[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2758 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2758

     To amend title 18, United States Code, to minimize the unfair 
   competition for Federal contracting opportunities between Federal 
    Prison Industries and private firms (especially small business 
   concerns), to provide to Federal agencies in their dealings with 
 Federal Prison Industries the contract administration tools generally 
 available to assure quality performance by their other suppliers, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 29, 1997

  Mr. Hoekstra (for himself, Mr. Frank of Massachusetts, Mr. Collins, 
  Mrs. Maloney of New York, Mr. Hilleary, Mr. Schumer, Mr. Coble, Mr. 
Clay, Mr. Bartlett of Maryland, Mr. Hamilton, Mr. Deal of Georgia, Mr. 
 Torres, Mr. Manzullo, Mr. DeFazio, Mr. Stump, Mr. Ehlers, Mr. Oxley, 
  Mr. Hefley, Mr. Taylor of North Carolina, Mr. Ewing, Mr. Upton, Mr. 
 Everett, Mr. English of Pennsylvania, Mr. Chambliss, Mr. Linder, Mr. 
  Nethercutt, Mr. Crane, Mr. Riggs, Mr. Hostettler, Mrs. Emerson, Mr. 
     Bilbray, Mr. Burr of North Carolina, Mr. Knollenberg, and Mr. 
  Ballenger) introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
     To amend title 18, United States Code, to minimize the unfair 
   competition for Federal contracting opportunities between Federal 
    Prison Industries and private firms (especially small business 
   concerns), to provide to Federal agencies in their dealings with 
 Federal Prison Industries the contract administration tools generally 
 available to assure quality performance by their other suppliers, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Prison Industries 
Competition in Contracting Act of 1997''.

SEC. 2. GOVERNMENT-WIDE PROCUREMENT POLICY RELATING TO PURCHASES FROM 
              FEDERAL PRISON INDUSTRIES.

    Section 4124 of title 18, United States Code, is amended to read as 
follows:
``Sec. 4124. Government-wide procurement policy relating to purchases 
              from Federal Prison Industries
    ``(a) In General.--Purchases from Federal Prison Industries, 
Incorporated, a wholly owned Government corporation, as defined in 
section 9101(3)(E) of title 31, may be made by a Federal department or 
agency only in accordance with this section.
    ``(b) Solicitation and Evaluation of Offers and Contract Awards.--
(1) When a procurement activity of a Federal department or agency has a 
requirement for a specific product or service that is authorized to be 
offered for sale by Federal Prison Industries (in accordance with 
section 4122 of this title) and is listed in the catalog referred to in 
subsection (h), the procurement activity shall solicit an offer from 
Federal Prison Industries, if the purchase is expected to be in excess 
of the micro-purchase threshold as defined by section 32(f) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 428(f)).
    ``(2) A contract award for such product or service shall be made 
using competitive procedures in accordance with the specifications and 
evaluation factors specified in the solicitation (or other request for 
offers), unless a determination is made by the Attorney General 
pursuant to paragraph (3).
    ``(3) The procurement activity shall negotiate with Federal Prison 
Industries on a noncompetitive basis for the award of a contract if the 
Attorney General determines that--
            ``(A) Federal Prison Industries cannot reasonably expect to 
        receive the contract award on a competitive basis; and
            ``(B) the contract award is necessary to maintain work 
        opportunities otherwise unavailable at the penal or 
        correctional facility at which the contract is to be performed 
        to prevent circumstances that could reasonably be expected to 
        significantly endanger the safe and effective administration of 
        such facility.
    ``(4) A contract award shall be made with Federal Prison Industries 
if the contracting officer for the procurement activity determines 
that--
            ``(A) the prison-made product or service to be furnished 
        will meet the requirements of the procurement activity 
        (including any applicable prequalification requirements and all 
        specified commercial or governmental standards pertaining to 
        quality, testing, safety, serviceability, and warranties);
            ``(B) timely performance of the contract can be reasonably 
        expected; and
            ``(C) the contract price does not exceed a current market 
        price.
    ``(5) A determination by the Attorney General pursuant to paragraph 
(3) shall be--
            ``(A) supported by specific findings by the warden of the 
        penal or correctional institution at which a Federal Prison 
        Industries workshop is scheduled to perform the contract;
            ``(B) supported by specific findings by Federal Prison 
        Industries regarding why it does not expect to win the contract 
        on a competitive basis; and
            ``(C) made and reported in the same manner as a 
        determination made pursuant to section 303(c)(7) of the Federal 
        Property and Administrative Services Act of 1949 (41 U.S.C. 
        253(c)(7)).
    ``(6) If the Attorney General has not made the determination 
described in paragraph (3) within 30 days after Federal Prison 
Industries has been informed of a contracting opportunity by a 
procurement activity, the procurement activity shall conduct a 
procurement for the product in accordance with the procedures generally 
applicable to such procurements by the procurement activity.
    ``(c) Competitive Offers From Federal Prison Industries.--A timely 
offer from Federal Prison Industries shall be eligible for award in 
accordance with the specification and evaluation factors specified in 
any competitive solicitation.
    ``(d) Performance by Federal Prison Industries.--Federal Prison 
Industries shall be required to perform its contractual obligations 
under a contract awarded by a Federal department or agency to the same 
extent as any other contractor under such a contract.
    ``(e) Finality of Contracting Officer's Decision.--(1) A decision 
by a contracting officer regarding the award of a contract to Federal 
Prison Industries or relating to the performance of such contract shall 
be final, unless reversed on appeal pursuant to paragraph (2) or (3).
    ``(2) The Chief Executive Officer of Federal Prison Industries may 
appeal to the head of a Federal department or agency a decision by a 
contracting officer not to award a contract to Federal Prison 
Industries pursuant to subsection (b)(4). The decision of the head of a 
Federal department or agency on appeal shall be final.
    ``(3) A dispute between Federal Prison Industries and a procurement 
activity regarding performance of a contract shall be subject to--
            ``(A) alternative means of dispute resolution pursuant to 
        subchapter IV of title 5; or
            ``(B) final resolution by the board of contract appeals 
        having jurisdiction over the procurement activity's contract 
        performance disputes pursuant to the Contract Disputes Act of 
        1978 (41 U.S.C. 601 et seq.).
    ``(f) Reporting of Purchases.--Each Federal department or agency 
shall report purchases from Federal Prison Industries to the Federal 
Procurement Data System (as referred to in section 6(d)(4) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 
same manner as it reports to such System any acquisition in an amount 
in excess of the simplified acquisition threshold (as defined by 
section 4(11) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(11))).
    ``(g) Catalog of Products.--Federal Prison Industries shall publish 
and maintain a catalog of all specific products and services that it is 
authorized to offer for sale. Such catalog shall be periodically 
revised as products and services are added or deleted by its board of 
directors (in accordance with section 4122(b) of this title).''.

SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION PROPOSALS BY FEDERAL 
              PRISON INDUSTRIES.

    Section 4122(b) of title 18, United States Code, is amended --
            (1) by redesignating paragraph (6) as paragraph (10); and
            (2) by striking paragraphs (4) and (5) and inserting the 
        following paragraphs:
    ``(4) A decision to authorize Federal Prison Industries to offer a 
new specific product or service or to expand the production of an 
existing product or service shall be made by its board of directors in 
conformance with the requirements of subsections (b), (c), (d), and (e) 
of section 553 of title 5, and this chapter.
    ``(5)(A) The corporation shall prepare and furnish to the board of 
directors for its consideration a detailed analysis of the probable 
impact on private sector firms and their employees of a proposal to 
authorize the sale of a new specific product or service or to expand 
production of a currently authorized product or service.
    ``(B) The analysis made pursuant to subparagraph (A) shall identify 
and consider--
            ``(i) the number of vendors that currently meet the 
        requirements of the Federal Government for the specific product 
        or service;
            ``(ii) the proportion of the Federal Government market for 
        the specific product or service currently furnished by small 
        businesses during the previous 3 fiscal years;
            ``(iii) the share of the Federal market for the specific 
        product or service projected for Federal Prison Industries for 
        the fiscal year in which production or performance will 
        commence (or expand) and the subsequent 3 fiscal years;
            ``(iv) whether the industry producing the product in the 
        private sector--
                    ``(I) has an unemployment rate higher than the 
                national average;
                    ``(II) has a rate of employment for production 
                workers that has consistently shown an increase during 
                the previous 5 years; or
                    ``(III) has an import to domestic production ratio 
                of 25 percent or greater;
            ``(v) the total volume of domestic production during each 
        of the 5 previous years in the industry producing the specific 
        product in the private sector;
            ``(vi) whether the specific product is an import-sensitive 
        product;
            ``(vii) the requirements of the Federal Government and the 
        demands of entities other than the Federal Government for the 
        specific product or service during the previous 3 fiscal years;
            ``(viii) the projected growth (or decline) in the demand of 
        the Federal Government for the specific product or service;
            ``(ix) the capability of the projected demand of the 
        Federal Government for the specific product or service to 
        sustain both Federal Prison Industries and private vendors; and
            ``(x) whether authorizing the production of the new product 
        or performance of a new service will provide inmates with the 
        maximum opportunity to acquire knowledge and skill in trades 
        and occupations that will provide them with a means of earning 
        a livelihood upon release.
    ``(C)(i) The board of directors may not approve a proposal to 
authorize the production and sale of a new specific product (or 
continued sales of a previously authorized product) unless the product 
to be furnished is a prison-made product.
    ``(ii) The board of directors may not approve a proposal to 
authorize the production and sale of a new prison-made product or to 
expand production of a currently authorized product if the product is--
            ``(I) produced in the private sector by an industry which 
        has reflected during the previous year an unemployment rate 
        above the national average; or
            ``(II) an import-sensitive product.
    ``(iii)(I) Federal Prison Industries is prohibited from furnishing 
construction services relating to buildings, structures, or other real 
property.
    ``(II) For purposes of this clause, the term `construction' has the 
meaning given such term by section 36.102 of the Federal Acquisition 
Regulation (48 C.F.R. part 36.102), as in effect on July 1, 1997 
(including the repair, alteration, or maintenance of real property in 
being).
    ``(6) To provide further opportunities for participation by 
interested parties, the board of directors shall--
            ``(A) give additional notice of a proposal to authorize the 
        production and sale of a new product or expand the production 
        of a currently authorized product in a publication designed to 
        most effectively provide notice to private vendors and labor 
        unions representing private sector workers who could reasonably 
        be expected to be affected by approval of the proposal, which 
        notice shall offer to furnish copies of the analysis required 
        by paragraph (5) and shall solicit comment on the analysis;
            ``(B) solicit comments on the analysis required by 
        paragraph (5) from trade associations representing vendors and 
        labor unions representing private sector workers who could 
        reasonably be expected to be affected by approval of the 
        proposal to authorize the production and sale of a new product 
        or expand the production of a currently authorized product; and
            ``(C) afford an opportunity, on request, for a 
        representative of an established trade association, labor 
        union, or other representatives of private industry to present 
        comments on the proposal directly to the board of directors.
    ``(7) The corporation shall provide to the board of directors its 
recommendation regarding action on the proposal taking into 
consideration the comments received.
    ``(8) The board of directors shall consider a proposal to authorize 
the sale of a new product or service (or to modify the volume of sales 
for a currently authorized product or service) and take any action with 
respect to such proposal, during a meeting that is open to the public, 
unless closed pursuant to section 5526 of title 5.
    ``(9) In conformity with the requirements of paragraphs (5) through 
(8) of this subsection, the board of directors may--
            ``(A) authorize the donation of products produced by 
        Federal industries and available for sale; or
            ``(B) authorize the production of a new specific product 
        for donation.''.

SEC. 4. FEDERAL PRISON INDUSTRIES REPORT TO CONGRESS.

    Section 4127 of title 18, United States Code, is amended to read as 
follows:
``Sec.  4127. Federal Prison Industries report to Congress
    ``(a) In General.--Pursuant to chapter 91 of title 31, the board of 
directors of Federal Prison Industries shall submit an annual report to 
Congress on the conduct of the business of the corporation during each 
fiscal year and the condition of its funds during the fiscal year.
    ``(b) Contents of Report.--In addition to the matters required by 
section 9106 of title 31, and such other matters as the board considers 
appropriate, a report under subsection (a) shall include--
            ``(1) a statement of the amount of obligations issued under 
        section 4129(a)(1) of this title during the fiscal year;
            ``(2) an estimate of the amount of obligations that will be 
        issued in the following fiscal year;
            ``(3) an analysis of--
                    ``(A) the corporation's total sales for each 
                specific product sold to the Federal departments and 
                agencies;
                    ``(B) the total purchases by each Federal 
                department or agency of each specific product;
                    ``(C) the corporation's share of such total Federal 
                Government purchases by specific product; and
                    ``(D) the number and disposition of disputes 
                submitted to the heads of the Federal departments and 
                agencies pursuant to section 4124(e) of this title;
            ``(4) an analysis of the inmate workforce that includes--
                    ``(A) the number of inmates employed;
                    ``(B) the number and percentage of employed inmates 
                by the term of their incarceration; and
                    ``(C) the various hourly wages paid to inmates 
                employed with respect to the production of the various 
                specific products authorized for production and sale; 
                and
            ``(5) data concerning employment obtained by former inmates 
        upon release to determine whether the employment provided by 
        Federal Prison Industries during incarceration provided such 
        inmates with knowledge and skill in a trade or occupation that 
        enabled such former inmate to earn a livelihood upon release.
    ``(c) Public Availability.--Copies of an annual report under 
subsection (a) shall be made available to the public at a price not 
exceeding the cost of printing the report.''.

SEC. 5. DEFINITIONS.

    Chapter 307 of title 18, United States Code, is amended by adding 
at the end the following new section:
``Sec.  4130. Definitions
    ``As used in this chapter--
            ``(1) the term `assembly' means the process of uniting or 
        combining articles or components (including ancillary finished 
        components or assemblies) so as to produce a significant change 
        in form or utility, without necessarily changing or altering 
        the component parts;
            ``(2) the term `current market price' means, with respect 
        to a specific product, the fair market price of the product 
        within the meaning of section 15(a) of the Small Business Act 
        (15 U.S.C. 644(a)), at the time that the contract is to be 
        awarded (verified through appropriate price analysis or cost 
        analysis), including any costs relating to transportation or 
        the furnishing of any ancillary services;
            ``(3) the term `import-sensitive product' means a product 
        which, according to Department of Commerce data, has 
        experienced competition from imports at an import to domestic 
        production ratio of 25 percent or greater;
            ``(4) the term `labor-intensive manufacture' means a 
        manufacturing activity in the private sector in which the ratio 
        of the value of direct labor to the value of the product prior 
        to shipment exceeds 20 percent;
            ``(5) the term `manufacture' means the process of 
        fabricating from raw or prepared materials, so as to impart to 
        those materials new forms, qualities, properties, and 
        combinations;
            ``(6) the term `prison-made products' means specific 
        products that require labor-intensive manufacture or assembly 
        employing Federal prison inmates for not less than 75 percent 
        of the hours of direct labor required for the production of the 
        product;
            ``(7) the term `reasonable share of the market' means a 
        share of the total purchases by the Federal departments and 
        agencies, as reported to the Federal Procurement Data System 
        for any specific product during the 3 preceding fiscal years, 
        that does not exceed 20 percent of the Federal market for the 
        specific product;
            ``(8) the term `services' has the meaning given the term 
        `service contract' by section 37.101 of the Federal Acquisition 
        Regulation (48 C.F.R. part 36.102), as in effect on July 1, 
        1997; and
            ``(9) the term `specific product' means a product that is 
        designed and manufactured to meet requirements distinct in 
        function and predominant material of manufacture from another 
        product, as described by--
                    ``(A) the 7-digit classification for the product in 
                the Standard Industrial Classification (SIC) Code (or 
                any successor classification system) published by the 
                Office of Management and Budget (or if there is no 7-
                digit code classification for a product, the 5-digit 
                code classification); and
                    ``(B) for purposes of reporting on sales by Federal 
                Prison Industries, the current National Stock Number 
                assigned to such product under the Federal Stock 
                Classification System (including group, part number and 
                section), as determined by the General Services 
                Administration.''.

SEC. 6. IMPLEMENTATION IN THE FEDERAL ACQUISITION REGULATION.

    (a) Proposed Revisions.--Proposed revisions to the Government-wide 
Federal Acquisition Regulation to implement the amendments made by this 
Act shall be published not later than 60 days after the date of the 
enactment of this Act and provide not less than 60 days for public 
comment.
    (b) Final Regulations.--Final regulations shall be published not 
later than 180 days after the date of the enactment of this Act and 
shall be effective on the date that is 30 days after the date of 
publication.
    (c) Public Participation.--The proposed regulations required by 
subsection (a) and the final regulations required by subsection (b) 
shall afford an opportunity for public participation in accordance with 
section 22 of the Office of Federal Procurement Policy Act (41 U.S.C. 
418b).

SEC. 7. RULE OF CONSTRUCTION.

    Subsection (e) of section 4124 of title 18, United States Code, as 
amended by section 2, is not intended to alter any rights of any 
offeror other than Federal Prison Industries to file a bid protest in 
accordance with other law or regulation in effect on the date of the 
enactment of this Act.

SEC. 8. EFFECTIVE DATE AND APPLICABILITY.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on the date of 
enactment of this Act.
    (b) Applicability.--Section 4124 of title 18, United States Code, 
as amended by section 2, shall apply to any requirement for a product 
or service offered by Federal Prison Industries needed by a Federal 
department or agency after the effective date of the final regulations 
issued pursuant to section 6(b), or after June 30, 1998, whichever is 
earlier.

SEC. 9. CLERICAL AMENDMENTS.

    The table of sections for chapter 307 of title 18, United States 
Code, is amended--
            (1) by inserting in lieu of the item relating to section 
        4124 the following:

``4124. Government-wide procurement policy relating to purchases from 
                            Federal Prison Industries.'';
            (2) by inserting in lieu of the item relating to section 
        4127 the following:

``4127. Federal Prison Industries report to Congress.'';
        and
            (3) by adding at the end the following new item:

``4130. Definitions.''.
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