Executives at CoreCivic and Geo Group — two of the federal government's longtime partners in private immigration detention — lauded President Donald Trump’s reelection and promises of a mass deportation campaign as an unprecedented growth opportunity.

But the White House passed over the stalwarts of the private detention sector and awarded some of the first contracts to operate new immigrant detention warehouses to untested defense and security contractors.

The two contracts totaling over $427M offer a glimpse into what the Trump administration is requiring for the build-out of warehouses being leveraged in its nearly $40B expansion of immigration detention. But the administration’s pivot to contractors outside the space also raises questions about the growth prospects of the publicly traded facility operators.

Security contractor GardaWorld Federal Services won a contract worth at least $313M to run a detention center planned for Surprise, Arizona. U.S. Immigration and Customs Enforcement paid $70M cash for a 418K SF warehouse in the Maricopa County city last month.

Another contract worth at least $113M went to defense contractor KVG LLC to build and operate a detention center outside Williamsport, Maryland. The state attorney general has sued to block the facility's construction.

GardaWorld previously had a contract with ICE to provide guards to the detention facility in the Florida Everglades, which became known as "Alligator Alcatraz," but had not previously been directly contracted by ICE for facilities oversight, The Washington Post reported. KVG LLC has not previously been awarded any contracts related to immigration detention.

The recent contracts require the companies to install climate control equipment and build dormitories, recreational spaces, courtrooms, cafeterias, visitation rooms and medical facilities, according to the Post.

CoreCivic and Geo Group met with officials at the Department of Homeland Security in recent months to try to hammer out deals, with DHS demanding a 15% discount to all existing contracts, and to suggest cost-saving changes to federal detention standards, anonymous sources told the Post. It’s unclear how either company responded.

“We are proud of the role our company has played for 40 years in providing management support services” to the federal government, a Geo Group spokesperson said in an email. “We look forward to continuing to provide management support services that help the federal government meet its goal of increasing overall detention capacity.”

CoreCivic spokesperson Brian Todd said in a statement to Bisnow that the firm’s expertise has never been more essential and pointed to multiple ICE contract awards the firm had won in recent months. He also questioned whether the new entrants to the sector would be able to deliver.

“The United States is facing an immigration enforcement challenge of historic scale, and the idea that companies with no track record in this industry can replicate the decades of operational experience, compliance infrastructure and facility management capability we have defies common sense,” he said.

Geo Group’s stock is down more than 10% this year, and CoreCivic has shed more than 7% of its value. The value of both firms had exploded by more than 80% in the days after Trump won a second term.

The public valuation of Core Civic, which has faced growing scrutiny after multiple deaths of detainees at its facilities, has held up better than Geo Group, which has given back all of its post-election bump.

After Trump’s reelection and the stock rally, Geo Group's then-CEO, David Donahue, called the moment unparalleled.

“We believe the scale of the opportunity before our company is unlike any we've previously experienced,” he said on the firm’s Feb. 27, 2025, earnings call. Donahue was replaced by George Zoley, Geo Group’s founder and executive chairman, last month.

The Trump administration has moved to quickly award contracts and initially said it wanted facilities open within 60 days of an award but extended the timeline after complaints from applicants, the Post reported.

During a scathing hearing earlier this month, former Homeland Security Secretary Kristi Noem was grilled over the price the government was paying to acquire warehouses. Noem, who was also facing bipartisan backlash to a $220M ad blitz that she was heavily featured in, was pushed out of the top spot last week.

She's the first member of Trump's cabinet to exit in his second term and will be replaced by Sen. Markwayne Mullin if he's confirmed by the Senate.