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FEDERAL PRISON INDUSTRIES
STATUS
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.
ISSUE
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
LEGISLATION
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.
OUTLOOK
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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