The Maloney Amendment was offered in response to recent press reports that the United States Agency for International Development (USAID) and other Federal agencies have been awarding no-bid or invitation-only contracts to firms for the rebuilding of Iraq.

The Maloney Amendment is modeled after legislation offered in the Senate by Wyden, Collins and Clinton, S. 876, the "Sunshine in Iraq Reconstruction Contracting Act of 2003." S. 876 is a bipartisan bill that sets out requirements for the government to publicly justify any closed bidding process used for Iraqi construction work.

Maloney has worked with Representatives Peter Hoekstra (R-MI), Barney Frank (D-MA), Mac Collins (R-GA), James Sensenbrenner (R-WI), and John Conyers (D-MI) on the issue of fairness in competitive contracting for several years. H.R. 1829, The Federal Prison Industries Competition in Contracting Act, would level the playing field and require FPI to compete for its contract opportunities.

Maloney became involved in this issue when her constituents who were employees of the Glamour Glove Company of Long Island City told her that their company was in jeopardy of closing and that many would lose their jobs because of the unfair practices of the Federal Prison Industries. In 1992, FPI illegally increased its glove production. The impact on the Glamour Glove Company was devastating -- then in its 44th year, the Glamour Glove Company lost 80 percent of its 400-dozen-pair-a-week glove business. A compromise was negotiated with FPI, and Glamour Glove remained in business and the workers kept their jobs.

Glamour Glove is located at 23 Eley Avenue at 23rd Street. Approximately 80% of their glove making was/is through military contracts with the Pentagon. The FPI threatened Glamour Glove's existence by heavily increasing glove production in the early 1990s. A 1934 U.S. law obligates federal agencies to buy from FPI under broad circumstances (see below). There was a good outcome, however, in this case. Congresswoman Maloney and others pushed FPI to reduce glove production and they did from $10.5 million to $7.4 million annually, with a cap in production at 1.6 million pairs annually, plus they limit contracts to 20% of military orders.

More and more, FPI has shifted its purpose from employing inmates to simply increasing profits. In 1985, FPI employed 10,000 inmates. A decade later, FPI employed approximately 17,000 inmates. FPI has focused on maximizing its profits from its increased sales to its Federal customers with the demand to build new factories and modernize existing operations. In the process, FPI has aimed to become more efficient, instead of adhering to its statutory mandate to engage in labor-intensive activities employing the greatest number of inmates, and thereby minimizing FPI's impact on the private sector.

From 1980 to 1985, FPI sales increased by 105 percent. And by the next decade, in 1995, FPI sales had increased by over $200 million. In 1996, FPI employed 17-thousand 379 inmates. It had sales of 489 million-ranking 38th among the top 100 Federal contractors. They rank right behind Texas Instruments.

FPI can dictate the price to be paid for its products. FPI, rather than its federal agency "customers," determines whether FPI's products and delivery schedule meets the agency's needs. If any dispute arises between FPI and one of the agency "customers," FPI decides whose position prevails under the threat of an unworkable appeal process unused since the 1930s. Two all-business coalitions-the Coalition for Government Procurement and the Competition in Contracting Act Coalition-are also pushing for legislation to end FPI's preferential status and to force FPI to compete with the private sector on a level playing field. UNITE, the AFL-CIO, and many other labor organizations support Rep. Maloney's bill.