|
Federal Prison Industries (FPI)
The Issue:
Federal Prison Industries (FPI) is a government corporation employing federal prison inmates to produce goods and services in prison factories for sale to the Federal government. FPI operates under the trade name UNICOR. Created in 1934, FPI enjoys a mandatory source preference in the federal market. This means that federal agencies are required to purchase from FPI any product that FPI offers for sale or wishes to produce. FPI does not face the same competitive requirements that private firms face, nor does it have to comply with basic minimum standards, like OSHA, that private firms face either. Left unchecked, FPI gobbles up government contracts, which destroys jobs in the private sector, at higher costs, which wastes valuable taxpayer dollars.
Over the past few years, Congress has approved some reforms to the way FPI works to give industry, their workers, and U.S. taxpayers some relief from FPI. About five years ago, the military was allowed to void FPI’s mandatory source, and award contracts through competitive bidding, if FPI met price, quality, and delivery parameters. This relief was subsequently extended to the rest of the government several years later. But reforms are still needed because FPI still maintains its mandatory source and because current law still allows it to avoid competitive bidding in many circumstances.
AAFA on the Issue:
AAFA supports permanent and comprehensive FPI reform to make the agency more accountable and subject to greater and more effective oversight in order to level the playing field for U.S. contractors by requiring the same price, quality and delivery time requirements met by the private sector. Competition from prison labor continues to take the jobs of law-abiding U.S. citizens—despite statutory mandates to the contrary. In the textile, footwear and apparel industries, this phenomenon has hit particularly hard. A few years ago, more than 22,000 workers supplied the U.S. military’s apparel needs. Today, that number is less than 13,000 and declining.
Status:
In early 2008, President Bush signed the 2008 Defense Authorization bill, which includes Section 827 (formerly Section 824) that modifies Federal Prison Industries’ (FPI) competition requirements. Specifically, the provision mandates that, if FPI has more than 5% of the DOD market, any DOD purchase from Federal Prison Industries (FPI) must compete and bid like any other contractor. AAFA and its member companies are very thankful to Senator Carl Levin (D-MI), Representative Pete Hoekstra (R-MI) and their colleagues for their diligence in working to keep this provision so important to the domestic manufacturing industry of apparel and footwear products.
Unfortunately, earlier this year when the Defense Department issued its regulations listing the items covered by the law, clothing and textiles were not included despite record increases in FPI’s revenue between 2006 and 2007 in clothing and textiles. In response to that ruling, AAFA submitted comments expressing disappointment that Clothing and Textiles were not included and ask that they be added to list of items meeting the definition and intent of the law.
What's Next:
AAFA will continue to push the new Administration and Congress for comprehensive FPI reform that levels the playing field for America’s military clothing, footwear and textile manufacturing base.
More Information: Kurt Courtney, Manager, Government Relations, 703-797-9034
The Latest News:
02.04.08
Last week, the President signed the 2008 Defense Authorization bill into law, which includes Section 827 (formerly Section 824) that modifies Federal Prison Industries’ (FPI) competition requirements. Specifically, the provision mandates that, if FPI has more than 5% of the DOD market, any DOD purchase from Federal Prison Industries (FPI) must compete and bid like any other contract. AAFA and its member companies are very thankful to Senator Carl Levin (D-MI), Representative Pete Hoekstra (R-MI) and their colleagues for their diligence in working to keep this provision so important to the domestic manufacturing industry of apparel and footwear products.
11.19.07
House and Senate Conferees to the 2008 National Defense Authorization Act reached agreement to retain Section 824, which mandates that any DOD purchase from Federal Prison Industries (FPI) must now be bid like any other contract, if FPI has more than 5% of the DOD market. AAFA has been steadfastly expressing its support for this provision for the past several weeks. Earlier this year, AAFA sent a letter to each Senator highlighting the importance of this reform. AAFA followed up that letter with another alert to each member of the Senate asking them to oppose any and all efforts to strip Section 824 from the underlying legislation. Most recently, AAFA joined several other groups in yet another note, this time, to House Armed Services Chairman Ike Skelton (D-MO) and Ranking Member Duncan Hunter (R-CA), requesting that Section 824 be kept in the underlying legislation as they entered conference committee with their Senate counterparts.
AAFA and its member companies are very thankful to Senator Carl Levin (D-MI), Representative Pete Hoekstra (R-MI) and their colleagues for their diligence in working to keep this provision so important to the domestic manufacturing industry of apparel and footwear products.
07.30.07
As a member of the Federal Prison Industries (FPI) Competition in Contracting Coalition, AAFA joined other industries in sending a letter to each United States Senator last week, asking for their support for Section 824 in the Senate FY08 National Defense Authorization bill. Section 824 would modify Section 2410n of title 10, United States Code, by mandating that any DOD purchase from FPI now must be bid like any other contract, if FPI has more than 5% of the DOD market.
Section 2410n, first added by the National Defense Authorization Act for Fiscal Year 2002, gave federal managers and their contracting officers reasonable tools in dealing with FPI, despite its continued preferential status as a mandatory source of supply. Section 2410n empowered federal buyers to conduct market research on those products available from private sector suppliers and compare it to FPI products in terms of quality, price and time of delivery. If a contracting officer determines that a better value can be obtained from the private sector, then the purchase must be made using competitive contracting procedures.
It is unclear when the legislation will come up for a final vote. Nevertheless, AAFA continues to monitor the progress on the FY08 National Defense Authorization bill and will work diligently to spread the word on the importance of fair and competitive bidding processes for our industries and fight against any amendments that may seek to strip Section 824 from the bill. AAFA members are encouraged to contact their senators in support of this provision.
07.27.07
AAFA President and CEO Kevin M. Burke wrote a letter this morning to Senators debating an annual Defense authorization bill to express strong support for a provision in that bill that would create more opportunities for private contractors to compete for government business against Federal Prison Industries (FPI).
Under current law, the Department of Defense (DoD) can still buy sole-source from FPI if it chooses to do so. Under the new provision (Section 824), DoD would be required to submit the contract to open competitive bidding procedures if it has more than a 5 percent share of the market for any given product.
AAFA members are encouraged to lobby their own Senators to express support for Section 824 by sending an email through the AAFA Legislative Action Center.
|
