Congress Abolishes Federal Prison Industries’ Monopoly on Federal Contracts

Congressional Passage is culmination of 10-year effort, says Levin

WASHINGTON – Sen. Carl Levin, D-Mich., announced that the omnibus spending bill that was cleared by Congress this week, and which the President is expected to sign today, contains a provision ensuring that private sector companies can compete against Federal Prison Industries for federal contracts that are paid for with their tax dollars. Under the previous law, federal agencies other than the Department of Defense were required to award contracts to Federal Prison Industries, even if private businesses offered better products at lower prices.

“The enactment of this provision is the culmination of a ten-year effort to ensure that private sector companies have a fair opportunity to sell their products to their own government,” Levin said. “It may seem incredible that they have been denied this opportunity in the past, but that was the law until today, because if Federal Prison Industries said that it wanted a contract, it got that contract, regardless whether a company in the private sector may offer to provide the product better, cheaper, or faster.”

The provision extends to all federal agencies legislation authored by Levin that ended Federal Prison Industries’ monopoly on Department of Defense contracts in 2001. Levin first introduced a bill to allow private sector companies to compete against Federal Prison Industries in 1996. Levin’s bill, which was co-sponsored by Sen. Craig Thomas (R-WY), was reported out of the Governmental Affairs Committee earlier this year on a voice vote. A companion measure, sponsored by Rep. Pete Hoekstra (R-MI), passed the House of Representatives last year on a 350-65 vote. Levin noted that Senator Richard C. Shelby (R-AL) was instrumental in the enactment of the provision.