@ehBeth,
Private enterprise, by no means, guarantees perfect or even effective operations, and the fact that there is so little competition in this area of the private sector is a reason why poor performance might be expected. This may, in fact, be a very good argument against the privatization of prisons.
The barriers for would-be competitors to enter this market are enormous, and no company is going to construct a prison facility without having some form of guarantee that they will get the government's business. Building the kind of relationships needed to obtain such guarantees is time consuming and expensive.
To the extent that private prisons do not operate properly or have results that are worse than public prisons (which is general a low bar to jump), public officials can be apportioned a fair share of the blame. The contracts between company and government should contain provisions that penalize the company financially if certain standards are not met. If they don't, whose fault is that, the company's?
Another good argument against private prisons, involving the size and scope of the endeavor, is that if effective incentives are not contained in the contracts and the company demonstrates no willingness or capability to improve, what course of action is available to the government? There is likely no array of competitors to jump in and take the place of a fired company, and unless the contract contains a provision that requires the company to sell its facilities to the government in the event of termination, it would be an impossible task for the government to come up with alternative facilities in anything like an acceptable period of time. Where the company is hired to manage a facility that is owned by the government, the problem is far less daunting but not one easily solved. Presumably part of the "savings" contemplated by hiring the company would come from a greatly reduced departmental bureaucracy, and that would need to be rebuilt.
So while I reject the notion that privatization of governmental functions is inherently a bad thing, if the elements that make the free market efficient and effective (competition being a big one) are not present, then it’s probably not a good idea for a government to go down that road. The question that needs to be answered though is why government officials find it so attractive. It could be nothing more than a desire to wipe their hands of a mess. It would be a lot easier to criticize private prisons if the government had been doing a great job before the companies got involved.