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FPI Board Initiated Administrative Actions FAQs

1. "Pass-throughs"
2. Blanket waiver threshold.
3. Waivers granted upon price.
4. Inmate access to personal and sensitive information.
5. Elimination of mandatory source for products in which FPI's share of the Federal market exceeds 20 percent.
6. Inmate value added.

1. "Pass-throughs"?

Whenever FPI accepts an order, it is with the intention of manufacturing the product in the prescribed manner, with extensive use of inmate labor. Sometimes, though, events such as a prison lock down, factory fire, fog, or machine failure occur, causing such delays in production that may render FPI unable to complete an order and/or meet the customer’s required delivery date. In the past, FPI asked vendors who commercially produced the same items to provide the product to the customer to avert any inconvenience to the purchaser. Such instances represented less than 2 percent of FPI’s total annual office furniture sales. The Board of Directors elected, however, to adopt a resolution discontinuing this practice.

On October 24, 2002, FPI’s Board of Directors adopted the following resolution: “The Board directs that the practice of “pass-through” of finished goods items that would otherwise be manufactured by FPI be discontinued; and that customers be given the right to accept late delivery, or be granted an immediate waiver to purchase that portion of the order elsewhere; and that such transactions be tracked and documented.” The resolution became effective immediately.

2. Blanket waiver threshold.

This notice announces a decision by the Board of Directors for Federal Prison Industries, Inc. (FPI), to hereby increase the blanket waiver relating to small dollar-value purchases from the existing threshold of $2,500 to a threshold of $3,000. This waiver of mandatory source for purchases totaling $3,000 or less is effective immediately. Customers may, however, still purchase from FPI at or below this threshold, if they so choose. No waiver is required to buy from an alternative source. Interested parties have a right to comment or raise questions with FPI's Board of Directors. All written correspondence should be addressed to: Chief, Corporate Marketing and Constituent Relations, Strategic Business Development and Marketing Branch, Federal Prison Industries, Inc., 320 First Street, NW, Washington, D.C. 20534.

3. Waivers granted based upon price.

On March 10, 2003, the Board of Directors adopted the following resolution: “The Board directs that FPI grant waivers in all cases where the private sector provides a lower price for a comparable product that FPI does not meet. This policy is effective immediately.”

4. Inmate access to personal and sensitive information.

FPI takes measures to ensure that inmates do not have access to personal and sensitive information. The FPI Board of Directors adopted a resolution on March 10, 2003, directing that FPI deny inmates access to personal information of any kind. This includes credit card numbers, medical records, social security numbers, credit records, and other personal information. This policy became effective immediately. 

FPI is responsible for ensuring that inmates do not have access to personal information, as determined by FPI’s Board of Directors. FPI products purchased by government credit card are not processed by inmates. 

5. Elimination of mandatory source for products in which FPI's share of the Federal market exceeds 20 percent.

On April 28, 2003, the Board adopted the following resolution: “ The Board directs FPI to end the application of mandatory source for products for which FPI’s share of the Federal market exceeds 20 percent.” On June 26, 2003, the resolution was revised as follows: “The Board of Directors directs Federal Prison Industries to limit the application of mandatory source to products for which FPI’s share of the Federal market is less than 20 percent.” 

Customers who plan to purchase products in which FPI’s Federal market share exceeds 20 percent need not initiate a waiver request to procure the item(s) from the private sector. FPI identifies those products no longer subject to FPI’s mandatory source, by FSC, on its website under “Waiver Requests/Waiver Processing Exceptions.” The list will be updated annually.

6. Inmate value added.

On April 28, 2003, the Board adopted the following resolution: “The Board directs that FPI stop selling products for which FPI value added does not contribute at least 20 percent to the selling price of a product. For purposes of this resolution, value added shall be defined as the sales price of an FPI product minus the cost of raw materials.