"We are one of three finalists, and bid selection is due inApril," Jones said. While this is a competitive bid, and there isno assurance CPT's RFP will be selected, he said it represents anexample of the company's new direct-lease business model andillustrates "that we're not just involved in inmate housing. We'realso seeking to establish sale-leaseback agreements with governmentagencies for mental health and higher educational facilities." Likeprisons, these types of facilities are becoming privatized on anincreasing basis.

On projects such as the state mental facility, Jones said CPTwould work with a construction partner. Under such agreements, thefirm would deliver the project, then sell it to the governmententity, which would become the lessee on a long-term basis.

CPT's revenues for the quarter were $7.1 million, up from $6.8million for the fourth quarter of 2004. The increase is attributedprimarily to rent increases at its 13 correctional facilities innine states. All are leased with an aggregate completed designcapacity of 7,556 beds.