The U.S. Department of Homeland Security has awarded what has the potential to be more than $1.3 billion in contracts to transform two newly purchased warehouses in Arizona and Maryland into Immigration and Customs Enforcement detention centers.
The two contracts together have an obligated award of $426.5 million, according to USASpending.gov, a federal spending website. The contracts are to "procure the renovation of existing, ICE-owned" permanent structures that will serve as processing and detention facilities and provide "all necessary services for operation" of the facilities, according to the contracts.
As of last count, ICE has purchased more than 6.8 million square feet of industrial space since the beginning of the year for at least $894 million as part of the federal government's plans to reform its national network of detention centers.
Using funds from the One Big Beautiful Bill Act, ICE is expanding bed capacity and hiring more officers while reducing its detention network from hundreds of facilities to just 34, which include a mix of large-scale detention centers and regional processing sites.
Of the two recently awarded contracts to transform warehouses into detention facilities, GardaWorld Federal Services LLC received the largest one. DHS awarded GardaWorld a contract of at least $313.4 million for the renovation of a 418,400-square-foot warehouse in Surprise, Arizona, that ICE bought in January, according to the contract.
GardaWorld deferred comment on the contract to the DHS. ICE, which is part of DHS, did not immediately respond to a media request from CoStar News. The newly awarded contract started March 6 with an estimated end date of March 5, 2027, and a potential end date in February 2029. The contract also has the potential of being a $704.1 million deal.
Detention center experience
GardaWorld, a private security firm, has an office in Arlington, Virginia, for its GardaWorld Federal Services division and is based out of Montreal. GardaWorld has a history in detention center operations, with it having contracted with Canada Border Services Agency and was cleared to bid on potential contracts tied to ICE detention centers last year, according to the American Friends Service Committee, a century-old nonprofit organization.
The other DHS contract went to KVG LLC, a Gettysburg, Pennsylvania-based firm that describes itself as a veteran-owned small business, to procure the renovation and provide operational services for a detention facility near Williamsport, Maryland. The initial contract has an obligated amount of $113.1 million, according to the document.
ICE bought the more than 800,000-square-foot facility in January. The newly awarded contract with KVG started March 6 with a potential end date in March 2029. The contract also has the potential of being a $641.8 million deal. KVG did not immediately respond to a media request from CoStar News.
ICE's plans for the Maryland detention facility are facing legal pushback from state leaders. Maryland Attorney General Anthony Brown filed a lawsuit on behalf of the state against the Trump administration seeking to halt plans to transform the warehouse into a 1,500-bed detention center.
For Maryland and any other U.S. state, one attorney with a vast array of immigration experience told CoStar News it would be an uphill battle, with states being unable to impose laws restricting the federal government from performing its functions.
CoreCivic, which has a history of bidding on federal government detention work, told CoStar News that the two contracts awarded to GardaWorld and KVG were not ones the firm pursued, and the company is "committed" to partnering with the federal government on other projects.
Steven Owen, CoreCivic's vice president of communications, said in an email: "The United States is facing an immigration enforcement challenge of historic scale, and multiple contract awards over the past several months reinforce that our federal partners view CoreCivic as a valued solution among all of the solutions they are pursuing to meet their detention needs."