Fight to Permanently Eliminate FPI’s Mandatory Source Continues
Past Congressional Actions make Furniture Purchases more Competitive, yet Recent Army Contract Demonstrates Why True Competition has not been Achieved
Washington,
Jul 5, 2005 -
U.S. Rep. Pete Hoekstra, R-Holland, today testified before a congressional committee that although furniture sales by Federal Prison Industries (FPI) are down, a recent Army contract demonstrates that true competition has yet to be achieved.
Hoekstra testified that mandatory source remains “alive and well,” noting that the U.S. Army announced on Wednesday a contract worth $198 million to FPI. The contract is for 66,000 kits for mounting radios, position locators and other communications equipment on a broad array of military vehicles. All contracted work will be performed at FPI factories, expect for 1 percent that will be performed by a small business in Grand Haven.
During the hearing, supporters of FPI emphasized the amount of products and services FPI purchases from small business in the performance of its contracts. However, under Hoekstra’s bill, the Federal Prison Industries Competition in Contracting Act of 2005 (H.R. 2965), small firms could choose to subcontract to FPI, could choose to subcontract with another firm or choose to sell directly to the government.
“In the real world, the company should have the opportunity to compete for this business, rather than having FPI as the gateway,” Hoekstra said.
Currently under mandatory source, small businesses must pass too frequently through FPI to gain access to government contracts worth $802.7 million, FPI’s sales in 2004.
Proponents of maintaining FPI’s mandatory source status also cited FPI’s recently released Annual Report for 2004. The report emphasized that FPI lost 3,000 inmate jobs between 2002 and 2004 because of the enacted changes to the manner in which federal procurement officers can deal with FPI within the constraints of its mandatory source status.
Hoekstra noted that during the same period, FPI sales increased from $678.7 million in 2002 to $802.7 million in 2004 and its profits increased from $71.4 million to $120.4 million at the same time as inmate employment decreased from 21,778 to 19,337.
During that three-year span, sales have increased by 18 percent, profits have increased by more than 70 percent, yet FPI laid off workers.
“If those sales were based on competition rather than mandatory source, FPI would be the envy of the business community,” Hoekstra said. “Given FPI’s total control over the size of its workforce, the asserted loss of work opportunities for 3,000 workers just seems implausible.”
Provisions in Hoekstra’s reform bill to improve inmate access to remedial and modern “hands-on” vocational training and other release preparation programs that are designed to better prepare federal inmates for a successful return to society were spearheaded by U.S. Reps. John Conyers, D-Mich., and Barney Frank, D-Mass., both lead co-sponsors of Hoekstra’s bill.
The bill also includes alternative inmate work opportunities in support of the public service activities of non-profit organizations, units of local government and special purpose districts such as school boards. Based on a program initiated by the Ohio Department of Corrections in 1991, the public service program now provides more inmate work opportunities than Ohio’s traditional prison industries program. The director of the Ohio Department of Rehabilitation and Correction testified at the hearing.
U.S. Rep. Howard Coble, R-N.C., chairman of the House Committee on the Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, which conducted the hearing, said that H.R. 2965 will simply promote fairness for private sector firms and their non-inmate workers, who only want the opportunity to bid on federal contracts funded by their own tax dollars.
“I am proud to be a co-sponsor of this legislation because I believe it will level the playing field in competition for federal agency contracts,” Coble said.
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