I 

108TH CONGRESS 

1ST SESSION H. R. 1829

To amend title 18, United States Code, to require Federal Prison Industries 

to compete for its contracts minimizing its unfair competition with private sector firms and their non-inmate workers and empowering Federal 

agencies to get the best value for taxpayers’ dollars, to provide a fiveyear period during which Federal Prison Industries adjusts to obtaining 

inmate work opportunities through other than its mandatory source status, to enhance inmate access to remedial and vocational opportunities 

and other rehabilitative opportunities to better prepare inmates for a 

successful return to society, to authorize alternative inmate work opportunities in support of non-profit organizations, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2003

Mr. HOEKSTRA (for himself, Mr. FRANK of Massachusetts, Mr. COLLINS, Mrs. 

MALONEY, Mr. SENSENBRENNER, Mr. CONYERS, Mr. COBLE, Mr. WATT, 

Mr. MANZULLO, Ms. VELA ́ZQUEZ, Mr. BOEHNER, Mr. GEORGE MILLER

of California, Mr. TOM DAVIS of Virginia, Mr. RANGEL, Mr. TOOMEY, 

Mr. NADLER, Mr. EHLERS, Mr. DINGELL, Mr. LOBIONDO, Mr. CANTOR, 

Ms. BALDWIN, Mr. NORWOOD, Ms. WOOLSEY, Mr. SOUDER, Mr. FERGUSON, Ms. SCHAKOWSKY, Mr. SHADEGG, Mr. KINGSTON, Ms. HART, 

Ms. LEE, Mr. HOSTETTLER, Mr. FILNER, Mr. BARTLETT of Maryland, 

Mr. OXLEY, Mr. ENGLISH, Mr. MCINTYRE, Mr. DEMINT, Mr. FLAKE, 

Mr. SMITH of New Jersey, Mr. RYAN of Wisconsin, Mr. CULBERSON, Mr. 

EMANUEL, Mr. FORBES, Mr. GOODE, Mrs. NORTHUP, Mr. OLVER, Mr. 

BLUNT, Ms. PRYCE of Ohio, Mrs. MILLER of Michigan, Mr. CRAMER, 

Mr. CAMP, Mr. ROGERS of Michigan, Mr. LEACH, Mr. PENCE, Mr. HILL, 

Mr. UPTON, Mr. MCCOTTER, Mr. LANGEVIN, Mr. NETHERCUTT, Mr. 

OSBORNE, Mr. HAYES, Mr. WAMP, Mr. TERRY, Mr. KLECZKA, Mrs. 

MYRICK, Mr. NEY, Mr. BRADY of Pennsylvania, Mr. BRADY of Texas, 

Mrs. JONES of Ohio, Mr. JONES of North Carolina, Mr. SESSIONS, Mrs. 

CUBIN, Mrs. CAPITO, Mr. BURR, Mr. CLAY, Mr. KNOLLENBERG, Mr. 

MORAN of Kansas, Mr. TIBERI, Mr. PORTER, Mr. MCGOVERN, Mr. 

BALLENGER, Mr. DEAL of Georgia, Mr. EVERETT, Mr. KENNEDY of 

Rhode Island, Mr. MCKEON, Mr. ISAKSON, Mr. LATOURETTE, Mr. 

THORNBERRY, Mrs. WILSON of New Mexico, Mr. ROYCE, Mr. KLINE, Mr. 

KUCINICH, Mr. DUNCAN, Mr. TIAHRT, Mr. QUINN, Mr. WILSON of South 

Carolina, Mr. DOOLITTLE, Mr. MCDERMOTT, Mrs. BIGGERT, Mrs. 

MUSGRAVE, Mr. CHOCOLA, Mr. GINGREY, Mr. NUNES, and Mr. BURNS) 
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introduced the following bill; which was referred to the Committee on the 

Judiciary 

A BILL

To amend title 18, United States Code, to require Federal 

Prison Industries to compete for its contracts minimizing 

its unfair competition with private sector firms and their 

non-inmate workers and empowering Federal agencies 

to get the best value for taxpayers’ dollars, to provide 

a five-year period during which Federal Prison Industries 

adjusts to obtaining inmate work opportunities through 

other than its mandatory source status, to enhance inmate access to remedial and vocational opportunities and 

other rehabilitative opportunities to better prepare inmates for a successful return to society, to authorize 

alternative inmate work opportunities in support of nonprofit organizations, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Federal Prison Industries Competition in Contracting 

6 Act of 2003’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Governmentwide procurement policy relating to purchases from Federal 

Prison Industries. 

Sec. 3. Public participation regarding expansion proposals by Federal Prison 

Industries. 
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Sec. 4. Transitional mandatory source authority. 

Sec. 5. Authority to perform as a Federal subcontractor. 

Sec. 6. Inmate wages and deductions. 

Sec. 7. Clarifying amendment relating to services. 

Sec. 8. Conforming amendment. 

Sec. 9. Rules of construction relating to chapter 307. 

Sec. 10. Providing additional rehabilitative opportunities for inmates. 

Sec. 11. Restructuring the Board of Directors. 

Sec. 12. Providing additional management flexibility to Federal Prison Industry 

operations. 

Sec. 13. Transitional personnel management authority. 

Sec. 14. Federal Prison Industries report to Congress. 

Sec. 15. Independent study to determine the effects of eliminating the Federal 

Prison Industries mandatory source authority. 

Sec. 16. Definitions. 

Sec. 17. Implementing regulations and procedures. 

Sec. 18. Rule of construction. 

Sec. 19. Effective date and applicability. 

Sec. 20. Clerical amendments.

1 SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT2 ING TO PURCHASES FROM FEDERAL PRISON 

3 INDUSTRIES. 

4 Section 4124 of title 18, United States Code, is 

5 amended to read as follows: 

6 ‘‘§ 4124. Governmentwide procurement policy relat7 ing to purchases from Federal Prison In8 dustries 

9 ‘‘(a) IN GENERAL.—Purchases from Federal Prison 

10 Industries, Incorporated, a wholly owned Government cor11 poration, as referred to in section 9101(3)(E) of title 31, 

12 may be made by a Federal department or agency only in 

13 accordance with this section. 

14 ‘‘(b) SOLICITATION AND EVALUATION OF OFFERS

15 AND CONTRACT AWARDS.—(1) If a procurement activity 

16 of a Federal department or agency has a requirement for 
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1 a specific product or service that is authorized to be of2 fered for sale by Federal Prison Industries, in accordance 

3 with section 4122 of this title, and is listed in the catalog 

4 referred to in subsection (g), the procurement activity 

5 shall solicit an offer from Federal Prison Industries, if the 

6 purchase is expected to be in excess of the micro-purchase 

7 threshold (as defined by section 32(f) of the Office of Fed8 eral Procurement Policy Act (41 U.S.C. 428(f))). 

9 ‘‘(2) A contract award for such product or service 

10 shall be made using competitive procedures in accordance

11 with the applicable evaluation factors, unless a determina12 tion is made by the Attorney General pursuant to para13 graph (3) or an award using other than competitive proce14 dures is authorized pursuant to paragraph (7). 

15 ‘‘(3) The procurement activity shall negotiate with 

16 Federal Prison Industries on a noncompetitive basis for 

17 the award of a contract if the Attorney General determines 

18 that—

19 ‘‘(A) Federal Prison Industries cannot reason20 ably expect fair consideration to receive the contract 

21 award on a competitive basis; and 

22 ‘‘(B) the contract award is necessary to main23 tain work opportunities otherwise unavailable at the 

24 penal or correctional facility at which the contract is 

25 to be performed to prevent circumstances that could 
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1 reasonably be expected to significantly endanger the 

2 safe and effective administration of such facility. 

3 ‘‘(4) Except in the case of an award to be made pur4 suant to paragraph (3), a contract award shall be made 

5 with Federal Prison Industries only if the contracting offi6 cer for the procurement activity determines that—

7 ‘‘(A) the specific product or service to be fur8 nished will meet the requirements of the procure9 ment activity (including any applicable 

10 prequalification requirements and all specified com11 mercial or governmental standards pertaining to 

12 quality, testing, safety, serviceability, and warran13 ties); 

14 ‘‘(B) timely performance of the contract can be 

15 reasonably expected; and 

16 ‘‘(C) the contract price does not exceed a cur17 rent market price. 

18 ‘‘(5) A determination by the Attorney General pursu19 ant to paragraph (3) shall be—

20 ‘‘(A) supported by specific findings by the war21 den of the penal or correctional institution at which 

22 a Federal Prison Industries workshop is scheduled 

23 to perform the contract; 
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1 ‘‘(B) supported by specific findings by Federal 

2 Prison Industries regarding why it does not expect 

3 to win the contract on a competitive basis; and 

4 ‘‘(C) made and reported in the same manner as 

5 a determination made pursuant to section 303(c)(7) 

6 of the Federal Property and Administrative Services 

7 Act of 1949 (41 U.S.C. 253(c)(7)). 

8 ‘‘(6) If the Attorney General has not made the deter9 mination described in paragraph (3) within 30 days after 

10 Federal Prison Industries has been informed of a con11 tracting opportunity by a procurement activity, the pro12 curement activity may proceed to conduct a procurement 

13 for the product or service in accordance with the proce14 dures generally applicable to such procurements by the 

15 procurement activity. 

16 ‘‘(7) A contract award may be made to Federal Pris17 on Industries using other than competitive procedures if 

18 such product or service is only available from Federal 

19 Prison Industries and the contract may be awarded under 

20 the authority of section 2304(c)(1) of title 10 or section 

21 303(c) of the Federal Property and Administrative Serv22 ices Act of 1949 (41 U.S.C. 252(c)(1)), as may be applica23 ble, and pursuant to the justification and approval re24 quirements relating to such noncompetitive procurements 
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1 specified by law and the Governmentwide Federal Acquisi2 tion Regulation. 

3 ‘‘(c) OFFERS FROM FEDERAL PRISON INDUS4 TRIES.—A timely offer received from Federal Prison In5 dustries to furnish a product or service to a Federal de6 partment or agency shall be considered for award without 

7 limitation as to the dollar value of the proposed purchase. 

8 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS9 TRIES.—Federal Prison Industries shall perform its con10 tractual obligations under a contract awarded by a Fed11 eral department or agency to the same extent as any other 

12 contractor.

13 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI14 SION.—(1) A decision by a contracting officer regarding 

15 the award of a contract to Federal Prison Industries or 

16 relating to the performance of such contract shall be final, 

17 unless reversed on appeal pursuant to paragraph (2) or 

18 (3). 

19 ‘‘(2) The Chief Executive Officer of Federal Prison 

20 Industries may appeal to the head of a Federal depart21 ment or agency a decision by a contracting officer not to 

22 award a contract to Federal Prison Industries pursuant 

23 to subsection (b)(4). The decision of the head of a Federal 

24 department or agency on appeal shall be final. 
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1 ‘‘(3) A dispute between Federal Prison Industries 

2 and a procurement activity regarding performance of a 

3 contract shall be subject to—

4 ‘‘(A) alternative means of dispute resolution 

5 pursuant to subchapter IV of chapter 5 of title 5; 

6 or 

7 ‘‘(B) final resolution by the board of contract 

8 appeals having jurisdiction over the procurement ac9 tivity’s contract performance disputes pursuant to 

10 the Contract Disputes Act of 1978 (41 U.S.C. 601 

11 et seq.). 

12 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de13 partment or agency shall report purchases from Federal 

14 Prison Industries to the Federal Procurement Data Sys15 tem (as referred to in section 6(d)(4) of the Office of Fed16 eral Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 

17 same manner as it reports to such System any acquisition 

18 in an amount in excess of the simplified acquisition thresh19 old (as defined by section 4(11) of the Office of Federal 

20 Procurement Policy Act (41 U.S.C. 403(11))). 

21 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In22 dustries shall publish and maintain a catalog of all specific 

23 products and services that it is authorized to offer for sale. 

24 Such catalog shall be periodically revised as products and 
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1 services are added or deleted by its board of directors (in 

2 accordance with section 4122(b) of this title). 

3 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Pris4 on Industries shall comply with Federal occupational, 

5 health, and safety standards with respect to the operation 

6 of its industrial operations.’’.

7 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

8 PROPOSALS BY FEDERAL PRISON INDUS9 TRIES. 

10 Section 4122(b) of title 18, United States Code, is 

11 amended—

12 (1) by redesignating paragraph (6) as para13 graph (12); and

14 (2) by striking paragraphs (4) and (5) and in15 serting the following new paragraphs: 

16 ‘‘(4) A decision to authorize Federal Prison Indus17 tries to offer a new specific product or specific service or 

18 to expand the production of an existing product or service 

19 shall be made by its board of directors in conformance 

20 with the requirements of subsections (b), (c), (d), and (e) 

21 of section 553 of title 5, and this chapter. 

22 ‘‘(5)(A) Whenever Federal Prison Industries pro23 poses to offer for sale a new specific product or specific 

24 service or to expand production of a currently authorized 

25 product or service, the Chief Operating Officer of Federal 
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1 Prison Industries shall submit an appropriate proposal to 

2 the board of directors and obtain the board’s approval be3 fore initiating any such expansion. The proposal submitted 

4 to the board shall include a detailed analysis of the prob5 able impact of the proposed expansion of sales within the 

6 Federal market by Federal Prison Industries on private 

7 sector firms and their non-inmate workers. 

8 ‘‘(B)(i) The analysis required by subparagraph (A) 

9 shall be performed by an interagency team on a reimburs10 able basis or by a private contractor paid by Federal Pris11 on Industries. 

12 ‘‘(ii) If the analysis is to be performed by an inter13 agency team, such team shall be led by the Administrator 

14 of the Small Business Administration or the designee of 

15 such officer with representatives of the Department of 

16 Labor, the Department of Commerce, and the Federal 

17 Procurement Data Center. 

18 ‘‘(iii) If the analysis is to be performed by a private 

19 contractor, the selection of the contractor and the admin20 istration of the contract shall be conducted by one of the 

21 entities referenced in clause (ii) as an independent execu22 tive agent for the board of directors. Maximum consider23 ation shall be given to any proposed statement of work 

24 furnished by the Chief Operating Officer of Federal Prison 

25 Industries. 
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1 ‘‘(C) The analysis required by subparagraph (A) shall 

2 identify and consider—

3 ‘‘(i) the number of vendors that currently meet 

4 the requirements of the Federal Government for the 

5 specific product or specific service; 

6 ‘‘(ii) the proportion of the Federal Government 

7 market for the specific product or specific service 

8 currently furnished by small businesses during the 

9 previous 3 fiscal years; 

10 ‘‘(iii) the share of the Federal market for the 

11 specific product or specific service projected for Fed12 eral Prison Industries for the fiscal year in which 

13 production or performance will commence or expand 

14 and the subsequent 4 fiscal years; 

15 ‘‘(iv) whether the industry producing the spe16 cific product or specific service in the private sec17 tor—

18 ‘‘(I) has an unemployment rate higher 

19 than the national average; or 

20 ‘‘(II) has a rate of unemployment for 

21 workers that has consistently shown an increase 

22 during the previous 5 years; 

23 ‘‘(v) whether the specific product is an import24 sensitive product; 
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1 ‘‘(vi) the requirements of the Federal Govern2 ment and the demands of entities other than the 

3 Federal Government for the specific product or serv4 ice during the previous 3 fiscal years; 

5 ‘‘(vii) the projected growth or decline in the de6 mand of the Federal Government for the specific 

7 product or specific service; 

8 ‘‘(viii) the capability of the projected demand of 

9 the Federal Government for the specific product or 

10 service to sustain both Federal Prison Industries 

11 and private vendors; and

12 ‘‘(ix) whether authorizing the production of the 

13 new product or performance of a new service will 

14 provide inmates with the maximum opportunity to 

15 acquire knowledge and skill in trades and occupa16 tions that will provide them with a means of earning 

17 a livelihood upon release. 

18 ‘‘(D)(i) The board of directors may not approve a 

19 proposal to authorize the production and sale of a new 

20 specific product or continued sales of a previously author21 ized product unless—

22 ‘‘(I) the product to be furnished is a prison23 made product; or 

24 ‘‘(II) the service to be furnished is to be per25 formed by inmate workers. 
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1 ‘‘(ii) The board of directors may not approve a pro2 posal to authorize the production and sale of a new prison3 made product or to expand production of a currently au4 thorized product if the product is—

5 ‘‘(I) produced in the private sector by an indus6 try which has reflected during the previous year an 

7 unemployment rate above the national average; or 

8 ‘‘(II) an import-sensitive product. 

9 ‘‘(iii) The board of directors may not approve a pro10 posal for inmates to provide a service in which an inmate 

11 worker has access to—

12 ‘‘(I) personal or financial information about in13 dividual private citizens, including information relat14 ing to such person’s real property, however de15 scribed, without giving prior notice to such persons 

16 or class of persons to the greatest extent practicable; 

17 ‘‘(II) geographic data regarding the location of 

18 surface and subsurface infrastructure providing com19 munications, water and electrical power distribution, 

20 pipelines for the distribution of natural gas, bulk pe21 troleum products and other commodities, and other 

22 utilities; or 

23 ‘‘(III) data that is classified. 

24 ‘‘(iv)(I) Federal Prison Industries is prohibited from 

25 furnishing through inmate labor construction services, un-
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1 less to be performed within a Federal correctional institu2 tion pursuant to the participation of an inmate in an ap3 prenticeship or other vocational education program teach4 ing the skills of the various building trades.

5 ‘‘(II) For purposes of this clause, the term ‘construc6 tion’ has the meaning given such term by section 2.101 

7 of the Federal Acquisition Regulation (48 CFR part 

8 2.101), as in effect on June 1, 2002, including the repair, 

9 alteration, or maintenance of real property in being. 

10 ‘‘(6) To provide further opportunities for participa11 tion by interested parties, the board of directors shall—

12 ‘‘(A) give additional notice of a proposal to au13 thorize the production and sale of a new product or

14 service, or expand the production of a currently au15 thorized product or service, in a publication designed 

16 to most effectively provide notice to private vendors 

17 and labor unions representing private sector workers 

18 who could reasonably be expected to be affected by 

19 approval of the proposal, which notice shall offer to 

20 furnish copies of the analysis required by paragraph 

21 (5) and shall solicit comment on the analysis; 

22 ‘‘(B) solicit comments on the analysis required 

23 by paragraph (5) from trade associations rep24 resenting vendors and labor unions representing pri25 vate sector workers who could reasonably be ex-
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1 pected to be affected by approval of the proposal to 

2 authorize the production and sale of a new product 

3 or service (or expand the production of a currently 

4 authorized product or service); and 

5 ‘‘(C) afford an opportunity, on request, for a 

6 representative of an established trade association, 

7 labor union, or other private sector representatives 

8 to present comments on the proposal directly to the 

9 board of directors. 

10 ‘‘(7) The board of directors shall be provided copies 

11 of all comments received on the expansion proposal. 

12 ‘‘(8) Based on the comments received on the initial 

13 expansion proposal, the Chief Operating Officer of Federal 

14 Prison Industries may provide the board of directors a re15 vised expansion proposal. If such revised proposal provides 

16 for expansion of inmate work opportunities in an industry 

17 different from that initially proposed, such revised pro18 posal shall reflect the analysis required by paragraph 

19 (5)(C) and be subject to the public comment requirements 

20 of paragraph (6). 

21 ‘‘(9) The board of directors shall consider a proposal 

22 to authorize the sale of a new specific product or specific 

23 service (or to expand the volume of sales for a currently 

24 authorized product or service) and take any action with 

25 respect to such proposal, during a meeting that is open 
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1 to the public, unless closed pursuant to section 552(b) of 

2 title 5. 

3 ‘‘(10) In conformity with the requirements of para4 graphs (5) through (9) of this subsection, the board of 

5 directors may—

6 ‘‘(A) authorize the donation of products pro7 duced or services furnished by Federal industries 

8 and available for sale; or 

9 ‘‘(B) authorize the production of a new specific 

10 product or the furnishing of a new specific service 

11 for donation.’’.

12 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

13 (a) IN GENERAL.—Notwithstanding the require14 ments of section 4124 of title 18, United States Code (as 

15 amended by section 2 of this Act), a Federal department 

16 or agency having a requirement for a product that is au17 thorized for sale by Federal Prison Industries and is listed 

18 in its catalog (referred to in section 4124(g) of title 18, 

19 United States Code) shall first solicit an offer from Fed20 eral Prison Industries and make purchases on a non21 competitive basis in accordance with this section. 

22 (b) PREFERENTIAL SOURCE STATUS.—Subject to 

23 the limitations of subsection (d), a contract award shall 

24 be made on a noncompetitive basis to Federal Prison In-
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1 dustries if the contracting officer for the procurement ac2 tivity determines that—

3 (1) the product offered by Federal Prison In4 dustries will meet the requirements of the procure5 ment activity (including commercial or governmental 

6 standards or specifications pertaining to design, per7 formance, testing, safety, serviceability, and warran8 ties as may be imposed upon a private sector sup9 plier of the type being offered by Federal Prison In10 dustries); 

11 (2) timely performance of the contract by Fed12 eral Prison Industries can be reasonably expected; 

13 and 

14 (3) the negotiated price does not exceed a fair 

15 and reasonable price. 

16 (c) CONTRACTUAL TERMS.—The terms and condi17 tions of the contract and the price to be paid to Federal 

18 Prison Industries shall be determined by negotiation be19 tween Federal Prison Industries and the Federal agency 

20 making the purchase. The negotiated price shall not ex21 ceed a fair and reasonable price determined in accordance 

22 with the procedures of the Federal Acquisition Regulation. 

23 (d) PERFORMANCE OF CONTRACTUAL OBLIGA24 TIONS.—
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1 (1) IN GENERAL.—Federal Prison Industries 

2 shall perform the obligations of the contract nego3 tiated pursuant to subsection (c). 

4 (2) PERFORMANCE DISPUTES.—If the head of 

5 the contracting activity and the Chief Operating Of6 ficer of Federal Prison Industries are unable to re7 solve a contract performance dispute to their mutual 

8 satisfaction, such dispute shall be resolved pursuant 

9 to section 4124(e)(3) of title 18, United States Code 

10 (as added by section 2 of this Act). 

11 (e) LIMITATIONS ON USE OF AUTHORITY.—

12 (1) IN GENERAL.—As a percentage of the sales 

13 made by Federal Prison Industries during the base 

14 period, the total dollar value of sales to the Govern15 ment made pursuant to subsection (b) and sub16 section (c) of this section shall not exceed—

17 (A) 90 percent in fiscal year 2005; 

18 (B) 85 percent in fiscal year 2006; 

19 (C) 70 percent in fiscal year 2007; 

20 (D) 55 percent in fiscal year 2008; and 

21 (E) 40 percent in fiscal year 2009. 

22 (2) SALES WITHIN VARIOUS BUSINESS SEC23 TORS.—Use of the authority provided by subsections 

24 (b) and (c) shall not result in sales by Federal Pris25 on Industries to the Government that are in excess 
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1 of its total sales during the base year for each busi2 ness sector. 

3 (3) LIMITATIONS RELATING TO SPECIFIC PROD4 UCTS.—Use of the authorities provided by sub5 sections (b) and (c) shall not result in contract 

6 awards to Federal Prison Industries that are in ex7 cess of its total sales during the base period for such 

8 product. 

9 (4) CHANGES IN DESIGN SPECIFICATIONS.—

10 The limitations on sales specified in paragraphs (2) 

11 and (3) shall not be affected by any increases in the 

12 unit cost of production of a specific product arising 

13 from changes in the design specification of such 

14 product directed by the buying agency.

15 (f) DURATION OF AUTHORITY.—The preferential 

16 contracting authorities authorized by subsection (b) may 

17 not be used on or after October 1, 2009, and become effec18 tive on the effective date of the final regulations issued 

19 pursuant to section 17. 

20 (g) DEFINITIONS.—For the purposes of this sec21 tion—

22 (1) the term ‘‘base period’’ means the total 

23 sales of Federal Prison Industries during the period 

24 October 1, 2001, and September 30, 2002 (Fiscal 

25 Year 2002); 
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1 (2) the term ‘‘business sectors’’ means the eight 

2 product/service business groups identified in the 

3 2002 Federal Prison Industries annual report as the 

4 Clothing and Textile Business Group, the Elec5 tronics Business Group, the Fleet Management and 

6 Vehicular Components Business Group, the Graphics 

7 Business Group, the Industrial Products Business 

8 Group, the Office Furniture Business Group, the 

9 Recycling Activities Business Group, and the Serv10 ices Business Group; and 

11 (3) the term ‘‘fair and reasonable price’’ shall 

12 be given the same meaning as, and be determined 

13 pursuant to, part 15.8 of the Federal Acquisition 

14 Regulation (48 C.F.R. 15.8). 

15 (h) FINDING BY ATTORNEY GENERAL WITH RE16 SPECT TO PUBLIC SAFETY.—(1) Not later than 60 days 

17 prior to the end of each fiscal year specified in subsection 

18 (e)(1), the Attorney General shall make a finding regard19 ing the effects of the percentage limitation imposed by 

20 such subsection for such fiscal year and the likely effects 

21 of the limitation imposed by such subsection for the fol22 lowing fiscal year. 

23 (2) The Attorney General’s finding shall include a de24 termination whether such limitation has resulted or is like25 ly to result in a substantial reduction in inmate industrial 
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1 employment and whether such reductions, if any, present 

2 a significant risk of adverse effects on safe prison oper3 ation or public safety. 

4 (3) If the Attorney General finds a significant risk 

5 of adverse effects on either safe prison management or 

6 public safety, he shall so advise the Congress. 

7 (4) In advising the Congress pursuant to paragraph 

8 (3), the Attorney General shall make recommendations for 

9 additional authorizations of appropriations to provide ad10 ditional alternative inmate rehabilitative opportunities and 

11 additional correctional staffing, as may be appropriate. 

12 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON13 TRACTOR. 

14 (a) IN GENERAL.—Federal Prison Industries is au15 thorized to enter into a contract with a Federal contractor 

16 (or a subcontractor of such contractor at any tier) to 

17 produce products as a subcontractor or supplier in the per18 formance of a Federal procurement contract. The use of 

19 Federal Prison Industries as a subcontractor or supplier 

20 shall be a wholly voluntary business decision by the Fed21 eral prime contractor or subcontractor, subject to any 

22 prior approval of subcontractors or suppliers by the con23 tracting officer which may be imposed by the Federal Ac24 quisition Regulation or by the contract. 
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1 (b) COMMERCIAL SALES PROHIBITED.—The author2 ity provided by subsection (a) shall not result, either di3 rectly or indirectly, in the sale in the commercial market 

4 of a product or service resulting from the labor of Federal 

5 inmate workers in violation of section 1762(a) of title 18, 

6 United States Code. A Federal contractor (or subcon7 tractor at any tier) using Federal Prison Industries as a 

8 subcontractor or supplier in furnishing a commercial prod9 uct pursuant to a Federal contract shall implement appro10 priate management procedures to prevent introducing an 

11 inmate-produced product into the commercial market. 

12 (c) PROHIBITIONS ON MANDATING SUBCONTRACTING

13 WITH FEDERAL PRISON INDUSTRIES.—Except as author14 ized under the Federal Acquisition Regulation, the use of 

15 Federal Prison Industries as a subcontractor or supplier 

16 of products or provider of services shall not be imposed 

17 upon prospective or actual Federal prime contractors or 

18 a subcontractors at any tier by means of—

19 (1) a contract solicitation provision requiring a 

20 contractor to offer to make use of Federal Prison 

21 Industries, its products or services; 

22 (2) specifications requiring the contractor to 

23 use specific products or services (or classes of prod24 ucts or services) offered by Federal Prison Indus25 tries in the performance of the contract; 
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1 (3) any contract modification directing the use 

2 of Federal Prison Industries, its products or serv3 ices; or 

4 (4) any other means. 

5 SEC. 6. INMATE WAGES AND DEDUCTIONS. 

6 Section 4122(b) of title 18, United States Code (as 

7 amended by section 3 of this Act), is further amended by 

8 adding a new paragraph (11) as follows: 

9 ‘‘(11)(A) The Board of Directors of Federal Prison 

10 Industries shall prescribe the rates of hourly wages to be 

11 paid inmates performing work for or through Federal 

12 Prison Industries. The Director of the Federal Bureau of 

13 Prisons shall prescribe the rates of hourly wages for other 

14 work assignments within the various Federal correctional 

15 institutions. 

16 ‘‘(B) The various inmate wage rates shall be reviewed 

17 and considered for increase on not less than a biannual 

18 basis. 

19 ‘‘(C) Wages earned by an inmate worker shall be paid 

20 in the name of the inmate. Deductions, aggregating to not 

21 more than 80 percent of gross wages, shall be taken from 

22 the wages due for—

23 ‘‘(i) applicable taxes (Federal, State, and local); 

24 ‘‘(ii) payment of fines and restitution pursuant 

25 to court order; 
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1 ‘‘(iii) payment of additional restitution for vic2 tims of the inmate’s crimes (at a rate not less than 

3 10 percent of gross wages); 

4 ‘‘(iv) allocations for support of the inmate’s 

5 family pursuant to statute, court order, or agree6 ment with the inmate; 

7 ‘‘(v) allocations to a fund in the inmate’s name 

8 to facilitate such inmate’s assimilation back into so9 ciety, payable at the conclusion of incarceration; and 

10 ‘‘(vi) such other deductions as may be specified 

11 by the Director of the Bureau of Prisons. 

12 ‘‘(D) Each inmate worker working for Federal Prison 

13 Industries shall indicate in writing that such person—

14 ‘‘(i) is participating voluntarily; and 

15 ‘‘(ii) understands and agrees to the wages to be 

16 paid and deductions to be taken from such wages.’’. 

17 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 

18 (a) IN GENERAL.—Section 1761 of title 18, United 

19 States Code, is amended in subsection (a), by striking 

20 ‘‘any goods, wares, or merchandise manufactured, pro21 duced, or mined’’ and inserting ‘‘products manufactured, 

22 services furnished, or minerals mined’’. 

23 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

24 prisoner work program operated by a prison or jail of a 

25 State or local jurisdiction of a State which is providing 
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1 services for the commercial market through inmate labor 

2 on October 1, 2002, may continue to provide such com3 mercial services until—

4 (1) the expiration date specified in the contract 

5 or other agreement with a commercial partner on 

6 October 1, 2002, or 

7 (2) until September 30, 2005, if the prison 

8 work program is directly furnishing the services to 

9 the commercial market. 

10 (c) APPROVAL REQUIRED FOR LONG-TERM OPER11 ATION.—A prison work program operated by a correc12 tional institution operated by a State or local jurisdiction 

13 of a State may continue to provide inmate labor to furnish 

14 services for sale in the commercial market after the dates 

15 specified in subsection (b) if such program has been cer16 tified pursuant to section 1761(c)(1) of title 18, United 

17 States Code, and is in compliance with the requirements 

18 of such subsection and its implementing regulations. 

19 SEC. 8. CONFORMING AMENDMENT. 

20 Section 4122(a) of title 18, United States Code, is 

21 amended by striking ‘‘production of commodities’’ and in22 serting ‘‘production of products or furnishing of services’’. 
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1 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

2 307. 

3 Chapter 307 of title 18, United States Code, is fur4 ther amended by adding the following: 

5 ‘‘§ 4130. Construction of provisions 

6 ‘‘Nothing in this chapter shall be construed—

7 ‘‘(1) to establish an entitlement of any inmate 

8 to—

9 ‘‘(A) employment in a Federal Prison In10 dustries facility; or 

11 ‘‘(B) any particular wage, compensation, 

12 or benefit on demand, except as otherwise spe13 cifically provided by law or regulation; 

14 ‘‘(2) to establish that inmates are employees for 

15 the purposes of any law or program; or 

16 ‘‘(3) to establish any cause of action by or on 

17 behalf of any inmate against the United States or 

18 any officer, employee, or contractor thereof.’’.

19 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR20 TUNITIES FOR INMATES. 

21 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE22 LEASE-PREPARATION OPPORTUNITIES.—

23 (1) PROGRAM ESTABLISHED.—There is hereby 

24 established the Enhanced In-Prison Educational and 

25 Vocational Assessment and Training Program within 

26 the Bureau of Prisons. 
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1 (2) COMPREHENSIVE PROGRAM.—In addition to 

2 such other components as the Director of the Bu3 reau of Prisons deems appropriate to reduce inmate 

4 idleness and better prepare inmates for a successful 

5 reentry into the community upon release, the pro6 gram shall provide—

7 (A) in-prison assessments of inmates’ 

8 needs and aptitudes; 

9 (B) a full range of educational opportuni10 ties; 

11 (C) vocational training and apprentice12 ships; and 

13 (D) comprehensive release-readiness prepa14 ration. 

15 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

16 the purposes of carrying out the program established 

17 by paragraph (1), $75,000,000 is authorized for 

18 each fiscal year after fiscal year 2003, to remain 

19 available until expended. Funds shall be allocated 

20 from the gross profits within the Federal Prison In21 dustries Fund, and, to the extent such amounts are 

22 inadequate, from the General Treasury. 

23 (b) INMATE WORK OPPORTUNITIES IN SUPPORT OF

24 NOT-FOR-PROFIT ENTITIES.—
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1 (1) PROPOSALS FOR DONATION PROGRAMS.—

2 The Chief Operating Officer of Federal Prison In3 dustries shall develop and present to the Board of 

4 Directors of Federal Prison Industries proposals to 

5 have Federal Prison Industries donate products and 

6 services to eligible entities that provide goods or 

7 services to low-income individuals who would likely 

8 otherwise have difficulty purchasing such products 

9 or services in the commercial market. 

10 (2) SCHEDULE FOR SUBMISSION AND CONSID11 ERATION OF DONATION PROGRAMS.—

12 (A) INITIAL PROPOSALS.—The Chief Oper13 ating Officer shall submit the initial group of 

14 proposals for programs of the type described in 

15 paragraph (1) within 180 days after the date of 

16 the enactment of this Act. The Board of Direc17 tors of Federal Prison Industries shall consider 

18 such proposals from the Chief Operating Officer 

19 not later than the date that is 270 days after 

20 the date of the enactment of this Act. 

21 (B) ANNUAL OPERATING PLAN.—The 

22 Board of Directors of Federal Prison Industries 

23 shall consider proposals by the Chief Operating 

24 Officer for programs of the type described in 
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1 paragraph (1) as part of the annual operating 

2 plan for Federal Prison Industries. 

3 (C) OTHER PROPOSALS.—In addition to 

4 proposals submitted by the Chief Operating Of5 ficer, the Board of Directors may, from time to 

6 time, consider proposals presented by prospec7 tive eligible entities. 

8 (3) DEFINITION OF ELIGIBLE ENTITIES.—For 

9 the purposes of this subsection, the term ‘‘eligible 

10 entity’’ means an entity—

11 (A) that is an organization described in 

12 section 501(c)(3) of the Internal Revenue Code 

13 of 1986 and exempt from taxation under sec14 tion 501(a) of such Code and that has been 

15 such an organization for a period of not less

16 than 36 months prior to inclusion in a proposal 

17 of the type described in paragraph (1), or 

18 (B) that is a religious organization de19 scribed in section 501(d) of such Code and ex20 empt from taxation under section 501(a) of 

21 such Code. 

22 (4) AUTHORIZATION OF APPROPRIATIONS.—

23 There are authorized to be appropriated $7,000,000 

24 for each of the fiscal years 2004 through 2008 for 

25 the purposes of paying the wages of inmates and 
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1 otherwise carrying out programs of the type de2 scribed in paragraph (1). 

3 (c) MAXIMIZING INMATE REHABILITATIVE OPPORTU4 NITIES THROUGH COGNITIVE ABILITIES ASSESSMENTS.—

5 (1) DEMONSTRATION PROGRAM AUTHORIZED.—

6 (A) IN GENERAL.—There is hereby estab7 lished within the Federal Bureau of Prisons a 

8 program to be known as the ‘‘Cognitive Abili9 ties Assessment Demonstration Program’’. The 

10 purpose of the demonstration program is to de11 termine the effectiveness of a program that as12 sesses the cognitive abilities and perceptual 

13 skills of Federal inmates to maximize the bene14 fits of various rehabilitative opportunities de15 signed to prepare each inmate for a successful 

16 return to society and reduce recidivism. The 

17 demonstration program shall be undertaken by 

18 a contractor with a demonstrated record of ena19 bling the behavioral and academic improvement 

20 of adults through the use of research-based sys21 tems that maximize the development of both the 

22 cognitive and perceptual capabilities of a par23 ticipating individual, including adults in a cor24 rectional setting. 
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1 (B) SCOPE OF DEMONSTRATION PRO2 GRAM.—The demonstration program shall to 

3 the maximum extent practicable, be—

4 (i) conducted during a period of three 

5 consecutive fiscal years, commencing dur6 ing fiscal year 2004; 

7 (ii) conducted at 12 Federal correc8 tional institutions; and 

9 (iii) offered to 6,000 inmates, who are 

10 categorized as minimum security or less, 

11 and are within five years of release. 

12 (2) AUTHORIZATION OF APPROPRIATIONS.—

13 There is authorized to be appropriated $3,000,000 

14 in each of the three fiscal years after fiscal year 

15 2003, to remain available until expended, for the 

16 purposes of conducting the demonstration program 

17 authorized by subsection (a). 

18 (d) PRERELEASE EMPLOYMENT ASSISTANCE.—

19 (1) IN GENERAL.—The Director of the Bureau 

20 of Prisons shall, to the maximum extent practicable, 

21 afford to inmates opportunities to participate in pro22 grams and activities designed to help prepare such 

23 inmates to obtain employment upon release. 

24 (2) PRERELEASE EMPLOYMENT PLACEMENT

25 ASSISTANCE.—Such prerelease employment place-
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1 ment assistance required by subsection (a) shall in2 clude—

3 (A) training in the preparation of resumes 

4 and job applications; 

5 (B) training in interviewing skills; 

6 (C) training and assistance in job search 

7 techniques; 

8 (D) conduct of job fairs; and 

9 (E) such other methods deemed appro10 priate by the Director of the Bureau of Prisons. 

11 (3) PRIORITY PARTICIPATION.—Priority in pro12 gram participation shall be accorded to inmates who 

13 are participating in work opportunities afforded by 

14 Federal Prison Industries and are within 24 months 

15 of release from incarceration. 

16 (e) PROVIDING ADDITIONAL OPPORTUNITIES FOR

17 POST INCARCERATION VOCATIONAL AND REMEDIAL EDU18 CATIONAL OPPORTUNITIES FOR INMATES.—

19 (1) FEDERAL REENTRY CENTER DEMONSTRA20 TION.—

21 (A) AUTHORITY AND ESTABLISHMENT OF

22 DEMONSTRATION PROJECT.—From funds made 

23 available to carry out this subsection, the Attor24 ney General, in consultation with the Director 

25 of the Administrative Office of the United 
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1 States Courts, shall establish the Federal Re2 entry Center Demonstration project. The 

3 project shall involve appropriate prisoners from 

4 the Federal prison population and shall utilize 

5 community corrections facilities, home confine6 ment, and a coordinated response by Federal 

7 agencies to assist participating prisoners in pre8 paring for and adjusting to reentry into the 

9 community. 

10 (B) PROJECT ELEMENTS.—The project au11 thorized by subparagraph (A) shall include the 

12 following core elements: 

13 (i) A Reentry Review Team for each 

14 prisoner, consisting of representative from 

15 the Bureau of Prisons, the United States 

16 Probation System, the United States Pa17 role Commission, and the relevant commu18 nity corrections facility, who shall initially 

19 meet with the prisoner to develop a reentry 

20 plan tailored to the needs of the prisoner. 

21 (ii) A system of graduated levels of 

22 supervision within the community correc23 tions facility to promote community safety, 

24 provide incentives for prisoners to complete 

25 the reentry plan, including victim restitu-
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1 tion, and provide a reasonable method for 

2 imposing sanctions for a prisoner’s viola3 tion of the conditions of participation in 

4 the project. 

5 (iii) Substance abuse treatment and 

6 aftercare, mental and medical health treat7 ment and aftercare, vocational and edu8 cational training, life skills instruction, 

9 conflict resolution skills training, batterer 

10 intervention programs, assistance obtaining 

11 suitable affordable housing, and other pro12 gramming to promote effective reintegra13 tion into the community as needed. 

14 (C) PROBATION OFFICERS.—From funds 

15 made available to carry out this subsection, the

16 Director of the Administrative Office of the 

17 United States Courts shall assign one or more 

18 probation officers from each participating judi19 cial district to the Reentry Demonstration 

20 project. Such officers shall be assigned to and 

21 stationed at the community corrections facility 

22 and shall serve on the Reentry Review Teams. 

23 (D) PROJECT DURATION.—The Reentry 

24 Center Demonstration project shall begin not 

25 later than 6 months following the availability of 
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1 funds to carry out this subsection, and shall 

2 last 3 years. 

3 (2) DEFINITIONS.—For the purposes of this 

4 subsection, the term ‘‘appropriate prisoner’’ shall 

5 mean a person who is considered by prison authori6 ties—

7 (A) to pose a medium to high risk of com8 mitting a criminal act upon reentering the com9 munity; and 

10 (B) to lack the skills and family support 

11 network that facilitate successful reintegration 

12 into the community. 

13 (3) AUTHORIZATION OF APPROPRIATIONS.—To 

14 carry out this subsection, there are authorized to be 

15 appropriated, to remain available until expended—

16 (A) to the Federal Bureau of Prisons—

17 (i) $1,375,000 for fiscal year 2004; 

18 (ii) $1,110,000 for fiscal year 2005; 

19 (iii) $1,130,000 for fiscal year 2006; 

20 (iv) $1,155,000 for fiscal year 2007; 

21 and 

22 (v) $1,230,000 for fiscal year 2008; 

23 and 

24 (B) to the Federal Judiciary—

25 (i) $3,380,000 for fiscal year 2004; 
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1 (ii) $3,540,000 for fiscal year 2005; 

2 (iii) $3,720,000 for fiscal year 2006; 

3 (iv) $3,910,000 for fiscal year 2007; 

4 and 

5 (v) $4,100,000 for fiscal year 2008.

6 SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS. 

7 Section 4121 of title 18, United States Code, is 

8 amended to read as follows:

9 ‘‘§ 4121. Federal Prison Industries; Board of Direc10 tors: executive management 

11 ‘‘(a) Federal Prison Industries is a government cor12 poration of the District of Columbia organized to carry 

13 on such industrial operations in Federal correctional insti14 tutions as authorized by its Board of Directors. The man15 ner and extent to which such industrial operations are car16 ried on in the various Federal correctional institutions 

17 shall be determined by the Attorney General. 

18 ‘‘(b)(1) The corporation shall be governed by a board 

19 of 11 directors appointed by the President. 

20 ‘‘(2) In making appointments to the Board, the 

21 President shall assure that 3 members represent the busi22 ness community, 3 members represent organized labor, 1 

23 member shall have special expertise in inmate rehabilita24 tion techniques, 1 member represents victims of crime, 1 

25 member represents the interests of Federal inmate work-
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1 ers, and 2 additional members whose background and ex2 pertise the President deems appropriate. The members of 

3 the Board representing the business community shall in4 clude, to the maximum extent practicable, representation 

5 of firms furnishing services as well as firms producing 

6 products, especially from those industry categories from 

7 which Federal Prison Industries derives substantial sales. 

8 The members of the Board representing organized labor 

9 shall, to the maximum practicable, include representation 

10 from labor unions whose members are likely to be most 

11 affected by the sales of Federal Prison Industries. 

12 ‘‘(3) Each member shall be appointed for a term of 

13 5 years, except that of members first appointed—

14 ‘‘(A) 2 members representing the business com15 munity shall be appointed for a term of 3 years; 

16 ‘‘(B) 2 members representing labor shall be ap17 pointed for a term of 3 years; 

18 ‘‘(C) 2 members whose background and exper19 tise the President deems appropriate for a term of 

20 3 years; 

21 ‘‘(D) 1 member representing victims of crime 

22 shall be appointed for a term of 3 years; 

23 ‘‘(E) 1 member representing the interests of 

24 Federal inmate workers shall be appointed for a 

25 term of 3 years; 
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1 ‘‘(F) 1 member representing the business com2 munity shall be appointed for a term of 4 years; 

3 ‘‘(G) 1 member representing the business com4 munity shall be appointed for a term of 4 years; and 

5 ‘‘(H) the members having special expertise in 

6 inmate rehabilitation techniques shall be appointed 

7 for a term of 5 years. 

8 ‘‘(4) The President shall designate 1 member of the 

9 Board as Chairperson. The Chairperson may designate a 

10 Vice Chairperson. 

11 ‘‘(5) Members of the Board may be reappointed. 

12 ‘‘(6) Any vacancy on the Board shall be filled in the 

13 same manner as the original appointment. Any member 

14 appointed to fill a vacancy occurring before the expiration 

15 of the term for which the member’s predecessor was ap16 pointed shall be appointed for the remainder of that term. 

17 ‘‘(7) The members of the Board shall serve without 

18 compensation. The members of the Board shall be allowed 

19 travel expenses, including per diem in lieu of subsistence, 

20 at rates authorized for employees of agencies under sub21 chapter I of chapter 57 of title 5, United States Code, 

22 to attend meetings of the Board and, with the advance 

23 approval of the Chairperson of the Board, while otherwise 

24 away from their homes or regular places of business for 

25 purposes of duties as a member of the Board. 
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1 ‘‘(8)(A) The Chairperson of the Board may appoint 

2 and terminate any personnel that may be necessary to en3 able the Board to perform its duties.

4 ‘‘(B) Upon request of the Chairperson of the Board, 

5 a Federal agency may detail a Federal Government em6 ployee to the Board without reimbursement. Such detail 

7 shall be without interruption or loss of civil service status 

8 or privilege. 

9 ‘‘(9) The Chairperson of the Board may procure tem10 porary and intermittent services under section 3109(b) of 

11 title 5, United States Code. 

12 ‘‘(c) The Director of the Bureau of Prisons shall 

13 serve as Chief Executive Officer of the Corporation. The

14 Director shall designate a person to serve as Chief Oper15 ating Officer of the Corporation.’’. 

16 SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXI17 BILITY TO FEDERAL PRISON INDUSTRY OP18 ERATIONS. 

19 Section 4122(b)(3) of title 18, United States Code, 

20 is amended—

21 (1) by striking ‘‘(3)’’ and inserting ‘‘(3)(A)’’; 

22 and 

23 (2) by adding at the end the following new 

24 paragraphs: 
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1 ‘‘(B) Federal Prison Industries may locate more than 

2 one workshop at a Federal correctional facility. 

3 ‘‘(C) Federal Prison Industries may operate a work4 shop outside of a correctional facility if all of the inmates 

5 working in such workshop are classified as minimum secu6 rity inmates.’’. 

7 SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AU8 THORITY. 

9 Any correctional officer or other employee of Federal 

10 Prison Industries being paid with nonappropriated funds 

11 who would be separated from service because of a reduc12 tion in the net income of Federal Prison Industries during 

13 any fiscal year specified in section 4(e)(1) shall be—

14 (1) eligible for appointment (or reappointment) 

15 in the competitive service pursuant to title 5, United 

16 States Code; 

17 (2) registered on a Bureau of Prisons reemploy18 ment priority list; and 

19 (3) given priority for any other position within 

20 the Bureau of Prisons for which such employee is 

21 qualified.

22 SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CON23 GRESS. 

24 Section 4127 of title 18, United States Code, is 

25 amended to read as follows: 
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1 ‘‘§ 4127. Federal Prison Industries report to Congress 

2 ‘‘(a) IN GENERAL.—Pursuant to chapter 91 of title 

3 31, the board of directors of Federal Prison Industries 

4 shall submit an annual report to Congress on the conduct 

5 of the business of the corporation during each fiscal year 

6 and the condition of its funds during the fiscal year. 

7 ‘‘(b) CONTENTS OF REPORT.—In addition to the 

8 matters required by section 9106 of title 31, and such 

9 other matters as the board considers appropriate, a report 

10 under subsection (a) shall include—

11 ‘‘(1) a statement of the amount of obligations 

12 issued under section 4129(a)(1) of this title during 

13 the fiscal year; 

14 ‘‘(2) an estimate of the amount of obligations 

15 that will be issued in the following fiscal year; 

16 ‘‘(3) an analysis of—

17 ‘‘(A) the corporation’s total sales for each 

18 specific product and type of service sold to the 

19 Federal agencies and the commercial market; 

20 ‘‘(B) the total purchases by each Federal 

21 agency of each specific product and type of 

22 service; 

23 ‘‘(C) the corporation’s share of such total 

24 Federal Government purchases by specific prod25 uct and type of service; and 
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1 ‘‘(D) the number and disposition of dis2 putes submitted to the heads of the Federal de3 partments and agencies pursuant to section 

4 4124(e) of this title; 

5 ‘‘(4) an analysis of the inmate workforce that 

6 includes—

7 ‘‘(A) the number of inmates employed; 

8 ‘‘(B) the number of inmates utilized to 

9 produce products or furnish services sold in the 

10 commercial market; 

11 ‘‘(C) the number and percentage of em12 ployed inmates by the term of their incarcer13 ation; and 

14 ‘‘(D) the various hourly wages paid to in15 mates employed with respect to the production 

16 of the various specific products and types of 

17 services authorized for production and sale to 

18 Federal agencies and in the commercial market; 

19 and 

20 ‘‘(5) data concerning employment obtained by 

21 former inmates upon release to determine whether 

22 the employment provided by Federal Prison Indus23 tries during incarceration provided such inmates 

24 with knowledge and skill in a trade or occupation 
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1 that enabled such former inmate to earn a livelihood 

2 upon release. 

3 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re4 port under subsection (a) shall be made available to the 

5 public at a price not exceeding the cost of printing the 

6 report.’’.

7 SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EF8 FECTS OF ELIMINATING THE FEDERAL PRIS9 ON INDUSTRIES MANDATORY SOURCE AU10 THORITY. 

11 (a) STUDY REQUIRED.—The Comptroller General 

12 shall undertake to have an independent study conducted 

13 on the effects of eliminating the Federal Prison Industries 

14 mandatory source authority. 

15 (b) SOLICITATION OF VIEWS.—The Comptroller Gen16 eral shall ensure that in developing the statement of work 

17 and the methodology for the study, the views and input 

18 of private industry, organized labor groups, Members and 

19 staff of the relevant Congressional committees, officials of 

20 the executive branch, and the public are solicited. 

21 (c) SUBMISSION.—Not later than January 31, 2005, 

22 the Comptroller General shall submit the results of the 

23 study to Congress, including any recommendations for leg24 islation. 
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1 SEC. 16. DEFINITIONS. 

2 Chapter 307 of title 18, United States Code, is 

3 amended by adding at the end the following new section: 

4 ‘‘§ 4131. Definitions

5 ‘‘As used in this chapter—

6 ‘‘(1) the term ‘assembly’ means the process of 

7 uniting or combining articles or components (includ8 ing ancillary finished components or assemblies) so 

9 as to produce a significant change in form or utility, 

10 without necessarily changing or altering the compo11 nent parts; 

12 ‘‘(2) the term ‘current market price’ means, 

13 with respect to a specific product, the fair market 

14 price of the product within the meaning of section 

15 15(a) of the Small Business Act (15 U.S.C. 644(a)),

16 at the time that the contract is to be awarded, 

17 verified through appropriate price analysis or cost 

18 analysis, including any costs relating to transpor19 tation or the furnishing of any ancillary services; 

20 ‘‘(3) the term ‘import-sensitive product’ means 

21 a product which, according to Department of Com22 merce data, has experienced competition from im23 ports at an import to domestic production ratio of 

24 25 percent or greater; 

25 ‘‘(4) the term ‘labor-intensive manufacture’ 

26 means a manufacturing activity in which the value 
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1 of inmate labor constitutes at least 10 percent of the 

2 estimate unit cost to produce the item by Federal 

3 Prison Industries; 

4 ‘‘(5) the term ‘manufacture’ means the process 

5 of fabricating from raw or prepared materials, so as 

6 to impart to those materials new forms, qualities, 

7 properties, and combinations;

8 ‘‘(6) the term ‘reasonable share of the market’ 

9 means a share of the total purchases by the Federal 

10 departments and agencies, as reported to the Fed11 eral Procurement Data System for—

12 ‘‘(A) any specific product during the 3 pre13 ceding fiscal years, that does not exceed 20 per14 cent of the Federal market for the specific 

15 product; and 

16 ‘‘(B) any specific service during the 3 pre17 ceding fiscal years, that does not exceed 5 per18 cent of the Federal market for the specific serv19 ice; and 

20 ‘‘(7) the term ‘services’ has the meaning given 

21 the term ‘service contract’ by section 37.101 of the 

22 Federal Acquisition Regulation (48 C.F.R. 36.102), 

23 as in effect on July 1, 2002.’’. 

24 SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES. 

25 (a) FEDERAL ACQUISITION REGULATION.—
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1 (1) PROPOSED REVISIONS.—Proposed revisions 

2 to the Governmentwide Federal Acquisition Regula3 tion to implement the amendments made by this Act 

4 shall be published not later than 60 days after the 

5 date of the enactment of this Act and provide not 

6 less than 60 days for public comment. 

7 (2) FINAL REGULATIONS.—Final regulations 

8 shall be published not later than 180 days after the 

9 date of the enactment of this Act and shall be effec10 tive on the date that is 30 days after the date of 

11 publication. 

12 (3) PUBLIC PARTICIPATION.—The proposed 

13 regulations required by subsection (a) and the final 

14 regulations required by subsection (b) shall afford 

15 an opportunity for public participation in accordance 

16 with section 22 of the Office of Federal Procurement 

17 Policy Act (41 U.S.C. 418b). 

18 (b) BOARD OF DIRECTORS.—

19 (1) IN GENERAL.—The Board of Directors of 

20 Federal Prison Industries shall issue regulations de21 fining the terms specified in paragraph (2). 

22 (2) TERMS TO BE DEFINED.—The Board of Di23 rectors shall issue regulations for the following 

24 terms: 

25 (A) Prison-made product. 
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1 (B) Prison-furnished service. 

2 (C) Specific product. 

3 (D) Specific service. 

4 (3) SCHEDULE FOR REGULATORY DEFINI5 TIONS.—

6 (A) Proposed regulations relating to the 

7 matter described in subsection (b)(2) shall be 

8 published not later than 60 days after the date 

9 of enactment of this Act and provide not less 

10 than 60 days for public comment. 

11 (B) Final regulations relating to the mat12 ters described in subsection (b)(2) shall be pub13 lished not less than 180 days after the date of 

14 enactment of this Act and shall be effective on 

15 the date that is 30 days after the date of publi16 cation. 

17 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

18 PARTICIPATION AND SCRUTINY.—

19 (A) ADMINISTRATIVE PROCEDURE ACT.—

20 Regulations issued by the Board of Directors 

21 shall be subject to notice and comment rule22 making pursuant to section 553 of title 5, 

23 United States Code. Unless determined wholly 

24 impracticable or unnecessary by the Board of 
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1 Directors, the public shall be afforded 60 days 

2 for comment on proposed regulations. 

3 (B) ENHANCED OUTREACH.—The Board 

4 of Directors shall use means designed to most 

5 effectively solicit public comment on proposed 

6 regulations, procedures, and policies and to in7 form the affected public of final regulations, 

8 procedures, and policies.

9 (C) OPEN MEETING PROCESSES.—The 

10 Board of Directors shall take all actions relat11 ing to the adoption of regulations, operating 

12 procedures, guidelines, and any other matter re13 lating to the governance and operation of Fed14 eral Prison Industries based on deliberations 

15 and a recorded vote conducted during a meeting 

16 open to the public, unless closed pursuant to 

17 section 552(b) of title 5, United States Code. 

18 SEC. 18. RULE OF CONSTRUCTION. 

19 Subsection (e) of section 4124 of title 18, United 

20 States Code, as amended by section 2, is not intended to 

21 alter any rights of any offeror other than Federal Prison 

22 Industries to file a bid protest in accordance with other 

23 law or regulation in effect on the date of the enactment 

24 of this Act. 
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1 SEC. 19. EFFECTIVE DATE AND APPLICABILITY. 

2 (a) EFFECTIVE DATE.—Except as provided in sub3 section (b), this Act and the amendments made by this 

4 Act shall take effect on the date of enactment of this Act. 

5 (b) APPLICABILITY.—Section 4124 of title 18, United 

6 States Code, as amended by section 2, shall apply to any 

7 requirement for a product or service offered by Federal 

8 Prison Industries needed by a Federal department or 

9 agency after the effective date of the final regulations 

10 issued pursuant to section 17(a)(2), or after September 

11 30, 2004, whichever is earlier. 

12 SEC. 20. CLERICAL AMENDMENTS. 

13 The table of sections for chapter 307 of title 18, 

14 United States Code, is amended—

15 (1) by amending the item relating to section 

16 4121 to read as follows:

‘‘4121. Federal Prison Industries; Board of Directors: executive management.’’;

17 (2) by amending the item relating to section 

18 4124 to read as follows:

‘‘4124. Governmentwide procurement policy relating to purchases from Federal 

Prison Industries.’’;

19 (3) by amending the item relating to section 

20 4127 to read as follows:

‘‘4127. Federal Prison Industries report to Congress.’’;

21 and

22 (4) by adding at the end the following new 

23 items:
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‘‘4130. Construction of provisions. 

‘‘4131. Definitions.’’.

Æ