[Congressional Record Volume 151, Number 41 (Monday, April 11, 2005)]
[Senate]
[Pages S3421-S3424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEVIN (for himself, Mr. Thomas, Mr. Grassley, and Ms. 
        Stabenow):
  S. 749. A bill to amend the Office of Federal Procurement Policy Act 
to establish a governmentwide policy requiring competition in certain 
executive agency procurements, and for other purposes; to the Committee 
on Homeland Security and Governmental Affairs.
  Mr. LEVIN. Mr. President, I am pleased to join with Senators Craig 
Thomas, Chuck Grassley and Debbie Stabenow in introducing the Federal 
Prison Industries Competition in Contracting Act. Our bill is based on 
a straightforward premise: it is unfair for Federal Prison Industries 
to deny businesses in the private sector an opportunity to compete for 
sales to their own government.
  We have made immeasurable progress on this issue since I first 
introduced a similar bill ten years ago. It may seem incredible, but at 
that time, Federal Prison Industries (FPI) could bar private sector 
companies from competing for a federal contract. Under the law 
establishing Federal Prison Industries, if Federal Prison Industries 
said that it wanted a contract, it would get that contract, regardless 
whether a company in the private sector could provide the product 
better, cheaper, or faster.
  Four years ago, the Senate took a giant step toward addressing this 
inequity when we voted 74-24 to end Federal Prison Industries' monopoly 
on Department of Defense contracts. Not only was that provision enacted 
into law, we were able to strengthen it with a second provision in last 
year's defense bill. Last year, we took another important step, 
enacting an appropriations provision which extends the DOD rules to 
other Federal agencies. This means that, for the first time, private 
sector companies should be able to compete against for contracts 
awarded by all Federal agencies.
  Despite this progress, work remains to be done. We have heard reports 
from federal procurement officials and from small businesses that FPI 
continues to claim that it retains the mandatory source status that 
protected it from competition for so long. This kind of misleading 
statement may undermine the right to compete that we have fought so 
hard for so long to establish.
  In addition, FPI continues to sell its services into interstate 
commerce on an unlimited basis. I am concerned that the sale of prison 
labor into commerce could have the effect of undermining companies and 
work forces that are already in a weakened position as a result of 
foreign competition. We have long taken the position as a nation that 
prison-made goods should not be sold into commerce, where prison wages 
of a few cents per hour could too easily undercut private sector 
competition. It is hard for me to understand why the sale of services 
should be treated any differently than the sale of products.
  The bill that we are introducing today would address these issues by 
making it absolutely clear that FPI no longer has a mandatory source 
status, by reaffirming the critical requirement that FPI compete for 
its contracts, and by carefully limiting the circumstances under which 
prison services may be sold into the private sector economy.
  I look forward to working with my colleagues on these important 
issues, and I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 749

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

     SECTION 1. GOVERNMENTWIDE PROCUREMENT POLICY RELATING TO 
                   PURCHASES FROM FEDERAL PRISON INDUSTRIES.

       (a) Requirements.--The Office of Federal Procurement Policy 
     Act (41 U.S.C. 401 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 42. GOVERNMENTWIDE PROCUREMENT POLICY RELATING TO 
                   PURCHASES FROM FEDERAL PRISON INDUSTRIES.

       ``(a) Competition Required.--In the procurement of any 
     product that is authorized to be offered for sale by Federal 
     Prison Industries and is listed in the catalog published and 
     maintained by Federal Prison Industries under section 4124(b) 
     of title 18, United States Code, or any service offered to be 
     provided by Federal Prison Industries, the head of an 
     executive agency shall, except as provided in subsection 
     (d)--
       ``(1) use competitive procedures for entering into a 
     contract for the procurement of such product, in accordance 
     with the requirements applicable to such executive agency 
     under sections 2304 and 2305 of title 10, United States Code, 
     or sections 303 through 303C of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 253 through 
     253c); or
       ``(2) make an individual purchase under a multiple award 
     contract in accordance with competition requirements 
     applicable to such purchases.
       ``(b) Offers From Federal Prison Industries.--In conducting 
     a procurement pursuant to subsection (a), the head of an 
     executive agency shall--
       ``(1) notify Federal Prison Industries of the procurement 
     at the same time and in the same manner as other potential 
     offerors are notified;
       ``(2) consider a timely offer from Federal Prison 
     Industries for award in the same manner as other offers 
     (regardless of whether Federal Prison Industries is a 
     contractor under an applicable multiple award contract); and
       ``(3) consider a timely offer from Federal Prison 
     Industries 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.
       ``(c) Implementation by Agencies.--The head of each 
     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 executive agency determines that the product 
     or service is comparable to a product or service available 
     from the private sector that best meet the executive agency's 
     needs in terms of price, quality, and time of delivery; and
       ``(2) Federal Prison Industries performs its contractual 
     obligations to the executive agency to the same extent as any 
     other contractor for the executive agency.

[[Page S3422]]

       ``(d) Exception.--
       ``(1) Other procedures.--The head of an executive agency 
     may use procedures other than competitive procedures to enter 
     into a contract with Federal Prison Industries only under the 
     following circumstances:
       ``(A) The Attorney General personally determines in 
     accordance with paragraph (2), within 30 days after Federal 
     Prison Industries has been informed by the head of that 
     executive agency of an opportunity for award of a contract 
     for a product or service, that--
       ``(i) Federal Prison Industries cannot reasonably expect 
     fair consideration in the selection of an offeror for award 
     of the contract on a competitive basis; and
       ``(ii) the award of the contract to Federal Prison 
     Industries for performance at a penal or correctional 
     facility is necessary to maintain work opportunities not 
     otherwise available at the penal or correctional facility 
     that prevent circumstances that could reasonably be expected 
     to significantly endanger the safe and effective 
     administration of such facility.
       ``(B) The product or service is available only from Federal 
     Prison Industries and the contract may be awarded under the 
     authority of section 2304(c)(1) of title 10, United States 
     Code, or section 303(c)(1) of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 253(c)(1)), as 
     may be applicable, pursuant to the justification and approval 
     requirements relating to noncompetitive procurements 
     specified by law and the Federal Acquisition Regulation.
       ``(2) Determination.--
       ``(A) In general.--A determination made by the Attorney 
     General regarding a contract pursuant to paragraph (1)(A) 
     shall be--
       ``(i) 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;
       ``(ii) supported by specific findings by Federal Prison 
     Industries regarding the reasons that it does not expect to 
     be selected for award of the contract on a competitive basis; 
     and
       ``(iii) 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)).
       ``(B) Nondelegation.--The Attorney General may not delegate 
     to any other official authority to make a determination that 
     is required under paragraph (1)(A) to be made personally by 
     the Attorney General.
       ``(e) Performance as a Subcontractor.--
       ``(1) In general.--A contractor or potential contractor 
     under a contract entered into by the head of an executive 
     agency may not be required to use Federal Prison Industries 
     as a subcontractor or supplier of a product or provider of a 
     service for the performance of the contract by any means, 
     including means such as--
       ``(A) a provision in a solicitation of offers that requires 
     a contractor to offer to use or specify a product or service 
     of Federal Prison Industries in the performance of the 
     contract;
       ``(B) a contract clause that requires the contractor to use 
     or specify a product or service (or classes of products or 
     services) offered by Federal Prison Industries in the 
     performance of the contract; or
       ``(C) any contract modification that requires the use of a 
     product or service of Federal Prison Industries in the 
     performance of the contract.
       ``(2) Subcontractor or supplier.--A contractor using 
     Federal Prison Industries as a subcontractor or supplier in 
     furnishing a commercial product pursuant to a contract of an 
     executive agency shall implement appropriate management 
     procedures to prevent an introduction of an inmate-produced 
     product into the commercial market.
       ``(3) Definition.--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 or will become classified 
     after being merged with other data;
       ``(2) any geographic data regarding the location of--
       ``(A) surface or 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.''.
       (b) Clerical Amendment.--The table of contents in section 
     1(b) of such Act is amended by adding at the end the 
     following:

``Sec. 42. Governmentwide procurement policy relating to purchases from 
              Federal Prison Industries.''.

     SEC. 2. CONFORMING AMENDMENTS.

       (a) Repeal of Inconsistent Requirements Applicable to 
     Department of Defense.--
       (1) In general.--Section 2410n of title 10, United States 
     Code, is repealed.
       (2) Table of sections.--The table of sections at the 
     beginning of chapter 141 of such title is amended by striking 
     the item relating to section 2410n.
       (b) Repeal of Inconsistent Requirements Applicable to Other 
     Agencies.--Section 4124 of title 18, United States Code, is 
     amended--
       (1) by striking subsections (a) and (b) and redesignating 
     subsections (c) and (d) as subsections (a) and (b), 
     respectively; and
       (2) in subsection (a), as redesignated by paragraph (1), by 
     striking ``Federal department, agency, and institution 
     subject to the requirements of subsection (a)'' and inserting 
     ``Federal department and agency''.
       (c) Other Laws.--
       (1) Javits-wagner-o'day act.--Section 3 of the Javits-
     Wagner-O'Day Act (41 U.S.C. 48) is amended by striking 
     ``which, under section 4124 of such title, is required'' and 
     inserting ``which is required by law''.
       (2) Small business act.--Section 31(b)(4) of the Small 
     Business Act (15 U.S.C. 657a(b)(4)) is amended by striking 
     ``a different source under section 4124 or 4125 of title 18, 
     United States Code, or the Javits-Wagner-O'Day Act (41 U.S.C. 
     46 et seq.)'' and inserting ``a different source under the 
     Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.) or Federal 
     Prison Industries under section 40(d) of the Office of 
     Federal Procurement Policy Act or section 4125 of title 18, 
     United States Code''.

     SEC. 3. UNLAWFUL TRANSPORTATION OR IMPORTATION OF PRODUCTS, 
                   SERVICES, OR MINERALS RESULTING FROM CONVICT 
                   LABOR.

       (a) Prohibition.--Section 1761 of title 18, United States 
     Code, is amended--
       (1) in subsection (a), by inserting after ``reformatory 
     institution,'' the following: ``or knowingly sells in 
     interstate commerce any services, other than disassembly and 
     scrap resale activities to achieve landfill avoidance, 
     furnished wholly or in part by convicts or prisoners, except 
     convicts or prisoners on parole, supervised release, or 
     probation, or in any penal or reformatory institution,''; and
       (2) in the matter preceding paragraph (1) in subsection 
     (c), by inserting ``, or services furnished,'' after ``or 
     mined''.
       (b) Completion of Existing Agreements.--Any prisoner work 
     program operated by the Federal Government or by a State or 
     local government which was providing a service for the 
     commercial market through inmate labor on October 1, 2005, 
     may continue to provide such commercial services until--
       (1) the expiration that was specified in the contract or 
     other agreement with a commercial partner on October 1, 2005; 
     or
       (2) until September 30, 2006, if no expiration date was 
     specified in a contract or other agreement with a commercial 
     partner.
       (c) Approval Required for Long-Term Operation of State and 
     Local Programs.--Except as provided in subsection (b), a 
     prison work program operated by a State or local government 
     may provide a service for the commercial market through 
     inmate labor only if such program has been certified pursuant 
     to section 1761(c) of title 18, United States Code, and is in 
     compliance with the requirements of such subsection and its 
     implementing regulations.
       (d) Approval Required for Long-Term Operation of Federal 
     Programs.--Except as provided in subsection (b), a prison 
     work program operated by the Federal Government may provide a 
     service for the commercial market through inmate labor only 
     if a Federal Prison Industries proposal to provide such 
     services is approved in accordance with the requirements of 
     this subsection by the Secretary of Commerce, the Secretary 
     of Labor, and the Administrator of the Small Business 
     Administration. Such a proposal may be approved only upon a 
     determination, after notice and an opportunity for public 
     comment, that--
       (1) the service to be provided would be provided 
     exclusively by foreign labor in the absence of the Federal 
     Prison Industries proposal; and
       (2) the approval of the proposal will not have an adverse 
     impact on employment in any United States business.
       (e) Protection of Classified and Sensitive Information.--A 
     prison work program operated by a State or local government 
     may not provide a service, including a service for the 
     commercial market through inmate labor pursuant to section 
     1761(c) of title 18, United States Code, under which an 
     inmate worker would have access to--
       (1) any data that is classified or will become classified 
     after being merged with other data;
       (2) any geographic data regarding the location of--
       (A) surface or 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 transportation infrastructure; 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.

     SEC. 4. ADDITIONAL INMATE WORK OPPORTUNITIES THROUGH PUBLIC 
                   SERVICE ACTIVITIES.

       (a) Cooperation With Charitable Organizations.--Chapter 307 
     of title 18, United States Code, is amended by adding at the 
     end the following:

[[Page S3423]]

     ``SEC. 4130. COOPERATION WITH CHARITABLE ORGANIZATIONS.

       ``(a) Sale or Donation of Products or Services to 
     Charitable Entities.--Federal Prison Industries may, subject 
     to subsection (b), sell or donate a product or service to an 
     organization described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 that is exempt from taxation under 
     section 501(a) of such Code. Any product or service sold or 
     donated under this section may be donated or sold by the 
     charitable organization to low-income individuals who would 
     otherwise have difficulty purchasing such products or 
     services.
       ``(b) Work Agreements With Charitable Organizations.--
       ``(1) In general.--Federal Prison Industries may sell or 
     donate a product or service to a charitable organization 
     under subsection (a) only pursuant to a work agreement with 
     the charitable organization receiving the product or service.
       ``(2) Terms.--Federal Prison Industries may enter a work 
     agreement relating to a product and service under paragraph 
     (1) only if--
       ``(A) the Attorney General determines, in consultation with 
     the Secretary of Labor and the Secretary of Commerce, that 
     the product or service would not be available except for the 
     availability of inmate workers provided by Federal Prison 
     Industries; and
       ``(B) the work agreement is accompanied by a written 
     certification by the chief executive officer of the 
     charitable organization that--
       ``(i) no job of a noninmate employee or volunteer of the 
     charitable organization (or any affiliate of the charitable 
     organization) will be abolished, and no such employee's or 
     volunteer's work hours will be reduced, as a result of the 
     entity being authorized to utilize inmate workers; and
       ``(ii) the work to be performed by the inmate workers will 
     not supplant work currently being performed by a contractor 
     of the charitable organization.
       ``(3) Nondelegation.--The Attorney General may not delegate 
     authority to make determinations under paragraph (2)(A) to 
     any person serving in a position below the lowest level of 
     positions that are filled by appointment by the President, by 
     and with the advice and consent of the Senate.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 307 of title 18, United States Code, is 
     amended by adding at the end the following:

``4130. Cooperation with charitable organizations. 

     SEC. 5. ADDITIONAL REHABILITATIVE OPPORTUNITIES FOR INMATES.

       (a) Establishment of Program.--
       (1) In general.--Chapter 303 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``SEC. 4049. ENHANCED IN-PRISON EDUCATIONAL AND VOCATIONAL 
                   ASSESSMENT AND TRAINING PROGRAM.

       ``(a) In General.--There is established the Enhanced In-
     Prison Educational and Vocational Assessment and Training 
     Program within the Federal Bureau of Prisons.
       ``(b) Requirements.--The program established under this 
     section shall provide, at a minimum, a full range of 
     educational opportunities, vocational training and 
     apprenticeships, and comprehensive release-readiness 
     preparation for inmates in Federal prisons.''.
       (2) Table of sections.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following:

``4049. Enhanced In-Prison Educational and Vocational Assessment and 
              Training Program. 

       (b) Implementation Objective.--It shall be the objective of 
     the Federal Bureau of Prisons to implement the program 
     established under section 4049 of title 18, United States 
     Code (as added by subsection (a)), in all Federal prisons not 
     later than 8 years after the date of the enactment of this 
     Act.

     SEC. 6. NEW PRODUCTS AND EXPANDED PRODUCTION OF EXISTING 
                   PRODUCTS.

       Federal Prison Industries shall, to the maximum extent 
     practicable, increase inmate employment by producing new 
     products or expanding the production of existing products for 
     the public sector that would otherwise be produced outside 
     the United States.

     SEC. 7. 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 before the date that 
     is 5 years after the date of the enactment of this Act shall 
     be--
       (1) eligible for appointment (or reappointment) in the 
     competitive service in accordance with subpart B or part III 
     of 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. 8. EFFECTIVE DATE.

       The amendments made by this Act shall take effect 180 days 
     after the date of the enactment of this Act.
  Mr. THOMAS. President, today I am pleased to join Senator Levin in 
introducing a bill that will further my efforts to limit unfair 
government competition with the private sector. Throughout my career in 
public office, I have always taken the position that government should 
not compete unfairly with American small businesses. If a function or 
product is available in the private sector, then that should be the 
first avenue of choice as opposed to having that function provided by 
government.
  For several years now, Federal Prison Industries (FPI), a government 
entity with the purpose of keeping prisoners busy while serving their 
sentences, has been providing a growing variety of products and 
services to both the Federal Government and the private sector. 
Currently, FPI employs approximately 21,000 Federal prisoners or 
roughly 12 percent of a population of 174,000. These prisoners are 
responsible for producing a diverse range of products for FPI, ranging 
from office furniture to clothing, as well as providing a variety of 
services, including telemarketing. The remaining Federal prisoners who 
work do so in and around Federal prisons.
  Through its status as a sole provider of certain goods to the Federal 
Government, FPI has effectively blocked private sector businesses from 
having a chance to provide products, even though they may be able to 
provide a better product in a more cost effective and efficient manner. 
This situation is not in the best interest of the American taxpayer and 
is blatantly unfair to American small businesses across the country. 
Along with Senators Grassley and Stabenow, Senator Levin and I propose 
to enact thorough and lasting reforms to Federal Prison Industries that 
would ensure that they no longer compete unfairly with private sector 
small businesses.
  We have already taken steps to remedy the situation. In last year's 
Omnibus Appropriations bill, language was included that prohibited 
funding for sole source products from FPI and subjected such 
procurements to follow the competitive requirements set out in the 
Federal Acquisitions Regulations. However, there are questions as to 
whether the mandatory sourcing requirement still remains under these 
regulations. Our bill makes it very clear to Federal Managers and 
Federal Prison Industries that contracting officers are to use 
competitive procedures for the procurement of products and services. 
This approach allows federal agencies to select FPI for contracts if, 
as a result of a competitive process, FPI can meet that particular 
agency's requirements and the product or service is the best value 
offered at a fair and reasonable price. By removing FPI's status as the 
sole provider and subjecting procurement to competition, the above 
outlined provision in our bill places the control of government 
procurement in the hands of contracting officers and allows them to 
pursue the most cost effective and efficient use of taxpayer dollars.
  While we believe that it is important to keep prisoners working, we 
do not believe that this effort should unduly harm or conflict with 
law-abiding businesses. This bill seeks to minimize the unfair 
competition that private sector companies face with the FPI. As FPI 
continues to expand its reach into providing services, the low costs of 
inmate labor is undercutting private sector businesses that provide 
similar services. The result is an unfair advantage for FPI. While 
allowing for the conclusion of current contracts, this bill also looks 
to limit services provided by inmates that compete with the private 
sector in interstate commerce. Additionally, the bill prohibits FPI 
from production of goods or services in which an inmate would have 
access to classified or sensitive data.
  We support the goal of keeping prisoners busy while serving their 
time in prison. But FPI should not be placed in a position of advantage 
when providing goods to the federal government, and these activities 
should not unfairly compete with services already provided in the 
private sector. However, I recognize that there may be cases in which a 
particular contract is deemed essential to the safety and effective 
administration of a particular prison. To deal with these exceptions, a 
provision is included that allows the Attorney General to grant a 
waiver to these reform measures in certain cases.
  In addition to bringing a halt to unfair business practices with the 
private sector, this bill allows for FPI to search for other means to 
keep prisoners working that do not impact the

[[Page S3424]]

employment of individuals in the private sector. There is a need to 
keep inmates busy, and this legislation addresses further work 
opportunities though public service activities and cooperation with 
charitable organizations. Additionally, the bill recognizes the need 
for further avenues of rehabilitation and directs the Federal Bureau of 
Prisons to establish an Enhanced In-Prison Educational and Vocational 
Assessment and Training Program for inmates.
  I am confident that by allowing competition for government contracts 
our bill will save taxpayer dollars. Through healthy competition with 
the private sector for procurement contracts, FPI will be forced to 
look internally for ways to improve its own effectiveness and 
efficiency. The reform of Federal Prison Industries will bring about 
numerous improvements, not just in cost savings, but also in preserving 
jobs for law abiding Americans in the private sector who work in small 
businesses. And the most important effect will be the better use of tax 
dollars. The American taxpayer is the one who will benefit most from 
this legislation.
  A similar version of our bill was reported favorably out of the 
Senate Governmental Affairs Committee in the 108th Congress, and reform 
measures have passed overwhelming in the House of Representatives. Our 
bill has the support of small business groups from across the country, 
as well as organized labor. Clearly, reforming the way Federal Prison 
Industries does business is an issue that enjoys broad, bipartisan 
support. I believe this bill provides that reform. I would ask my 
colleagues to look at this legislation and consider giving it their 
support.
                                 ______