Late in the 109th Congress, the House of Representatives passed H.R. 2965, the Federal Prison Industries Competition in Contracting Act, by a vote of 362-57.  While this was the second time the House passed such legislation, it again stalled in the Senate.  Supporters hope to re-introduce this bill by mid-September.

The Senate’s National Defense Authorization Act for Fiscal Year 2008 contains a provision that would make important modifications encouraging the Department of Defense to the purchasing of products from the Federal Prison Industries (FPI) catalog. 


UNICOR, the trade name for FPI, is the government corporation that employs offenders incarcerated in federal prisons.  When the federal prison system was established in the first decades of the 20th century, factories were constructed within the prisons to manufacture products needed by the federal government.  Congress approved legislation in 1930 giving general authority for "employment for all physically fit inmates in the United States penal and correctional institutions."  The legislation specified, however, that the work of prisoners should not compete with that of the private sector.

Labor organizations had been making arguments against prison industries since the late 1800s. The depression of the 1930s, and the resulting high levels of unemployment, crystallized the debate.  Congress and President Franklin Roosevelt responded by establishing UNICOR.  The purpose was to consolidate the operations of all federal prison industries in order to provide training opportunities for inmates and "diversify the production of prison shops so that no individual industry would be substantially affected."  Originally authorized in 1934 through P.L. 73-461 and Executive Order 6917, the current statutory authority for FPI was first codified in the 1948 revision of the "Crimes and Criminal Procedure" statutes.  The only amendments to the statute since the 1948 codification were relatively recent provisions added in 1988, 1990, and 1992.

The absence of legislative action on this issue for the half century from 1934 to 1988 is notable. Developments in recent decades that have increased congressional interest in prison industries include: 

  • the erosion of the nation's manufacturing sector over the past 10 or 20 years, resulting in higher levels of unemployment among members of the workforce with marginal skills;


  • the rapid and dramatic increase in the federal inmate population (from roughly 30,000 in the early 1980s to three times that amount today) at the same time that the federal government was downsizing, resulting in a reduction of FPI's federal market; and,


  • the need to develop more aggressive inmate management techniques in federal prisons as the profile of the federal offender population changed from primarily non-violent offenders to those convicted of violent crimes and drug trafficking.

FPI is administered by a six-person board of directors appointed by the President.  Its enabling act requires that representatives of agricultural producers, labor, and retailers serve as board members.  The board's decisions regarding products to be manufactured and areas of expansion are driven by a goal of employing the greatest possible number of inmates.  FPI is required to diversify its product line and operate so that "no single private industry" bears "an undue burden;" it is also charged with reducing "to a minimum competition with private industry or free labor."  Of the roughly 125,000 inmates held in federal prisons, about 17,000 (18 percent) are employed by FPI in 100 factories scattered in half of the states. Goods and services provided by inmates employed by FPI include: metal products (lockers, storage cabinets, shelving), clothing and textile products (draperies, canvas goods, military clothing), graphics and services (data entry, text editing, road signs), plastics, and electronics (cable assemblies, connectors, power distribution systems), and furniture products and accessories.  FPI is a self-supporting government corporation that may borrow funds from the U.S. Treasury and use the proceeds to purchase equipment, pay wages to inmates and staff (over 1,600 staffers who are not inmates are employed), and invest in expansion of facilities.  No funds are appropriated for FPI operations.  Inmates earn from $.25 per hour up to a maximum of $1.15 per hour, rates considerably below the minimum wage.

Since FPI does not compete for their contracts, their sales are remarkable.  In 1960, FPI had sales of $29 million.  By 1980, FPI sales jumped to $117 million.  Today, however, FPI has turned into one of the largest federal contractors.  In fiscal years 1996, 1997, and 1998 FPI had net sales of about $496 million, $513 million, and $534 million, respectively, in products and services.  In 1999, FPI's sales soared to $566.2 million; this ranked them 36th among the top-100 Federal contractors.  FPI's size and scope also continues to increase


The Federal Prison Industries Competition in Contracting Act

The Federal Prison Industries Competition in Contracting Act seeks to amend the Federal criminal code to replace provisions regarding the purchase of prison-made products by Federal departments with provisions establishing a government-wide procurement policy relating to purchases from FPI which shall generally require the use of competitive procedures.

The measure requires that an analysis be made of the probable impact of a proposed expansion of sales within the Federal market by FPI on private sector firms and their non-inmate workers whenever FPI proposes to authorize the sale of a new specific product or service or to expand production of a current product or service.

The legislation also would authorize the FPI to enter into a contract with a Federal contractor to produce products as a subcontractor or supplier in the performance of a Federal procurement contract.  It also establishes within the Bureau: (1) the Enhanced In-Prison Educational and Vocational Assessment and Training Program; and (2) the Cognitive Abilities Assessment Demonstration Program.

The measure seek to direct: (1) the Chief Operating Officer of FPI to develop proposals to have FPI donate products and services to eligible entities that provide goods or services to low-income individuals who would likely otherwise have difficulty purchasing such products or services; (2) the Director of the Bureau to afford to inmates opportunities to participate in programs and activities designed to help prepare such inmates for gainful employment upon release; (3) the Attorney General to establish the Federal Reentry Center Demonstration Project; and (4) the Comptroller General to undertake to have an independent study conducted on the effects of eliminating FPI's mandatory source authority.

The National Defense Authorization Act

Section 824 of S. 1547, the National Defense Authorization Act for Fiscal Year 2008, contains a provision instructing the Secretary of Defense, before purchasing a product listed in the latest edition of the FPI catalog for which FPI does not have a significant market share, to conduct market research to determine whether the product is comparable to products available from the private sector that best meet the needs of DOD in terms of price, quality, and time of delivery.

The bill also authorizes the Secretary to purchase a product listed in the latest edition of the FPI catalog for which FPI does have a significant market share only if the Secretary uses competitive procedures for the procurement of the product or makes an individual purchase under a multiple award contract in accordance with applicable competition requirements.  Finally, it requires the Secretary to publish a list of product categories for which FPI's share of the DOD market is greater than 5 percent.

Senators Charles Grassley (R-IA), Tom Harkin (D-IA), and Debbie Stabenow (D-MI) may also offer an amendment that would ensure that Section 824 of S. 1547 is applied throughout the government, not contained to the Department of Defense.  


This is an issue that has traditionally had strong bipartisan support, yet runs against the wishes of the Administration.  According to the “Statement of Administration Policy,” section 824 of the 2008 National Defense Authorization Act “would greatly reduce Federal inmate work opportunities through the FPI  program, the Federal Bureau of Prisons' most successful tool in reducing recidivism. Any proposal to curtail the FPI program needs to be accompanied by proposals to cost-effectively increase Federal inmate work opportunities.” 



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