Vanir.
Passing Judgment.
“I would rather jump out of an airplane with a parachute with a hole in it than trust a prison building company estimate.” Sen. Bryan King, (R)-Green Forest
For reference:
3.37% of:
$470m is $15,839,000.
$825m is $27,802,500.
$1.b is $33,700,000.
$1.25b is $42,125,000.
$1.5b is $50,550,000.
This is precisely why we proffer that the “preliminary budget” offered by Vanir is wholly unreliable and insufficient to cover the costs associated with the project. They are self-interested, stand to benefit as the cost rises, and have a vested interest in not projecting the actual cost of the project until the legislature makes an initial commitment. After all, if they admit too early that what we’ve been saying from the beginning, that $1b is still only 2/3rds of the dollars needed for the build, they risk scaring off desperately needed votes and killing the project.
Then no one would get paid.
We present the above as our character witness testimony against Vanir Construction Management. Rendering a verdict is up to you, and the legislature.
1 Even though they had already had the $1.2b estimate for over a year and had been saying, internally, that $470m was insufficient for the past 11 months.
