[House Report 107-583]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-583
======================================================================
FEDERAL PRISON INDUSTRIES COMPETITION IN CONTRACTING ACT OF 2002
_______
July 16, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1577]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1577) to amend title 18, United States Code, to
require Federal Prison Industries to compete for its contracts
minimizing its unfair competition with non-inmate workers and
the firms that employ them and increasing the likelihood that
Federal agencies get the best value for taxpayers dollars, to
require that Federal Prison Industries fully and timely perform
its Government contracts by empowering Federal contracting
officers with the contract administration tools generally
available to assure full and timely performance of other
Government contracts, to enhance the opportunities for
effective public participation in decisions to expand the
activities of Federal Prison Industries, to provide to Federal
agencies temporary preferential contract award authority to
ease the transition of Federal Prison Industries to obtaining
inmate work opportunities through other than its mandatory
source status, to provide additional work opportunities for
Federal inmates by authorizing Federal Prison Industries to
provide inmate workers to nonprofit entities with protections
against commercial activities, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 13
Background and Need for the Legislation.......................... 16
Hearings......................................................... 18
Committee Consideration.......................................... 18
Vote of the Committee............................................ 18
Committee Oversight Findings..................................... 22
Performance Goals and Objectives................................. 22
New Budget Authority and Tax Expenditures........................ 22
Congressional Budget Office Cost Estimate........................ 22
Constitutional Authority Statement............................... 26
Section-by-Section Analysis and Discussion....................... 26
Changes in Existing Law Made by the Bill, as Reported............ 29
Markup Transcript................................................ 42
Dissenting Views................................................. 207
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Prison Industries
Competition in Contracting Act of 2002''.
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.
``(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.
``(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
comply with 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 noninmate 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 sales 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 CFR part 2.101), as in effect on June 1, 2001, 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; or
``(B) authorize the production of a new specific product or
the furnishing of a new specific service for donation.''.
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.
(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 2004;
(B) 85 percent in fiscal year 2005;
(C) 70 percent in fiscal year 2006;
(D) 55 percent in fiscal year 2007; and
(E) 40 percent in fiscal year 2008.
(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, 2008, and become effective on the effective date of the
final regulations issued pursuant to section 17.
(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, 2000,
and September 30, 2001 (Fiscal Year 2001);
(2) the term ``business sectors'' means the eight product/
service business groups identified in the 2001 Federal Prison
Industries annual report as the Clothing and Textile Business
Group, the Electronics Business Group, the Fleet Management and
Vehicular Components Business Group, the Furniture Business
Group, the Graphics Business Group, the Industrial Products
Business Group, the Recycled Electronics Products and Services
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.
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 1762(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 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.
``(B) The various inmate wage rates shall be reviewed and
considered for increase on not less than a biannual basis.
``(C) 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.
``(D) 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, 2001, 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, 2001, or
(2) until September 30, 2004, 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 with a correctional institution operated by 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 OPPORTUNITIES FOR POST INCARCERATION
VOCATIONAL AND REMEDIAL EDUCATIONAL OPPORTUNITIES
FOR INMATES.
(a) Federal Reentry Center Demonstration.--
(1) Authority and establishment of demonstration project.--
From funds made available to carry out this section, the
Attorney General, in consultation with the Director of the
Administrative Office of the United States Courts, shall
establish the Federal Reentry Center Demonstration project. The
project shall involve appropriate prisoners from the Federal
prison population and shall utilize community corrections
facilities, home confinement, and a coordinated response by
Federal agencies to assist participating prisoners in preparing
for and adjusting to reentry into the community.
(2) Project elements.--The project authorized by paragraph
(1) shall include the following core elements:
(A) A Reentry Review Team for each prisoner,
consisting of representative from the Bureau of
Prisons, the United States Probation System, the United
States Parole Commission, and the relevant community
corrections facility, who shall initially meet with the
prisoner to develop a reentry plan tailored to the
needs of the prisoner.
(B) A system of graduated levels of supervision
within the community corrections facility to promote
community safety, provide incentives for prisoners to
complete the reentry plan, including victim
restitution, and provide a reasonable method for
imposing sanctions for a prisoner's violation of the
conditions of participation in the project.
(C) Substance abuse treatment and aftercare, mental
and medical health treatment and aftercare, vocational
and educational training, life skills instruction,
conflict resolution skills training, batterer
intervention programs, assistance obtaining suitable
affordable housing, and other programming to promote
effective reintegration into the community as needed.
(3) Probation officers.--From funds made available to carry
out this section, the Director of the Administrative Office of
the United States Courts shall assign one or more probation
officers from each participating judicial district to the
Reentry Demonstration project. Such officers shall be assigned
to and stationed at the community corrections facility and
shall serve on the Reentry Review Teams.
(4) Project duration.--The Reentry Center Demonstration
project shall begin not later than 6 months following the
availability of funds to carry out this subsection, and shall
last 3 years.
(b) Definitions.--For the purposes of this section, ``Appropriate
prisoner'' shall mean a person who is considered by prison
authorities--
(1) to pose a medium to high risk of committing a criminal
act upon reentering the community, and
(2) to lack the skills and family support network that
facilitate successful reintegration into the community.
(c) Authorization of Appropriations.--To carry out this section,
there are authorized to be appropriated, to remain available until
expended--
(1) to the Federal Bureau of Prisons--
(A) $1,375,000 for fiscal year 2003;
(B) $1,110,000 for fiscal year 2004;
(C) $1,130,000 for fiscal year 2005;
(D) $1,155,000 for fiscal year 2006; and
(E) $1,230,000 for fiscal year 2007;
(2) to the Federal Judiciary--
(A) $3,380,000 for fiscal year 2003;
(B) $3,540,000 for fiscal year 2004;
(C) $3,720,000 for fiscal year 2005;
(D) $3,910,000 for fiscal year 2006; and
(E) $4,100,000 for fiscal year 2007.
SEC. 11. PROVIDING ADDITIONAL TRAINING AND EDUCATIONAL OPPORTUNITIES
FOR INMATES.
(a) Amendment Regarding the Department of Justice Assets Forfeiture
Fund.--Section 524(c)(1) of title 28, United States Code, is amended--
(1) by redesignating the second appearance of subparagraph
(I) as subparagraph (J); and
(2) by amending subparagraph (J) (as redesignated by
paragraph (2)) to read as follows:
``(J) payments to the Bureau of Prisons exclusively for the
purpose of establishing the Federal Enhanced In-Prison
Vocational Assessment and Training Program in all Federal
institutions, which shall provide in-prison assessments of
prisoners' needs and aptitudes, enhanced work skills developed,
enhanced release readiness programming, and other components as
appropriate to reduce inmate idleness and prepare Federal
prisoners for release and reentry into the community;''; and
(4) by adding at the end the following new subparagraph:
``(K) payments to the Bureau of Prisons exclusively for the
purpose of establishing a nonprofit component for inmate work
in all Federal institutions, in carrying out which Federal
Prison Industries shall (i) work actively to identify and
donate to nonprofit organizations that provide goods and
services to low income individuals who can use Federal Prison
Industry products and have difficulty purchasing these products
on their own, and (ii) focus on organizations that would not
otherwise be available to purchase such products.''.
(b) Priority Established.--During each fiscal year after fiscal
year 2002, the Attorney General shall, to carry out the programs
described in subparagraphs (J) and (K) of section 524(c)(1) of title
28, United States Code (as added by subsection (a)), allocate such
funds as may be appropriate, but in no event less than $75,000,000,
from the excess unobligated balance in the Department of Justice Assets
Forfeiture Fund. If the unobligated balance of the Fund is less than
such amount or such funds are otherwise unavailable from the Fund, such
allocation shall be made from the General Treasury.
SEC. 12. 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 Oversight 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. 13. PRE-RELEASE EMPLOYMENT ASSISTANCE.
(a) In General.--The Director of the 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.
(b) Pre-Release Employment Placement Assistance.--Such pre-release
employment placement assistance required by subsection (a) shall
include--
(1) training in the preparation of resumes and job
applications;
(2) training in interviewing skills;
(3) training and assistance in job search techniques;
(4) conduct of job fairs; and
(5) such other methods deemed appropriate by the Director
of the Bureau of Prisons.
(c) 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 12
months of release from incarceration.
SEC. 14. PROVIDING ADDITIONAL MANAGEMENT FLEXIBILITY TO FEDERAL PRISON
INDUSTRY 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. 15. 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. 16. 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, 2001.''.
SEC. 17. 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. 18. RULE OF CONSTRUCTION.
Subsection (e) of section 4124 of title 18, United States Code, as
amended by section 2, is not intended to alter any rights of any
offeror other than Federal Prison Industries to file a bid protest in
accordance with other law or regulation in effect on the date of the
enactment of this Act.
SEC. 19. 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 16(a)(2), or after September 30, 2003,
whichever is earlier.
SEC. 20. 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.''.
SEC. 21. 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 January 31, 2003, the Comptroller
General shall submit the results of the study to Congress, including
any recommendations for legislation.
Purpose and Summary
H.R. 1577 would fundamentally amend Federal Prison
Industries' (FPI) 1934 authorizing statute. This bill would
gradually phase out the exclusive right of FPI, deemed
``mandatory source,'' to sell goods to Federal agencies by
October 1, 2008. The bill changes the manner in which FPI sells
its products and services to the various Federal departments
and agencies. During the phase-out period, FPI would be
required to provide the agencies with a product that meets its
needs at a ``fair and reasonable price'' in a timely manner.
Today, FPI's offered price meets the ``current market''
price standard if it does not exceed the highest price offered
to the Government for a comparable item, even if no actual
sales have been made at that price. Under the Federal
Acquisition Regulations (FAR), the buying agency must obtain
FPI's permission through a ``waiver'' to solicit competitive
offers from the private sector.
This legislation would establish new competitive procedures
for Government procurement of products or services that are
offered for sale by FPI. H.R. 1577 would require that FPI sales
to its Federal agency customers be made through contracts won
on a competitive basis, for both products and services. Like
other suppliers to the Federal Government, FPI would be
required to fulfill its contractual obligations in a timely
manner.
To enable FPI to adjust to the requirement that it obtain
contracts on a competitive basis, H.R. 1577 provides FPI with a
5-year transitional period to phase-out its sole-source
dealings with its Federal agency customers. Under this
authority, Federal agencies could continue to contract with FPI
on a noncompetitive basis, subject to annually declining caps
on the use of the preferential contracting authority. During
the first transitional year, FY 2004, Federal agencies could
make noncompetitive awards to FPI in an amount not to exceed 90
percent of FPI's sales in FY 2001. The percentage decreases to
85 percent in FY 2005, 70 percent in FY 2006, 55 percent in FY
2007, and 40 percent in the final transitional year FY 2008.
To assure that the loss of a contract by FPI does not
endanger the safety of a Federal Correctional Institution
(FCI), H.R. 1577 contains a provision that permits the Attorney
General to authorize a sole source contract award to prevent
idleness ``that could reasonably be expected to significantly
endanger the safe and effective administration'' of the FCI at
which the work required by the contract is scheduled to be
performed. To prevent abuse of this sole-source authority by
FPI, the provision requires that the Attorney General's
decision to authorize the sole source contract award be
supported by findings by the FCI's warden.
H.R. 1577 does not alter a broad array of advantages that
FPI enjoys when it competes with private sector firms. Inmates
working for FPI will continue to be paid at sub-minimum wage
rates, the highest of which is $1.15 per hour. FPI factory
space is provided by the host FCI, and is constructed at
taxpayer expense. Similarly, FPI receives its utilities from
the host FCI. As a Government corporation, FPI may receive
industrial equipment excess without cost from other Departments
and agencies, including the substantial quantities of
industrial equipment returned to the Department of Defense by
its contractors. FPI has had a $20 million line-of-credit from
the U.S. Treasury on an interest-free basis since 1988.
In addition to requiring that FPI competes for its Federal
agency sales, H.R. 1577 improves the process by which FPI's
Board of Directors considers proposals from FPI's career
management staff to authorize production expansion. The bill
provides clearer standards to guide the Board deliberations
regarding expansion proposals. It improves, and makes
independent, the process by which the impact on private sector
suppliers is evaluated. It increases the opportunities for
public comment on the proposed expansions and assures that FPI
has direct access to those comments. For the first time, it
extends the process to proposals to offer a new service as well
as a new product or to expand the production of a currently
authorized product or service.
The legislation substantially modifies the structure of
FPI's Board of Directors. Currently, the FPI Board of Directors
is composed of six-members, appointed by the President. Two are
public members, one representing the Attorney General and
another representing the Secretary of Defense. Of the four
private sector members, one represents ``industry,'' one
represents ``labor,'' one represents ``agriculture'' (although
FPI does not sell agricultural products), and one represents
``retailers and consumers'' (although FPI is not authorized to
sell products or services in the commercial market).
H.R. 1577 replaces the current Board with an 11-member
Board, with three members representing business, three members
representing labor, one member with special expertise in inmate
rehabilitation techniques, one member representing victims of
crime, one member representing inmate workers, and two
additional members ``whose background and expertise the
President deems appropriate.'' The restructuring of the Board
was modeled after the Internal Revenue Service Oversight Board,
enacted as part of the Internal Revenue Service Restructuring
and Reform Act of 1998. Most important, H.R. 1577 requires that
the Board deliberate and make decisions in public rather than
in closed session as they do today.
SENSENBRENNER-FRANK AMENDMENT
IN THE NATURE OF A SUBSTITUTE
The amendment in the nature of a substitute offered by Mr.
Sensenbrenner and Mr. Frank was based upon the text of H.R.
1577 with a series of substantive modifications based upon
detailed discussions with Federal Prison Industries (FPI)
designed to address concerns regarding the phase-out of
mandatory source.
MR. CONYERS AMENDMENT
Mr. Conyers offered an amendment to the amendment in the
nature of the substitute, which was adopted by the Committee,
that will expand upon the provisions of the legislation that
provide alternative rehabilitative opportunities for more
Federal inmates to better prepare them for a successful return
to society. It allows a demonstration project for a Federal
Reentry program to be established to protect communities and
help prisoners reintegrate into society after release. The
amendment provides increased opportunities to participate in
programs providing fundamental remedial education as well as
modern hands-on vocational and apprenticeship training.
Additionally, the amendment provides alternative paid work
opportunities by authorizing FPI to produce products for
donation to nonprofit organizations that provide goods and
services to low income individuals who can use these goods and
have difficulty purchasing these products on their own.
HYDE AMENDMENT
Mr. Hyde offered an amendment to the amendment in the
nature of a substitute that was approved by the Committee,
after being modified by an amendment offered by Mr. Frank,
which would require the Attorney General to make a finding
regarding the effects of the phase-out of mandatory source
authority on inmate employment and safety in the prisons and of
the public. If the Attorney General finds a significant risk of
adverse effects, he would notify the Congress and postpone any
further phase-out of mandatory source for 1 year. The phase-out
postponed shall resume 1 year later if the Attorney General
makes a finding 60 days prior to the start of that fiscal year
that it will not result in a substantial reduction in inmate
employment or will not present significant threats to prison
operations or public safety.
FRANK AMENDMENT
The Committee approved an amendment offered by Mr. Frank to
the Hyde amendment to the amendment in the nature of a
substitute to allow for a study and report to Congress by the
Attorney General, but did not allow the Attorney General to
postpone the phase-out.
JACKSON LEE AMENDMENT
The Committee adopted an amendment to the amendment in the
nature of a substitute offered by Ms. Jackson Lee to allow the
Comptroller General to have an independent study performed on
the effects of eliminating mandatory source contracting.
GREEN AMENDMENT
Mr. Green offered an amendment to the amendment in the
nature of the substitute, which was adopted by the Committee,
that would add two additional members to the Board of
Directors, one member to represent victims of crime and another
to represent Federal inmate workers.
WATT AMENDMENT
The Committee adopted an amendment offered by Mr. Watt to
the amendment in the nature of a substitute that would alter
the first of two determinations that the Attorney General must
make to allow procurement activity to be had on a
noncompetitive basis by FPI to require a determination that FPI
cannot reasonably expect fair consideration to receive the
contract award on a competitive basis.
SCOTT AMENDMENT
Mr. Scott offered an amendment to the amendment in the
nature of a substitute that the Committee adopted which would
require the Attorney General to include information in his
annual report to Congress (adopted by the Hyde amendment) on
the impact of the loss of prison industry jobs on the safety
and work environment of the workers.
Background and Need for the Legislation
The Federal Bureau of Prisons (BOP) has approximately
150,000 prisoners convicted of Federal crimes in custody. The
BOP operates 98 institutions that hold more than 126,000
prisoners. Prisoners who are physically able must work in some
capacity 5 days a week. The Federal Prison Industries (FPI), a
Government corporation that operates the BOP's correctional
program, employs approximately 17 percent of the Federal prison
population to manufacture goods for, and provide services to,
Federal agencies.
FPI is a large and growing Government-owned corporation. It
currently operates 102 factories at 67 of its correctional
institutions where it produces products in over 150 different
product lines under the trade name UNICOR. It offers products
and services through eight business groups. They are the
Clothing and Textile Business Group, the Electronics Business
Group, the Fleet Management and Vehicular Components Business
Group, the Furniture Business Group, the Graphics Business
Group, the Industrial Products Business Group, the Recycled
Electronics Products and Services Business Group, and the
Services Business Group.
In Fiscal Year 2001, FPI had sales of $583.5 million, up
from $546.4 million in FY 2000. These sales place FPI among the
top 40 contractors to the Federal Government, in the same
league with Motorola and Dell Computer Corporation. By
contrast, FPI sales were $29 million in 1960. They reached $117
million in 1980. By 1985, they had grown to $240 million.
Although total Federal procurement expenditures were dropping,
FPI sales were $339 million in 1990 and climbed to $459.1
million by 1995.
Federal agencies are required by law, under 18 U.S.C.
Sec. 4124, to purchase FPI products if a product is available
that meets the agencies' requirements and does not exceed
current market prices. Under FPI's 1934 authorizing statute
Federal agencies ``shall purchase at not to exceed current
market prices, such products . . . as meet their requirements
and may be available'' (18 U.S.C. Sec. 4124). This provision in
the law, deemed `mandatory source preference,' does not specify
how the current market price should be determined. The General
Accounting Office (GAO) concluded in a 1998 report to Congress
that ``the only limitation on FPI's price is that it may not
exceed the upper end of the current market price range.''
The ``mandatory preference'' given FPI is viewed as an
exception to the Federal Acquisition Regulation standards
established for a ``fair and reasonable price.'' Agencies are
required to purchase products from FPI regardless of whether
FPI provides the agency with a price it considers reasonable or
factually supports the price it offered. An agency must obtain
a waiver from FPI to purchase a product from another source;
however, differences in price alone cannot sustain the request
for a waiver.
Under FPI's mandatory source status, FPI, rather than the
buying Federal agency, determines if FPI's offered product and
proposed delivery schedule meet the mission needs of the buying
agency and whether FPI's offered price meets the ``current
market'' price standard. Thus, FPI's mandatory source status
deprives the Federal agencies from using competitive
procurement procedures to get the ``best value'' for the tax
dollars they expend. Private sector businesses, and their non-
inmate workers, are deprived of even the opportunity to bid on
a broad array of contracting opportunities funded with their
tax dollars.
Although FPI is precluded from selling its goods in the
commercial market under 18 U.S.C. Sec. 1761, the Bureau of
Prisons (BOP) has taken the position that the language
prohibiting interstate transport of goods does not prohibit it
from selling services in the commercial market. Many private
companies and small business have trouble competing with the
advantages the prison industry enjoys such as a guaranteed
market for its products and reduced costs for labor and
capital.
Opponents of this legislation maintain that FPI is
completely self-sufficient and serves a vital purpose. FPI
provides inmates with employment skills and the opportunity to
learn a trade that will help them obtain a job upon release.
Some studies have shown that inmates who participate in work
programs are less likely to commit new offenses. Additionally,
allowing prisoners to work helps productivity and minimizes
opportunities for conflict within the prison. Some wages paid
to the prisoners are directed toward restitution payments owed
to victims.
B. Legislative History
H.R. 1577, the ``Federal Prison Industries Competition in
Contracting Act of 2001'' was introduced on April 24, 2001 and
referred to the House Subcommittee on Crime, Terrorism, and
Homeland Security on April 25, 2001. The bill is similar to two
different bills that were introduced in the 106th Congress to
address the mandatory source preference in FPI. Hearings were
held on these bills in the Subcommittee and H.R. 1577 was
forwarded to the House Committee on the Judiciary.
Hearings
The Committee's Subcommittee on Crime, Terrorism, and
Homeland Security held 1 day of hearings on H.R. 1577 on April
26, 2001. During that hearing Rep. Peter Hoekstra (MI-2d), the
sponsor of H.R. 1577, testified and submitted for the record
the printed hearing records from five oversight hearings
conducted by the Subcommittee on Oversight and Investigations
of the Committee on Education and the Workforce during the
104th, 105th, and 106th Congress. Testimony was received from
three other witnesses, representing business and labor
organizations, with additional material submitted by two
individuals and organizations.
Committee Consideration
On April 18, 2002 and April 24, 2002, the Committee met in
open session and ordered favorably reported the bill H.R. 1577
with amendments by a voice vote, a quorum being present.
Vote of the Committee
1. Mr. Conyers offered an amendment to the amendment in the
nature of the substitute which would provide funds for
additional vocational and educational opportunities for inmates
during their incarceration and establish a demonstration
project for a Federal offender reentry program after release to
assist prisoners in adapting to life outside of prison,
including skills training. The amendment would also allow FPI
to donate products to nonprofit organizations that serve low
income individuals. This amendment was adopted by voice vote.
2. Mr. Green of Wisconsin offered an amendment to the
amendment in the nature of a substitute which would allow FPI
to sell on a noncompetitive basis to agencies only in
accordance with the applicable laws and regulations and not in
accordance with the procedures described in the amendment in
the nature of a substitute. It would also require agencies to
solicit bids from FPI for any purchase even those under the
micro-purchase threshold. This amendment was defeated on a
rollcall vote, 8-18.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................ X
Mr. Gekas....................................................... X
Mr. Coble....................................................... X
Mr. Smith (Texas)............................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte...................................................
Mr. Bryant......................................................
Mr. Chabot...................................................... X
Mr. Barr........................................................ X
Mr. Jenkins..................................................... X
Mr. Cannon...................................................... X
Mr. Graham......................................................
Mr. Bachus...................................................... X
Mr. Hostettler.................................................. X
Mr. Green....................................................... X
Mr. Keller...................................................... X
Mr. Issa........................................................ X
Ms. Hart........................................................ X
Mr. Flake.......................................................
Mr. Pence.......................................................
Mr. Conyers..................................................... X
Mr. Frank....................................................... X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Meehan...................................................... X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin..................................................... X
Mr. Weiner...................................................... X
Mr. Schiff......................................................
Mr. Sensenbrenner, Chairman..................................... X
-----------------------------------------------
Total....................................................... 8 18
----------------------------------------------------------------------------------------------------------------
3. Mr. Hyde offered an amendment to the amendment in the
nature of a substitute that would require the Attorney General
to make a finding regarding the effects of the phase-out of
mandatory source authority on inmate employment and safety
within the prisons and to the public. If the Attorney General
finds a significant risk of adverse effects, he would notify
the Congress and postpone for 1 year any further phase-out of
mandatory source. The phase-out postponed shall resume 1 year
later if the Attorney General makes a finding 60 days prior to
the start of that fiscal year that it will not result in a
substantial reduction in inmate employment or will not present
significant threats to prison operations or public safety. The
Hyde amendment was adopted by voice vote after being modified
by an amendment offered by Mr. Frank.
4. Mr. Frank offered an amendment to the Hyde amendment to
the amendment in the nature of a substitute to allow for a
study and report to Congress by the Attorney General, but did
not allow the Attorney General to postpone the phase-out. The
Frank amendment to the Hyde amendment was adopted by a rollcall
vote, 18-9.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................ X
Mr. Gekas....................................................... X
Mr. Coble....................................................... X
Mr. Smith (Texas)............................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte...................................................
Mr. Bryant......................................................
Mr. Chabot...................................................... X
Mr. Barr........................................................ X
Mr. Jenkins..................................................... X
Mr. Cannon...................................................... X
Mr. Graham...................................................... X
Mr. Bachus...................................................... X
Mr. Hostettler.................................................. X
Mr. Green....................................................... X
Mr. Keller...................................................... X
Mr. Issa........................................................ X
Ms. Hart........................................................ X
Mr. Flake....................................................... X
Mr. Pence.......................................................
Mr. Conyers..................................................... X
Mr. Frank....................................................... X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Meehan......................................................
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner...................................................... X
Mr. Schiff...................................................... X
Mr. Sensenbrenner, Chairman..................................... X
-----------------------------------------------
Total....................................................... 18 9
----------------------------------------------------------------------------------------------------------------
5. Ms. Jackson Lee offered an amendment to the amendment in
the nature of a substitute to allow the Comptroller General to
have an independent study performed on the effects of
eliminating mandatory source contracting. This amendment was
adopted by a voice vote.
6. Mr. Green offered an amendment in the nature of a
substitute that would add two additional members to the Board
of Directors, one member to represent victims of crime and
another to represent Federal inmate workers. This amendment was
adopted by a voice vote.
7. Mr. Watt offered an amendment to the amendment in the
nature of the substitute that would alter the first of two
determinations that the Attorney General must make to allow
procurement activity to be had on a noncompetitive basis by FPI
to require a determination that FPI cannot reasonably expect
fair consideration to receive the contract award on a
competitive basis. This amendment was adopted by a voice vote.
8. Mr. Issa offered an amendment that would have allowed
Federal Prison Industries to continue to utilize mandatory
source if 80 percent of the products are manufactured by
inmates within 2 years of release or in a pre-release program.
This amendment was defeated by a rollcall vote, 5-22.
ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Gekas....................................................... X
Mr. Coble....................................................... X
Mr. Smith (Texas)............................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Bryant...................................................... X
Mr. Chabot...................................................... X
Mr. Barr........................................................ X
Mr. Jenkins..................................................... X
Mr. Cannon...................................................... X
Mr. Graham......................................................
Mr. Bachus......................................................
Mr. Hostettler.................................................. X
Mr. Green....................................................... X
Mr. Keller...................................................... X
Mr. Issa........................................................ X
Ms. Hart........................................................ X
Mr. Flake....................................................... X
Mr. Pence.......................................................
Mr. Conyers..................................................... X
Mr. Frank....................................................... X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Meehan...................................................... X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin..................................................... X
Mr. Weiner......................................................
Mr. Schiff...................................................... X
Mr. Sensenbrenner, Chairman..................................... X
-----------------------------------------------
Total....................................................... 5 22
----------------------------------------------------------------------------------------------------------------
9. Mr. Scott offered an amendment that would require the
Attorney General to include information in his annual report to
Congress (as added by the Hyde amendment) on the impact of the
loss of prison industry jobs on the safety and work environment
of the workers. This amendment was adopted by voice vote.
10. Mr. Scott offered an amendment that would allow the
Board of Directors to approve a proposal authorizing FPI to
exceed a ``reasonable share of the market,'' as defined in the
Sensenbrenner-Frank amendment in the nature of a substitute, if
it is specifically requested by the agency and the contract
award is made using competitive procedures. This amendment was
defeated by voice vote.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Performance Goals and Objectives
The legislation as amended includes an authorization of
funds to improve vocational training and educational
opportunities within the Federal prison system and to allow a
demonstration project for a Federal offender reentry program.
The goal is to ensure that with the phase-out of mandatory
source, inmates in prison are still receiving skills training
to improve job opportunities after release. Additionally, the
Federal reentry program will establish plans for individual
prisoners to address community safety, substance abuse/mental
health treatment, vocational and educational training, and
programming to assist with successful reintegration into the
community.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of House rule XIII is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 1577, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 27, 2002.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1577, the Federal
Prison Industries Competition in Contracting Act of 2002.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lanette J.
Walker, who can be reached at 226-2860.
Sincerely,
Dan L. Crippen, Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 1577--Federal Prison Industries Competition in Contracting Act of
2002.
SUMMARY
H.R. 1577 would amend the laws that authorize the Federal
Prison Industries (FPI), a Government-owned corporation that
produces products for the Federal Government with prison labor.
Under current law, Federal agencies are required to purchase
products from FPI if products are available to meet the
agencies' needs and the cost would not exceed current market
prices. Such products include office furniture, textiles,
vehicle tags, and fiber optics. Under the bill, this
requirement would be reduced over the next several years, and
the share of the Federal market that FPI holds for the products
and services it provides would be limited to 20 percent and 5
percent, respectively.
Section 11 would authorize the Attorney General to
establish a Federal Enhanced In-Prison Vocational Assessment
and Training Program in all Federal institutions and establish
an FPI program that would produce products to be donated to
nonprofit organizations. The bill also would appropriate a
minimum of $75 million per year for such programs. Based on
information from the Department of Justice (DOJ) and major FPI
customers, CBO estimates that enacting this provision would
result in direct spending of about $1.9 billion over the 2003-
2007 period and $5.3 billion over the 2003-2012 period. Because
enactment of H.R. 1577 would affect direct spending, pay-as-
you-go procedures would apply to the bill.
The bill also would authorize the appropriation of $4
million to $5 million each year over the 2003-2007 period for
the Bureau of Prisons and the Federal courts to establish a
Federal Reentry Center Demonstration project. CBO estimates
that implementing this provision would cost $24 million over
the 2003-2007 period to establish and operate the program,
assuming the appropriation of the authorized amounts.
H.R. 1577 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on State, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 1577 is shown in the
following table. The cost of this legislation falls within
budget function 750 (administration of justice).
BASIS OF ESTIMATE
CBO assumes that H.R. 1577 will be enacted near the end of
fiscal year 2002 and that amounts authorized by the bill will
be appropriated. The bill's effects on direct spending and
spending subject to appropriation are described in the
following paragraphs.
Direct Spending
H.R. 1577 would authorize the Attorney General to spend no
less than $75 million a year to establish and administer the
programs authorized in section 11. CBO estimates that direct
spending as a result of enacting H.R. 1577 would exceed that
minimum level and would total about $1.9 billion over the 2003-
2007 period and $5.3 billion over the next 10 years. Our
estimate is based primarily on the assumption that all able
inmates continue to work as under current law.
FPI Donation Program. The bill would facilitate developing
a significant donation program by restricting the portion of
the Federal market for goods and services that FPI can serve
and by reducing the requirement for Federal agencies to
purchase such goods and services from FPI. H.R. 1577 would
limit the portion of the Federal market for any product or
service that FPI can provide to the government to 20 percent
and 5 percent, respectively. For example, FPI provides 94
percent of all mail carrier bag repair for the U.S. Postal
Service. H.R. 1577 would prevent FPI from providing more than 5
percent of that service. In addition, the bill would gradually
reduce the requirement for Federal agencies to purchase FPI
products and services. Based on information from DOJ and major
Federal customers of FPI, we expect that FPI's total sales to
the Federal Government would decrease under the bill by 20
percent of projected sales in 2003 and that such sales would
continue to decline--eroding by 50 percent of anticipated sales
by 2008.
H.R. 1577 also would authorize the Attorney General to
establish a new FPI program in every Federal institution that
would produce goods and services to be donated to nonprofit
organizations instead of being offered for purchase to the
Federal Government. Because the Bureau of Prisons requires all
able inmates to work, CBO assumes that the loss in production
due to reduced demand by Federal agencies for FPI products and
services would be offset by the production of goods and
services for donation under this new program.
CBO estimates that the donation program would cost $137
million in fiscal year 2003, about $1.1 billion over the 2003-
2007 period, and about $3.1 billion over the 2003-2012 period
to operate in existing facilities. Costs would include inmate
and civilian salaries, raw materials, maintenance, and other
expenses to convert manufacturing facilities to produce
products desirable to nonprofit organizations.
The cost of operating the FPI donation program would
increase as more prison facilities are added to the Federal
system. DOJ anticipates that about 25 new Federal prison
facilities will open during the next 10 years. Based on
information from DOJ, CBO estimates that implementing the FPI
donation program in those new facilities would cost $700
million over the 2003-2007 period and about $1.9 billion over
the 2003-2012 period.
Enhanced In-Prison Vocational Assessment and Training.
Section 11 would authorize the Attorney General to establish a
Federal Enhanced In-Prison Vocational Assessment and Training
Program in all Federal institutions. Federal institutions
currently participate in vocational assessment and training
programs, and we assume that the program that would be
authorized by H.R. 1577 would be an expanded version of the
current program. Based on information from DOJ, CBO estimates
that the enhanced program would cost $28 million to $30 million
per year to increase the number of inmates who participate in
the training and expand the services provided by the program.
Spending Subject to Appropriation
Section 10 would authorize the appropriation of $1 million
each year to the Bureau of Prisons and $3 million to $4 million
each year to the Federal courts to establish the Federal
Reentry Center Demonstration project. The project would include
substance abuse treatment, vocation and educational training,
conflict resolution skills training, and assistance with
affordable housing. CBO estimates that this provision would
cost $24 million over the 2003-2007 period, assuming the
appropriation of the authorized amounts.
PAY-AS-YOU-GO CONSIDERATIONS
The Balanced Budget and Emergency Deficit Control Act sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts. The changes in direct spending that would
be subject to pay-as-you-go procedures are shown in the
following table. For the purposes of pay-as-you-go procedures,
only the effects through 2006 are counted.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 1577 contains no intergovernmental or private-sector
mandates as defined in UMRA and would impose no cost on State,
local, or tribal governments.
ESTIMATE PREPARED BY:
Federal Costs: Lanette J. Walker (226-2860)
Impact on State, Local, and Tribal Governments: Angela Seitz
(225-3220)
Impact on the Private Sector: Paige Piper/Bach (226-2940)
ESTIMATE APPROVED BY:
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clauses 3, 14 and 18,
of the Constitution.
Section-by-Section Analysis and Discussion
Section 1. Short Title. The short title of this bill is the
``Federal Prison Industries Competition in Contracting Act of
2002.''
Section 2. Government-Wide Procurement Policy Relating to
Purchases from Federal Prison Industries. Amends Title 18 to
replace provisions regarding the purchase of prison-made
products by Federal departments with provisions establishing a
Government-wide procurement policy relating to purchases from
FPI, which will generally require the use of competitive
procedures.
This section includes a provision to allow FPI to make
sales on a noncompetitive basis if the Attorney General makes
two findings regarding the ability of FPI to receive the
contract and the need for the contract to maintain safety in
the prison and the community. Additionally, this section
requires the Attorney General to study the effects of the
phase-out of mandatory source and provide a report to Congress
with recommendations regarding the need for further
appropriations to provide additional staffing for prison safety
and inmate rehabilitation.
Section 3. Public Participation Regarding Expansion
Proposals by Federal Prison Industries. Requires that, whenever
FPI proposes to authorize the sale of a new product or service
or to expand production of a current product or service, an
analysis of the probable impact of the proposed expansion on
private sector firms be performed.
Section 4. Transitional Mandatory Source Authority.
Establishes a 5-year phase-out of the Federal Prison Industries
mandatory source preference. It requires that during the phase-
out period Federal agencies must solicit contracts from FPI
first, if FPI has a product that meets the agency's needs, can
provide that product in a timely manner, and can provide it at
a fair and reasonable price.
Section 5. Authority to Perform as a Federal Subcontractor.
Authorizes FPI to enter into a contract with a Federal
contractor to produce products as a subcontractor or supplier
in the performance of a Federal procurement contract. The use
of FPI as a subcontractor or supplier must be a voluntary
business decision by the Federal prime contractor or
subcontractor.
Section 5 prohibits commercial sales of a product or
service either directly or indirectly, resulting from the labor
of inmate workers. It also requires a Federal contractor using
FPI as a subcontractor to implement appropriate management
procedures to prevent introducing an inmate-produced product
into the commercial market.
The use of FPI as a subcontractor or supplier of products
or provider of services cannot be imposed upon Federal prime
contractors or subcontractors as a condition of the contract
requiring it to make use of Federal Prison Industries, its
products or services.
Section 6. Inmate Wages and Deductions. Requires the
director of the BOP to establish the rates of hourly wages to
be paid inmates performing work for FPI and other work
assignments within the correctional institutions.
Wages earned by an inmate worker will be paid in the name
of the inmate. Deductions will be taken from the wages as
follows: (1) applicable taxes (Federal, State, and local); (2)
payment of fines and restitution pursuant to court order; (3)
payment of additional restitution for victims of the inmate's
crimes; (4) allocations for support of the inmate's family
pursuant to statute, court order, or agreement with the inmate;
(5) allocations to a fund in the name of the inmate to
facilitate assimilation back into society, payable at the
conclusion of incarceration; and (6) such other deductions as
may be specified by the Director of the Bureau of Prisons.
Section 7. Clarifying Amendment Relating to Services.
Amends section 1761(a) of Title 18, United States Code, to
clarify that the prohibition on the results of inmate labor
being introduced into interstate commerce extends to services
as well as products. The section also provides transitional
authority to hold harmless prison industry programs operated by
the states and their units of local government, which may have
engaged in the commercial sale of inmate services in reliance
on the February 1998 memorandum opinion from a special counsel
in the Criminal Division of the U.S. Department of Justice.
Section 8. Conforming Amendment. Provides FPI with explicit
statutory authority to offer services to the various Federal
departments and agencies. Presently, FPI's authorizing statute
only specifically addresses the sale of products to Federal
agencies.
Section 9. Rules of Construction Relating to Chapter 307.
Establishes a series of rules of construction relating to
Chapter 307 (Employment, Prisons and Prisoners) to prevent
causes of action by inmates with regard to employment in the
Federal prisons.
Section 10. Providing Additional Opportunities for
Vocational and Remedial Educational Opportunities for Inmates.
Authorizes appropriations to the Federal Bureau of Prisons and
the Federal Judiciary to establish a Federal Reentry Center
Demonstration to develop prisoner reentry plans to ensure the
safety of the community and assist prisoners in successful
reintegration into the community after release.
Section 11. Allocation of Profits to Vocational Training.
Amends the United States Code, regarding the Department of
Justice Assets Forfeiture Fund, to authorize disbursements to
the BOP exclusively for the purpose of providing vocational
assessments and training, paid work opportunities for FPI to
donate goods to nonprofits, and remedial educational training
for inmates.
Section 12. Restructuring the Board of Directors.
Restructures FPI's Board of Directors by increasing it from its
current 6-member board to 11 members appointed by the President
including 3 members to represent the business community, 3
members to represent organized labor, and 1 member with special
expertise in inmate rehabilitation techniques, 1 member
representing the interests victims of crime, 1 member
representing Federal inmates, and 2 members ``whose background
and expertise the President deems appropriate.''
Section 13. Pre-Release Employment Assistance. Requires the
director of the BOP, to the extent practicable, to provide
inmates opportunities to participate in programs and activities
designed to help prepare such inmates to obtain employment upon
release.
The pre-release employment placement assistance required by
this section will include(1) training in the preparation of
resumes and job applications; (2) training in interviewing
skills; (3) training and assistance in job search techniques;
(4) conduct of job fairs; and (5) such other methods deemed
appropriate by the director.
Section 14. Providing Additional Management Flexibility to
Federal Prison Industry Operations. Allows FPI to locate more
than one workshop at a facility and also allows Federal Prison
Industries to operate a workshop outside a correctional
facility if all of the inmates in such workshop are classified
as minimum security inmates.
Section 15. Federal Prison Industries Report to Congress.
Requires the Board of Directors of FPI to 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. The report will include an
analysis of the number of inmates served by the program and the
products and services offered.
Section 16. Definitions. This section defines relevant
terms in the bill.
Section 17. Implementing Regulations and Procedures.
Establishes a time line for revisions to the Federal
Acquisition Regulations and other regulations, consistent with
this legislation.
Section 18. Rule of Construction. Specifies this
legislation does not alter the rights of any offerer other than
FPI to file a bid protest.
Section 19. Effective Date and Applicability. Establishes
the effective date for the various provisions of the bill. It
also provides a time line for the issuance of proposed and
final regulations, spanning approximately a 1-year period, to
assure ample time for public comment on proposed regulations
and time to revise the proposed regulations in response to
public comments.
Section 20. Clerical Amendments. This section makes
clerical changes to Title 18 consistent with the changes in the
legislation.
Section 21. Independent Study to Determine the Effects of
Eliminating The Federal Prison Industries Mandatory Source
Authority. Allows the Comptroller General to have an
independent study performed on the effects of eliminating
mandatory source contracting.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 85--PRISON-MADE GOODS
* * * * * * *
Sec. 1761. Transportation or importation
(a) Whoever knowingly transports in interstate commerce or
from any foreign country into the United States [any goods,
wares, or merchandise manufactured, produced, or mined]
products manufactured, services furnished, or minerals mined,
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, shall be fined under this
title or imprisoned not more than two years, or both.
* * * * * * *
PART III--PRISONS AND PRISONERS
* * * * * * *
CHAPTER 307--EMPLOYMENT
Sec.
[4121. Federal Prison Industries; board of directors.]
4121. Federal Prison Industries; Board of Directors: executive
management.
* * * * * * *
[4124. Purchase of prison-made products by Federal departments.]
4124. Governmentwide procurement policy relating to purchases from
Federal Prison Industries.
* * * * * * *
[4127. Prison Industries report to Congress.]
4127. Federal Prison Industries report to Congress.
* * * * * * *
4130. Construction of provisions.
4131. Definitions.
* * * * * * *
[Sec. 4121. Federal Prison Industries; board of directors
[``Federal Prison Industries'', a government corporation of
the District of Columbia, shall be administered by a board of
six directors, appointed by the President to serve at the will
of the President without compensation.
[The directors shall be representatives of (1) industry,
(2) labor, (3) agriculture, (4) retailers and consumers, (5)
the Secretary of Defense, and (6) the Attorney General,
respectively.]
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 Oversight 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. 4122. Administration of Federal Prison Industries
(a) Federal Prison Industries shall determine in what
manner and to what extent industrial operations shall be
carried on in Federal penal and correctional institutions for
the [production of commodities] production of products or
furnishing of services for consumption in such institutions or
for sale to the departments or agencies of the United States,
but not for sale to the public in competition with private
enterprise.
(b)(1) * * *
* * * * * * *
(3)(A) Federal Prison Industries shall diversify its
products so that its sales are distributed among its industries
as broadly as possible.
(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.
[(4) Any decision by Federal Prison Industries to produce a
new product or to significantly expand the production of an
existing product shall be made by the board of directors of the
corporation. Before the board of directors makes a final
decision, the corporation shall do the following:
[(A) The corporation shall prepare a detailed
written analysis of the probable impact on industry and
free labor of the plans for new production or expanded
production. In such written analysis the corporation
shall, at a minimum, identify and consider--
[(i) the number of vendors currently
meeting the requirements of the Federal
Government for the product;
[(ii) the proportion of the Federal
Government market for the product currently
served by small businesses, small disadvantaged
businesses, or businesses operating in labor
surplus areas;
[(iii) the size of the Federal Government
and non-Federal Government markets for the
product;
[(iv) the projected growth in the Federal
Government demand for the product; and
[(v) the projected ability of the Federal
Government market to sustain both Federal
Prison Industries and private vendors.
[(B) The corporation shall announce in a
publication designed to most effectively provide notice
to potentially affected private vendors the plans to
produce any new product or to significantly expand
production of an existing product. The announcement
shall also indicate that the analysis prepared under
subparagraph (A) is available through the corporation
and shall invite comments from private industry
regarding the new production or expanded production.
[(C) The corporation shall directly advise those
affected trade associations that the corporation can
reasonably identify the plans for new production or
expanded production, and the corporation shall invite
such trade associations to submit comments on those
plans.
[(D) The corporation shall provide to the board of
directors--
[(i) the analysis prepared under
subparagraph (A) on the proposal to produce a
new product or to significantly expand the
production of an existing product,
[(ii) comments submitted to the corporation
on the proposal, and
[(iii) the corporation's recommendations
for action on the proposal in light of such
comments.
In addition, the board of directors, before making a final
decision under this paragraph on a proposal, shall, upon the
request of an established trade association or other interested
representatives of private industry, provide a reasonable
opportunity to such trade association or other representatives
to present comments directly to the board of directors on the
proposal.
[(5) Federal Prison Industries shall publish in the manner
specified in paragraph (4)(B) the final decision of the board
with respect to the production of a new product or the
significant expansion of the production of an existing
product.]
(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 noninmate 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 sales 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 CFR part 2.101), as in effect on
June 1, 2001, 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; or
(B) authorize the production of a new specific
product or the furnishing of a new specific service for
donation.
(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.
(B) The various inmate wage rates shall be reviewed and
considered for increase on not less than a biannual basis.
(C) 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.
(D) 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.
[(6)] (12) Federal Prison Industries shall publish, after
the end of each 6-month period, a list of sales by the
corporation for that 6-month period. Such list shall be made
available to all interested parties.
* * * * * * *
[Sec. 4124. Purchase of prison-made products by Federal departments
[(a) The several Federal departments and agencies and all
other Government institutions of the United States shall
purchase at not to exceed current market prices, such products
of the industries authorized by this chapter as meet their
requirements and may be available.
[(b) Disputes as to the price, quality, character, or
suitability of such products shall be arbitrated by a board
consisting of the Attorney General, the Administrator of
General Services, and the President, or their representatives.
Their decision shall be final and binding upon all parties.
[(c) Each Federal department, agency, and institution
subject to the requirements of subsection (a) shall separately
report acquisitions of products and services 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) in the same manner as it reports other
acquisitions. Each report published by the Federal Procurement
Data System that contains the information collected by the
System shall include a statement to accompany the information
reported by the department, agency, or institution under the
preceding sentence as follows: ``Under current law, sales by
Federal Prison Industries are considered intragovernmental
transfers. The purpose of reporting sales by Federal Prison
Industries is to provide a complete overview of acquisitions by
the Federal Government during the reporting period.''.
[(d) Within 90 days after the date of the enactment of this
subsection, Federal Prison Industries shall publish a catalog
of all products and services which it offers for sale. This
catalog shall be updated periodically to the extent necessary
to ensure that the information in the catalog is complete and
accurate.]
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.
(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.
(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 comply with Federal occupational, health, and safety
standards with respect to the operation of its industrial
operations.
* * * * * * *
[Sec. 4127. Prison Industries report to Congress
[The board of directors of Federal Prison Industries shall
submit an annual report to the Congress on the conduct of the
business of the corporation during each fiscal year, and on the
condition of its funds during such fiscal year. Such report
shall include a statement of the amount of obligations issued
under section 4129(a)(1) during such fiscal year, and an
estimate of the amount of obligations that will be so issued in
the following fiscal year.]
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. 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. 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, 2001.
* * * * * * *
----------
SECTION 524 OF TITLE 28, UNITED STATES CODE
Sec. 524. Availability of appropriations
(a) * * *
* * * * * * *
(c)(1) There is established in the United States Treasury a
special fund to be known as the Department of Justice Assets
Forfeiture Fund (hereafter in this subsection referred to as
the ``Fund'') which shall be available to the Attorney General
without fiscal year limitation for the following law
enforcement purposes--
(A) * * *
* * * * * * *
[(I) after all reimbursements and program-related
expenses have been met at the end of fiscal year 1989,
the Attorney General may transfer deposits from the
Fund to the building and facilities account of the
Federal prison system for the construction of
correctional institutions.]
(J) payments to the Bureau of Prisons exclusively
for the purpose of establishing the Federal Enhanced
In-Prison Vocational Assessment and Training Program in
all Federal institutions, which shall provide in-prison
assessments of prisoners' needs and aptitudes, enhanced
work skills developed, enhanced release readiness
programming, and other components as appropriate to
reduce inmate idleness and prepare Federal prisoners
for release and reentry into the community;
(K) payments to the Bureau of Prisons exclusively
for the purpose of establishing a nonprofit component
for inmate work in all Federal institutions, in
carrying out which Federal Prison Industries shall (i)
work actively to identify and donate to nonprofit
organizations that provide goods and services to low
income individuals who can use Federal Prison Industry
products and have difficulty purchasing these products
on their own, and (ii) focus on organizations that
would not otherwise be available to purchase such
products.
* * * * * * *
Markup Transcript
BUSINESS MEETING
THURSDAY, APRIL 18, 2002
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:00 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
Chairman Sensenbrenner. The Committee will be in order. We
have a working quorum here. Pursuant to notice I now call up
the bill H.R. 1577, the ``Federal Prison Industries Competition
and Contracting Act,'' for purposes of markup and move its
favorable recommendation to the House. Without objection, the
bill will be considered as read and open for amendment at any
point.
[The bill, H.R. 1577, follows:]
Without objection, the amendment in the nature of a
substitute before all Members will be considered as read and
open for amendment at any point in the original text of the
amendment.
[The amendment follows:]
Chairman Sensenbrenner. The Chair recognizes himself for 5
minutes to explain the bill. Although Federal Prison Industries
(FPI) may have started with good intentions, it has been
surrounded by controversy since its inception. FPI is in direct
competition with private companies for labor, goods and
services. It enjoys a guaranteed market for its products and
reduced cost for labor and capital. This has resulted in unfair
competition with industries that are struggling. Since I was
first elected to Congress, I have been working to correct this
situation and level the playing field for industry. I feel that
we as Members of Congress have a duty to ensure that Government
corporations do not take away opportunities from small
business. We also have a duty to ensure the taxpayer money is
wisely spent. Neither one of these things can be guaranteed
under the current law governing FPI.
Today we will mark up legislation to change that law.
Today's markup comes after extensive work and effort by
Representative Smith. Chairman Smith dedicated numerous staff
hours and his own time to try to achieve a workable compromise
among the many differing viewpoints on this issue. Although he
was able to achieve agreement on some issues, he was unable to
achieve a comprehensive compromised package. The reform package
we will mark up today incorporates many of those agreed-upon
changes that follows recent reforms to the Defense Department
procurement process with regards to FPI. The provision in the
Department of Defense authorization bill which changed
procurement to allow DOD to determine if FPI products best meet
the department needs for price, quality and timeliness of
delivery can be seen as a victory for labor, business, industry
and the American taxpayer. FPI hurts private industry.
In 1998 FPI sold over $220 million in office furniture
directly in competition with the private sector. It is a large
and growing government corporation. The legislation that we are
marking up today is a substitute amendment based on H.R. 1577
introduced by Representative Hoekstra through a series of
substantive modifications that have been agreed upon after 30
hours of detailed discussion. The legislation will force
competition not only on DOD contracts, but those of other
Federal agencies. It will fundamentally alter FPI's
relationship with the Government customers. They will no longer
be held captive by mandatory source requirements. All Federal
Government agencies will have the ability to utilize taxpayer
dollars in the most efficient manner possible. Decisions about
purchases will be based on what is valuable in the market, such
as timeliness of delivery, reasonableness of price and quality
of products.
The legislation includes the following: First, requires FPI
to compete for its contracts by phasing out the mandatory
source requirement unless the Attorney General authorizes sole
source award; eliminates FPI's ability to charge a price that
exceeds the fair market value; allows contracting officers
rather than FPI to determine if the product was best serviced
by the agency's mission; allows the buying agency rather than
FPI to determine the adequacy of FPI's performance; increases
the opportunity for public participation in the process;
ensures that FPI is prohibited from offering products or
services as a subcontractor for private for-profit business
concerns; authorizes FPI to produce products or provide
services to be donated to meet public needs that will not be
met by private sector for-profit businesses, requires better
reporting of FPI sales to Federal agency customers, and
specifies the data to be included in the FPI annual report to
Congress so we can better assess the impact of FPI on private
sector firms and their law-abiding workers.
I am proud to be a part of this legislation and look
forward to the chance to create a more competitive marketplace
for Government contracts, and recognize the gentleman from
Michigan.
Mr. Conyers. Good morning Mr. Chairman and Members. I am
happy to join you here on the prison industries problem, which
is an important and difficult one. And I want to begin by
acknowledging the hard work that everybody has put in on this.
In one sense that is good, because I can remember a time when
prison industries was a neglected subject. I mean who cared.
Now we have a lot more interest in it and I think that is
healthy.
Now on one hand, we have a prison industry program which
does cry out for reform, which has grown far too reliant on
sole source contracting. Once the small program focused solely
on rehabilitation, Federal Prison Industries is now a massive
enterprise that has, in effect, a monopoly in the Federal
marketplace on over 300 products and services that generated
nearly 600 million in sales last year. The program has seen
these sales go from $29 million to $580 million and all too
often these sole source sales come at the expense of hard-
working individuals outside the prison system.
The fact that Federal Prison Industries is exempt from
labor and safety laws, pays its workers a small fraction of the
minimum wage, does not provide us with a model of fair
competition. But, on the other hand, we are faced with the
tremendously important dilemma of how we rehabilitate our
inmates and prepare them for reentry into society. For all its
critics, the Federal Prison Industries program clearly serves
this important objective and in particular benefits minority
individuals.
For example, a long term post-release employment study
conducted by the Bureau of Prisons found that inmates who were
released as long as 8 to 12 years ago who participated in
Industry's work or vocational training programs were 24 percent
less likely to be recommitted to Federal prisons than a
comparison group of inmates who had no such training. I think
that is significant.
Another study conducted in Florida found that less than 13
percent of the released inmates that participated in a State
prison work program were recommitted after 2 years as compared
to the national average rate of 60 percent recidivism.
So it is my view that if we do away with mandatory source,
it is incumbent on this Committee to replace it with programs
that give hope and skills to our prison population. So I come
to this hearing today hoping to work out some common frames of
reference where we can combine the best features of both the
views that I know are present on the Committee. The increased
vocational training provided in the underlying bill is a good
start, but I plan to offer a provision which also increases the
opportunity for nonprofit work and facilitates an inmate
reentry back into society. And I hope my colleagues will
examine that very carefully.
Federal Prison Industries can work, and our reform here
today must be carefully crafted with as much compassion as we
can muster. Thank you, Mr. Chairman.
Chairman Sensenbrenner. Gentleman's time has expired. For
purposes of markup, unanimous consent has already been granted
that the text we will be working off is an amendment in the
nature of a substitute offered by the gentleman from
Massachusetts, Mr. Frank, and myself. Are there any amendments
to the amendment in the nature of a substitute? Gentleman from
Virginia.
Mr. Scott. I thought the gentleman from Michigan had
amendments that we were going to do first.
Chairman Sensenbrenner. Do we have a manager's amendment?
The gentleman from Michigan has an amendment. The clerk will
report the amendment when she gets it.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577, offered by Mr. Conyers.
[The amendment follows:]
The Clerk. Strike sections 10 and 11 and insert the
following: Section 10----
Mr. Conyers. I ask unanimous consent the amendment be
considered as read.
Mr. Gekas. Reserving a point of order.
Chairman Sensenbrenner. Point of order is reserved by the
gentleman from Pennsylvania. Without objection, the amendment
is considered as read. The gentleman from Michigan is
recognized for 5 minutes.
Mr. Conyers. Members of the Committee, we add two new
sections to the bill, as you have heard, strike a couple. The
first section would provide for a reentry program for Federal
offenders, including drug treatment and aftercare.
Second, it would provide for improved programs for
vocational and educational training programs along with the
programs by which Federal Prison Industries is empowered to
donate prison industry products to not-for-profit organizations
that provide goods and services to low income individuals.
This latter change is based in large part on suggestions
from several Members, particularly the gentleman from
Massachusetts. I hope that we are past the days where the
solution to crime is to lock people up for as long as we
possibly can, ignore them, punish them along the way and hope
the problem would go away. We have got tens of thousands of
Federal inmates, an all-time record, by the way, and a world
record, incidentally, who have been in prison for 10 years, 20
and even longer.
The very last thing that I hope we would want to do is
return them to society with no skills and no hope. Now I have
seen this happen. A person gets out of Jackson Prison with no
money, nothing, a bus ticket, and you can start your watch
ticking before the time he gets in trouble again and gets
busted. I mean it is so incredibly elementary that you wonder
how this could be going on in the 21st century with a straight
face. Nothing, no skills, nobody, no relatives, no jobs, no
prospects, and they say, see you, under their breath, later.
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Conyers. Of course.
Chairman Sensenbrenner. I have reviewed the gentleman's
amendment and I think he is going in the right direction, and
at this point in time I am prepared to accept it with a couple
of words of caution of what we have to do in working matters
out between now and the floor.
First of all, the gentleman's amendment provides for
authorizations in the neighborhood of $5 million, plus or
minus, to the Bureau of Prisons and the judiciary for each of
the next five fiscal years. I think that DOJ would go ballistic
over that and I hope we can reach out some kind of an agreement
where there is perhaps a different figure put in that they
would be willing to accept.
The other concern that I have relates to the provisions in
section 11 relating to the Department of Justice assets
forfeiture fund. I think we will have the same concern
expressed by the Department of Justice, and I am prepared to
put this in the bill kind of as a negotiating point with DOJ,
but with the express understanding that this language is not
written in stone tablets.
Mr. Conyers. Well, that is a very good start, Mr. Chairman.
I am happy to hear you say that. I yield to the gentleman from
Massachusetts.
Mr. Frank. I must say it is a lot easier for all of us--I
want to express my strong support for the gentleman's
amendment. It is a lot easier for us to be flexible when we
know that the appropriators will have a lot to say about this,
anyway. In acknowledging flexibility, we are not giving away
any of our own decision-making. But I just want to thank the
Ranking Member for offering this. Many of us are torn because
we certainly want to see people who are incarcerated being
given opportunities to learn to break this pattern. We also are
concerned about the negative competitive effect it has on low
wage private sector people. There were several things in here
that tried to bridge that, and one that I have been working on,
and I thank the Chairman and the Ranking Member for working
with us on it to get a more active program of donations, and I
want to highlight that this is part of what we are talking
about.
I would ask for an additional minute.
Chairman Sensenbrenner. Without objection.
Mr. Frank. We have in here an authorization for them to
begin an active program of seeking out nonprofit groups that
cannot afford to go into the private market and buy furniture
and buy clothing and buy draperies and get this donated to
them. In other words, the prisoners are presumably not doing a
lot of marketing. The prisoners are doing the physical work.
What we are trying to do here is more actively create a program
whereby we will seek out groups, daycare centers, homeless
shelters, drug treatment centers, who cannot now be in the
market, and this will allow the prisoners to still make the
machinery and make the stuff and have it donated. And I must
say it seems to me this is an area in the whole faith-based
area, this would be one of the areas we could be reaching out
to groups that would not otherwise have been able to afford it.
So I realize we will have difficulties over the financing, but
I think this is a very constructive amendment that tries to
deal with this conflict.
Chairman Sensenbrenner. The time of the gentleman has once
again expired. Does the gentleman from Pennsylvania insist upon
his point of order?
Mr. Gekas. I do not. I ask unanimous consent to withdraw.
Chairman Sensenbrenner. The point of order is withdrawn.
The question is on the amendment.
Mr. Scott. Mr. Chairman.
Chairman Sensenbrenner. Gentleman from Virginia.
Mr. Scott. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Thank you, Mr. Chairman. The prison industries
program, or FPI, has been around since the 1930's. Under the
law, Federal agencies are required to buy needed products from
FPI if they can meet the order. The purpose of the program is
to teach prisoners real work skills so when they are released
from prison they will be able to find and hold jobs to support
themselves and their families and be less likely to commit
crimes in the future. There is no question that the program has
worked. Follow-up studies covering as much as 16 years of data
has shown that inmates who participate in prison industry
programs are more likely to be employed and less likely to
commit crimes than those who did not participate in the
program. But it certainly benefits offenders and their
families. That is beside the point from a public policy
perspective. The real benefit to all of us is that as a result
of this program, we are less likely to be victims of crime.
We are prepared to spend billions of dollars in prison
construction and prison upkeep in our efforts to reduce crime,
but this is a program that reduces crime while it essentially
pays for itself. FPI works through a process of requiring
Federal agencies to seek as a first resort to meet its
procurement needs from prison-made goods. The total revenues of
FPI represent a very small percent, much less than 1 percent,
about one quarter of 1 percent of Federal agency procurement
dollars. The furniture and apparel industry are two industries
which the FPI does most of its work, and when representatives
of those industries were asked at a hearing to estimate the
impact on their industry, words such as ``insignificant'' and
``negligible'' were used. If such industries are having
problems, it is probably not--it is obviously not due to the
impact of FPI. The program generates almost as much business as
it takes by pumping in three quarters of its revenue back into
the economy through purchases, much of it going to small,
minority and women-owned businesses.
For several years FPI has received awards for spending
money in this sector of the economy. All able-bodied inmates in
the Federal system are required by law to work. Few offenders
enter the prison program with marketable work skills. The vast
majority do not even have credible work habits such as showing
up for work, cooperating with employees, and working
productively with others. Such habits are required to be
maintained in an FPI job. With elimination of parole, good
conduct credits, Pell Grants and other incentives, Federal
prison system has little to offer as an incentive for self-
development. But FPI is an exception. FPI jobs pay much more
than the other prison jobs. To hold down an FPI job, an inmate
must have completed high school or be making steady progress
towards obtaining a GED and maintaining a good record of good
behavior. This is true not only for those already in an FPI job
but those on the waiting list.
Some have suggested that vocational education is a good
substitute for FPI work experience. While vocational education
is important and ought to be available for all inmates, no
amount of educational course work can substitute for real work
at a workplace in terms of work experience. The average
sentence for prisoners in the Federal prison is 8 years. The
vocational education program usually runs 2 years or less.
In any case, we have a situation what do you do with the
other 6 years. I am first to concede there are problems at FPI
which should be fixed. When a small business is making a single
client product such as Army helmets, and depends on DOD
contracts for its operations, FPI should not be able to take
that business away. We don't need to fix the problem through a
meat cleaver approach that the bill has before us. While it
suggests that the lack of competition is a problem, the bill
seeks to stranglehold FPI as a competitor not only by
strengthening the prohibition against activities in the
commercial market, but in the Government market as well. We
should fix the problems and we should do so in such a way that
breaks the cycle of crime by ensuring the viability of this
vital crime reducing program.
With 20 new programs scheduled to come on-line in the next
few years, we can ill afford to diminish the successful crime
reduction programs, and we should not believe that if any job
goes to an FPI project that somebody will lose a job. We have
to focus on the fact that this Committee with oversight
responsibility should look at the safe, efficient and
productive operation of our prison system, and that is why we
need, Mr. Chairman, to make sure if we are going to get rid of
the mandatory source, we need to make sure that the FPI system
is alive and well.
Ms. Lofgren. Would the gentleman yield?
Mr. Scott. I yield.
Chairman Sensenbrenner. The gentleman's time has expired.
Without objection, he gets two more minutes.
Ms. Lofgren. Thank you, Mr. Chairman. In addition to those
excellent comments, I would like to note that an additional
benefit of the industry's program is the reduction of violence
and disorder in the institution itself. That is true not only
in the Federal prisons, but in all of the State and local jails
and prisons we have looked at. That if you have focused job
activity, the institutions become much less violent, and I
think that is why correctional officers associations tend to be
very big fans of these industry programs because it gives--idle
hands lead to problems and this gives something productive for
inmates to do and learn a skill that will allow them to be
successful after entering when their term is served.
Mr. Conyers. Would the gentleman from Virginia yield?
Mr. Scott. I yield.
Mr. Conyers. I want to thank the gentleman for his
statement because I think it is important that all of us
appreciate where the gentleman is coming from. I mean I think
it is a very important and enlightened position that Mr. Scott
is taking here. And I think it is important that we see if we
can marry these new ideas that are here, that we go beyond the
private sector and that we get into the places where there
isn't any money and there isn't any competition either. And so
it is in that spirit that I appreciate the gentleman's comment
on my amendment.
Chairman Sensenbrenner. The gentleman's time has expired.
The gentleman from Georgia, Mr. Barr.
Mr. Barr. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Barr. I know this isn't very popular here in response
to the arguments from the other side, but let me interject a
small dose of reality here. For those who claim that
maintaining the monopoly of FPI to be the sole source for
Federal contracting and provision of furniture and other
paraphernalia to Federal agencies as being a cure-all for
prison violence and for rehabilitation, let me remind folks
that the major prison uprising that we had at the Federal
penitentiary in Atlanta back in the late 1980's was centered at
the FPI building there because it was high profile. It was the
first target and cost millions upon millions of dollars when
that facility was burned down. So, yes, it can be a benefit,
but it is not going to be a cure-all and simply because you
have a Federal Prison Industries facility at a Federal prison
facility does not mean that you are not going to have serious
problems, and sometimes it can be a catalyst for more serious
violence than if you don't have it. So these things can cut
both ways. Let us look at it on its merit and not based on some
Pollyannaish theory in saying that we ought to interject that
the alien concept of competition into the provision of
Government furnishings and services will decimate our ability
to do away with prison violence and rehabilitate prisoners.
That is not really so.
Let us look at it on its merits. I think it is a very
meritorious bill. It does not do away with Federal Prison
Industries. It simply interjects the concept of competition and
rationality into that process on behalf of the American
taxpayers who are the people that we represent here. I yield
back.
Chairman Sensenbrenner. The question is on the amendment
offered by the gentleman from Michigan, Mr. Conyers. For what
purpose does the gentleman from Wisconsin seek recognition?
Mr. Green. Mr. Chairman, move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Green. Real briefly, I don't believe I take a
Pollyannaish approach to FPI and the concept of rehabilitation,
but I do believe that the FPI program can be an important part
of the answer as we deal with increasing number of prisoners
and increasingly long prison terms. Even with those longer
terms, these prisoners will return to society some day, and
unless we have assisted them in getting job skills, we know
where they are going to be within a short period of time after
release, and that is right back in prison.
It is interesting to note that the supporters of this bill
don't say that they are doing away with FPI. They claim to be
reforming it and fixing it. I think most of us can agree that
FPI does need reform. It does need improvements. But I think we
will also learn during the debate today if you take a look at
some of the issues raised by amendment that this bill doesn't
reform FPI. It is an effort to do away with it entirely. And
if, in fact, this bill succeeds and if, in fact, we do away
with FPI, I think we will see just how valuable the program has
been and can be, and I think it will be a sad day. I yield back
my time.
Chairman Sensenbrenner. Gentleman yields back. Question is
on the Conyers amendment. Those in favor will say aye. Opposed,
no. The ayes appear to have it. The ayes have it and the
Conyers amendment is agreed to. Are there further amendments?
Mr. Frank. Mr. Chairman.
Chairman Sensenbrenner. The gentleman from Massachusetts,
Mr. Frank.
Mr. Frank. I move to strike the last word.
Chairman Sensenbrenner. You are recognized for 5 minutes.
Mr. Frank. I agree that there is a self-interest in helping
those prisoners who can be rehabilitated. Obviously not all of
them can be, but many of them, we hope, can be and I think it
is very important to try. And that is why I was appreciative
that the Chairman and the Ranking Member have accepted the
amendment on donations. I think this is something that is
really quite important.
We have in this society a large number of institutions,
many of them religious-based, some of them nonreligious-based,
that try to provide help to some of the most unfortunate people
in our society. They deal with drug rehab, they deal with
homelessness. They deal with daycare for people at the low end.
Many of them could benefit from clothing and furniture, two of
the areas that the Federal Prison Industries does so much of
its work. On the other hand, I don't want to see them in the
market.
I do want to make a couple of points. First of all, let us
note that we ban from import into America, because we think it
is unfair competition, goods made in foreign countries with
prison labor. And nobody has yet to explain to me the moral
difference. If prison labor should not be the source of goods
and commerce because it was foreign, I don't understand this.
Indeed, under world trade rules, are we allowed to solely
discriminate? If we send into the stream of commerce prison-
made goods in America without restriction and then in effect
give them a preference, by what right do we discriminate
internationally?
Secondly, let us note, there are people, for instance, in
the garment and textile field who have been those most affected
by international trade. It is not a good idea, and I would say
this to people who try to promote acceptance of a trade regime.
The FPI has a terrific impact, and so do many of the State
prison programs, on precisely that segment of our economy,
workers and smaller business people who are already very
negatively affected by trade. And I think it would be a grave
error. It is piling on.
On the other hand, with the amendment that has been
adopted, we are instructing the Bureau of Prisons to find
groups actively that could take furniture, that could take
clothing, take draperies, that would not otherwise be in the
market, so they are not competing. They are not taking away
from anything that would be sold. They could even start a
special line that would be aimed at some of these facilities
which have special needs for this and that would give the
prisoners the work because, as I said, I am a strong supporter
of rehabilitation, but having the prisoners actively engaged in
marketing doesn't seem a good idea.
Mr. Scott. Would the gentleman yield.
Mr. Frank. I yield.
Mr. Scott. Mr. Chairman, I say to the gentleman I agree
with his assessment, but there is one problem. If you are
supplying people that can't pay, then the program isn't paying
for itself.
Mr. Frank. I would say to them--I agree, but I think the
notion that it has to pay for itself is not one that I accept.
We don't say that putting people in prison has to pay for
itself. But that is a separate issue. Frankly, maybe we ought
to pay for itself by cutting back on some of the excess in
imprisonment. But I don't think we have to have a prison
program pay for itself. I would yield back.
Chairman Sensenbrenner. We have two votes on the floor. The
Committee is recessed until after the votes and it is the
intention of the Chair to start up as soon as we get a working
quorum. The Committee stands in recess.
[Recess.]
Chairman Sensenbrenner. The Committee will be in order.
When the Committee recessed for the votes, the bill H.R. 1577
was under consideration. The Conyers amendment had been agreed
to. Are there further amendments? Gentleman from North
Carolina.
Mr. Coble. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Coble. I will not consume the entire 5 minutes. I come
to this bill subjectively involved because I represent many
furniture and textile employees in my district. This bill has
been in the stream for a long, long time. I have met with the
Federal Bureau of Prisons director and her able staff and,
without exception, those conferences were harmonious, but we
left failing to convince each other that either side was right
or wrong. We need balance. I don't want to do anything that
would endanger life inside the walls, that is public safety and
prison safety. I think we must be ever conscious of the
significance of that both as to inmates, guards, prison
administrative personnel as well. And I want to commend you and
the gentleman from Massachusetts, Mr. Frank. I think your work
has resulted in striking this balance.
I think by eliminating ultimately the mandatory source
rule, which plagues my textile and furniture people back home
and it plagues me, by gradually getting rid of that, striking
the balance that you and Mr. Frank have seen to it that now
exists, I think is a good way to go, a good course to pursue.
And having said that, Mr. Chairman, I yield back my time.
[The prepared statement of Mr. Coble follows:]
Prepared Statement of the Honorable Howard Coble, a Representative in
Congress From the State of North Carolina
Mr. Chairman and Members of the Committee,
Federal statute authorizes Federal Prison Industries (FPI), the
government corporation that employs federal inmates, to sell the goods
and services produced by these inmates to federal agencies but not to
the public in competition with the private sector. Federal law also
mandates that federal agencies purchase FPI products. This requirement
is generally referred to as ``FPI's mandatory source status.''
While I support efforts to train prisoners to become productive
members of society, I strongly believe that such efforts should take
great care not to threaten the jobs of hard-working taxpayers. This
issue is especially important to the 6th Congressional District of
North Carolina, home to more than 40,000 textile and furniture workers,
since two major classes of items produced by FPI are textiles and
furniture. The mandatory source status gives FPI an unfair advantage
over private manufacturers contending for federal contracts. Therefore,
many of my constituents are deprived of employment opportunities in
order to give work to federal inmates. In addition, the furniture
industry in North Carolina is already competing with an increasing
number of furniture imports arriving to the U.S. from countries such as
China.
For these reasons, I am greatly concerned about FPI's proposal to
begin selling inmate-furnished services in the commercial marketplace.
I am equally concerned with FPI's publication of a regulation that
professes to be a codification of ``existing standards and procedures
utilized to accomplish FPI's mission.'' It is my opinion that FPI is in
need of reform before it is allowed to expand.
I am strong proponent of H.R. 1577 because it does just that--
eliminates FPI's mandatory source advantage. It also prohibits FPI from
entering the commercial market which I believe may have an adverse
effect on private companies not able to compete with the low wages and
cost benefits enjoyed by FPI. Further, the bill incorporates vocational
and educational programs to teach inmates job-hunting and professional
skills and coordinates funding to help inmates transition back into
society.
Chairman Sensenbrenner. Are there further amendments? The
gentleman from Wisconsin, Mr. Green.
Mr. Green. Thank you, Mr. Chairman. I have an amendment at
the desk.
Chairman Sensenbrenner. The clerk will report the
amendment. It is Green point 050.
[The amendment follows:]
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577 offered by Mr. Green of Wisconsin. Page
1, beginning on line 15, strike ``only in accordance with this
section'' and insert ``in accordance with applicable laws and
regulations.'' .
Page 2, strike line 6 through 9 and insert ``shall advise
Federal Prison industries of the requirement so that Federal
Prison Industries may submit a timely offer.''.
Chairman Sensenbrenner. The gentleman from Wisconsin is
recognized for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. Mr. Chairman, I would
not be involved in the debate here before this Committee today
if I believed that this bill would do what its strongest
supporters suggest. If this bill were merely about reforming
FPI, I would be supporting it, but it isn't. It claims to
reform FPI when it really condemns FPI. It claims to add
elements of competition, but what it really does is stack the
deck against competition. And section 2 of this bill is a prime
example of that, and that is what this amendment gets at.
Section 2 of the bill provides that after the mandatory
source is phased out, contracting officers aren't required to
even solicit a competitive offer from FPI if the purchase
involved is under the micropurchase threshold, which is $2500.
Understand that three-fourths of all of FPI's orders are under
$2500.
Now if, as the supporters of this bill suggest, they are
trying to introduce competitive forces here, surely for these
types of purchases FPI should at least be advised of the
purchase and given a chance to compete for it. But under this
bill, they aren't even advised of it. This amendment merely
provides that purchases from FPI after the mandatory source
rule has been phased out be accomplished in accordance with the
applicable laws and regulations, and it provides that Federal
agencies should advise FPI of any procurement requirements that
they have so that FPI can at least have the chance to make an
offer, to make a bid. If we don't do this, we are condemning
FPI.
What we are essentially saying is in the name of reform, we
are going to turn out the lights. FPI will essentially cease to
exist after the mandatory phaseout has taken place. That would
be terribly unfortunate for a lot of the reasons that you
already heard. So if we are really about creating a soft
landing for FPI, if we are really about introducing market
forces into this program, if we are really about continuing FPI
to sort of push them in a new direction, then this is the type
of amendment we should support. It gives FPI at least a modest
ability and opportunity to continue. With that, I yield back my
time.
Chairman Sensenbrenner. I move to strike the last word and
ask the Members to vote in opposition to the amendment. I will
be very brief.
Currently nobody is required to solicit bids for purchases
under $2500. What this amendment proposes to do is to go
through the expense of soliciting bids for minor purchases and
that is going to increase the cost to every other agency of the
Government simply because FPI might be in the market.
I think that if we are interested in eliminating
unnecessary paperwork, the amendment should go down and we
should continue the present law where bids or purchases under
$2500 can be done without competitive bidding.
Yield to the gentleman from Massachusetts.
Mr. Frank. I thank the Chairman and I agree with his
remarks. I don't think you are going to see on the part of
Federal agencies an anti-FPI bias. And I think there may be an
apprehension there. I don't think there is any basis for it.
Where the FPI has had good relationships with agencies and been
a good supplier, they are likely to get the same kind of
treatment as anybody else, and I don't see the need for any
special provisions.
Mr. Green. Will the gentleman yield?
Chairman Sensenbrenner. The gentleman from Wisconsin.
Mr. Green. My question to Mr. Frank is if what Mr. Frank
says is true, shouldn't those agencies at least be required to
advise FPI of opportunities to compete for contracts?
Chairman Sensenbrenner. I yield to the gentleman from
Massachusetts.
Mr. Frank. We are talking about a de minimis situation and
I think the normal rule again is the potential supplier ought
to be doing the job of monitoring this. I don't believe that
the--as I said, I don't want to give a preferential situation
here. I don't believe that the agencies are required to inform
everybody else. I don't want FPI to be discriminated against,
but I don't want there to be some special rule. And it is my
understanding that they are currently required to notify every
potential supplier.
Ms. Lofgren. Would the gentleman yield?
Chairman Sensenbrenner. I yield to the gentlewoman from
California.
Ms. Lofgren. I think the amendment is a reasonable one, and
one of the reasons why is that the prison system doesn't have a
marketing arm. I mean the private sector has marketers, but the
prison industries do not, that I am aware of. And so as time
goes on, the sales relationship will diminish, and there is no
ability to really to resurrect it in the budget, and so I think
it was at least notified that some competition is sensible and
reasonable, and I thank the gentleman for yielding.
Mr. Frank. Will the gentleman yield.
Chairman Sensenbrenner. I yield to the gentleman from
Massachusetts.
Mr. Frank. I will say for an agency that does not have a
marketing arm, the FPI has done a pretty good job of staying in
touch with a lot of us and getting other people to stay in
touch with a lot of us. They may not have a marketing arm, but
they sure do a lot of marketing.
Chairman Sensenbrenner. I yield back the balance of my
time. The gentleman from Virginia, Mr. Scott.
Mr. Scott. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Mr. Chairman, you talk about the vitality and
viability and industry of the present system. 75 percent of the
contracts are under $2,500 and that is $2,500 each. You can
purchase an awful lot of goods if make them in sequential
$2,500 or less purchases. If we can eliminate mandatory source
and, as the gentlewoman from California mentioned, you have no
ability to market, you will be losing 25, 75 percent of all of
your orders if this amendment does not pass. All this is is
that you have to at least notify them so you can make the
offer. You do not have to accept the offer. The price may be
better, the delivery situation may be better if you go
somewhere else, but at least FPI would have the notice that the
purchase is about to be made so they can at least compete.
Without this amendment, the very viability of prison
industries is at risk. We are going to be building several new
prisons in the upcoming years. I think it is about 20 new
prisons. And if you do not have this amendment, the ability to
put a prison industry in those new prisons will be seriously at
risk. I would certainly hope we would agree to the amendment.
Chairman Sensenbrenner. Does the gentleman yield back?
Mr. Scott. I yield back.
Chairman Sensenbrenner. The question is on the amendment
offered by the gentleman.
Mr. Watt. Mr. Chairman, I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. Just for the purpose of asking Mr. Frank a
question. Under the micro purchase threshold standards now--in
excess of the micro purchase standards, is the FPI required to
give the prison industries notice of a bid, notice of
opportunity?
Mr. Frank. I do not know if the FPI--the FPI is prison
industries.
Mr. Watt. Is anybody required to give the prison
industries----
Mr. Frank. I do not know the exact status. I think the FPI
ought to be treated in this regard like any other potential
supplier so that if notices go out, they ought to get the same
notices that anybody else does. I do not want them to be given
any kind of special rule or not.
Meanwhile, help has arrived in the person of someone who
knows the answer. I might be able to give the gentleman an
answer. If the gentleman would withhold for a minute, we might
be able to have it for him.
I am informed that the legislation that we are considering
does require for above that micro level that there be a notice
to FPI to Federal agencies that are in the business.
Mr. Watt. And below the level, is the FPI guaranteed the
contract or is this available?
Mr. Frank. It is available to anyone, and I think you have
a problem of paperwork requirements on the agencies for these
small purchases.
Mr. Watt. Okay.
Mr. Scott. Will the gentleman yield.
Mr. Watt. Yes.
Mr. Scott. One of the problems in these so-called micro
purchases, if you are doing $2,000, you are buying a lot of
computers one at a time, $2,000 will add up to a lot of money.
What happens under these is you have no notice to--requirement
to notify anybody.
Mr. Watt. Does not that put everybody on the same basis,
then?
Mr. Scott. It puts everybody on the same basis if you have
a marketing arm. But you are right.
Mr. Watt. Why should we be required to give a Government
agency more notice than the general public has? You would think
they would be on the inside of the system. They would be more
likely to get the information.
Mr. Scott. If the gentleman would yield. We are eliminating
the mandatory source and going to competition. 75 percent of
the orders----
Mr. Watt. If--you want to put them on the same basis that
we put everybody else, I thought.
Mr. Watt. If you put them----
Mr. Scott. If you put them in the dark.
Mr. Watt. That is not in the dark. It is no more in the
dark than private industry.
Mr. Scott. You can go to wherever you want, to your
brother-in-law, wherever you want. I think the requirement is
you have to do a little--you can pick a couple of office supply
companies and let them kind of do an informal--but you
basically can go where you want. And if you do not, and 75
percent of the orders in FPI are under $2,500 and they do not
have a marketing arm, and maybe they would have to. But all the
Government agencies, all this says is you are at least posted
somewhere where prison industries can at least know where they
have given up mandatory source, at least let them know so the
prisoners will have some work to do so they will be less likely
to commit crimes in the future.
Mr. Frank. Will the gentleman yield?
Mr. Watt. I yield to Mr. Frank.
Mr. Frank. The gentleman from Virginia says this is to
prevent people from giving preferential treatment to the
brother-in-law. That is assuming the brother-in-law is not in
prison. I do not always want to assume that. But beyond that, I
am informed, not surprisingly, the FPI has a budget for
marketing. They have a budget of $25 million for marketing.
They do do the marketing. It does not say post it somewhere
where they can see it. It says they get a special notice.
And I would also note, remember, the FPI starts out here to
some extent with existing law, with existing relationships.
Where they have existing relationships with agencies, why would
an agency go out of its way to terminate that relationship? In
fact, they probably have a lot of advantage over others because
there is this ongoing relationship with others.
We are saying everybody ought to be treated equally. Where
there is a notice, they should get it. If there is no
requirement for notice, they should not be treated any
differently than anybody else. I do think because of the
relationships they have enjoyed under the mandatory sourcing,
they start out with an advantage.
Chairman Sensenbrenner. The gentleman's time has expired.
The question is on the amendment of the gentleman from
Wisconsin, Mr. Green. All those in favor, say aye. Those
opposed, no. The noes appear to have it.
Mr. Green of Wisconsin. Mr. Chairman, on that I ask the
yeas and nays.
Chairman Sensenbrenner. rollcall is ordered. Those in
favor, say aye. Those opposed, no. The clerk will call the
roll.
The Clerk. Mr. Hyde.
Mr. Hyde. Aye.
The Clerk. Mr. Gekas.
[No response.]
The Clerk. Mr. Coble.
Mr. Coble. No.
The Clerk. Mr. Smith.
Mr. Smith. No.
The Clerk. Mr. Gallegly.
Mr. Gallegly. No.
The Clerk. Mr. Goodlatte.
[No response.]
The Clerk. Mr. Bryant.
[No response.]
The Clerk. Mr. Chabot.
Mr. Chabot. Aye.
The Clerk. Mr. Barr.
Mr. Barr. No.
The Clerk. Mr. Jenkins.
[No response.]
The Clerk. Mr. Cannon.
Mr. Cannon. No.
The Clerk. Mr. Graham.
[No response.]
The Clerk. Mr. Bachus.
[No response.]
The Clerk. Mr. Hostettler.
Mr. Hostettler. No.
The Clerk. Mr. Green.
Mr. Green. Aye.
The Clerk. Mr. Keller.
[No response.]
The Clerk. Mr. Issa.
Mr. Issa. Aye.
The Clerk. Ms. Hart.
[No response.]
The Clerk. Mr. Flake.
[No response.]
The Clerk. Mr. Pence.
[No response.]
The Clerk. Mr. Conyers.
Mr. Conyers. No.
The Clerk. Mr. Conyers, no.
Mr. Frank.
Mr. Frank. No.
The Clerk. Mr. Berman.
[No response.]
The Clerk. Mr. Boucher.
[No response.]
The Clerk. Mr. Nadler.
[No response.]
The Clerk. Mr. Scott.
Mr. Scott. Aye.
The Clerk. Mr. Scott, aye.
Mr. Watt.
Mr. Watt. Pass.
The Clerk. Mr. Watt, pass.
Ms. Lofgren.
Ms. Lofgren. Aye.
The Clerk. Ms. Lofgren, aye.
Ms. Jackson Lee.
Ms. Jackson Lee. Pass.
The Clerk. Ms. Jackson Lee, pass.
Ms. Waters.
Ms. Waters. No.
The Clerk. Ms. Waters, no.
Mr. Meehan.
Mr. Meehan. No.
The Clerk. Mr. Meehan, no.
Mr. Delahunt.
[No response.]
The Clerk. Mr. Wexler.
[No response.]
The Clerk. Ms. Baldwin.
Ms. Baldwin. No.
The Clerk. Mr. Weiner.
Mr. Weiner. No.
The Clerk. Mr. Schiff.
[No response.]
The Clerk. Mr. Chairman.
Chairman Sensenbrenner. No.
The Clerk. Mr. Chairman, no.
Chairman Sensenbrenner. Are there additional Members in the
room who wish to pass or change their vote? The gentleman from
Pennsylvania, Mr. Gekas.
The Clerk. Mr. Gekas.
Mr. Gekas. No.
Chairman Sensenbrenner. Gentlewoman from Pennsylvania, Ms.
Hart.
Ms. Hart. No.
Chairman Sensenbrenner. Gentleman from Florida, Mr. Keller.
Mr. Keller. No.
Chairman Sensenbrenner. Gentleman from Tennessee, Mr.
Jenkins.
Mr. Jenkins. No.
Chairman Sensenbrenner. Gentleman from North Carolina, Mr.
Watt.
Mr. Watt. No.
The Clerk. Mr. Watt, no.
Chairman Sensenbrenner. Other Members who wish to cast or
change their votes?
Gentlewoman from Texas, Ms. Jackson Lee.
Ms. Jackson Lee. Aye.
Chairman Sensenbrenner. Gentleman from Alabama, Mr. Bachus.
Mr. Bachus. Aye.
The Clerk. Mr. Bachus, aye.
Chairman Sensenbrenner. Further Members who wish to cast or
change their vote? If not, the clerk will report.
The Clerk. Mr. Chairman, there are 8 ayes and 18 nays.
Chairman Sensenbrenner. The amendment is not agreed to. Are
there further amendments? Ms. Jackson Lee.
Ms. Jackson Lee. I have an amendment at the desk.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577, offered by Ms. Jackson Lee of Texas.
[The amendment follows:]
The Clerk. At the end of the bill add the following new
section. ``section. Independent study to determine the effect
of eliminating the Federal Prison Industries mandatory source
authority.''.
Ms. Jackson Lee. I ask unanimous consent that the amendment
be considered as read.
Chairman Sensenbrenner. Without objection, ordered. The
gentlewoman is recognized for 5 minutes.
Ms. Jackson Lee. Thank you, Mr. Chairman. This is an
informative and instructional amendment that I ask my
colleagues to support to provide us with the information of
what impact the Federal Prison Industries have. We obviously
appreciate the advantage the program can have on persons who
are incarcerated and society at large. At the same time there
is, I think, the need to be able to determine what value comes
to those who are incarcerated with respect to training and
experience with development of job skills and work ethic. Also
how these particular industries compete with opportunities
needed by low income families and, as well, other small private
contractors. Information goes a long way. It is instructional,
and I believe this study is long overdue, Mr. Chairman. We have
never had one, to my understanding, and, of course, one of the
issues that could be raised is whether or not it brings down
recidivism, which is something we all want to encourage to
happen; that recidivism is diminished, if you will. This
provides an opportunity in the community for those individuals
who are to go back into the community.
I would ask my colleagues to support this study because we
can only be better policymakers and legislators if we have this
information. I yield back.
Chairman Sensenbrenner. I move to strike the last words and
recognize myself for 5 minutes.
I do not think we need to have an independent study on
this. It kind of punts the whole question on whether or not the
mandatory source rule should be repealed, continued, or phased
out. I think most of the Members of this Committee have
realized that mandatory source is not in the public interest.
What the legislation proposes to do is phase out mandatory
source in the way to prevent the rug from being pulled out from
underneath Federal Prison Industries. The Comptroller General
is overloaded with GAO studies. Any Member can ask for a GAO
study. It does not require a Committee action.
I believe this amendment really fuzzes the issue of whether
mandatory sourcing shall be taken away. I would point out that
the Department of Justice supports the phaseout of mandatory
sourcing that is contained in this bill. The AFL-CIO does as
well, with letters that have been delivered to the Committee
today, and it seems to me that we ought to bite the bullet,
make a decision, and do it.
I yield to the gentleman from Michigan.
Mr. Conyers. I thank the Chair for yielding. The Chair must
consider the fact that there are some Members who have never
seen a study that they did not like. So what is one more study
onto all the hundreds of other studies that have been ordered
in the 107th Congress. And so if it will give the gentlewoman
support for final passage, will reduce the number of amendments
she might otherwise introduce, I am for it.
Ms. Jackson Lee. You are so eloquent, Mr. Ranking Member.
Would the gentleman yield?
Chairman Sensenbrenner. I am happy to yield to the
gentlewoman from Texas.
Ms. Jackson Lee. My Ranking Member has expressed himself in
such an eloquent fashion that I just want to echo the
sentiments. I believe that information is not negative and I
believe that the refined information coming from the
Comptroller would be very helpful to us. I appreciate the
general support of the mandatory source, but there is not only
a question about that. It raises many additional issues dealing
with the impact of the prison bureau industries, the impact on
local private entrepreneurs, employment issues. It is a helpful
document to be able to not have other Congresses revisit this
question again.
I would ask my colleagues to support this amendment.
Chairman Sensenbrenner. I yield to the gentleman from
Massachusetts.
Mr. Frank. I would suggest another reason why the majority
might want to authorize this study. You might want to give the
Controller General more to do, in which case he would stop
trying to find out just what the Vice President was doing last
year.
Chairman Sensenbrenner. Well, we will think about that. I
yield back the balance of my time. The question is on the
amendment offered by the gentlewoman from Texas, Ms. Jackson
Lee. Those in favor, say aye. Those opposed, no. The ayes
appear to have it. The ayes have it, and the amendment is
agreed to.
Are there further amendments?
Mr. Hyde. I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
substitute.
The Clerk. Amendment to the amendment in the nature of an
substitute to H.R. 1577 offered by Mr. Hyde.
[The amendment follows:]
The Clerk. Page 18 after line 14 insert the following.
Mr. Hyde. Mr. Chairman, I ask unanimous consent that the
further reading of the amendment be dispensed with.
Chairman Sensenbrenner. Without objection.
Mr. Hyde. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes in support of his amendment.
Mr. Hyde. Mr. Chairman, I am offering what I believe to be
a perfecting amendment designed to ensure that the bill will
serve the purposes for which its authors intend, which is to
improve Federal Prison Industries rather than destroy it. It
will provide a safety valve just in case the provisions of the
bill do not work out as planned. I believe it is important to
preserve Federal Prison Industries because it has a proven
record of improving prison safety as well as overall public
safety. Participation in Federal Prison Industries works
programs has been shown to reduce recidivism, to increase the
likelihood that inmates will be gainfully employed after they
are released. Those programs are currently providing employment
and training to about 22,000 inmates which is about 25 percent
of the total number of inmates who are eligible for work
programs, and there are plans to increase that number by
building new factories in some of the Federal prisons, the
newer Federal prisons.
Mr. Chairman, the proponents of this bill believe they can
preserve these social benefits by gradually phasing out the
preference that Federal Prison Industries projects gets in the
Federal Government's procurement system. Each year the number
of items sold under this preference will become smaller and
smaller until 2008 when there would be no preference at all. In
theory, by then, Federal Prison Industries would have
reorganized its operation so that they could continue to sell
their product to the Government agencies even without a
preference. I hope this plan works. But the bill as currently
drafted makes no provision for what will happen if it does not
work.
Mr. Chairman, there are at least three reasons why turning
Federal Prison Industries into an enterprise that can undersell
private contractors may be easier said than done.
First, even though prison wages are lower than private
wages, productivity is also far lower.
Second, the overhead cost for such items as supervision and
security are far higher in prison factories than in private
enterprises.
Finally, Federal Prison Industries is forbidden by law to
sell its product on the open market. Unlike private
competitors, it can sell only to the Federal Government. So it
can take advantage of economies of scale to nearly the same
extent as its competitors.
Mr. Chairman, my amendment would require the Attorney
General to make a determination each year about whether the
phasing-out of Federal Prison Industries' procurement
preference has resulted in a reduction in the number of inmates
provided employed in-work programs or is likely to do during
the following year. If, and only if, there had been or was
likely to be a substantial reduction in the number of inmates
employed, the Attorney General would then determine whether
this reduction posed a significant threat to prison safety or
to general public safety. If not, then further reductions would
be imposed on schedule. But if the Attorney General found both,
that the phasing-out of the preference would substantially
reduce prison work opportunities and that this reduction posed
a significant threat to prison safety or public safety, then
any further phasing-out would be postponed for at least a year.
The phasing-out would occur only after the Attorney General
found that it was safe to proceed.
Mr. Chairman, I hope the Committee will adopt this
amendment. If the proponents of the bill are correct in
assuming that their reforms will make Federal Prison Industries
more competitive rather than putting it out of business, then
the safety valve provided by this amendment will never come
into play. But if the proponents are wrong and if our highest
law enforcement official determines there is a significant risk
to prison safety or public safety, then the safety valve which
I am providing will be badly needed.
I urge my colleagues to support this perfecting amendment.
Chairman Sensenbrenner. Mr. Chairman, I move to strike the
last words and recognize myself for 5 minutes.
Mr. Chairman, this amendment guts the bill. And with all
due respect to my good friend from Illinois, what he has
proposed to do is to have a rolling postponement of the phase-
out of the mandatory procurement practices.
In the early determination from the Attorney General we can
postpone that phase-out 1 year at a time so it never gets
phased out. Now, nobody on this Committee is in favor of making
prisons unsafe and we do not endorse prison riots and we want
to make sure prisoners are kept in safe and humane conditions.
But the effect of this amendment, given the way the Federal
Bureau of Prisons operates will be to prevent the transferring
of people who are presently in money-making industrial
practices in the prison into the vocational rehabilitation
programs that were authorized under the Conyers amendments and
which will give those prisoners better skills to get jobs in
the private sector once they are released from prison and are
looking for jobs.
I think that the adoption of the Hyde amendment will allow
Federal Prison Industries to keep doing business as usual, but
also will really disadvantage the prisoners who do want to make
a sincere attempt at rehabilitation from being forced into the
vocational rehab jobs that the gentleman from Michigan, Mr.
Conyers, is correctly pushing.
So I would hope that this amendment would not be adopted.
Mr. Frank. Mr. Chairman.
Chairman Sensenbrenner. I yield to the gentleman from
Massachusetts.
Mr. Frank. Mr. Chairman, I have an amendment to the
amendment at the desk.
Chairman Sensenbrenner. I would yield back the balance of
my time.
Mr. Frank. Mr. Chairman, I move to offer an amendment to
the amendment.
Chairman Sensenbrenner. The clerk will report the amendment
to the amendment.
[The amendment follows:]
The Clerk. Amendment offered by Mr. Frank to the Hyde
amendment to the amendment in the nature of a substitute to
H.R. 1577 moves to amend the amendment by striking all after
the word Congress on line 17.
Chairman Sensenbrenner. The gentleman from Massachusetts is
recognized in 5 minutes in support of the amendment to the
amendment.
Mr. Frank. Mr. Chairman, the effect of this amendment is
very simple. That is why we have not distributed copies. It
would just amendment at the word Congress on line 17 of page
one. It would leave in place the requirement that the Attorney
General make this double finding. As you remember, the Attorney
General is instructed to find whether or not there has been a
substantial reduction in employment and whether or not that
reduction in employment has presented a significant risk of
adverse effects. It would have the Attorney General report that
to the Congress, which is the appropriate policymaking body.
In its current form it seems to me to be a degree of
delegation much too far. It lets the Attorney General
unilaterally amend the legislation based on the finding. Now we
understand that these are not the findings of great
specificity. I think it is worth having this. That is why I did
not want to oppose the amendment altogether but simply get the
finding. But we all know that the issues here are somewhat
going to be ambiguous.
One, there is perhaps the more quantifiable question about
whether there has been a reduction. There is a more difficult
question as to whether or not this causes adverse risks to
public safety. Whether there might be alternative methods of
trying to rehabilitate prisoners, whether there are other
things we can do. It does not seem to me this is a legislative
principle we ought to adopt. It almost comes close to the
reverse of the legislative veto, an executive unilateral power
to suspend a significant impact of a statute.
I do believe if the Attorney General--and the Attorney
General came to this Committee and said, look, we have a
serious problem here, that we would not ignore it. We would
look at it. It seems to me that is the appropriate process. It
ought to trigger a serious investigation from this Committee.
I would also point out there is a little bit of an
inconsistency in the amendment because in the first part, the
report requires a finding that there has been a loss of
employment that has led to adverse risk of public safety. But
on page 2, those are independent factors. They have been
delinked. There is an ``or'' there on line 11 and that what I
would strike out. So that once there has been a suspension, a
finding that there has been a drop in employment, even in the
absence of finding that that had an adverse risk of public
safety, would allow the Attorney General to continue to suspend
an Act of Congress. I think that is not a good idea.
So I agree that this kind of a report from the Attorney
General would be useful, but I do not think this is, either in
this particular instance or as a general legislative matter, an
appropriate way to structure a program, and that is why I
offered offer the amendment.
I yield to my Ranking Member.
Mr. Conyers. I thank the gentleman for yielding. I want my
friend Mr. Hyde to know that I just called Lionel Hampton,
whose birthday we celebrated in this room yesterday, and he
supports your amendment and Henry Hyde's amendment.
Mr. Frank. I just hope the gentleman vibrates with me on
this particular issue.
Chairman Sensenbrenner. The gentleman from Virginia, Mr.
Scott.
Mr. Scott. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Mr. Chairman, I have a different reading of the
language on page 2, line 11. That order seems to me that the
postponement would be withdrawn and the reductions take place
if either there is A or B. So that if it has been postponed by
the Attorney General, he would find either A or B and then it
goes into effect.
Mr. Chairman, we have delegated a lot of authority to the
Attorney General in the past few months. I mean, we delegated
him to name terrorist organizations and start taking their
property without any judicial review. So this little delegation
pales in consideration of some of the other powers we have
given him.
Congress, as we know from the way we have dealt with this
very issue, will take a long time to respond to such a finding.
It seems to me if we want to ignore his findings that we
would allow this postponement to go into effect or take
affirmative action to go ahead and limit the prison industry
program notwithstanding his specific finding, and we could pass
a bill to that effect. It seems to me if the Attorney General
has made such a finding that we ought to stop the process right
where it is before we go much further. The Attorney General has
the ultimate responsibility in the Government or responsibility
in his department to make sure the prisons are being run
safely. And if he finds the implementation of this bill is
jeopardizing that, he ought to have the power to continue the
prison industry program to make sure that the prisons are safe
and the public safety is not adversely affected.
Finally, Mr. Chairman, if the amendment without the Frank
amendment guts the bill, then the bill in fact guts prison
industries. And that is the ultimate question before us,
whether we are going to have a viable prison industry program
or not. And I think this amendment at least will make sure that
we have a viable prison industry program, the amendment without
the Frank amendment. I would hope we defeat the Frank amendment
and adopt the Hyde amendment.
Mr. Bachus. I seek recognition in opposition to the Frank
amendment.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Bachus. Mr. Chairman, I would hate to pick up the paper
3 or 4 years from now and read that there was a prison riot in
my district or my State or anywhere in the United States, and
one of the root causes of that was some program had been--had
been shut down, some work program of prison industries, as a
result of what we have passed today. I believe that the Hyde
amendment would assure us at least that we would be watching
out for any unforeseen or foreseen consequences of the
legislation which did make prison safety or undermine prison
safety.
I would just tell you that I was sent to work at 14 years
of age here in the summer for a month or two because my dad
said that was the best way to keep me out of trouble, and I do
not think I ever got in trouble when I was at work, any serious
trouble. And I believe that it also builds character. I believe
it builds a work ethic, and I do not want to deny the prisoners
an opportunity to do something to feel better about themselves.
And this amendment offers me a great deal of comfort with the
overall bill. I believe for the safety of the community we
represent, we ought to support this amendment.
Mr. Hyde. Would the gentleman yield?
Mr. Bachus. I would yield.
Mr. Hyde. I want to thank the gentleman for his remarks and
I want to thank Mr. Scott for his analysis. I think he is
exactly right. Prison industries is a valuable asset. You get
somebody locked up in a prison who has no hope, especially when
they leave the prison, and they have not had a work experience,
they can learn they can put the time there in prison to good
use and come out a person who can cope with life. And I think
to deny that--and that is really what the bill does, the bill
eviscerates prison industries.
It is not an enormous gash into the commerce of the
community. It is worthwhile, it gives the prisoners a work
experience, and I think we ought to nurture it and not destroy
it.
The Attorney General has to make two findings. One is that
the limitation has resulted or is likely to result in a
substantial reduction in inmate industrial employment. Well, if
the program makes that, you would want to correct that, would
you not? And the other is, the other finding is, and he has to
find both, is that it presents a significant risk of adverse
effect on safe prison operation or public safety.
So I do not think this is such a big deal to preserve the
viability of prison industries. I think it is therapeutic. I
think it helps society. It helps the inmates, and it does not
harm the local shoe store or delicatessen or anybody we are
trying to protect.
I thank Mr. Bachus and I thank Mr. Scott.
Chairman Sensenbrenner. The time belongs to the gentleman
from Alabama.
Mr. Bachus. I yield back the balance of my time.
Chairman Sensenbrenner. The gentleman from Michigan.
Mr. Conyers. Mr. Chairman, we have to recognize here that,
first of all, that my dear friend Mr. Hyde's amendment
effectively destroys the objective of the bill. You have to
start out with that premise. If we are going to let the
distinguished Attorney General call the last shots on prison
industries, you have got to start out with that recognition.
The Frank amendment gives us some life. It gives the
Attorney General some responsibility, but it does not give him
the chance to pull the switch. So as long as you understand
that when you are voting on the amendment, we will go along
with the majority.
I yield to the gentleman from Massachusetts.
Mr. Frank. I thank the gentleman.
I want to stress the amendments that we adopted offered by
the gentleman from Michigan do encourage prison industries to
keep going. We talk about a wide donation program so they can
give things away. We talked about some other aspect of
rehabilitation. No one is talking about simply having the
prisoners sit there and sulk. We are talking about having stuff
given away rather than sold in competition. But beyond that,
here is the problem with the amendment. Let us be very clear
that the finding about whether or not there has been a drop in
sales is a fairly specific one, but does that lead to a risk of
public safety? Most of the Members in this Committee know what
they think about this now. This is not some objective
determination to be made by the Attorney General. This is a
basic philosophical thing. Members here have been arguing on
behalf of the Attorney General making that finding. They have
been arguing the finding. They are calling for it.
Let us also understand--and I know we have given other
forms of delegation to the Attorney General and I used to join
the gentleman from Virginia in being a little skeptical of
those. But here is the problem, too. We are not talking about a
purely intellectual issue. The Attorney General is the chief
operating officer for the Federal department. The FPI brings in
revenue to his department. He is going to be heavily lobbied by
the people within his department to do something that stops
this program from going into effect. We had FPI lobbying us
very heavily to oppose any such legislation. They wanted an
expansion. The fact is that the revenues here are useful to the
department.
In fact, if you were going to give somebody the power to
stop it, I do not think we should do that as appropriate
legislative policy. It probably should not be the Cabinet
budget officer whose budget will be directly affected one way
or another. You might want to give it to somebody else. I do
not think we ought to give it to anybody.
I do think if the Attorney General sends Congress a well-
documented report that says we had trouble in the prisons
because of this, we can go on. A short suspension can be part
of an appropriations bill. It does not require a whole
legislative operation.
I will say to my friends on my side, these kinds of
principles are not good for one bill only. Give the Attorney
General the power to suspend the program affecting the prisons
based on his unilateral unchallengeable finding, why does it
stop here? Are there other things that this Attorney General or
the next Attorney General could? Did my friends on the other
side want Janet Reno to have that? Do we want John Ashcroft to
have it? Attorneys general are not neutral figures. They are
often very high profile, very ideologically defined figures.
What a precedent we are setting here to give the Attorney
General of the United States the power unilaterally to suspend
because of a finding that is part philosophical and part
factual.
Mr. Hyde. Will the gentleman yield?
Mr. Frank. Yes.
Mr. Hyde. You have said the amendment guts the bill.
Mr. Frank. I did not say that. Other people have said it.
Mr. Hyde. You have not objected to them using those words.
Mr. Frank. No.
Mr. Hyde. I am told by Mr. Conyers that under his breath he
has said that.
In any event, the bill is not gutted because it requires
the Attorney General to make two findings. One is that a
substantial limitation in inmate industrial employment has
occurred and the other is it presents a significant risk of
adverse effect on safe prison operation or public safety. So if
those two elements are not found, the bill is in its full
glory. If they are found, we have some flexibility to adjust
the situation and keep Federal industries flying.
Mr. Frank. Let me take back my time and ask for an
additional minute to respond.
Chairman Sensenbrenner. No objection.
Mr. Frank. I did not say the bill was gutted. I say what I
say, and other people can say what they say, and if I objected
to everything with which I disagreed, nobody else would get a
chance to talk around here. The fact is that there is still a
principle here of delegation that seems to me very unwise and
precedential to say on an issue that is partly factual but
partly philosophical that we will let one of the most high
profile, often politically sharply defined public officials,
Janet Reno or John Ashcroft or any Attorney General that you
think of, will allow that kind of a suspension. And I think
that is a grave error. No, I do not say it guts the bill. I
would note that it does appear to be kind of a tendency for
people who do not like the bill to vote one way and people who
do like the bill to vote another. I think it is a mistake, as I
said, of setting this precedent of giving that power.
I think the part of the amendment that requires the finding
by the Attorney General is a useful one. But having the
Attorney General, highly ideological in either party's case,
the man whose budget or woman whose budget is influenced by
this has the unilateral power to suspend congressional action
is a bad idea.
Chairman Sensenbrenner. The gentleman's time has expired.
The gentleman from North Carolina, Mr. Watt, is recognized for
5 minutes.
Mr. Watt. Mr. Chairman, I move to strike the last words.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. First of all, Mr. Chairman, I would just say that
there is among the best debates I think I have ever witnessed
in this Committee. When you have a bill and an amendment that
divides allies like the Chairman and the former Chairman on one
side and Bobby Scott and myself on the other side--and this is
not along political lines, it is along substantive and public
policy lines--you have got the ingredients of a very difficult
issue that needs to have this kind of public debate. And a lot
of it goes back to your opinion about what prison industries,
whether there even ought to be such a thing as prison
industries and what it does to contribute to a complex out
there that many of us perceive as growing out of control. But I
am not going to go there.
I want to go back to the substantive part of this. I
clearly disagree with the former Chairman's amendment, and the
trouble I have with Mr. Frank's amendment to the amendment is
that it seems to have been once we have passed Ms. Jackson
Lee's amendment, if we also passed this amendment, Mr. Frank's
amendment, we would then have a study by the Comptroller
General that under Ms. Jackson Lee's amendment, which I presume
would do essentially the same thing that the Attorney General's
study would do under this amendment as amended by Mr. Frank. I
am just, I guess, I am a little concerned that what if the
Comptroller General comes up with one set of findings and if,
as I presume the Attorney General would, he would find whatever
is necessary to, I think to preserve prison industries? I mean,
I think it probably would be easier to document that if you cut
out prison industries, somebody is more likely to not be
rehabilitated or go back into the community and engage in some
counterproductive activity. I mean, the Attorney General could
easily find that. The Comptroller General could conduct the
same study and find the exact opposite.
Where does that leave us if that happens? If either the
sponsor of the amendment or the sponsor of the amendment to the
amendment would address that?
Mr. Frank. Will the gentleman yield?
I would say I think that is right, but I worry about the
duplication. But it is an important issue. It would leave us,
the Congress, in a better position because, as the gentleman
knows, particularly the gentleman who studies these things, we
would not simply get that conclusion. We would get presumably
the reasons behind that conclusion, and I would not find myself
unhappy if we got two conflicting recommendations, each the
product not simply of an ideological free disposition but of a
kind of a study. But I think obviously that is why I do not
want it to be automatically triggered by either finding. But if
we got two studies that were contradictory but if they were
both serious studies, maybe we would have more good debates.
Mr. Watt. That is a fair answer. I would obviously favor
Mr. Frank's over Mr. Hyde's amendment, and with that
explanation, I think I will support Mr. Frank's amendment to
the amendment. I yield back the balance of my time.
Mr. Green. Mr. Chairman, I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Green. Thank you, Mr. Chairman.
Again, I think this amendment and the debate surrounding
this amendment really points out what is going on here. Those
who are arguing that the bill is about reform and making FPI
work should in no way or form object to the Hyde amendment.
There is no reason to object. If they are confident of this
quote/unquote soft landing, if they are confident that prison
industries can continue after the phase-out of the preference
that takes place, then they should be just fine with this
amendment. They will have no reason to be nervous about it or
to be anxious about it at all. The fact that they are
protesting so much shows that this is not about reforming FPI.
It is instead about trying to condemn it and trying to
terminate it and trying to make the program go away.
I would note that the Department of Justice, as the
Chairman has pointed out, is in favor of the phase-out. So you
have got the Department of Justice here in favor of the phase-
out. This amendment, the Hyde amendment, the underlying
amendment, simply has them look at this, has the Department of
Justice, the Attorney General's office, take a look year by
year monitoring the progress of the phase-out and monitoring
the progress of prison industries to determine whether or not
they are wrong. And, in fact, this does have the type of effect
that many of us who are opposed to this bill fear. And I
appreciate the good intentions of many of the supporters who
talk about how because of the donation initiatives that are in
this bill that there will still be FPI. Let us not fool
ourselves. There will not be, because under these donation
provision--and again the Bureau of Prisons has a public works
seperate from FPI, it is going to cost money. Where is that
money going to come from?
Right now we have in FPI essentially a self-funding
institution. It pays for itself. That is one of the beauties of
it. But if this bill goes through and if it has the effect that
many of us fear, what will happen is if FPI is going to
continue at all, if it is going to have these donation
programs, these donation elements, they will have to come to us
in Congress and ask for a lot of money, an awful lot of money.
So, again, we should really understand what is going on in
this debate. This is not about whether or not we are reforming
FPI and making it work better. This is about whether or not we
are going to end FPI, whether we will condemn it and terminate
the program. It is for that reason that despite, I think, the
constructive comments of my friend, Congressman Frank, I must
oppose his amendment and strongly support the underlying Hyde
amendment. I yield back my time.
Chairman Sensenbrenner. The question is on the Frank
amendment to the Hyde amendment. Those in favor will say aye.
Those opposed will say no. The ayes appear to have it.
Mr. Hyde. I ask for a rollcall vote, Mr. Chairman.
Chairman Sensenbrenner. This is a rollcall vote. Those in
favor of the Frank amendment to the Hyde amendment will say
aye. The clerk will call the roll.
The Clerk. Mr. Hyde.
Mr. Hyde. No.
The Clerk. Mr. Gekas.
[No response.]
The Clerk. Mr. Coble.
[No response.]
The Clerk. Mr. Smith.
Mr. Smith. Yes.
The Clerk. Mr. Smith, aye.
Mr. Gallegly.
Mr. Gallegly. Aye.
The Clerk. Mr. Goodlatte.
[No response.]
The Clerk. Mr. Bryant.
[No response.]
The Clerk. Mr. Chabot.
Mr. Chabot. No.
The Clerk. Mr. Chabot, no. Mr. Barr.
Mr. Barr. Aye.
The Clerk. Mr. Barr, aye. Mr. Jenkins.
[No response.]
The Clerk. Mr. Cannon.
Mr. Cannon. Aye.
The Clerk. Mr. Cannon, aye. Mr. Graham.
Mr. Graham. Aye.
The Clerk. Mr. Graham, aye. Mr. Bachus.
Mr. Bachus. No.
The Clerk. Mr. Hostettler.
Mr. Hostettler. Aye.
The Clerk. Mr. Green.
Mr. Green. No.
The Clerk. Mr. Keller.
Mr. Keller. Aye.
The Clerk. Mr. Issa.
[No response.]
The Clerk. Ms. Hart.
Ms. Hart. Aye.
The Clerk. Ms. Hart, aye. Mr. Flake.
Mr. Flake. No.
The Clerk. Mr. Flake, no. Mr. Pence.
[No response.]
The Clerk. Mr. Conyers.
Mr. Conyers. Aye.
The Clerk. Mr. Conyers, aye. Mr. Frank.
Mr. Frank. Aye.
The Clerk. Mr. Frank, aye. Mr. Berman.
[No response.]
The Clerk. Mr. Boucher.
[No response.]
The Clerk. Mr. Nadler.
[No response.]
The Clerk. Mr. Scott.
Mr. Scott. No.
The Clerk. Mr. Scott, no. Mr. Watt.
Mr. Watt. Aye.
The Clerk. Mr. Watt, aye. Ms. Lofgren.
Ms. Lofgren. No.
The Clerk. Ms. Jackson Lee.
[No response.]
The Clerk. Ms. Waters.
[No response.]
The Clerk. Mr. Meehan.
[No response.]
The Clerk. Ms. Waters.
Ms. Waters. Aye.
The Clerk. Ms. Waters, aye. Mr. Meehan.
[No response.]
The Clerk. Mr. Delahunt.
[No response.]
The Clerk. Mr. Wexler.
[No response.]
The Clerk. Ms. Baldwin.
[No response.]
The Clerk. Mr. Weiner.
Mr. Weiner. Aye.
The Clerk. Mr. Weiner, aye. Mr. Schiff.
Mr. Schiff. No.
The Clerk. Mr. Schiff, no. Mr. Chairman.
Chairman Sensenbrenner. Aye.
The Clerk. Mr. Chairman, aye.
Chairman Sensenbrenner. Are there additional Members who
wish to cast or change their vote? Gentleman from North
Carolina, Mr. Coble.
Mr. Coble. Aye.
The Clerk. Mr. Coble, aye.
Chairman Sensenbrenner. Gentleman from Tennessee, Mr.
Jenkins.
Mr. Jenkins. Aye.
The Clerk. Mr. Jenkins, aye.
Chairman Sensenbrenner. Gentleman from California, Mr.
Issa.
Mr. Issa. No.
Chairman Sensenbrenner. Gentleman from Pennsylvania, Mr.
Gekas.
Mr. Gekas. Aye.
The Clerk. Mr. Gekas, aye.
Chairman Sensenbrenner. Gentleman from New York, Mr.
Nadler.
Mr. Nadler. Aye.
The Clerk. Mr. Nadler, aye.
Chairman Sensenbrenner. Further Members who wish to cast or
change their votes? Hearing none, the clerk will report.
The Clerk. Mr. Chairman, there are 18 ayes and 9 nays.
Chairman Sensenbrenner. The amendment to the amendment is
agreed to. The question is now on the amendment of the
gentleman from Illinois, Mr. Hyde, as amended. Those in favor,
say aye. Opposed no. The ayes appear to have it. The ayes have
it and the amendment as amended is agreed to.
The Chair will give a bit of a scheduling note. We are due
for a vote at 12:15. It is not the intention of the Chair to
bring us back after the vote on the rule on the tax bill. So we
will recess the Committee subject to the call of the Chair at
the time the bell rings. Members will get at least 24 hours
notice on when the Committee will resume its sitting.
Mr. Conyers. Mr. Chairman, are there other major amendments
that are outstanding?
Chairman Sensenbrenner. I believe there are.
For what purpose does the gentleman from Virginia seek
recognition?.
Mr. Scott. Mr. Chairman, I have an amendment at the desk
that I hope will take more than 5 minutes.
Chairman Sensenbrenner. You are not getting more than 5
minutes to speak on it. The clerk will report the amendment.
Mr. Scott. Mr. Chairman, I think there are other amendments
that may go quicker.
Chairman Sensenbrenner. The clerk will report the Scott
amendment.
[The amendment follows:]
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577 offered by Mr. Scott and Mr. Green.
``section 21, additional pilot authorities for inmate work
opportunities. A, section 4124 of title 18, United States Code,
is amended to read as follows: Subsection 4132.''.
Mr. Scott. Mr. Chairman, I ask the amendment be considered
as read.
Chairman Sensenbrenner. Without objection, the amendment is
considered as read. The gentleman from Virginia is recognized
for 5 minutes.
Mr. Scott. Mr. Chairman, last fall with your support,
discussions were held in good faith between the gentleman from
Virginia, Mr. Wolf, the gentleman from Texas, Mr. Smith, the
gentleman from Michigan, Mr. Hoekstra, and their staffs to work
out a compromise to the various bills restructuring FPI and to
present to us some kind of compromise people could agree to.
The proposal was developed. Many of the elements agreed to
were reflected in your substitute version of H.R. 1577 before
us now, and this amendment applied to that underlying
substitute is that entire proposal. The proposal was never
presented to us because some who had originally joined in
decided to reflect the compromise approach. The key element to
this amendment, which is in the proposal developed but not in
the substitute, is a provision to authorize FPI to pilot
potential ways to offset the effect of the elimination of its
mandatory source provision for obtaining work for inmates.
This amendment offers the same language regarding these
pilot authorities as everyone agreed to last fall.
Specifically, FPI would be authorized to produce commercial
market items for private companies which have been produced
offshore for at least 3 years providing inmates are at least
paid twice the foreign market wage. That is to ensure that the
lower wage is not the focus of the pilot.
FPI is also authorized to produce items for the domestic
commercial market, provided inmates are paid at the domestic
market wages. This will allow FPI to pilot a program similar to
the Federal PIE or Prison Industries Enhancement program,
already in operation for State prison industry programs.
Under this program, FPI would be allowed to pilot the
production of products for services for which there is no
domestic labor force available. There are strong protections
against American worker displacements. Again the language is a
language that was developed by representatives involved in the
compromise.
The third pilot would allow FPI to produce products or
perform services for nonprofit agencies in support of their
charitable activities. During this pilot this amendment would
authorize there would be extensive input from the International
Trade Commission and the Department of Labor and other
interested groups, proposals are noticed to the public and
affected parties. All actions taken by the board are open to
public meetings. We are talking about piloting these notions.
They are in both the Wolf bill and the gentleman from Wisconsin
Mr. Green's bill restructuring FPI. If they do not work, it
will create the kind of problems that some rhetorically suggest
are possible, then we can simply put a stop to them.
Mr. Chairman, if we are going to take away the only
reliable basis the prison system has to ensure the real work
opportunities for prisoners since 1934 because one quarter of 1
percent of Federal procurement expenditures are too much to
allow for a program that has been proven to reduce crime, it
would be irresponsible for us to not at least test out other
ways to give the program some reliability.
I hope my colleagues would support the amendment. And I
point out, Mr. Chairman, that this amendment is being offered
by myself and Mr. Green.
Chairman Sensenbrenner. For what purpose does the gentleman
from Massachusetts seek recognition?
Mr. Frank. To strike the requisite number of words.
Chairman Sensenbrenner. Gentleman is recognized for 5
minutes.
Mr. Frank. Mr. Chairman, I want to speak in opposition to
the amendment, and I will say it is the first I have seen it so
I cannot fully comment, but there were things that disturb me
right from the beginning.
One, I am troubled by the fundamental inconsistency here
that this to some extent exacerbates. I and many of my
colleagues have campaigned hard against foreign-made goods made
by prison labor coming into the U.S. I think that has been an
important human rights cause and it has been a bipartisan one.
And I must stay I am struck at the outset and no one has yet
explained to me that fundamental contradiction why we are
morally right in not allowing foreign prison goods into the
U.S. And simultaneously allowing the expansion of prison-made
goods within the U.S.
Here in particular this is exacerbated because this says
one of the things it encourages is the production of products
and performance of services which have been otherwise produced
or performed by the companies by foreign labor outside of the
U.S.. Here is what we are saying.
On the one hand, we will be encouraging prison labor to
displace foreign-made goods. That may have some appeal to
people. But how then do we go to various world trade
organizations and object to foreign-made goods coming here? It
is not always important to be 100 percent consistent, but I am
really troubled by this.
On the one hand we are saying, look, one of the things we
will try to do is replace and displace your foreign-made goods
with our prison-made goods, but do not dare send any prison-
made goods here. That is troubling to me.
Secondly, on first reading, this says they can produce
three kinds of products. They can produce products and services
that are performed by foreign labor, or they can produce
products or perform services for commercial companies which
would otherwise be performed for the companies by domestic
labor.
Well, it seems between foreign labor and domestic labor, on
the assumption that extraterrestrial labor does not do a
significant amount of business here, I think we have pretty
much everything. So I am not sure what we have domestic and
foreign. I would yield if I am missing something.
Mr. Scott. I think the operative language there is ``if
available.'' it could have been done by domestic labor if
domestic labor had been available and it was not available.
Mr. Frank. It does not say ``if not available''. It says
produce products and perform services for commercial companies
which would otherwise be performed for the companies by
domestic labor, if available.
Again, we are giving an agency that has got a budget--and
one of the arguments that has been made by the gentleman from
Wisconsin, and I appreciate his presenting the argument in this
way, this is a way for the prison industries to get some money.
I would say to the gentleman, and this is relevant to this
whole pilot, by the way, it is an interesting pilot. I may
misunderstand pilot. Pilot sounds to me like something small.
By the time I add it up, 35 percent of the total inmates can be
in this pilot program, which is a pretty big pilot program.
But here is the problem. I want to do some things for the
people in prison, but why should garment and furniture workers
be paying for this as opposed to the taxpayer? Let us not do
this work on the backs of some of the lowest wage people in the
country.
You say, how are we going to pay for it? You are paying for
it now by displacing workers, garment workers, furniture
workers, and I think that is wrong. I am prepared to vote for
good programs. But I guess let us take that financing issue
head-on.
Should we finance a program that is of general benefit to
the society by I think competing at a subsidized way, in a
monopoly way--not even competing, taking work that would
otherwise be done by some of the lower wage people in our
society, or should we do it by a more general form of
financing? I would say to the gentleman that is a difference
between us.
I do say there are programs in prisons I want to support.
By the way, why just this program? Why not prison guards? Let
us find some other industry that we can displace to pay for
prison guards. Why do we single out rehabilitation as the one
example of something that is publicly-funded here?
I still want to go back and say I am troubled by this on
the foreign side, but also as it reads, it is pretty much
anything. It can be foreign or domestic. And you say maybe they
left out on the words ``understood if available'' so it is only
for places that were not available. Again, these are not hard-
and-fast decisions. These are not strict factual questions. Is
the labor available or not available? At what wage? With or
what unions? Under what working conditions? This is a real
problem.
Chairman Sensenbrenner. The gentleman's time has expired.
Mr. Green. Mr. Chairman, I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Green. Thank you. I will not take the full time. I
appreciate the gentleman, Mr. Frank, his reference to
extraterrestrial labor. That may be all that is left for FPI
after this bill passes.
Again, the other part that we need to think about here is
whether or not the purpose of this bill is to reform abuses and
problems within FPI or whether or not it is an effort to simply
terminate it and condemn it and put away. I would argue the
bill does the latter. I think what this substitute amendment
tries to do is to provide at least a limited opportunity,
limited, very limited opportunity for the program to continue.
Mr. Green. Everyone here has talked about the value of the
program, but no one here is arguing that FPI doesn't perform an
important valuable service. And yet this bill would take that
service away. It will end it. There is no doubt--there should
be no doubt in anybody's mind. This amendment was a simple
limited way to offer some hope that the program might continue.
And our goal with these reforms is to offer competition. I
would argue the other side wishes to take it away.
At this point I would like to yield the balance of my time
to my friend, Mr. Scott.
Mr. Scott. Could you yield to the gentlelady from
California? She had a question to ask.
Ms. Lofgren. Very quickly. If I am reading this correctly,
the only work that could be provided under this amendment is
work that has already gone offshore, and inmates would be paid
the prevailing wage. I mean--the question I have, though, has
to do with limitations on the service side. Several years ago
when I was on the crime subcommittee Mark Clask came and gave
testimony to us that inmates were doing data entry relative to
private information in children, which was a shocking thing to
me and many people, and I would want to make sure that there
would be privacy limitations in terms of the service side,
because I think this is a very interesting and useful
amendment, but there is that element that needs to be guarded
against. And I yield back and I thank the gentleman.
Mr. Conyers. Would the gentleman yield for a second.
Mr. Green. I have very little time. I need to get to Mr.
Scott.
Mr. Conyers. Have we checked--I asked the author of the
bill with the Virginia AFL-CIO on this question.
Mr. Scott. Not specifically, Mr. Chairman.
Mr. Conyers. What about the National AFL-CIO?
Mr. Scott. Well, Mr. Chairman, I would say that the prison
industry program has been--has been proven to reduce crime
significantly for those who are--who are potentially victims of
crime. I think they would appreciate it if we would pass
legislation that would reduce crime. This prison industry
program reduces crime. I think there are a lot of hard-working
Americans who would like the opportunity not to be victims of
crime, and if we can do something about the crime rate, they
would appreciate it.
Mr. Conyers. Well, that is a good answer.
Mr. Green. Mr. Chairman, I yield time to my friend, Mr.
Scott.
Mr. Scott. The gentleman from Massachusetts has indicated
that he has not had time to fully read the amendment. I would
ask that we withdraw it if we could have the opportunity to
have it considered as a floor amendment.
The Chairman. If the gentleman from Wisconsin will yield, I
will ask the Rules Committee in its wisdom to protect you.
Sometimes my pleas fall on deaf ears there, but you know what
that is like.
Mr. Scott. You are very persuasive.
Mr. Frank. If the gentleman would yield. As a sponsor of
the bill, I would similarly agree to go and lobby for the right
to offer this amendment as long as I didn't have to read it.
The Chairman. The amendment is withdrawn. So we can make a
clean get-away, the Committee is recessed subject to the call
of the Chair.
[Whereupon, at 12:05 p.m., the Committee was adjourned,
subject to the call of the Chair.]
* * * * *
The Committee met, pursuant to notice, at 10:09 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [Chairman of the Committee] presiding.
Chairman Sensenbrenner. [Presiding.] The Committee will be
in order.
When the Committee recessed last week, the bill H.R. 1577
was the pending business. A motion had been made to report the
bill favorably, and the bill had been considered as read and
open for amendment at any point. There was no amendment pending
at the time of the recess.
Chairman Sensenbrenner. Are there further amendments?
The gentleman from Wisconsin, Mr. Green.
Mr. Green. Mr. Chairman, I have amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Green. It should be Green.052.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577, offered by Mr. Green of Wisconsin.
Page 25, line 24, strike----
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman from Wisconsin is
recognized for 5 minutes.
Mr. Green. Thank you.
Mr. Chairman, as we've gone through the debate on this
legislation, it is my belief that in some ways the debate is
inappropriately focused, because I don't believe that the
debate or that the efforts in this legislation are, as they
suggest, really aimed at improving FPI and merely attacking its
abuses and making it operate more effectively and more
efficiently.
Instead, I believe that the legislation that's before us
seeks to terminate FPI. I believe it seeks to condemn FPI----
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Green. Yes.
Chairman Sensenbrenner. This looks like a constructive
amendment to this bill, and we're happy to accept it.
Mr. Frank. Will the gentleman yield?
Mr. Green. Yes, I will yield.
Mr. Frank. Me, too. [Laughter.]
Chairman Sensenbrenner. Does the gentleman yield back the
balance of his time?
Mr. Green. Seeing such strong bipartisan direction being
sent my way, I do yield back the balance of my time. And I
appreciate the efforts of the Chair and the Ranking Member.
Chairman Sensenbrenner. The question is on the adoption of
the amendment by the gentleman from Wisconsin, Mr. Green.
Those in favor will say aye.
Opposed, no.
The ayes appear to have it. The ayes have it, and the
amendment is agreed to.
Are there further amendments?
Mr. Watt. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from North Carolina,
Mr. Watt.
Mr. Watt. I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Watt. It's Watt number 2.
Chairman Sensenbrenner. Watt 2.
Mr. Watt. Mr. Chairman, I ask unanimous consent the
amendment be considered as read.
Chairman Sensenbrenner. Without objection, so ordered.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman is recognized for
5 minutes.
Mr. Watt. Thank you, Mr. Chairman.
I actually think this is a good and well-balanced bill.
However, I am concerned that in one important area, the area
which this amendment seeks to address, this bill leaves a
gaping loophole. And either we need to correct it or maybe
somebody will be able to explain to me exactly why the language
is worded the way it is.
As I understood the purpose of the bill, the objective was
to basically create an opportunity during the interim here for
Federal Prison Industries to be competitive. And I certainly
support that.
Unfortunately, this language on page 2, starting at line
21, I think basically guarantees the Federal Prison Industries
the receipt of the contract award. And I can't understand why
the language is worded the way it is. I think the Federal
Prison Industries should always----
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Watt. Yes, I----
Chairman Sensenbrenner. We've looked at your amendment. We
think it's a good one.
Mr. Watt. Okay. Well, in that case, some other brilliant
minds must have thought the same way. I think----
Mr. Frank. Will the gentleman yield?
I concur.
Mr. Watt. Thank you.
I will yield back the balance of my time and shut up.
Chairman Sensenbrenner. The question is on the--agreeing to
the amendment of the gentleman from North Carolina, Mr. Watt.
Those in favor will say aye.
Opposed, no.
The ayes appear to have it. The ayes have it, and the
amendment is agreed to.
Are there further amendments?
The gentleman from California, Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Issa. I have three, actually. I'll take 1, the one that
begins ``Page 7, strike line 6.''
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1544, offered by Mr. Issa. Page 7, strike
line 6, and insert the following: of its industrial
operations----
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman is recognized for
5 minutes.
Mr. Issa. Thank you, Mr. Chairman.
My amendment seeks to, if you will, mend it, not end it,
when it comes to the Federal Prison Industries.
I recognize there have been abuses of the requirement to
purchase prison-made goods in the past. But I also recognize,
as I think all of my colleagues do, that we need to find
training and work skills for prisoners being released.
My amendment specifically requires that in order retain any
preference in this case, Prison Industries would have to have
programs in which 80 percent of the inmates are within 2 years
of their release from prison, or they're released to a
prerelease program, which obviously takes them out of being
able to have this kind of training.
In order to do this, we would end a policy that I believe
is one of the major abuses in the Prison Industries system,
which is the tendency to use what I call lifers, or long-term
prisoners, because they're easier to work with. And even though
they're not going to be released, and they're certainly not in
need of training, it's a great way for wardens to have less
problems behind bars. I don't believe that when an industry
competes--could I have order, Mr. Chairman?
Thank you, Mr. Chairman. I don't believe when prisons
compete with private enterprise they should do so unless there
is a compelling reason. In this case a 2-year imminent release
back into society would seem to be an example where we must
ensure that these--that those being released in fact have
skills and have a work ethic so that we can ensure that they
will not return.
And with that I yield back the balance of my time and ask
for approval.
Chairman Sensenbrenner. I yield myself 5 minutes to oppose
the amendment.
This just gets FPI back into the same business of predatory
practices that makes it impossible for anybody else to compete,
and it is an administrative nightmare because nobody knows who
in the prison, you know, is within 2 years of release or not.
You know, if they are eligible for parole, that's up to the
Parole Board to make a determination and parole hearings don't
occur 2 years out. And if the prison management, you know,
wants to start stacking an FPI facility with people who might
be within 2 years of release, I think that flies directly in
the face of good management of the prison and good management
of the inmates.
I don't think this amendment fixes the problem. You know,
it compounds it and it causes more administrative problems
within the prison, and I would hope that the amendment would
not be agreed to.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. I yield to the gentleman from
Massachusetts.
Mr. Frank. I'll take the 5.
Chairman Sensenbrenner. The gentleman is recognized.
Mr. Frank. I move to strike the last word. I join in
opposing it. First, in the amendment that we previously adopted
offered by the gentleman from Michigan, we sought to provide
opportunities, vocational and other for prisoners. The
gentleman's amendment includes a specific section mandating
that FPI seek out and service nonprofits and other entities
that seek to provide services to low income people that are not
now in the market, and I think, frankly, there was a great
market in day care centers, in homeless shelters, in drug rehab
places. Many of them would be faith-based institutions that are
not now in the market. So the premise of this is, apparently,
that absent this there wouldn't be any work for the prisoners.
We hope that there will be work for the prisoners, but it won't
be work that will be depriving private sector workers,
particularly in beleaguered industries like furniture and
clothing from doing their job.
Secondly, there is the problem that the Chairman pointed
out. One, I don't believe you always know who's 2 years away
from release. Release dates are not always fixed. People are
able to get off short of the maximum sentence. Secondly, from
the standpoint of prison administration, segregating the
prisoners so that only those who are--even if you are sure that
there are some who have less than 2 years because they're up
against their maximum sentences or whatever, trying to run a
prison so that only they get the--they're involved, seems to me
to be very difficult. It adds an enormous complication.
But I also say this assumes, I think, incorrectly, that
absent mandatory sourcing, there's no work for the prisoners.
And we believe that in the amendment offered by the gentleman
from Michigan, which was adopted in other ways, we are
providing some work opportunities, some rehabilitation and
vocational opportunities. So I would agree with the Chairman
and hope the amendment is defeated.
Mr. Green. Mr. Chairman?
Chairman Sensenbrenner. For what purpose the gentleman from
Wisconsin seek recognition?
Mr. Green. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Green. Thank you, Mr. Chairman. I rise in support of
the Issa amendment. I believe that it is narrowly drafted, and
I believe that it focuses the mandatory source rule on those
who most need it, in the sense of those who we know are about
to be release, they're on the verge of being released. And we
believe that FPI presents some rehabilitative opportunities for
them. We know that the majority of inmates don't lack
employability skills. This is one way of providing them with
some of the skills that they will need to be successful when
they are released, so hopefully they won't be going back into
prison.
But the balance of my time, I'd like to yield to Mr. Issa.
Mr. Issa. Thank you, Mr. Green.
Mr. Chairman, as you may be aware, I served on a Prison
Industry Board for the State of California, the largest program
in the United States, actually in many ways larger than the
Federal Government's program. I'm very well aware of the
abuses, but I'm also well aware that in fact under the Federal
Prison, although there will not be a very large group that
could be assessed under this amendment, it would be a targeted
group and if you read the language of the amendment, it
specifically limits it to a burden on the prison industry,
meaning that if they cannot fill it with 80 percent of people
who are within 2 years, then they lose the exemption. So the
burden would be on the Federal Prison Industries. This would be
a small group, targeted specifically at an area in which the
private sector has very, very little concern.
Again, having served on a Prison Industry Board, I'm well
aware and very sympathetic that simply competing, using people
who will not be release, is unfair competition. This seeks to
remedy this by making it a pre-release program, and I once
again strongly urge the adoption of this based on its narrow
focus and the burden being on the Prison Industries. And I
yield back to Mr. Green.
Mr. Nadler. Mr. Chairman?
Mr. Green. Mr. Chairman, yield back my time.
Chairman Sensenbrenner. Gentleman from New York, Mr.
Nadler.
Mr. Nadler. Thank you, Mr. Chairman. Mr. Chairman, I have
to oppose this amendment. I think that--I strongly support this
bill because it's wrong for prisons to be competing--for Prison
Industries competing with private companies, when the wages
paid to the prisoners are, compared to private wage rates,
virtually nonexistent. And this amendment, aside from the
obvious practical problem pointed out by several Members
previously about how do you know who's going to--within 2 years
of release, would simply continue the preference for Prison
Industries, which is wrong. I do hope that Prison Industries
continue, and as Mr. Frank said, there are many other uses for
the products, but we should not be competing at an advantage,
at a great advantage, at a subsidized advantage with private
enterprise. So I oppose the amendment and I support the bill.
Thank you. I yield back.
Chairman Sensenbrenner. For what purpose the gentleman from
Virginia, Mr. Scott, seek recognition?
Mr. Scott. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Scott. Mr. Chairman, just very briefly, the average
sentence that people are serving now in Federal prisons is
about 8 years. This would mean that for the last two of those
years, they would be--have an advantage and have much more
likelihood of having work to do. I think we ought to consider
the fact that these people are going to be released. We ought
to consider the impact of the reduced recidivism for those who
will be participating in the Federal Prison Industry program.
I would think that the average citizen would like us to do
what we can to reduce recidivism and increase public safety.
This amendment certainly goes in that direction, and I hope it
would be adopted.
Mr. Watt. Mr. Chairman.
Chairman Sensenbrenner. The question is--what purpose the
gentleman from North Carolina seek recognition?
Mr. Watt. I move to strike the last word just briefly.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. I actually support the thrust of Mr. Issa's
amendment. I think the 2-year period, however, is too short and
there are some practical problems with how it would be
implemented, as the Chairman has pointed out, so on balance I
think while he's thinking in the right direction, I don't think
we can support this amendment as it's drawn. I yield back.
Chairman Sensenbrenner. The question is on agreeing to the
amendment offered by the gentleman from California, Mr. Issa,
those in favor will say aye.
Opposed, no.
The noes appear to have it.
Mr. Issa. Mr. Chairman, I request a recorded vote.
Chairman Sensenbrenner. A recorded vote is ordered. Those
in favor of the Issa amendment will, as your names are called,
answer aye, those opposed no, and the clerk will call the roll.
The Clerk. Mr. Hyde?
[No response.]
The Clerk. Mr. Gekas?
Mr. Gekas. No.
The Clerk. Mr. Gekas, no. Mr. Coble?
Mr. Coble. No.
The Clerk. Mr. Coble, no. Mr. Smith?
Mr. Smith. No.
The Clerk. Mr. Smith, no. Mr. Gallegly?
[No response.]
The Clerk. Mr. Goodlatte?
[No response.]
The Clerk. Mr. Bryant?
Mr. Bryant. No.
The Clerk. Mr. Bryant, no. Mr. Chabot?
[No response.]
The Clerk. Mr. Barr?
Mr. Barr. No.
The Clerk. Mr. Barr, no. Mr. Jenkins?
Mr. Jenkins. No.
The Clerk. Mr. Jenkins, no. Mr. Cannon?
[No response.]
The Clerk. Mr. Graham?
[No response.]
The Clerk. Mr. Bachus?
[No response.]
The Clerk. Mr. Hostettler?
Mr. Hostettler. No.
The Clerk. Mr. Hostettler, no. Mr. Green?
[No response.]
The Clerk. Mr. Keller?
Mr. Keller. No.
The Clerk. Mr. Keller, no. Mr. Issa?
Mr. Issa. Yes.
The Clerk. Mr. Issa, aye. Ms. Hart?
Ms. Hart. No.
The Clerk. Ms. Hart, no. Mr. Flake?
Mr. Flake. No.
The Clerk. Mr. Flake, no. Mr. Pence?
[No response.]
The Clerk. Mr. Conyers?
Mr. Conyers. No.
The Clerk. Mr. Conyers, no. Mr. Frank?
Mr. Frank. No.
The Clerk. Mr. Frank, no. Mr. Berman?
[No response.]
The Clerk. Mr. Boucher?
[No response.]
The Clerk. Mr. Nadler?
Mr. Nadler. No.
The Clerk. Mr. Nadler, no. Mr. Scott?
Mr. Scott. Aye.
The Clerk. Mr. Scott, aye. Mr. Watt?
Mr. Watt. No.
The Clerk. Mr. Watt, no. Ms. Lofgren?
Ms. Lofgren. Aye.
The Clerk. Ms. Lofgren, aye. Ms. Jackson Lee?
Ms. Jackson Lee. No.
The Clerk. Ms. Jackson Lee, no. Ms. Waters?
Ms. Waters. No.
The Clerk. Ms. Waters, no. Mr. Meehan?
Mr. Meehan. No.
The Clerk. Mr. Meehan, no. Mr. Wexler--Mr. Delahunt?
[No response.]
The Clerk. Mr. Wexler?
[No response.]
The Clerk. Ms. Baldwin?
[No response.]
The Clerk. Mr. Weiner?
[No response.]
The Clerk. Mr. Schiff?
Mr. Schiff. No.
The Clerk. Mr. Schiff, no. Mr. Chairman?
Chairman Sensenbrenner. No.
The Clerk. Mr. Chairman, no.
Chairman Sensenbrenner. Are there additional Members who
wish to cast or change their vote? Gentleman from Virginia, Mr.
Goodlatte?
Mr. Goodlatte. No.
The Clerk. Mr. Goodlatte, no.
Chairman Sensenbrenner. Gentleman from Ohio, Mr. Chabot?
Mr. Chabot. Aye.
The Clerk. Mr. Chabot, aye.
Chairman Sensenbrenner. Gentleman from Utah, Mr. Cannon?
Mr. Cannon. No.
The Clerk. Mr. Cannon, no.
Chairman Sensenbrenner. Further Members who wish to cast or
change their votes? If not, the clerk will report.
Gentlewoman from Wisconsin, Ms. Baldwin.
Ms. Baldwin. No.
The Clerk. Ms. Baldwin, no.
Chairman Sensenbrenner. The other gentleman from Wisconsin,
Mr. Green?
Mr. Green. Aye.
The Clerk. Mr. Green, aye.
Chairman Sensenbrenner. Anybody else who wish to cast or
change their vote? The clerk will try again.
The Clerk. Mr. Chairman, there are 5 ayes and 22 nays.
Chairman Sensenbrenner. And the amendment is not agreed to.
Are there further amendments?
Mr. Scott. Yes.
Chairman Sensenbrenner. Gentleman from Virginia, Mr. Scott.
Mr. Scott. Mr. Chairman, is this--do we have a vote
pending?
Chairman Sensenbrenner. No, this is a recess.
Mr. Scott. Mr. Chairman, I have an amendment at the desk,
Number 1.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Scott. No. 1.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577 offered by Mr. Scott. After Section 4,
subsection (h)(3) (as added by the Hyde Amendment), insert the
following:
(4) In advising the Congress pursuant to (3)----
Chairman Sensenbrenner. Without objection the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman from Virginia is
recognized for 5 minutes.
Mr. Scott. Mr. Chairman, this amendment is requested by
correctional workers and the American Federation of Government
Employees. It simply requires the Attorney General, in his
Hyde-Frank Annual Report to Congress----
Chairman Sensenbrenner. The gentleman yield?
Mr. Scott. I yield.
Chairman Sensenbrenner. This is a good amendment. I urge
the Members to accept it.
Mr. Frank. Mr. Chairman yield?
Mr. Scott. I yield.
Mr. Frank. I agree. I certainly wouldn't want to stop John
Ashcroft from asking for more money. [Laughter.]
Chairman Sensenbrenner. Does the gentleman yield back?
Mr. Scott. Yes, Mr. Chairman.
Chairman Sensenbrenner. All those in favor of allowing the
Attorney General to ask for more money by supporting the Scott
amendment will say aye
Opposed, no.
The ayes have it, and the Attorney General can go to it.
Further amendments?
Mr. Issa. I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577 offered by Mr. Issa. Page 7, strike
line 6 and insert the following:
``of its industrial operations.''
``(i) Rule For Certain Products--Federal Prison Industries
shall be the mandatory source supplier to all Federal
agencies''----
Chairman Sensenbrenner. Without objection the amendment is
read--considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the Gentleman from California
is recognized for 5 minutes.
Mr. Issa. Mr. Chairman, I would once again predict that if
we want to mend, not end, Prison Industries, this is an
excellent opportunity to do so. What we are doing here is
crafting a narrow exception for nonprofit humanitarian and
disaster relief. Literally here all we're saying in this
amendment is if the government is going to give it away for
these purposes, then it may choose to use what is effectively
its own workforce rather than going to the outside.
Now, good example of where these types of things go on is
prisoners could in fact be paid their, albeit less than minimum
wage, small wages, but put to work for small wages making toys
for tots for Christmas, or making supplies for disaster relief,
or in fact sleeping bags for the children of Kosovo. You can
name a lot of good uses in which the government purchases and
gives away products.
I am not asking for them to have office supplies, modular
furniture, any of the normal things. Those don't go to
charities. We're talking about disaster relief limited to
501(c)(3) corporations, and particularly in support of
humanitarian aid and disaster relief activities.
Mr. Chairman, I strongly ask you to consider leaving a
carve out for times again, in which the government is going to
have it made for the purpose of giving it away. And I yield
back the balance of my time.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Massachusetts.
Mr. Frank. Mr. Chairman, I support much of this amendment
to the point where we've already done it. And I would say to
the gentleman, I would hope he wouldn't press for a vote at
this point, and we could work out, particularly the part about
humanitarian and disaster relief.
But let me call Members' attention to the amendment offered
by the gentleman from Michigan, which we've already adopted,
and I'll just read--it's on page 5 of the Conyers amendment,
beginning line 10. ``Payments to the Bureau of Prisons
exclusively for the purpose of establishing a nonprofit
component for inmate work in all Federal institutions in
carrying out which FPI shall work actively to identify and
donate to nonprofit organizations that provide goods and
services to low-income individuals and have difficulty
purchasing them on their own, to focus on organizations that
would not otherwise be available to purchase such products.''
Indeed, I'd point out to the gentleman, this is somewhat
broader in scope as a permission than his, because it says
``nonprofit.'' It doesn't restrict that to 501(c)(3)'s because
there are nonprofit organizations that aren't 501(c)(3)'s. So
we're in agreement on that.
The gentleman does, I think, make a contribution when he
talks about explicitly in support of humanitarian aid or
disaster relief activities, and I would urge him--if he would
withdraw this, I would be glad to work with him, I think the
Chairman would, so that when we got to the floor we explicitly
dealt with that, but I certainly agree with the gentleman, and
that, as I said, is the thrust of an amendment already adopted.
Chairman Sensenbrenner. Will the gentleman from
Massachusetts yield?
Mr. Frank. I yield to the Chairman.
Chairman Sensenbrenner. I think that in terms of the
humanitarian aid or disaster relief activities, the Conyers
amendment is sufficient. But I agree with the gentleman from
Massachusetts as well, that restricting this just to
501(c)(3)'s might be unduly restrictive, and I would be willing
to commit between now and the floor that we deal with the
issues as he and I have described.
Mr. Frank. I would yield to the gentleman from California.
Mr. Issa. Thank you. And with that, I very delightfully
withdraw this and thank you for your assistance on making it
better.
Chairman Sensenbrenner. The amendment is withdrawn. Are
there further amendments?
Mr. Watt. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from North Carolina,
Mr. Watt.
Mr. Watt. Could I just strike the last word for 1 minute?
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. I didn't want Mr. Issa's comments to go by
unnoticed. I think we do ourselves a severe disservice to
consider people who are in prison as part of the Federal
workforce. That is not, I repeat, not something that I
subscribe to, even though I could support the thrust of the
gentleman's amendment. The comments that Mr. Issa made, I just
think we ought to--we ought to be very careful about how we do
this.
If we said the same thing about a foreign country, we would
be offended and we ought to be offended thinking about people
being in prison being part of the Federal workforce in the
United States.
Mr. Scott. Will the gentleman yield?
Mr. Watt. I'll yield to Mr. Scott.
Mr. Scott. Thank you for yielding. I would think that the
gentleman meant that we'd use this as an opportunity to give
work opportunities to prisoners, rather than consider it part
of the workforce. I agree with the amendment, and I also agree
that we ought to have more opportunities for work. It reduces
recidivism, helps the prison operations, and I yield back.
Mr. Watt. I yield back the balance of my time.
Chairman Sensenbrenner. Are there further amendments? The
gentleman from California, Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman. No. 3 please.
Chairman Sensenbrenner. The clerk will report the
amendment.
The Clerk. And amendment offered by Mr. Issa to the
amendment in the nature of a substitute to H.R. 1577. Page 5,
line 2, after ``regulation insert contract award shall be made
to Federal Prison''----
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman from California
is recognized for 5 minutes.
Mr. Issa. Thank you, Mr. Chairman. I believe this is my
third, final and least controversial amendment.
What this seeks to do is specifically recognize that the
reform of Prison Industries proposed by the Chairman and I
believe by the Committee as a whole, is to eliminate a practice
of unfair competition by Federal Prison workers through the
Prison Industry authority. And I agree with that completely.
However, if what we are concerned about is protecting
American jobs, while the other side is worrying about putting
gainful employment to people to teach them skills prior to
their release, and to keep them from being idle, which
certainly is very difficult in a prison environment, then we
want to make sure that this reform only protects Americans.
I think we can all agree, Mr. Chairman, that if we are
going to outsource to China or to any other foreign country,
the goods, the services and the production for Federal
purchasers, we--it serves no purpose when compared to employing
Americans who are incarcerated and who need the skills that
this would train. And so it's very narrowly focused only on the
fact that if there is no competitive American market, then this
preference, if you will, remains, but it only remains because
there is not a market, and certainly I believe that in any
contract in which we're concerned about American jobs, we
should be able to find at least two competitors who can certify
that they make in the United States.
And with that, Mr. Chairman, I gladly yield back the
balance of my time.
Ms. Waters. Mr. Chairman?
Chairman Sensenbrenner. Gentlewoman from California.
Ms. Waters. Thank you very much, Mr. Chairman. I'm going to
oppose all of these amendments that claim to be concerned about
training the prisoners so that they will be competitive for
jobs when they get out.
One of the things that we refuse to wrestle with is the
fact that we've had prisoners doing work. I can remember at one
time prisoners were doing some reservations for the airline
industry, but when they get out, they can't get any jobs, they
don't hire them. Their applications go in the wastebasket. This
Congress, no other Congress that I know of, have really taken
into consideration the fact that one of the problems that we
have is recidivism, it's not because they're not trained. It's
not because they can't do things. It's because employers will
not hire them. I don't care where they have gotten training.
You spend 5, 6, 7, 8, 9, 10 years in our Federal Penitentiary,
we make sure that you don't get hired. They put it on the
application. It's right there. We don't have any way by which
to give support to ex-felons, and this business about the
Prison Industries training them and getting them prepared to do
away recidivism is--it's not real.
The fact of the matter is, until we are prepared to deal
with how, we'll say to industries who have used prisoners in
the past, that they have some responsibility to hire them when
they get out, then this is for nought.
I oppose it.
Mr. Issa. Would the gentlewoman yield?
Ms. Waters. Yeah.
Mr. Issa. I thank the gentlelady. I couldn't agree with you
more, that a fundamental problem we have within our existing
laws is in fact the ongoing stigma of Federal prisoners, and
for that matter, other prisoners who have paid their dues,
being denied repeatedly their ability to get the vast majority
of jobs. As the gentlelady may not know, not only did I serve
on the Prison Industries, but to be as candid as can be, I have
a brother who served in both State and Federal prison. I'm
acutely aware of the lifetime stigma, the problems, the jobs,
that even though he has a master's degree, that are closed to
him. And I look forward to, on another bill--and I'd be glad to
co-author it with you--that we try to address this, we try to
craft the ability for those who want to put the past behind
them to be able to, but I must reassert that if we are to make
sure that those jobs will be available, including working as
reservation people or whatever the skill that we've taught
them, that in fact we have to make sure that we beget the
skill, because if they don't have the skill and yet the
stigma's gone, they're still not going to get hired, and I hope
the gentlelady----
Ms. Waters. Reclaiming my time.
Mr. Issa. Thank you.
Ms. Waters. Thank you very much. And I appreciate what the
gentleman is saying. I have a whole section, one part of my
district, not all of my district, but one section of my
district, where we have returning ex-felons or felons, whatever
you want to call them, and that's the problem. The problem is
they cannot find jobs, and I'm sure that the gentleman would
like to think of something to do, but the fact of the matter
is, a bill by you and I would no good in this Congress,
absolutely none. Take it up with your caucus. See if they're
prepared to give you some support on it, and then talk to me.
And I'd be happy to do something, but otherwise, you're
going to get defeated in any attempts to talk about what you do
with helping to give some support to felons who are returning
to these communities, who want to work, and they go about
looking for work sometimes for several years, and then they
give up. And guess what? Yeah, they go back to prison because
they refuse to stand on the street and die and not eat. They do
bad things. And I don't want to fool you. I don't want to fool
anybody. Yes, I'm interested in doing something, but we don't
have the will in my caucus or your caucus. We're all afraid to
deal with felons and ex-felons. We're afraid we're going to be
tagged as soft on crime, and protecting felons is such a false
thing that goes on here, that I'm not going to support any of
this, because actually we're just blowing smoke about training
people for jobs when they get out of prisons. They will not get
hired. And when we're prepared to do something about it, then
we can talk about real training in the prisons.
Chairman Sensenbrenner. I yield myself 5 minutes in
opposition to the amendment. First of all, the amendment is not
necessary. The bill already provides for sole source
contracting if there's no competition. But the real rub with
this amendment on that is that the Federal agencies who are
buying products will not have the ability to make an
independent decision regarding the contract or its terms. And
Federal Prison Industries would again have uncontrolled
monopoly power not governed by other provisions of law
including the Federal acquisition regulations.
So for those two reasons, one is, is that when there isn't
competition, this is already taken care of, and secondly, the
fact that FPI will be able to write the terms of the contract
and the purchaser really will not have very much to say about
it, I believe this amendment should be rejected.
Mr. Scott. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Virginia, Mr.
Scott.
Mr. Scott. Strike the last word.
Chairman Sensenbrenner. The gentleman's recognized for 5
minutes.
Mr. Scott. Thank you, Mr. Chairman. Mr. Chairman, I agree
with the comments of the gentlelady from California that we
need to do more to improve the employability of inmates after
they get out. That is not what this amendment addresses. This
amendment will actually help improve the employability of
inmates. It will help manage the prisons. It will reduce crime.
And we have a choice of doing that or protecting foreign jobs.
I would support the amendment because I think improving the
employability of inmates, helping to manage the prison, and
reducing crime are more important to me than protecting foreign
jobs. So I support the amendment and hope it will be adopted.
Ms. Waters. Will the gentleman yield?
Mr. Scott. I yield to the gentlelady from California.
Ms. Waters. Would you be willing to amend the amendment to
say that they would get a letter of reference from the Prison
Industry where they were trained, to say that they have done a
good job, they have worked well, and that particularly if they
have not caused any problems in prison, that would say this was
an ideal employee, and you think that IBM should hire them?
Mr. Scott. Reclaiming my time, I would assume that that was
the situation now, that they get--that they would get a letter
indicating what their job history was, and if not, I would--I
don't know if it's relevant to this amendment, but I'd
certainly support such a thing, because it's just telling the
truth about what they did.
Ms. Waters. Well, the fact of the matter is, they get no
letters of reference about their good work in the Prison
Industries.
Mr. Scott. Well, that's something we need to deal on. I
would agree with the gentlelady.
And I yield back, Mr. Chairman.
Chairman Sensenbrenner. For what purpose does the gentleman
from Florida seek recognition?
Mr. Keller. Move to strike the last word.
Chairman Sensenbrenner. The gentleman's recognized for 5
minutes.
Mr. Keller. Mr. Chairman, I just have a--if I can have just
a little colloquy with my colleague from California.
I know your intent is to protect American jobs, and at the
same time, help with reducing recidivism by the positive thing
Prison Industries does. My question is this: what if you have a
foreign company, let's say Toyota or Mitsubishi, definitely a
foreign corporation. The product is manufactured in that
company, but yet it employs hundreds of people in America, for
example, they assemble the product here in America. Would that
company still be one that could bid for various government
projects, or would it be excluded under your particular rule
because it's a foreign corporation?
Mr. Issa. I thank the gentleman. No, we wouldn't be
prohibiting foreign corporations. We simply would ask for the
federally determined made in the United States requirement,
which is a content rule, and it requires that you substantially
change the form of the energy. You can bring in raw goods, turn
them into something. The raw goods can be imported. But there
has to be a substantive change, and there's various standards
the Federal Government has determined for it, and it's not
uncommon. We require the same thing--if you want to export to
Mexico or import from Mexico, we require a certain content
level be declared. In this case, what we're talking about is an
effort to save jobs in America, whether they are by
incarcerated individuals or by Americans on the outside. And so
this would not intend to reduce any American jobs. It would
simply say why--why export American jobs in your buying
practices if there are people needing training and work, albeit
inside the Federal prisons?
Mr. Keller. If that is the case, would you be willing to
amend the language and tweak it slightly to say who are able to
certify the product to be provided is made or assembled in the
United States since a lot of foreign products are assembled in
the United States and benefits American jobs?
Mr. Issa. I don't have a problem with that if that would
bring additional people into the fold. The intention is to save
American jobs.
Mr. Keller. Mr. Chairman, I'll yield back.
Mr. Frank. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Massachusetts?
Mr. Frank. Mr. Chairman, with or without the amended
language--and I think the gentleman from Florida made a good
point, and I'm glad he clarified it. I'm opposing this for a
couple reasons. First--and I admire the diligence of the
gentleman from California, and I appreciate his bringing his
experience to bear, and that's why on that amendment for
charitable donations I very much agreed with him and want to
make sure we take the fullest account of it. Yes, we should be
providing vocational experience to the extent that it's
rehabilitative and training to prisoners. But I disagree when
he says we must protect American jobs whether they are being
performed by people in or out of prison. I really do think
there is a qualitative difference between employment of people
in the private sector, trying to earn livings to support
themselves and their families, and job training, in effect,
that we provide the people in prison. They ought not to be
equated.
Yes, it's important to protect those people in the American
private sector from unfair competition, but that can be unfair
competition from within the prisons as well as from outside.
There are a couple of problems I have with this.
First of all, it says FPI gets it as a monopoly, sole
source, if there are not at least two bidding contractors.
Well, what if there's one? In other words, if there was one
American manufacturer employing workers in the furniture
industry, in the clothing industry, in other vulnerable
industries, he or she moves it out to FPI. Why--why does the
tie go to FPI even if there are two?
Secondly, we are talking about a dynamic economy. We are
talking about--we're not talking about the production of super-
computers here. We're talking about product lines where there's
not a high barrier to entry. So there may not be at a given
point two people ready to do this, but there may be 6 months
from now or a year from now. It may be that the Federal
Government going into a new line of work, expanding--we've got
a situation now where the Federal Government is increasing its
purchases in the area of homeland security. We're all familiar
with companies that are now gearing up to do this. If the
Federal Government were to begin to expand its purchases in a
particular area and there was only one supplier before because
it wasn't a major activity and now it's a bigger activity, why
should we be discouraging the creation and development of new
companies?
So you're talking here as if it's a static situation
economically that there's only one bidding contractor, and that
seems to me in error.
I would yield to the gentleman from California.
Mr. Issa. Yes, are you asking unanimous consent to amend
that, and would you support it if amended?
Mr. Frank. No. I'm asking for unanimous consent to defeat
it, to be honest, because I think--you, I think, have several
flaws with it. One is the two versus the one. One is--and this
is another one that concerns me. We do have exports as well as
imports. We have a national policy that says goods made with
prison labor can be excluded from the U.S. In fact, it's one of
the few categories where I think we are able to exclude goods
that unfairly compete. They can be made in terrible working
conditions. They can be made by children. And we still can't
exclude them. But we can exclude prison goods.
Well, what you're saying here is, okay, if anybody in the--
if the American prison industry is making it, that becomes a
basis for an exclusion of any foreign good. What basis do we
then have when China says we're not going to import any
American goods if we can make them in Chinese prisons? I want
our ability to oppose Chinese prison labor to be unencumbered
by our giving ourselves this kind of preference.
You know, trade is not a one-way street, and, yes, we
should be protecting American jobs against unfair, subsidized,
low-wage competition. But to have a rule that says if it can be
made in an American prison and there is not another American
major supplier--by the way, the gentleman--if there is only one
American supplier, we're not going to--we're going to let the
prison have it, and you totally exclude the foreign goods,
where do we go to object in that case?
And then, finally, I would go back to the gentleman's point
about the two bidding contractors. If you said there were no
contractors--it already says that in the bill. A contract may
be made if it's only available from Federal Prison Industries.
Right on page 4, just the section the gentleman's amending, it
already says if there are none. So if you were to amend it to
say if there's not at least one, then it goes to FPI, the bill
already says that. And I don't want to, as I said, discourage
the development of more competition. I don't want to put an
American seal of approval on other countries' saying, hey, if
we can make it in our prisons, we're not buying it from
America, and the bill already allows for situations where there
are no domestic contractors. So I would hope that the amendment
would be defeated.
Mr. Goodlatte. Would the gentleman yield?
Mr. Frank. Yes.
Mr. Goodlatte. I share some of the gentleman's concerns
about the amendment, particularly as it relates to reciprocal
nature of foreign trade. But what if--is there some middle
ground here? What if the only competition is a Chinese prison?
Mr. Frank. I would say to the gentleman--if I could get one
more minute, Mr. Chairman?
Chairman Sensenbrenner. Without objection, the gentleman is
recognized.
Mr. Frank. In those very limited cases, I would be prepared
to give preference to American prisoners over Chinese
prisoners. But I would say it would be kind of hard to work
that out right now. I would certainly agree to try to work that
out between now and going to the floor. Again, the bill does
deal with situations where it's only available from Federal
Prison Industries. It does not deal with this--that particular
situation, and I think we could clarify that so if the
amendment were withdrawn, we could work out that at the--
between now and going to the floor.
Mr. Goodlatte. I wonder if the gentleman----
Mr. Frank. I yield further.
Mr. Goodlatte.--to direct that to the Chairman and ask if
there is an opportunity--I would oppose this amendment, but
work with you on----
Mr. Frank. I would yield to----
Mr. Goodlatte.--whether there are some ways to deal with
competition issues----
Chairman Sensenbrenner. I certainly think the gentleman
from California raises a point. I don't think his amendment is
properly drafted to do what needs to be done, you know, in a
fair manner without putting FPI back into mandatory sourcing
through the back door. So if the gentleman from California
would forbear a bit and work with us, you might be able to get
something.
The time of the gentleman from Massachusetts has expired.
For what purpose does the gentleman from Wisconsin seek
recognition?
Mr. Green. Move to strike the last word.
Chairman Sensenbrenner. The gentleman's recognized for 5
minutes.
Mr. Green. Thank you, Mr. Chairman. I'll speak very
briefly. Then I'll turn it back over to Mr. Issa for his
comments and action.
Just as a reminder, we began the debate last week on this
legislation with Members from both sides of the aisle praising
the inherent worth of FPI. There was a lot of discussion about
how the core values of FPI, providing opportunities for
training, on-the-job training, skills training for inmates who
will 1 day be back out in the work market. It was praised, both
sides. And the view of many of us has been that, despite those
good intentions, the legislation, the base legislation,
unfortunately will end FPI.
And so as we've looked at a number of the amendments, they
have been efforts to preserve some sliver of opportunity for
the program to continue. And I think what Mr. Issa has
attempted to do with this amendment is, again, taking a look at
a very small set of circumstances, tried to allow FPI some
ability to continue, to provide those very opportunities, that
very experience that we've all been praising.
Unfortunately, the efforts haven't been successful. I think
it's unfortunate because I think this effort to preserve
aspects of FPI is an important one. And I hope that we'll have
an opportunity in a future venue to do just that.
And with that, Mr. Chairman, I'll yield the balance of my
time to Mr. Issa.
Mr. Issa. Thank you, Mr. Green. And, Mr. Chairman I want to
thank you for having this markup in a way in which we were able
to express some of our concerns, and I very much appreciate the
gentleman from Massachusetts and the gentleman from Virginia
suggestions. And, Mr. Chairman, with your willingness to try to
incorporate some of the principles that could remain from this
amendment, I ask unanimous consent to withdraw it.
Chairman Sensenbrenner. And it is withdrawn.
Are there further amendments? If not, the Chair notes the
presence--the gentleman from Virginia?
Mr. Scott. I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
The Clerk. Amendment to the amendment in the nature of a
substitute to H.R. 1577, offered by Mr. Scott. Page 10, insert
after Line 17 the following language: ``(D) The board of
directors may approve a proposal to authorize the production of
a specific product or the furnishing of a specific service in
excess of a reasonable share of the market, if specifically
requested by the agency to--''
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. The gentleman from Virginia is
recognized for 5 minutes.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Chairman, this amendment would change the restriction
in the bill on how much Federal share FPI could have of a
particular product for which it has competed. Under the bill,
the FPI is restricted to no more than 20 percent of a
particular Federal market share with respect to products and 5
percent with respect to services, even after it is no longer
entitled to the mandatory source and FPI has won a competitive
bid.
Now, while a 20 percent share limitation may seem
reasonable if your goal is simply to eliminate FPI from all
potential contract activity, this restriction would put Federal
agencies as well as FPI in a difficult situation. For example,
the Postal Service's contracts with FPI to make and mend its
mailbags for internal use, prior to contracting with FPI, it
was an in-house operation of the Postal Service's, and as I
understand it, the Postal Services approached FPI and asked if
they could do the work, it could, and so now FPI has 100
percent of that business, and there is little sense in such--
any other business getting into the business. We got 100
percent of the postal business. That's 95 percent market share
of the bag making and mending business with the Federal
Government.
Now, the definition in this amendment would allow some
flexibility, but only if FPI gets the business through a
competitive bid and the customer wants FPI to do more than 20
percent. The service restriction, which is not under mandatory
source, reflects the promotion--promoting competition on which
some have justified their support for the bill, but that's not
really what the bill is about. FPI gets service contracts now
only competitively. This restriction suggests that the fear is
that FPI will actually outcompete, so we want to make sure they
don't get more than they can actually win in competition.
Now, one point we need to make is that the lost--that it's
difficult for FPI to compete. The cost of production or
services in FPI is much higher than in the private sector, in
part because the goal in FPI is to try to employ as many
inmates as possible. There are generally about four inmates
doing what one person could do in the private sector in an
efficient operation. But because you're trying to involve so
many people, it's better to have four people doing the one job
than just one. So $1.25 an hour actually costs $6 in
competitive pricing.
So I would hope, Mr. Chairman, that my colleagues would
support this amendment, just simply make sure that FPI does not
lose control of the matter by requiring that the board has to
specifically--make sure that FPI does not have any control in
the matter by requiring that the board has to specifically
approve the contract and the agency customer.
So, Mr. Chairman, I would hope that we would have this
small exception to the 20 percent and the 5 percent rule so in
those few circumstances FPI can continue doing what it's doing
now.
Chairman Sensenbrenner. I recognize myself for 5 minutes in
opposition to the amendment. The amendment that Mr. Frank and I
have offered provides that after the phase-out of mandatory
source, FPI cannot exceed a reasonable share of the market,
which is defined as a share of the total purchases by Federal
departments and agencies that does not exceed 20 percent of the
Federal market for the specific product or 5 percent of the
Federal market for the specific service.
The Scott amendment would allow the board of directors to
approve a proposal offering FPI to go above the 20 and 5
percent limitations if it is specifically requested by the
agency and the contract award is used as competitive
procedures. And this puts the wolf in sheep's clothing because
the amendment allows FPI to use its advantages of low wages, no
benefits, no taxes, and a free facility to focus on a
particular market and to monopolize that market, thus driving
competitors out of that market.
FPI's original authorizing statute made it clear that FPI
was not intended to focus its attention on one particular
industry and that the board should do everything in its power
to prevent that. The concern was then, as it is now, that FPI
would use its advantages to drive weaker, smaller businesses
out of a particular industry area.
These concerns remain that even with board approval this
amendment could drive competition out of business. Although the
legislation provides for a new board, the requirement of board
approval has not helped prevent this in the past. The
legislation already provides for sole-source contracting if FPI
is the only manufacturer or service provider in the market.
This allows them to exceed the market share at the request of
the agency.
I would urge the rejection of this amendment and yield back
the balance of my time.
Mr. Green. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from Wisconsin, Mr.
Green?
Mr. Green. Move to strike the last word.
Chairman Sensenbrenner. The gentleman's recognize for 5
minutes.
Mr. Green. Thank you, Mr. Chairman. I'll be brief.
FPI as it exists now could conceivably have the opportunity
or the potential or the power to force businesses or to drive a
monopoly, but let's not forget that what we are talking about
here is FPI as reconstituted and restricted by this
legislation. FPI has restricted by this legislation will hardly
be the monopolistic organization which the Chairman warns of.
Again, I would argue that what we are attempting to do here
is to hang onto some threads of operation for FPI. Lord knows
that after this legislation passes there will be very little
left for it. We're trying to preserve at least some
opportunities on a limited scale. In this case, after an award
has already been made using competitive procedures, we're
trying to preserve at least something that will allow FPI to
continue to promote, to preserve those values which we have all
said are positive, are good, to keep that roll going which
everyone here on both sides of the aisle has said is important
for societal reasons.
So I think the amendment is modest, and I think it would
hardly do any harm. It might help at least a little bit. And I
would yield back my time.
Chairman Sensenbrenner. The gentleman from Massachusetts,
Mr. Frank?
Mr. Frank. Mr. Chairman, I join you in opposing this
amendment. The problem I have is that there are no objective
standards here. It's just if the agency wants to do it. I
believe many agencies--we've heard from many agencies that
don't want to be put in a way--a restricted kind of position,
but agencies may for reasons of comfort want to continue with
the status quo or they've got one relationship, maybe they want
to keep it. You also have an administration in power or a
particular Cabinet Secretary that may have some particular
ideological predisposition in this direction.
I think the bill as we have presented it, as amended, as I
noted, by the gentleman from Michigan and perhaps that
amendment to be even made more explicit, which provides for
charitable donations, which authorizes them to get aggressive
in finding places to make charitable donations, to deal with
the humanitarian and disaster situations that the gentleman
from California raised and to make that explicit if necessary,
that this is sufficient. And to give any particular agency the
power essentially to kind of deviate from the overall patter I
think is unwise, and so I hope the amendment is defeated.
Chairman Sensenbrenner. The gentleman from California, Mr.
Issa?
Mr. Issa. Thank you, Mr. Chairman. I move to strike the
last word.
Chairman Sensenbrenner. The gentleman's recognized for 5
minutes.
Mr. Issa. I support this amendment, and I support it
because of basic fairness. Nowhere in the language now or in
the future, I'm sure, will there be a similar restriction for
EDS, IBM, steel case. None of them are going to be limited to
20 percent of the product or 5 percent of the services. Why in
the world, if we really are not trying to simply close down and
kill Prison Industries, would we, in fact, put a limitation
which is purely artificial against them? If what we want to do
is eliminate shoddy goods being delivered at high prices when
there are better companies able to deliver better products at
better value, then legislation need not fear if the best
product at the best price, more than 20 percent of it, were to
come from Prison Industries.
Mr. Frank. Would the gentleman yield?
Mr. Issa. Yes, I would.
Mr. Frank. The gentleman makes a fair point and let me
respond. It's something we're familiar with in antitrust. It's
one thing if you are dealing with a competitive situation which
everyone starts evenly. In situations where there has been a
monopoly shown, then you get into the remedy situation. And we
are talking about a situation where FPI had been given
statutorily a monopoly. So in that situation, where a monopoly
has been in existence for some time, the kind of restrictions
the gentleman is talking about are often imposed, and that's
the reason. They don't all start even, all those other private
sectors.
If 10 or 15 years from now we have done away with a
monopoly situation, it might very well be that doing away with
the 20 percent would be reasonable. But when you are in a long-
time monopoly situation, adopting these kind of remedial
restrictions is common practice.
Mr. Issa. Reclaiming my time, if I could ask the gentleman
from Virginia, if, in fact, this amendment were to specifically
envision that we only take away this limitation when there was
not 100 percent--when Prison Industries was not an exclusive
vendor, that might solve the gentleman from Massachusetts'
problem. And if I heard correctly, he would be supportive, if
we were bidding on a brand-new contract, the Prison Industries
is able to bid and get 100 percent of something they've never
even gotten before.
Mr. Scott. Well, if the gentleman would yield?
Mr. Issa. I'd yield.
Mr. Scott. One of the situations I mentioned was the bag
making, bag mending contract with the Postal Service. They were
doing it in-house. It was never bid before. The Prison
Industries has started doing it. They're doing it all.
Now, I don't know if there's ever going to be any
contract--there's not enough work to start a business. Prison
Industries is doing it, and limiting that to 20 percent would
probably have it revert back to the Postal Service trying to do
it in-house again. That's what they were doing for years.
Mr. Issa. I'd yield to the gentlelady from California.
Ms. Waters. Thank you. On this example that has been given
by Mr. Scott, I would dare say that just thinking about the
number of bags that are needed in the Postal Service all over
this country, that there is enough there for an industry. It
seems to me that, again, if you're saying the only place that
these bags are being made are with the Prison Industries, this
training that you're talking about is not going to do them any
good when they get out. Where are they going to mend postal
bags and make postal bags when they get out if they've got a
monopoly on it in the prison system?
Again, I keep bringing you back to this because I want us
to get real, and this may be a tough lesson. If, in fact, we
don't have cheap labor and no rehabilitation and felons are
getting out----
Mr. Issa. Reclaiming my time.
Ms. Waters. Yes.
Mr. Issa. If the Chairman would entertain changing the 20
and 5 to 50 percent, I think we could solve the gentlelady's
problem and ensure that in the example that there would be at
least one other source outside of Prison Industries at all
time. I don't know if the Chairman would consider that----
Ms. Waters. Would the gentleman yield?
Mr. Issa.--management amendment.
Ms. Waters. Would the gentleman----
Mr. Issa. Yes.
Ms. Waters. That would not solve my problem.
Mr. Issa. I realize the gentlelady--but I was--I was
still--Maxine, I was really trying to get to the essence of--I
agree that we do not want to have an absence of a market after
someone leaves, but to Mr. Scott's point, we also don't want to
limit it so small that many markets would simply not be worth--
--
Mr. Frank. Would the gentleman yield?
Mr. Issa. I would yield to the gentleman from
Massachusetts.
Mr. Frank. Thank you. First, I would point out in the
situation which is nobody else making it, I would remind people
again the bill does say on page 4, ``if the product or service
is only available from FPI.'' So that would be taken care of.
Beyond that, I would say to the gentleman, I'd be willing
to talk about some further refinements, but it's kind of hard
to do it here. Again, if we could do this with a real safety
valve between now and the floor, I'd participate.
Chairman Sensenbrenner. The gentleman's time has expired.
The question is on the amendment offered by the gentleman from
Virginia, Mr. Scott. Those in favor will say aye? Opposed, no?
The noes appear to have it. The noes have it, and the
amendment is not agreed to.
Are there further amendments? If there are not, the
question is on the amendment in the nature of a substitute
offered by the Chairman and the gentleman from Massachusetts,
Mr. Frank. Those in favor will say aye? Opposed, no?
The ayes appear to have it. The ayes have it, and the
amendment in the nature of a substitute is agreed to. The Chair
notes the presence of a reporting quorum.
The question now occurs on the motion to report the bill
H.R. 1577 favorably as amended. Those in favor will say aye?
Opposed, no?
The ayes appear to have it. The ayes have it and the bill
is favorably reported.
Without objection, the bill will be reported favorably to
the House in the form of a single amendment in the nature of a
substitute incorporating the amendments adopted. Without
objection, the Chairman is authorized to move to go to
conference pursuant to House rules. Without objection, the
staff is directed to make any technical and conforming changes,
and all Members will be given 2 days, as provided by House
rules, in which to submit additional dissenting, supplemental,
or minority views.
Dissenting Views
These views dissent from the Committee Report on H.R. 1577.
The bill would phase out the ``mandatory source'' authority
under which Federal Prison Industries (FPI) sells products to
Federal agencies (mandatory source has never applied to
services) and require that FPI compete for Federal business.
The bill also imposes severe Federal market share restrictions
which impede FPI's ability to compete. A promising alternative
currently employed by FPI to reduce its reliance on both
mandatory source and the Federal market, performing services
for companies which are currently being performed in foreign
countries, is prohibited under the bill.
In acknowledgment of the anticipated decline in inmate work
opportunities, the bill provides authority for increased
vocational training programs and for FPI to make products and
donate them to non-profit organizations. Funding for these two
initiatives is authorized from the Department of Justice Asset
Forfeiture Fund and/or from appropriated funds. Given the
improbability of funding being available from these two
sources, these new authorities will not likely offset
reductions in inmate employment. While vocational education is
important and ought to be available to all inmates, no amount
of educational course work can substitute the real world
workplace experience of a job. This is true for several
reasons.
Few offenders enter prison with marketable work skills. The
vast majority do not have even credible work habits such as
showing up for work on time each day, and working cooperatively
and productively with others. Such habits are required to
maintain an FPI job.
A vocational education program typically runs for 2 years
or less and is generally thought better to be provided toward
the end of the sentence. The average sentence for prisoners in
the Federal system is 8 years. Whenever the vocational training
is provided, the question becomes what to do with other 6 years
of the sentence prior to or after completion of what is
considered a beneficial period of vocational education.
With the elimination of parole, good conduct credits, Pell
grants, and other such incentives, the Federal prison system
has little to offer as an incentive for self development. The
one shining exception is FPI. Non-FPI jobs pay from about $.12
an hour to about $.30 cents an hour while FPI jobs pay up to
$1.25 per hour. To hold down an FPI job, an inmate must have
completed high school or be making steady progress toward
obtaining a GED, and maintain a record of good behavior. This
is true not only for those already in an FPI job, but also for
those on the waiting list for a job, as well as those seeking
to establish eligibility to be placed on the waiting list
These contributions to inmate development are important,
but the least important of FPI's contributions. Research has
shown that inmates employed in Federal Prison Industries are
less likely to engage in prison misconduct while in custody and
more likely to be employed and to refrain from criminal
behavior upon return to society. These benefits of inmate work
to inmate families and crime victims (support and restitution
payments), to prison staff (reduced inmate idleness and a safer
work environment) and to the taxpayers (reduced cost of
incarceration and reduced recidivism) are far more compelling.
While there are certainly problems in FPI's operations,
reforming the manner in which FPI operates should be done in a
way which does not result in the aforementioned societal
benefits being substantially reduced or eliminated.
BACKGROUND
On April 18 and 24, 2002, the House Judiciary Committee
marked up H.R. 1577 and voted to report the bill. During the
markup, several amendments were offered by Reps. Scott, Hyde,
Green and Issa to address serious concerns about the effects of
this bill on the future viability of Federal Prison Industries.
The amendments would have either mitigated some of the adverse
effects of the bill or provided realistic alternative work
opportunities for Federal inmates. None of the amendments were
approved.
Two other bills have been introduced on FPI this session,
H.R. 1535 (Wolf, Scott et al) and H.R. 2754 (Green, Scott et
al). Both provide new authorities for FPI which offset the
effects of mandatory source elimination.
CONCERNS RAISED BY H.R. 1577
1. To comply with the definition of ``reasonable share of
the market'', FPI will have to close factories and reduce
several thousand inmate jobs, as well as several hundred staff
jobs.
Section 16 of the bill defines several terms, including
``reasonable share of the market''. The definition limits FPI's
share of the Federal Government market to no more than 20
percent in products and 5 percent in services. It should be
noted that these market share ceilings are separate and apart
from the elimination of FPI's mandatory source authority. It is
also ironic that the proponents of the bill suggest that they
want FPI to compete for its business without mandatory source
and then insist that the share of the Federal market which FPI
can acquire be statutorily restricted.
Rep. Scott offered an amendment which would define
``reasonable share'' as ``that share which is acquired
competitively by FPI without reliance on mandatory source, is
requested by the Federal customer and is approved by the FPI
Board of Directors''. That amendment was defeated by rollcall
vote. Mr. Scott also used an example to illustrate the impact
this language would have. FPI currently repairs mail bags for
the U.S. Postal Service and has done so for decades. As a
service, mandatory source has never applied. FPI is the
principal source for these services and thus FPI currently
provides 94 percent of the Federal market for the ``Bag
Repair'' services category. To support the needs of the Postal
Service, FPI employs nearly 500 inmates in four factories,
three of which are in high security penitentiaries, where the
need for productive work is most critical. Under the definition
contained in the bill, FPI would have to reduce its production
to no more than 5 percent of the market, which would employ so
few inmates that the costs of operating the factories would
exceed the revenue. Further, the production output would be so
low that the customer would likely refuse to give any business
at all to FPI. The net result would be that FPI would have to
close all four factories, laying off nearly 500 inmates and
over 25 staff.
``Bag repair'' is only one example of the adverse effects
the definition of reasonable market share will have. Several
dozen other categories of products and services will also be
restricted, resulting in several thousand inmates being
displaced, as well as several hundred staff.
2. FPI's ability to compete for business will be crippled
by the bill.
It has been expected by all parties that some of FPI's
sales would decline when mandatory source is eliminated. If
FPI's sales are first constricted by the market share ceilings,
its costs will go up and its efficiencies will go down. Thus,
its ability to compete for business will be dramatically
diminished.
3. The safe operation of the 24 additional Federal prisons
under development will be jeopardized.
If FPI is unable to maintain its current levels of inmate
employment (see #1) and is crippled in its ability to compete
for business (see #2) it will not be able to justify opening
new factories in the additional prisons already authorized by
the Congress. All these new prisons are high and medium
security, which house the two most difficult to manage inmate
groups. Each new prison is planned to have a factory which
employs about 350 inmates. Without these new factories, Wardens
will have to manage their new prisons without meaningful
employment for 8,400 inmates, a dangerous prison management
proposition.
4. Most of the adverse impact of this bill will fall on
private sector companies and their workers.
FPI would not exist, and certainly could not offer quality
products and services without the direct support of private
sector companies. Each of these companies responded to
solicitations issued by FPI (as a Federal agency, FPI follows
all the Federal procurement regulations) and were awarded the
contracts through competitive procedures. In order to fulfill
their contractual obligations, these companies have hired law-
abiding citizens as staff, added equipment, and some have even
opened entire new plants. Many of these companies have FPI
contracts which extend 5-10 years.
In fiscal year 2001, FPI spent 73 percent of all its
revenue on purchases of raw materials, equipment, supplies, and
services from private sector companies. These expenditures
totaled $426 million. The private sector companies involved
have played by the rules, competing fair and square for the
contracts. They and their employees do not deserve to be on the
receiving end of an unjustified animus toward inmates or FPI.
5. The bill will have an unintended discriminatory effect.
Unfortunately, racial and ethnic minorities are
disproportionately represented among the inmate population.
Their representation in FPI jobs, however, mirrors their
overall representation. Importantly, research on the value to
inmates of working in prison industries jobs demonstrates that
these minority inmates benefit more than majority group members
regarding their likelihood of remaining crime-free and being
successfully employed upon release. Thus, job reductions in FPI
of the magnitude certain to occur under the bill, will fall
hardest on racial and ethnic minorities.
Of all the purchases made by FPI in fiscal year 2001, 66
percent were made from small, women and minority owned and
disadvantaged businesses. This is one of the highest rates
among all Federal agencies. It is well established that small
businesses create more jobs per dollar of revenue than large
businesses. As mentioned in #4 above, any downturn in FPI sales
will be felt mostly by its private sector vendors. To the
extent that FPI's sales decline, the hardest hit will be the
socio-economically disadvantaged businesses which are
deliberately targeted to provide them Federal procurement
opportunities.
6. The bill precludes both the Federal and State prison
industries programs from continuing the most promising inmate
job creation option.
Current Federal statute (18 U.S.C. 1761(a)) restricts
interstate commerce of inmate made products. The law, circa
1935, does not discuss inmate performed services. Legal
opinions from the U.S. Department of Justice and at least a
half dozen State attorneys general conclude that inmate
performed services are not precluded by law.
Utilizing these opinions, both State and Federal prison
industries programs have pursued opportunities to create inmate
jobs by focusing predominantly on performing services for
private companies which are otherwise being performed in
foreign countries. Currently there are 2600 State inmates
performing service work. FPI has initiated several pilots under
this authority which are expected to employ several hundred
inmates. The private sector companies have made resource
investments and have diverted work from overseas to support
inmate job creation.
The principal virtue of these work opportunities is that,
by definition, the work is not currently being performed by
domestic employees. Therefore, repatriating this work for
inmates to perform achieves one of the highest priorities for
inmate work: avoiding adverse impact on law-abiding American
workers.
Notwithstanding the virtues of these work opportunities,
sections 7 and 8 of the bill completely preclude State or
Federal inmates from performing such services.
7. The bill provides no practical alternatives to provide
for meaningful inmate employment.
Despite the obvious and irrefutable adverse impact on FPI,
the bill offers no practical, realistic alternatives to keep
inmates from being idle and to teach work skills.
An amendment offered by Reps. Conyers and Frank, and
adopted by the Committee by voice vote, would provide authority
for more vocational training programs and for FPI to
manufacture items for donation to non-profit recipients. While
such alternatives are laudable in intent, they are impractical
for several reasons. First, they both specifically rely on
additional funds being appropriated or on funds being allocated
from the Department of Justice's Asset Forfeiture Fund. The
probability of funds being made available for these purposes
from either source is extremely low. Second, vocational
training programs are typically 18-24 months in duration, while
the average Federal inmate sentence is 8 years. Thus, work
programs are still necessary for \3/4\ of the typical inmate's
sentence. Both authorities are commendable and should be part
of a comprehensive reform strategy for FPI. In and of
themselves, however, they do not serve to offset the
significant inmate job losses which will occur under the bill.
8. An amendment that is critical to the future of FPI will
be considered by the House during floor debate on the bill.
An amendment was offered by Rep. Scott to provide two
additional authorities for FPI. The authorities are similar to
those provided in H.R. 1535 and H.R. 2754.
The first would authorize FPI to produce items for private
sector companies which they are otherwise having produced by
foreign labor outside the country. Contrary to the arguments
advanced during mark-up against this idea, it is consistent
with our trade treaties, with Federal statute and with
international labor standards.
Neither the NAFTA nor GATT agreements preclude the U.S.
from having American inmates produce items for domestic
consumption while still prohibiting items made in foreign
prisons from being imported into the U.S. In fact, according to
research done by Professor Ursulla Smartt of England, trading
partner countries such as Japan, Canada, Mexico, England,
France, Germany, Spain and Sweden allow their own inmates to
produce products for their domestic commercial market but
preclude imported prison made products. Further, International
Labor Organization Conventions 29 and 105 specifically allow
inmate labor to be used to produce items for domestic
consumption within a country's economy.
For decades, Federal statute has permitted inmates to
produce items for the commercial market. 18 U.S.C. 1761(b)
provides that agricultural products and products sold to non-
profits may be made with inmate labor, regardless of wage paid.
This same section of statute also provides authority for
the State prison industries programs which is virtually
identical to the second authority proposed by Rep. Scott. Under
18 U.S.C. 1761(c), referred to as the Prison Industries
Enhancement Program, State prison inmates may product items for
the commercial market provided: (a) they are paid market wages
as approved by the State employment security office; (b)
organized labor is consulted; (c) non-inmate workers are not
displaced as a result; (d) the work is not done in labor
surplus areas; and (e) the program is certified by the
Department of Justice. This program was adopted into law in
1979 and there are currently 4,000 inmates performing such work
in conjunction with 150 private sector companies. Mr. Scott's
amendment would have extended similar authority to FPI.
It is clear that our country's concerns about the
importation of ``Chinese prison made goods'' revolve around
human rights abuses, and our inability to determine the
conditions under which these products were made. These concerns
certainly do not apply to United States operated prisons or
prison industries programs.
The amendment by Rep. Scott which would have provided FPI
these new authorities was withdrawn during mark-up with the
expressed intention to have it ruled in order for consideration
by the full House. Chairman Sensenbrenner and Reps. Conyers and
Frank indicated they would support such a proposal to the Rules
Committee.
Robert C. Scott.
Mark Green.