Editor's note: This story has been updated throughout.

Private companies will lose their contracts to operate five federal prisons in Texas under a U.S. Department of Justice plan announced Thursday to phase out private management of federal lockups nationwide. 

The agency's inspector general's office concluded in a recent report that prisons run by private companies have greater problems with contraband, inmate discipline and other issues than those run by the Federal Bureau of Prisons.

"In recent years, disturbances in several federal contract prisons resulted in extensive property damage, bodily injury, and the death of a correctional officer," the office noted in its review of the bureau's monitoring of privately run lockups.

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Three incidents in West Texas were among those prompting the DOJ's move.

In 2009, two riots broke out at the Reeves County Detention Center. In 2011, inmates attacked staff at the Big Spring Correctional Center.

Matters escalated in 2012, when a guard was killed in a riot in the Adams County Correctional Center in Mississippi. Twenty people were injured during that incident, according to the report.

"The disturbance involved approximately 250 inmates who, according to contemporaneous media reports, were angry about low-quality food and medical care, as well as about Correctional Officers the inmates believed were disrespectful," the report states.

In 2015, the Bureau of Prisons ended its contract with the Willacy County Correctional Center in deep south Texas after inmates set fires and damaged property beyond the contractor's ability to continue services required by the federal monitor.

Three companies operate five federal prisons in Texas. The GEO Group Inc. operates two compounds at the Reeves County Detention Complex and the Big Spring Correctional Center in Howard County. Corrections Corporation of America operates the Eden Detention Center in Concho County. Management and Training Corporation operates Giles W. Dalby Correctional Facility in Garza County.

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The Texas facilities house close to 10,000 federal inmates out of about 22,000 in 13 privately run locations nationwide. More than 190,000 federal inmates in total are housed throughout the country.

Private companies accommodated the Bureau of Prisons when the federal inmate population grew beyond what it could handle, but it's time for a change, U.S. Deputy Attorney General Sally Yates said in a memo Thursday.

"Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own bureau facilities," she stated. "They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department's Office of Inspector General, they do not maintain the same level of safety and security."

It's unclear whether the Bureau of Prisons will take over privately run facilities or relocate inmates as existing contracts expire.

Shares for Corrections Corporation of America and The GEO Group Inc. plummeted 35 percent and 39 percent, respectively, after the announcement. A spokesman for Corrections Corporation of America said in a statement the agency's announcement only affects Bureau of Prisons correctional facilities, which accounts for 7 percent of its business.

"The Inspector General’s report used to buttress this decision has significant flaws. The report’s authors freely admit that they 'were unable to evaluate all of the factors that contributed to the underlying data,'" CCA spokesman Jonathan Burns said. "And they failed to account for the impact of elements such as population demographics or the scope and efficacy of efforts to mitigate contraband. The findings simply don’t match up to the numerous independent studies that show our facilities to be equal or better with regard to safety and quality, or the excellent feedback we get from our partners at all levels of government."

A Management and Training Corporation spokesman said the DOJ's decision was disappointing and would cost taxpayers. The corporation operates Big Spring Correctional Center.

"If the DOJ’s decision to end the use of contract prisons were based solely on declining inmate populations, there may be some justification, but to base this decision on cost, safety and security, and programming is wrong," spokesman Issa Arnita said in a statement. "The facts don’t support the allegations as demonstrated below."

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Specifically, he called out the agency's charge that private-run facilities were less safe and secure than those the bureau operates itself.

"The majority of inmates in contract prisons are from one country which brings inherent increased risk of violence," he said. "Homogeneous inmate populations have greater gang activity and increased misconduct which naturally results in more incidents. It is not because contract prisons are not as safe and secure, it is because a homogeneous inmate population has a greater inherent risk for problems."

The GEO Group Inc. said it will continue to work with the Bureau of Prisons.

"While our company was disappointed by today’s DOJ announcement, the impact of this decision on GEO is not imminent," said Pablo E. Paez, vice president of corporate relations, in a statement. "As acknowledged in the announcement, the BOP will continue, on a case-by-case basis, to determine whether to extend contracts at the end of their contract period."

This week's decision also has opponents of for-profit prisons hoping that privately managed immigration detention centers will also shutter.

The Department of Homeland Security has contracts with several such facilities nationwide, including those in Karnes City and Dilley, Texas. The facilities, operated by the GEO group and Corrections Corporation of America, respectively, have been in the crosshairs of immigrant rights groups, who have alleged that abuses occur within their walls.

Thursday’s decision will give momentum to the efforts to persuade the DHS to sever ties with the companies. But immigrant rights groups have so far conceded that battle will probably take time.

“The DOJ’s decision to phase out its use of troubled for-profit private prisons may be a turning point for an industry that has continued to win federal contracts despite well-documented operational problems,” said Bob Libal, the executive director of Grassroots Leadership, a nonprofit immigrant rights group.

The Immigrations and Customs Enforcement detention centers are solely to keep individuals awaiting the resolution of an immigration case or to hold people facing removal orders, an ICE official told Tribune. ICE does not detain for punitive reasons.

“U.S. Immigration and Customs Enforcement (ICE) remains committed to providing a safe and humane environment for all those in its custody,” ICE said in an statement. 

Read more on this issue:

Use our Texas Prison Inmates app to explore Texas’ prison units, and learn more about the more than 143,000 inmates housed inside them.

Julián Aguilar contributed to this report.

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