[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2965 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2965

   To amend title 18, United States Code, to require Federal Prison 
     Industries to compete for its contracts minimizing its unfair 
competition with private sector firms and their non-inmate workers and 
   empowering Federal agencies to get the best value for taxpayers' 
  dollars, to provide a five-year period during which Federal Prison 
Industries adjusts to obtaining inmate work opportunities through other 
than its mandatory source status, to enhance inmate access to remedial 
and vocational opportunities and other rehabilitative opportunities to 
better prepare inmates for a successful return to society, to authorize 
    alternative inmate work opportunities in support of non-profit 
    organizations and other public service programs, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 17, 2005

 Mr. Hoekstra (for himself, Mr. Frank of Massachusetts, Mrs. Maloney, 
 Mr. Sensenbrenner, Mr. Conyers, Mr. Coble, Mr. Manzullo, Mr. Nadler, 
 Mr. Ehlers, Mr. Tom Davis of Virginia, Mr. Dingell, Mr. Jenkins, Mr. 
  Everett, Mr. Rangel, Mr. Hostettler, Mr. Feeney, Mr. Kingston, Ms. 
  Baldwin, Mr. Inglis of South Carolina, Mr. Upton, Mr. Emanuel, Mr. 
   Bartlett of Maryland, Mr. Knollenberg, Mr. Forbes, Mr. Flake, Mr. 
Sessions, Mr. Olver, Mr. LoBiondo, Mrs. Myrick, Mr. Royce, Mr. Lantos, 
Mr. McGovern, Mr. Pence, Mr. Souder, Mr. Camp, Mr. Doyle, Mr. Boehner, 
Mr. Ney, Mr. Carter, Mr. Nussle, Mr. Weiner, Mr. Norwood, Mr. Rogers of 
  Michigan, Mr. Brady of Pennsylvania, Mr. Duncan, Mr. McCotter, Mr. 
McKeon, Ms. Hart, Mr. Kucinich, Mr. Thornberry, Mr. Ryan of Wisconsin, 
   Mr. Latham, Mrs. Miller of Michigan, Mr. Leach, Mr. Shadegg, Ms. 
  Woolsey, Mrs. Blackburn, Mr. Culberson, Mr. Gingrey, Mr. Terry, Mr. 
   Wamp, Mr. Ferguson, Mrs. Musgrave, Mr. Chocola, Mr. Beauprez, Mr. 
  Porter, Mr. Osborne, Mr. Tiberi, Mrs. Biggert, Mr. Wilson of South 
  Carolina, Mr. Shuster, Mr. Moran of Kansas, Mr. Hayes, Mr. King of 
  Iowa, Mrs. Wilson of New Mexico, Mr. Barrett of South Carolina, Mr. 
   Platts, and Mr. Cantor) introduced the following bill; which was 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend title 18, United States Code, to require Federal Prison 
     Industries to compete for its contracts minimizing its unfair 
competition with private sector firms and their non-inmate workers and 
   empowering Federal agencies to get the best value for taxpayers' 
  dollars, to provide a five-year period during which Federal Prison 
Industries adjusts to obtaining inmate work opportunities through other 
than its mandatory source status, to enhance inmate access to remedial 
and vocational opportunities and other rehabilitative opportunities to 
better prepare inmates for a successful return to society, to authorize 
    alternative inmate work opportunities in support of non-profit 
    organizations and other public service programs, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Prison 
Industries Competition in Contracting Act of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Governmentwide procurement policy relating to purchases from 
                            Federal Prison Industries.
Sec. 3. Public participation regarding expansion proposals by Federal 
                            Prison Industries.
Sec. 4. Transitional mandatory source authority.
Sec. 5. Authority to perform as a Federal subcontractor.
Sec. 6. Inmate wages and deductions.
Sec. 7. Clarifying amendment relating to services.
Sec. 8. Conforming amendment.
Sec. 9. Rules of construction relating to chapter 307.
Sec. 10. Providing additional rehabilitative opportunities for inmates.
Sec. 11. Restructuring the Board of Directors.
Sec. 12. Providing additional management flexibility to Federal Prison 
                            Industries operations.
Sec. 13. Transitional personnel management authority.
Sec. 14. Federal Prison Industries report to Congress.
Sec. 15. Independent study to determine the effects of eliminating the 
                            Federal Prison Industries mandatory source 
                            authority.
Sec. 16. Sense of Congress.
Sec. 17. Definitions.
Sec. 18. Implementing regulations and procedures.
Sec. 19. Rules of construction.
Sec. 20. Effective date and applicability.
Sec. 21. Clerical amendments.

SEC. 2. GOVERNMENTWIDE 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. Governmentwide procurement policy relating to purchases 
              from Federal Prison Industries
    ``(a) In General.--Purchases from Federal Prison Industries, 
Incorporated, a wholly owned Government corporation, as referred to 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) If 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 (g), 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 applicable 
evaluation factors, unless a determination is made by the Attorney 
General pursuant to paragraph (3) or an award using other than 
competitive procedures is authorized pursuant to paragraph (7).
    ``(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 
        fair consideration 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) Except in the case of an award to be made pursuant to 
paragraph (3), a contract award shall be made with Federal Prison 
Industries only if the contracting officer for the procurement activity 
determines that--
            ``(A) the specific 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 may proceed to conduct a 
procurement for the product or service in accordance with the 
procedures generally applicable to such procurements by the procurement 
activity.
    ``(7) A contract award may be made to Federal Prison Industries 
using other than competitive procedures if such product or service is 
only available from Federal Prison Industries and the contract may be 
awarded under the authority of section 2304(c)(1) of title 10 or 
section 303(c) of the Federal Property and Administrative Services Act 
of 1949 (41 U.S.C. 252(c)(1)), as may be applicable, and pursuant to 
the justification and approval requirements relating to such 
noncompetitive procurements specified by law and the Governmentwide 
Federal Acquisition Regulation.
    ``(8) A contract award may be made to Federal Prison Industries 
using other than competitive procedures by the Federal Bureau of 
Prisons.
    ``(9) A contract award may be made to Federal Prison Industries 
using other than competitive procedures if the product or service to be 
acquired would otherwise be furnished by a contractor preforming the 
work outside of the United States.
    ``(c) Offers From Federal Prison Industries.--A timely offer 
received from Federal Prison Industries to furnish a product or service 
to a Federal department or agency shall be considered for award without 
limitation as to the dollar value of the proposed purchase, unless the 
contract opportunity has been reserved for competition exclusively 
among small business concerns pursuant to section 15(a) of the Small 
Business Act (15 U.S.C. 644(a)) and its implementing regulations.
    ``(d) Performance by Federal Prison Industries.--Federal Prison 
Industries shall perform its contractual obligations under a contract 
awarded by a Federal department or agency to the same extent as any 
other contractor.
    ``(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 chapter 5 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).
    ``(h) Compliance With Standards.--Federal Prison Industries shall 
be subject to Federal occupational, health, and safety standards with 
respect to the operation of its industrial operations.''.

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 (12); and
            (2) by striking paragraphs (4) and (5) and inserting the 
        following new paragraphs:
    ``(4) A decision to authorize Federal Prison Industries to offer a 
new specific product or specific 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) Whenever Federal Prison Industries proposes to offer for 
sale a new specific product or specific service or to expand production 
of a currently authorized product or service, the Chief Operating 
Officer of Federal Prison Industries shall submit an appropriate 
proposal to the board of directors and obtain the board's approval 
before initiating any such expansion. The proposal submitted to the 
board shall include a detailed analysis of the probable impact of the 
proposed expansion of sales within the Federal market by Federal Prison 
Industries on private sector firms and their non-inmate workers.
    ``(B)(i) The analysis required by subparagraph (A) shall be 
performed by an interagency team on a reimbursable basis or by a 
private contractor paid by Federal Prison Industries.
    ``(ii) If the analysis is to be performed by an interagency team, 
such team shall be led by the Administrator of the Small Business 
Administration or the designee of such officer with representatives of 
the Department of Labor, the Department of Commerce, and the Federal 
Procurement Data Center.
    ``(iii) If the analysis is to be performed by a private contractor, 
the selection of the contractor and the administration of the contract 
shall be conducted by one of the entities referenced in clause (ii) as 
an independent executive agent for the board of directors. Maximum 
consideration shall be given to any proposed statement of work 
furnished by the Chief Operating Officer of Federal Prison Industries.
    ``(C) The analysis required by 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 specific service;
            ``(ii) the proportion of the Federal Government market for 
        the specific product or specific service currently furnished by 
        small businesses during the previous 3 fiscal years;
            ``(iii) the share of the Federal market for the specific 
        product or specific service projected for Federal Prison 
        Industries for the fiscal year in which production or 
        performance will commence or expand and the subsequent 4 fiscal 
        years;
            ``(iv) whether the industry producing the specific product 
        or specific service in the private sector--
                    ``(I) has an unemployment rate higher than the 
                national average; or
                    ``(II) has a rate of unemployment for workers that 
                has consistently shown an increase during the previous 
                5 years;
            ``(v) whether the specific product is an import-sensitive 
        product;
            ``(vi) 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;
            ``(vii) the projected growth or decline in the demand of 
        the Federal Government for the specific product or specific 
        service;
            ``(viii) 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
            ``(ix) 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.
    ``(D)(i) The board of directors may not approve a proposal to 
authorize the production and sale of a new specific product or 
continued sale of a previously authorized product unless--
            ``(I) the product to be furnished is a prison-made product; 
        or
            ``(II) the service to be furnished is to be performed by 
        inmate workers.
    ``(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) The board of directors may not approve a proposal for 
inmates to provide a service in which an inmate worker has access to--
            ``(I) personal or financial information about individual 
        private citizens, including information relating to such 
        person's real property, however described, without giving prior 
        notice to such persons or class of persons to the greatest 
        extent practicable;
            ``(II) geographic data regarding the location of surface 
        and subsurface infrastructure providing communications, water 
        and electrical power distribution, pipelines for the 
        distribution of natural gas, bulk petroleum products and other 
        commodities, and other utilities; or
            ``(III) data that is classified.
    ``(iv)(I) Federal Prison Industries is prohibited from furnishing 
through inmate labor construction services, unless to be performed 
within a Federal correctional institution pursuant to the participation 
of an inmate in an apprenticeship or other vocational education program 
teaching the skills of the various building trades.
    ``(II) For purposes of this clause, the term `construction' has the 
meaning given such term by section 2.101 of the Federal Acquisition 
Regulation (48 C.F.R. part 2.101), as in effect on June 1, 2004, 
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 service, or expand the 
        production of a currently authorized product or service, 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 service (or expand the production of a currently authorized 
        product or service); and
            ``(C) afford an opportunity, on request, for a 
        representative of an established trade association, labor 
        union, or other private sector representatives to present 
        comments on the proposal directly to the board of directors.
    ``(7) The board of directors shall be provided copies of all 
comments received on the expansion proposal.
    ``(8) Based on the comments received on the initial expansion 
proposal, the Chief Operating Officer of Federal Prison Industries may 
provide the board of directors a revised expansion proposal. If such 
revised proposal provides for expansion of inmate work opportunities in 
an industry different from that initially proposed, such revised 
proposal shall reflect the analysis required by paragraph (5)(C) and be 
subject to the public comment requirements of paragraph (6).
    ``(9) The board of directors shall consider a proposal to authorize 
the sale of a new specific product or specific service (or to expand 
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 552(b) of title 
5.
    ``(10) In conformity with the requirements of paragraphs (5) 
through (9) of this subsection, the board of directors may--
            ``(A) authorize the donation of products produced or 
        services furnished by Federal industries and available for 
        sale;
            ``(B) authorize the production of a new specific product or 
        the furnishing of a new specific service for donation; or
            ``(C) authorize a proposal to expand production of a 
        currently authorized specific product or specific service in an 
        amount in excess of a reasonable share of the market for such 
        product or service, if--
                    ``(i) a Federal agency or department, purchasing 
                such product or service, has requested that Federal 
                Prison Industries be authorized to furnish such product 
                or service in amounts that are needed by such agency or 
                department; or
                    ``(ii) the proposal is justified for other good 
                cause and supported by at least eight members of the 
                board.''.

SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY.

    (a) In General.--Notwithstanding the requirements of section 4124 
of title 18, United States Code (as amended by section 2 of this Act), 
a Federal department or agency having a requirement for a product that 
is authorized for sale by Federal Prison Industries and is listed in 
its catalog (referred to in section 4124(g) of title 18, United States 
Code) shall first solicit an offer from Federal Prison Industries and 
make purchases on a noncompetitive basis in accordance with this 
section or in accordance with section 2410n of title 10, United States 
Code, or section 318 of title III of the Federal Property and 
Administrative Services Act of 1949 (as added by subsection (i)).
    (b) Preferential Source Status.--Subject to the limitations of 
subsection (d), a contract award shall be made on a noncompetitive 
basis to Federal Prison Industries if the contracting officer for the 
procurement activity determines that--
            (1) the product offered by Federal Prison Industries will 
        meet the requirements of the procurement activity (including 
        commercial or governmental standards or specifications 
        pertaining to design, performance, testing, safety, 
        serviceability, and warranties as may be imposed upon a private 
        sector supplier of the type being offered by Federal Prison 
        Industries);
            (2) timely performance of the contract by Federal Prison 
        Industries can be reasonably expected; and
            (3) the negotiated price does not exceed a fair and 
        reasonable price.
    (c) Contractual Terms.--The terms and conditions of the contract 
and the price to be paid to Federal Prison Industries shall be 
determined by negotiation between Federal Prison Industries and the 
Federal agency making the purchase. The negotiated price shall not 
exceed a fair and reasonable price determined in accordance with the 
procedures of the Federal Acquisition Regulation.
    (d) Performance of Contractual Obligations.--
            (1) In general.--Federal Prison Industries shall perform 
        the obligations of the contract negotiated pursuant to 
        subsection (c).
            (2) Performance disputes.--If the head of the contracting 
        activity and the Chief Operating Officer of Federal Prison 
        Industries are unable to resolve a contract performance dispute 
        to their mutual satisfaction, such dispute shall be resolved 
        pursuant to section 4124(e)(3) of title 18, United States Code 
        (as added by section 2 of this Act).
    (e) Limitations on Use of Authority.--
            (1) In general.--As a percentage of the sales made by 
        Federal Prison Industries during the base period, the total 
        dollar value of sales to the Government made pursuant to 
        subsection (b) and subsection (c) of this section shall not 
        exceed--
                    (A) 90 percent in fiscal year 2007;
                    (B) 85 percent in fiscal year 2008;
                    (C) 70 percent in fiscal year 2009;
                    (D) 55 percent in fiscal year 2010; and
                    (E) 40 percent in fiscal year 2011.
            (2) Sales within various business sectors.--Use of the 
        authority provided by subsections (b) and (c) shall not result 
        in sales by Federal Prison Industries to the Government that 
        are in excess of its total sales during the base year for each 
        business sector.
            (3) Limitations relating to specific products.--Use of the 
        authorities provided by subsections (b) and (c) shall not 
        result in contract awards to Federal Prison Industries that are 
        in excess of its total sales during the base period for such 
        product.
            (4) Changes in design specifications.--The limitations on 
        sales specified in paragraphs (2) and (3) shall not be affected 
        by any increases in the unit cost of production of a specific 
        product arising from changes in the design specification of 
        such product directed by the buying agency.
    (f) Duration of Authority.--The preferential contracting 
authorities authorized by subsection (b) may not be used on or after 
October 1, 2011, and become effective on the effective date of the 
final regulations issued pursuant to section 18.
    (g) Definitions.--For the purposes of this section--
            (1) the term ``base period'' means the total sales of 
        Federal Prison Industries during the period October 1, 2003, 
        and September 30, 2004 (Fiscal Year 2004);
            (2) the term ``business sectors'' means the eight product/
        service business groups identified in the 2002 Federal Prison 
        Industries annual report as the Clothing and Textiles Business 
        Group, the Electronics Business Group, the Fleet Management and 
        Vehicular Components Business Group, the Graphics Business 
        Group, the Industrial Products Business Group, the Office 
        Furniture Business Group, the Recycling Activities Business 
        Group, and the Services Business Group; and
            (3) the term ``fair and reasonable price'' shall be given 
        the same meaning as, and be determined pursuant to, part 15.8 
        of the Federal Acquisition Regulation (48 C.F.R. 15.8).
    (h) Finding by Attorney General With Respect to Public Safety.--(1) 
Not later than 60 days prior to the end of each fiscal year specified 
in subsection (e)(1), the Attorney General shall make a finding 
regarding the effects of the percentage limitation imposed by such 
subsection for such fiscal year and the likely effects of the 
limitation imposed by such subsection for the following fiscal year.
    (2) The Attorney General's finding shall include a determination 
whether such limitation has resulted or is likely to result in a 
substantial reduction in inmate industrial employment and whether such 
reductions, if any, present a significant risk of adverse effects on 
safe prison operation or public safety.
    (3) If the Attorney General finds a significant risk of adverse 
effects on either safe prison management or public safety, he shall so 
advise the Congress.
    (4) In advising the Congress pursuant to paragraph (3), the 
Attorney General shall make recommendations for additional 
authorizations of appropriations to provide additional alternative 
inmate rehabilitative opportunities and additional correctional 
staffing, as may be appropriate.
    (i) Procedural Requirements for Civilian Agencies Relating to 
Products of Federal Prison Industries.--Title III of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 251 et 
seq.) is amended by adding at the end the following new section:

``SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: PROCEDURAL 
              REQUIREMENTS.

    ``(a) Market Research.--Before purchasing a product listed in the 
latest edition of the Federal Prison Industries catalog under section 
4124(d) of title 18, United States Code, the head of an executive 
agency shall conduct market research to determine whether the Federal 
Prison Industries product is comparable to products available from the 
private sector that best meet the executive agency's needs in terms of 
price, quality, and time of delivery.
    ``(b) Competition Requirement.--If the head of the executive agency 
determines that a Federal Prison Industries product is not comparable 
in price, quality, or time of delivery to products available from the 
private sector that best meet the executive agency's needs in terms of 
price, quality, and time of delivery, the agency head shall use 
competitive procedures for the procurement of the product or shall make 
an individual purchase under a multiple award contract. In conducting 
such a competition or making such a purchase, the agency head shall 
consider a timely offer from Federal Prison Industries.
    ``(c) Implementation by Head of Executive Agency.--The head of an 
executive agency shall ensure that--
            ``(1) the executive agency does not purchase a Federal 
        Prison Industries product or service unless a contracting 
        officer of the agency determines that the product or service is 
        comparable to products or services available from the private 
        sector that best meet the agency's needs in terms of price, 
        quality, and time of delivery; and
            ``(2) Federal Prison Industries performs its contractual 
        obligations to the same extent as any other contractor for the 
        executive agency.
    ``(d) Market Research Determination not Subject to Review.--A 
determination by a contracting officer regarding whether a product or 
service offered by Federal Prison Industries is comparable to products 
or services available from the private sector that best meet an 
executive agency's needs in terms of price, quality, and time of 
delivery shall not be subject to review pursuant to section 4124(b) of 
title 18.
    ``(e) Performance as a Subcontractor.--(1) A contractor or 
potential contractor of an executive agency may not be required to use 
Federal Prison Industries as a subcontractor or supplier of products or 
provider of services for the performance of a contract of the executive 
agency by any means, including means such as--
            ``(A) a contract solicitation provision requiring a 
        contractor to offer to make use of products or services of 
        Federal Prison Industries in the performance of the contract;
            ``(B) a contract specification requiring the contractor to 
        use specific products or services (or classes of products or 
        services) offered by Federal Prison Industries in the 
        performance of the contract; or
            ``(C) any contract modification directing the use of 
        products or services of Federal Prison Industries in the 
        performance of the contract.
    ``(2) In this subsection, the term `contractor', with respect to a 
contract, includes a subcontractor at any tier under the contract.
    ``(f) Protection of Classified and Sensitive Information.--The head 
of an executive agency may not enter into any contract with Federal 
Prison Industries under which an inmate worker would have access to--
            ``(1) any data that is classified;
            ``(2) any geographic data regarding the location of--
                    ``(A) surface and subsurface infrastructure 
                providing communications or water or electrical power 
                distribution;
                    ``(B) pipelines for the distribution of natural 
                gas, bulk petroleum products, or other commodities; or
                    ``(C) other utilities; or
            ``(3) any personal or financial information about any 
        individual private citizen, including information relating to 
        such person's real property however described, without the 
        prior consent of the individual.
    ``(g) Definitions.--In this section:
            ``(1) The term `competitive procedures' has the meaning 
        given such term in section 4(5) of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403(5)).
            ``(2) The term `market research' means obtaining specific 
        information about the price, quality, and time of delivery of 
        products available in the private sector through a variety of 
        means, which may include--
                    ``(A) contacting knowledgeable individuals in 
                government and industry;
                    ``(B) interactive communication among industry, 
                acquisition personnel, and customers; and
                    ``(C) interchange meetings or pre-solicitation 
                conferences with potential offerors.''.

SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCONTRACTOR.

    (a) In General.--Federal Prison Industries is authorized to enter 
into a contract with a Federal contractor (or a subcontractor of such 
contractor at any tier) to produce products as a subcontractor or 
supplier in the performance of a Federal procurement contract. The use 
of Federal Prison Industries as a subcontractor or supplier shall be a 
wholly voluntary business decision by the Federal prime contractor or 
subcontractor, subject to any prior approval of subcontractors or 
suppliers by the contracting officer which may be imposed by the 
Federal Acquisition Regulation or by the contract.
    (b) Commercial Sales Prohibited.--The authority provided by 
subsection (a) shall not result, either directly or indirectly, in the 
sale in the commercial market of a product or service resulting from 
the labor of Federal inmate workers in violation of section 1761(a) of 
title 18, United States Code. A Federal contractor (or subcontractor at 
any tier) using Federal Prison Industries as a subcontractor or 
supplier in furnishing a commercial product pursuant to a Federal 
contract shall implement appropriate management procedures to prevent 
introducing an inmate-produced product into the commercial market.
    (c) Prohibitions on Mandating Subcontracting With Federal Prison 
Industries.--Except as authorized under the Federal Acquisition 
Regulation, the use of Federal Prison Industries as a subcontractor or 
supplier of products or provider of services shall not be imposed upon 
prospective or actual Federal prime contractors or a subcontractors at 
any tier by means of--
            (1) a contract solicitation provision requiring a 
        contractor to offer to make use of Federal Prison Industries, 
        its products or services;
            (2) specifications requiring the contractor to use specific 
        products or services (or classes of products or services) 
        offered by Federal Prison Industries in the performance of the 
        contract;
            (3) any contract modification directing the use of Federal 
        Prison Industries, its products or services; or
            (4) any other means.

SEC. 6. INMATE WAGES AND DEDUCTIONS.

    Section 4122(b) of title 18, United States Code (as amended by 
section 3 of this Act), is further amended by adding after paragraph 
(10) a new paragraph (11) as follows:
    ``(11)(A) The Board of Directors of Federal Prison Industries shall 
prescribe the rates of hourly wages to be paid inmates performing work 
for or through Federal Prison Industries. The Director of the Federal 
Bureau of Prisons shall prescribe the rates of hourly wages for other 
work assignments within the various Federal correctional institutions. 
In the case of an inmate whose term of imprisonment is to expire in not 
more than 2 years, wages shall be earned at an hourly rate of not less 
than $2.50, but paid at the same rate and in the same manner as to any 
other inmate, and any amount earned but not paid shall be held in trust 
and paid only upon the actual expiration of the term of imprisonment.
    ``(B) The various inmate wage rates shall be reviewed and 
considered for increase on not less than a biannual basis.
    ``(C) The Board of Directors of Federal Prison Industries shall--
            ``(i) not later than September 30, 2005, increase the 
        maximum wage rate for inmates performing work for or through 
        Federal Prison Industries to an amount equal to 50 percent of 
        the minimum wage prescribed by section 6(a)(1) of the Fair 
        Labor Standards Act of 1938 (29 U.S.C. 206(a)(1));
            ``(ii) not later than September 30, 2010, increase such 
        maximum wage rate to an amount equal to such minimum wage; and
            ``(iii) request the Secretary of Labor to establish, not 
        later than October 1, 2005, an `inmate training wage' pursuant 
        to that Act.
    ``(D) Wages earned by an inmate worker shall be paid in the name of 
the inmate. Deductions, aggregating to not more than 80 percent of 
gross wages, shall be taken from the wages due for--
            ``(i) applicable taxes (Federal, State, and local);
            ``(ii) payment of fines and restitution pursuant to court 
        order;
            ``(iii) payment of additional restitution for victims of 
        the inmate's crimes (at a rate not less than 10 percent of 
        gross wages);
            ``(iv) allocations for support of the inmate's family 
        pursuant to statute, court order, or agreement with the inmate;
            ``(v) allocations to a fund in the inmate's name to 
        facilitate such inmate's assimilation back into society, 
        payable at the conclusion of incarceration; and
            ``(vi) such other deductions as may be specified by the 
        Director of the Bureau of Prisons.
    ``(E) Each inmate worker working for Federal Prison Industries 
shall indicate in writing that such person--
            ``(i) is participating voluntarily; and
            ``(ii) understands and agrees to the wages to be paid and 
        deductions to be taken from such wages.''.

SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES.

    (a) In General.--Section 1761 of title 18, United States Code, is 
amended in subsection (a), by striking ``any goods, wares, or 
merchandise manufactured, produced, or mined'' and inserting ``products 
manufactured, services furnished, or minerals mined''.
    (b) Completion of Existing Agreements.--Any prisoner work program 
operated by a prison or jail of a State or local jurisdiction of a 
State which is providing services for the commercial market through 
inmate labor on October 1, 2004, may continue to provide such 
commercial services until--
            (1) the expiration date specified in the contract or other 
        agreement with a commercial partner on October 1, 2004, or
            (2) until September 30, 2008, if the prison work program is 
        directly furnishing the services to the commercial market.
    (c) Approval Required for Long-Term Operation.--A prison work 
program operated by a correctional institution operated by a State or 
local jurisdiction of a State may continue to provide inmate labor to 
furnish services for sale in the commercial market after the dates 
specified in subsection (b) if such program has been certified pursuant 
to section 1761(c)(1) of title 18, United States Code, and is in 
compliance with the requirements of such subsection and its 
implementing regulations.

SEC. 8. CONFORMING AMENDMENT.

    Section 4122(a) of title 18, United States Code, is amended by 
striking ``production of commodities'' and inserting ``production of 
products or furnishing of services''.

SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 307.

    Chapter 307 of title 18, United States Code, is further amended by 
adding the following:
``Sec. 4130. Construction of provisions
    ``Nothing in this chapter shall be construed--
            ``(1) to establish an entitlement of any inmate to--
                    ``(A) employment in a Federal Prison Industries 
                facility; or
                    ``(B) any particular wage, compensation, or benefit 
                on demand, except as otherwise specifically provided by 
                law or regulation;
            ``(2) to establish that inmates are employees for the 
        purposes of any law or program; or
            ``(3) to establish any cause of action by or on behalf of 
        any inmate against the United States or any officer, employee, 
        or contractor thereof.''.

SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPORTUNITIES FOR INMATES.

    (a) Additional Educational, Training, and Release-Preparation 
Opportunities.--
            (1) Program established.--There is hereby established the 
        Enhanced In-Prison Educational and Vocational Assessment and 
        Training Program within the Federal Bureau of Prisons.
            (2) Comprehensive program.--In addition to such other 
        components as the Director of the Bureau of Prisons deems 
        appropriate to reduce inmate idleness and better prepare 
        inmates for a successful reentry into the community upon 
        release, the program shall provide--
                    (A) in-prison assessments of inmates' needs and 
                aptitudes;
                    (B) a full range of educational opportunities;
                    (C) vocational training and apprenticeships; and
                    (D) comprehensive release-readiness preparation.
            (3) Authorization of appropriations.--For the purposes of 
        carrying out the program established by paragraph (1), 
        $75,000,000 is authorized for each fiscal year after fiscal 
        year 2005, to remain available until expended. Funds shall be 
        allocated from the gross profits within the Federal Prison 
        Industries Fund, and, to the extent such amounts are 
        inadequate, from the General Treasury.
            (4) Schedule for implementation.--All components of the 
        program shall be established--
                    (A) in at least 25 percent of all Federal prisons 
                not later than 2 years after the date of the enactment 
                of this Act;
                    (B) in at least 50 percent of all Federal prisons 
                not later than 4 years after such date of enactment;
                    (C) in at least 75 percent of all Federal prisons 
                not later than 6 years after such date of enactment; 
                and
                    (D) in all Federal prisons not later than 8 years 
                after such date of enactment.
    (b) Additional Inmate Work Opportunities Through Public Service 
Activities.--
            (1) In general.--Chapter 307 of title 18, United States 
        Code, is further amended by inserting after section 4124 the 
        following new section:
``Sec. 4124a. Additional inmate work opportunities through public 
              service activities
    ``(a) In General.--Inmates with work assignments within Federal 
Prison Industries may perform work for an eligible entity pursuant to 
an agreement between such entity and the Inmate Work Training 
Administrator in accordance with the requirements of this section.
    ``(b) Definition of Eligible Entities.--For the purposes of this 
section, the term `eligible entity' means an entity--
            ``(1) that is an organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986 and exempt from 
        taxation under section 501(a) of such Code and that has been 
        such an organization for a period of not less than 36 months 
        prior to inclusion in an agreement under this section;
            ``(2) that is a religious organization described in section 
        501(d) of such Code and exempt from taxation under section 
        501(a) of such Code; or
            ``(3) that is a unit of local government, a school 
        district, or another special purpose district.
    ``(c) Inmate Work Training Administrator.--
            ``(1) The Federal Prison Industries Board of Directors 
        shall designate an entity as the Inmate Work Training 
        Administrator to administer the work-based training program 
        authorized by this section.
            ``(2) In selecting the Inmate Work Training Administrator, 
        the Board of Directors shall select an entity--
                    ``(A) that is an organization described in section 
                501(c)(3) of the Internal Revenue Code of 1986 and 
                exempt from taxation under section 501(a) of such Code; 
                and
                    ``(B) that has demonstrated, for a period of not 
                less than 5 years, expertise in the theory and practice 
                of fostering inmate rehabilitation through work-based 
                programs in cooperation with private sector firms.
            ``(3) With respect to the formation and performance of an 
        agreement authorized by this section, the Director of the 
        Bureau of Prisons and the Chief Operating Officer of Federal 
        Prison Industries shall be responsible only for--
                    ``(A) maintaining appropriate institutional and 
                inmate security; and
                    ``(B) matters relating to the selection and payment 
                of participating inmates.
    ``(d) Proposed Agreements.--An eligible entity seeking to enter 
into an agreement pursuant to subsection (a) shall submit a detailed 
proposal to the Inmate Work Training Administrator. Each such agreement 
shall specify--
            ``(1) types of work to be performed;
            ``(2) the proposed duration of the agreement, specified in 
        terms of a base year and number of option years;
            ``(3) the number of inmate workers expected to be employed 
        in the specified types of work during the various phases of the 
        agreement;
            ``(4) the wage rates proposed to be paid to various classes 
        of inmate workers; and
            ``(5) the facilities, services and personnel (other than 
        correctional personnel dedicated to the security of the inmate 
        workers) to be furnished by Federal Prison Industries or the 
        Bureau of Prisons and the rates of reimbursement, if any, for 
        such facilities, services, and personnel.
    ``(e) Representations.--
            ``(1) Eleemosynary work activities.--Each proposed 
        agreement shall be accompanied by a written certification by 
        the chief executive officer of the eligible entity that--
                    ``(A) the work to be performed by the inmate 
                workers will be limited to the eleemosynary work of 
                such entity in the case of an entity described in 
                paragraph (1) or (2) of subsection (b);
                    ``(B) the work would not be performed but for the 
                availability of the inmate workers;
                    ``(C) the work performed by the inmate workers will 
                not result, either directly or indirectly, in the 
                production of a new product or the furnishing of a 
                service that is to be offered for other than resale or 
                donation by the eligible entity or any affiliate of the 
                such entity.
            ``(2) Protections for non-inmate workers.--Each proposed 
        agreement shall also be accompanied by a written certification 
        by the chief executive officer of the eligible entity that--
                    ``(A) no non-inmate employee or volunteer of the 
                eligible entity (or any affiliate of the entity) will 
                have his or her job abolished or work hours reduced as 
                a result of the entity being authorized to utilize 
                inmate workers; and
                    ``(B) the work to be performed by the inmate 
                workers will not supplant work currently being 
                performed by a contractor of the eligible entity.
    ``(f) Approval by Board of Directors.--
            ``(1) In general.--Each such proposed agreement shall be -
        presented to the Board of Directors, be subject to the same 
        opportunities for public comment, and be publicly considered 
        and acted upon by the Board in a manner comparable to that 
        required by paragraphs (6) and (7) of section 4122(b).
            ``(2) Matters to be considered.--In determining whether to 
        approve a proposed agreement, the Board shall--
                    ``(A) give priority to an agreement that provides 
                inmate work opportunities that will provide 
                participating inmates with the best prospects of 
                obtaining employment paying a livable wage upon 
                release;
                    ``(B) give priority to an agreement that provides 
                for maximum reimbursement for inmate wages and for the 
                costs of supplies and equipment needed to perform the 
                types of work to be performed;
                    ``(C) not approve an agreement that will result in 
                the displacement of non-inmate workers or volunteers 
                contrary to the representations required by subsection 
                (e)(2) as determined by the Board or by the Secretary 
                of Labor (pursuant to subsection (i)); and
                    ``(D) not approve an agreement that will result, 
                either directly or indirectly, in the production of a 
                new product or the furnishing of a service for other 
                than resale or donation.
    ``(g) Wage Rates and Deductions From Inmate Wages.--
            ``(1) In general.--Inmate workers shall be paid wages for 
        work under the agreement at a basic hourly rate to be 
        negotiated between the eligible entity and Federal Prison 
        Industries and specified in the agreement. The wage rates set 
        by the Director of the Federal Bureau of Prisons to be paid 
        inmates for various institutional work assignments are 
        specifically authorized.
            ``(2) Payment to inmate worker and authorized deductions.--
        Wages shall be paid and deductions taken pursuant to section 
        4122(b)(11)(C).
            ``(3) Voluntary participation by inmate.--Each inmate 
        worker to be utilized by an eligible entity shall indicate in 
        writing that such person--
                    ``(A) is participating voluntarily; and
                    ``(B) understands and agrees to the wages to be 
                paid and deductions to be taken from such wages.
    ``(h) Assignment to Work Opportunities.--Assignment of inmates to 
work under an approved agreement with an eligible entity shall be 
subject to the Bureau of Prisons Program Statement Number 1040.10 (Non-
Discrimination Toward Inmates), as contained in section 551.90 of title 
28 of the Code of Federal Regulations (or any successor document).
    ``(i) Enforcement of Protections for Non-Inmate Workers.--
            ``(1) Prior to board consideration.--Upon request of any 
        interested person, the Secretary of Labor may promptly verify a 
        certification made pursuant subsection (e)(2) with respect to 
        the displacement of non-inmate workers so as to make the 
        results of such inquiry available to the Board of Directors 
        prior to the Board's consideration of the proposed agreement. 
        The Secretary and the person requesting the inquiry may make 
        recommendations to the Board regarding modifications to the 
        proposed agreement.
            ``(2) During performance.--
                    ``(A) In general.--Whenever the Secretary deems 
                appropriate, upon request or otherwise, the Secretary 
                may verify whether the actual performance of the 
                agreement is resulting in the -displacement of non-
                inmate workers or the use of inmate workers in -a work 
                activity not authorized under the approved agreement.
                    ``(B) Sanctions.--Whenever the Secretary determines 
                that performance of the agreement has resulted in the 
                displacement of non-inmate workers or employment of an 
                inmate worker in an unauthorized work activity, the 
                Secretary may--
                            ``(i) direct the Inmate Work Training 
                        Administrator to terminate the agreement for 
                        default, subject to the processes and appeals 
                        available to a Federal contractor whose 
                        procurement contract has been terminated for 
                        default; and
                            ``(ii) initiate proceedings to impose upon 
                        the person furnishing the certification 
                        regarding non-displacement of non-inmate 
                        workers required by subsection (d)(2)(B) any 
                        administrative, civil, and criminal sanctions 
                        as may be available.''.
            (2) Authorization of appropriation.--There is authorized to 
        be appropriated $5,000,000 for each of the fiscal years 2006 
        through 2010 for the purposes of paying the wages of inmates 
        and otherwise undertaking the maximum number of agreements with 
        eligible entities pursuant to section 4124a of title 18, United 
        States Code, as added by paragraph (1).
            (3) Clerical amendment.--The table of sections for chapter 
        307 of title 18, United States Code, is amended by inserting 
        after the item relating to section 4124 the following new item:

``4124a. Additional inmate work opportunities through public service 
                            activities.''.
    (c) Inmate Work Opportunities in Support of not-for-Profit 
Entities.--
            (1) Proposals for donation programs.--The Chief Operating 
        Officer of Federal Prison Industries shall develop and present 
        to the Board of Directors of Federal Prison Industries 
        proposals to have Federal Prison Industries 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 in the 
        commercial market.
            (2) Schedule for submission and consideration of donation 
        programs.--
                    (A) Initial proposals.--The Chief Operating Officer 
                shall submit the initial group of proposals for 
                programs of the type described in paragraph (1) within 
                180 days after the date of the enactment of this Act. 
                The Board of Directors of Federal Prison Industries 
                shall consider such proposals from the Chief Operating 
                Officer not later than the date that is 270 days after 
                the date of the enactment of this Act.
                    (B) Annual operating plan.--The Board of Directors 
                of Federal Prison Industries shall consider proposals 
                by the Chief Operating Officer for programs of the type 
                described in paragraph (1) as part of the annual 
                operating plan for Federal Prison Industries.
                    (C) Other proposals.--In addition to proposals 
                submitted by the Chief Operating Officer, the Board of 
                Directors may, from time to time, consider proposals 
                presented by prospective eligible entities.
            (3) Definition of eligible entities.--For the purposes of 
        this subsection, the term ``eligible entity'' means an entity--
                    (A) that is an organization described in section 
                501(c)(3) of the Internal Revenue Code of 1986 and 
                exempt from taxation under section 501(a) of such Code 
                and that has been such an organization for a period of 
                not less than 36 months prior to inclusion in a 
                proposal of the type described in paragraph (1), or
                    (B) that is a religious organization described in 
                section 501(d) of such Code and exempt from taxation 
                under section 501(a) of such Code.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated $7,000,000 for each of the fiscal years 2006 
        through 2010 for the purposes of paying the wages of inmates 
        and otherwise carrying out programs of the type described in 
        paragraph (1).
    (d) Maximizing Inmate Rehabilitative Opportunities Through 
Cognitive Abilities Assessments.--
            (1) Demonstration program authorized.--
                    (A) In general.--There is hereby established within 
                the Federal Bureau of Prisons a program to be known as 
                the ``Cognitive Abilities Assessment Demonstration 
                Program''. The purpose of the demonstration program is 
                to determine the effectiveness of a program that 
                assesses the cognitive abilities and perceptual skills 
                of Federal inmates to maximize the benefits of various 
                rehabilitative opportunities designed to prepare each 
                inmate for a successful return to society and reduce 
                recidivism. The demonstration program shall be 
                undertaken by a contractor with a demonstrated record 
                of enabling the behavioral and academic improvement of 
                adults through the use of research-based systems that 
                maximize the development of both the cognitive and 
                perceptual capabilities of a participating individual, 
                including adults in a correctional setting.
                    (B) Scope of demonstration program.--The 
                demonstration program shall to the maximum extent 
                practicable, be--
                            (i) conducted during a period of three 
                        consecutive fiscal years, commencing during 
                        fiscal year 2006;
                            (ii) conducted at 12 Federal correctional 
                        institutions; and
                            (iii) offered to 6,000 inmates, who are 
                        categorized as minimum security or less, and 
                        are within five years of release.
                    (C) Report on results of program.--Not later than 
                60 days after completion of the demonstration program, 
                the Director shall submit to Congress a report on the 
                results of the program. At a minimum, the report shall 
                include an analysis of employment stability, stability 
                of residence, and rates of recidivism among inmates who 
                participated in the program after 18 months of release.
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated $3,000,000 in each of the three fiscal years 
        after fiscal year 2005, to remain available until expended, for 
        the purposes of conducting the demonstration program authorized 
        by subsection (a).
    (e) Prerelease Employment Assistance.--
            (1) In general.--The Director of the Federal Bureau of 
        Prisons shall, to the maximum extent practicable, afford to 
        inmates opportunities to participate in programs and activities 
        designed to help prepare such inmates to obtain employment upon 
        release.
            (2) Prerelease employment placement assistance.--Such 
        prerelease employment placement assistance required by 
        subsection (a) shall include--
                    (A) training in the preparation of resumes and job 
                applications;
                    (B) training in interviewing skills;
                    (C) training and assistance in job search 
                techniques;
                    (D) conduct of job fairs; and
                    (E) such other methods deemed appropriate by the 
                Director.
            (3) Priority participation.--Priority in program 
        participation shall be accorded to inmates who are 
        participating in work opportunities afforded by Federal Prison 
        Industries and are within 24 months of release from 
        incarceration.

SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS.

    Section 4121 of title 18, United States Code, is amended to read as 
follows:
``Sec. 4121. Federal Prison Industries; Board of Directors: executive 
              management
    ``(a) Federal Prison Industries is a government corporation of the 
District of Columbia organized to carry on such industrial operations 
in Federal correctional institutions as authorized by its Board of 
Directors. The manner and extent to which such industrial operations 
are carried on in the various Federal correctional institutions shall 
be determined by the Attorney General.
    ``(b)(1) The corporation shall be governed by a board of 11 
directors appointed by the President.
    ``(2) In making appointments to the Board, the President shall 
assure that 3 members represent the business community, 3 members 
represent organized labor, 1 member shall have special expertise in 
inmate rehabilitation techniques, 1 member represents victims of crime, 
1 member represents the interests of Federal inmate workers, and 2 
additional members whose background and expertise the President deems 
appropriate. The members of the Board representing the business 
community shall include, to the maximum extent practicable, 
representation of firms furnishing services as well as firms producing 
products, especially from those industry categories from which Federal 
Prison Industries derives substantial sales. The members of the Board 
representing organized labor shall, to the maximum practicable, include 
representation from labor unions whose members are likely to be most 
affected by the sales of Federal Prison Industries.
    ``(3) Each member shall be appointed for a term of 5 years, except 
that of members first appointed--
            ``(A) 2 members representing the business community shall 
        be appointed for a term of 3 years;
            ``(B) 2 members representing labor shall be appointed for a 
        term of 3 years;
            ``(C) 2 members whose background and expertise the 
        President deems appropriate for a term of 3 years;
            ``(D) 1 member representing victims of crime shall be 
        appointed for a term of 3 years;
            ``(E) 1 member representing the interests of Federal inmate 
        workers shall be appointed for a term of 3 years;
            ``(F) 1 member representing the business community shall be 
        appointed for a term of 4 years;
            ``(G) 1 member representing the business community shall be 
        appointed for a term of 4 years; and
            ``(H) the members having special expertise in inmate 
        rehabilitation techniques shall be appointed for a term of 5 
        years.
    ``(4) The President shall designate 1 member of the Board as 
Chairperson. The Chairperson may designate a Vice Chairperson.
    ``(5) Members of the Board may be reappointed.
    ``(6) Any vacancy on the Board shall be filled in the same manner 
as the original appointment. Any member appointed to fill a vacancy 
occurring before the expiration of the term for which the member's 
predecessor was appointed shall be appointed for the remainder of that 
term.
    ``(7) The members of the Board shall serve without compensation. 
The members of the Board shall be allowed travel expenses, including 
per diem in lieu of subsistence, at rates authorized for employees of 
agencies under subchapter I of chapter 57 of title 5, United States 
Code, to attend meetings of the Board and, with the advance approval of 
the Chairperson of the Board, while otherwise away from their homes or 
regular places of business for purposes of duties as a member of the 
Board.
    ``(8)(A) The Chairperson of the Board may appoint and terminate any 
personnel that may be necessary to enable the Board to perform its 
duties.
    ``(B) Upon request of the Chairperson of the Board, a Federal 
agency may detail a Federal Government employee to the Board without 
reimbursement. Such detail shall be without interruption or loss of 
civil service status or privilege.
    ``(9) The Chairperson of the Board may procure temporary and 
intermittent services under section 3109(b) of title 5, United States 
Code.
    ``(c) The Director of the Bureau of Prisons shall serve as Chief 
Executive Officer of the Corporation. The Director shall designate a 
person to serve as Chief Operating Officer of the Corporation.''.

SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXIBILITY TO FEDERAL PRISON 
              INDUSTRIES OPERATIONS.

    Section 4122(b)(3) of title 18, United States Code, is amended--
            (1) by striking ``(3)'' and inserting ``(3)(A)''; and
            (2) by adding at the end the following new paragraphs:
    ``(B) Federal Prison Industries may locate more than one workshop 
at a Federal correctional facility.
    ``(C) Federal Prison Industries may operate a workshop outside of a 
correctional facility if all of the inmates working in such workshop 
are classified as minimum security inmates.''.

SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AUTHORITY.

    Any correctional officer or other employee of Federal Prison 
Industries being paid with nonappropriated funds who would be separated 
from service because of a reduction in the net income of Federal Prison 
Industries during any fiscal year specified in section 4(e)(1) shall 
be--
            (1) eligible for appointment (or reappointment) in the 
        competitive service pursuant to title 5, United States Code;
            (2) registered on a Bureau of Prisons reemployment priority 
        list; and
            (3) given priority for any other position within the Bureau 
        of Prisons for which such employee is qualified.

SEC. 14. 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 and type of service sold to the 
                Federal agencies and the commercial market;
                    ``(B) the total purchases by each Federal agency of 
                each specific product and type of service;
                    ``(C) the corporation's share of such total Federal 
                Government purchases by specific product and type of 
                service; 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 of inmates utilized to produce 
                products or furnish services sold in the commercial 
                market;
                    ``(C) the number and percentage of employed inmates 
                by the term of their incarceration; and
                    ``(D) the various hourly wages paid to inmates 
                employed with respect to the production of the various 
                specific products and types of services authorized for 
                production and sale to Federal agencies and in the 
                commercial market; 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. 15. INDEPENDENT STUDY TO DETERMINE THE EFFECTS OF ELIMINATING THE 
              FEDERAL PRISON INDUSTRIES MANDATORY SOURCE AUTHORITY.

    (a) Study Required.--The Comptroller General shall undertake to 
have an independent study conducted on the effects of eliminating the 
Federal Prison Industries mandatory source authority.
    (b) Solicitation of Views.--The Comptroller General shall ensure 
that in developing the statement of work and the methodology for the 
study, the views and input of private industry, organized labor groups, 
Members and staff of the relevant Congressional committees, officials 
of the executive branch, and the public are solicited.
    (c) Submission.--Not later than June 30, 2006, the Comptroller 
General shall submit the results of the study to Congress, including 
any recommendations for legislation.

SEC. 16. SENSE OF CONGRESS.

    It is the sense of Congress that it is important to study the 
concept of implementing a ``good time'' release program for non-violent 
criminals in the Federal prison system.

SEC. 17. DEFINITIONS.

    Chapter 307 of title 18, United States Code, is amended by adding 
at the end the following new section:
``Sec. 4131. 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 which the value of inmate labor 
        constitutes at least 10 percent of the estimate unit cost to 
        produce the item by Federal Prison Industries;
            ``(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 `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--
                    ``(A) any specific product during the 3 preceding 
                fiscal years, that does not exceed 20 percent of the 
                Federal market for the specific product; and
                    ``(B) any specific service during the 3 preceding 
                fiscal years, that does not exceed 5 percent of the 
                Federal market for the specific service; and
            ``(7) the term `services' has the meaning given the term 
        `service contract' by section 37.101 of the Federal Acquisition 
        Regulation (48 C.F.R. 36.102), as in effect on July 1, 2004.''.

SEC. 18. IMPLEMENTING REGULATIONS AND PROCEDURES.

    (a) Federal Acquisition Regulation.--
            (1) Proposed revisions.--Proposed revisions to the 
        Governmentwide 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.
            (2) 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.
            (3) 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).
    (b) Board of Directors.--
            (1) In general.--The Board of Directors of Federal Prison 
        Industries shall issue regulations defining the terms specified 
        in paragraph (2).
            (2) Terms to be defined.--The Board of Directors shall 
        issue regulations for the following terms:
                    (A) Prison-made product.
                    (B) Prison-furnished service.
                    (C) Specific product.
                    (D) Specific service.
            (3) Schedule for regulatory definitions.--
                    (A) Proposed regulations relating to the matter 
                described in subsection (b)(2) shall be published not 
                later than 60 days after the date of enactment of this 
                Act and provide not less than 60 days for public 
                comment.
                    (B) Final regulations relating to the matters 
                described in subsection (b)(2) shall be published not 
                less than 180 days after the date of enactment of this 
                Act and shall be effective on the date that is 30 days 
                after the date of publication.
            (4) Enhanced opportunities for public participation and 
        scrutiny.--
                    (A) Administrative procedure act.--Regulations 
                issued by the Board of Directors shall be subject to 
                notice and comment rulemaking pursuant to section 553 
                of title 5, United States Code. Unless determined 
                wholly impracticable or unnecessary by the Board of 
                Directors, the public shall be afforded 60 days for 
                comment on proposed regulations.
                    (B) Enhanced outreach.--The Board of Directors 
                shall use means designed to most effectively solicit 
                public comment on proposed regulations, procedures, and 
                policies and to inform the affected public of final 
                regulations, procedures, and policies.
                    (C) Open meeting processes.--The Board of Directors 
                shall take all actions relating to the adoption of 
                regulations, operating procedures, guidelines, and any 
                other matter relating to the governance and operation 
                of Federal Prison Industries based on deliberations and 
                a recorded vote conducted during a meeting open to the 
                public, unless closed pursuant to section 552(b) of 
                title 5, United States Code.

SEC. 19. RULES OF CONSTRUCTION.

    (a) Agency Bid Protests.--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.
    (b) Javits-Wagner-O'Day Act.--Nothing in this Act is intended to 
modify the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).

SEC. 20. 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 18(a)(2), or after September 30, 2006, 
whichever is earlier.

SEC. 21. CLERICAL AMENDMENTS.

    The table of sections for chapter 307 of title 18, United States 
Code, is amended--
            (1) by amending the item relating to section 4121 to read 
        as follows:

``4121. Federal Prison Industries; Board of Directors: executive 
                            management.'';
            (2) by amending the item relating to section 4124 to read 
        as follows:

``4124. Governmentwide procurement policy relating to purchases from 
                            Federal Prison Industries.'';
            (3) by amending the item relating to section 4127 to read 
        as follows:

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

``4130. Construction of provisions.
``4131. Definitions.''.
                                 <all>