[Congressional Record Volume 149, Number 168 (Wednesday, November 19, 2003)]
[Extensions of Remarks]
[Page E2319]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




H.R. 1829--FEDERAL PRISON INDUSTRIES COMPETITION IN CONTRACTING ACT OF 
                                  2003

                                 ______
                                 

                             HON. TOM UDALL

                             of new mexico

                    in the house of representatives

                       Tuesday, November 18, 2003

  Mr. UDALL of New Mexico. Mr. Speaker, I rise today in support of H.R. 
1829, the Federal Prison Industries Competition in Contracting Act of 
2003. As a Ranking Member of one of the Small Business Committee's 
Subcommittees, I take very seriously the importance of small businesses 
in our economy, as well as the impact of our policies in small 
businesses.
  As we have said time and time again, small businesses are the driving 
force in our economic recovery. They are the lifeblood of the American 
economy, creating three out of four new jobs, and representing 99 
percent of all employers. This is why we must ensure that small 
businesses receive the tools that they need to compete in today's 
competitive marketplace and we must make the playing field as level as 
possible.
  Today, we look at a form of unfair competition for small businesses 
coming from the federal prison industry. The idea behind FPI is to use 
work as a means of rehabilitation and to teach inmates a skill, which 
can be used to put them back on the right track. I strongly support 
this goal. I'm sure all of my colleagues support this goal, as well. 
Unfortunately it is not that simple. I believe that this commendable 
idea of giving individuals a means for a second chance has turned into 
an industry who's sole focus is not rehabilitation, but turning a 
profit.
  As of fiscal year 2002, FPI brought in $678.7 million in revenue and 
this would have placed them at 34 out of the top 100 federal 
contractors for the year. FPI increased their revenue from FY 2001 by 
more than $95 million. This level of involvement might seem justified. 
Yet, as FPI becomes a ``Mega'' contractor, it benefits only 15 percent 
of all federal inmates. Something is not right with this picture.
  Over past years, FPI has been able to grow through the use of 
preferential contracting treatment, exemption from such labor laws as 
OSHA, minimum wage rates and an endless line of credit from the U.S. 
Treasury Department. This industry is government owned and operated, 
and has used these competitive advantages to expand its market share, 
yet they are competing against private sector companies.
  Adding on to these advantages is that FPI are not held to basic 
standards of product quality or requirements to meet deadlines. This is 
especially concerning because many of the products that come from FPI 
are used by the troops in our military, and agencies like FAA that 
ensure safe transportation. These are areas that cannot afford to be 
taken lightly. We have an obligation to ensure that the public is 
safeguarded.
  I do believe that we can have the principle of using the federal 
marketplace as a tool in the rehabilitation process of inmates, but it 
must be balanced and it must be fair. The current practice is weighted 
too far in favor of FPI with very little demonstrated benefit, while 
clearly costing our nation's small businesses jobs and opportunities.
  As the main driver of our economy, small businesses deserve a level 
playing field. In today's competitive market--we cannot overlook an 
industry that continues to expand while at the same time causing our 
nation's small businesses to lose valuable opportunities.
  It is for these reasons that I support passage of H.R. 1829, and urge 
my colleagues to do the same.

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