IB 

Union Calendar No. 165

108TH CONGRESS 

1ST SESSION H. R. 1829

[Report No. 108–286] 

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 
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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) 

introduced the following bill; which was referred to the Committee on the 

Judiciary 

SEPTEMBER 25, 2003

Additional sponsors: Mr. KING of Iowa, Mr. FROST, Mrs. BLACKBURN, Mr. 

WEINER, Mr. JENKINS, Mr. STENHOLM, Mr. MCINNIS, Mr. GUTIERREZ, 

Mr. LANTOS, Mr. UDALL of Colorado, Mr. GORDON, Mr. ISRAEL, Ms. 

LORETTA SANCHEZ of California, Mr. GONZALEZ, Mr. MILLER of North 

Carolina, Mr. LATHAM, Mr. FEENEY, Mr. MICHAUD, Mr. NUSSLE, Mr. 

HOEFFEL, Mr. MCHUGH, Mr. LEVIN, Mr. BEAUPREZ, Ms. CARSON of Indiana, Mr. SHUSTER, Mr. STUPAK, Mr. CARTER, Mr. WELDON of Florida, Ms. LINDA T. SA ́NCHEZ of California, Mr. RAHALL, Ms. ESHOO, Mr. 

PLATTS, Mr. MEEHAN, Mr. BARRETT of South Carolina, Mr. DOYLE, Mr. 

FOLEY, Mr. TAYLOR of North Carolina, Mr. KIRK, and Ms. KILPATRICK

SEPTEMBER 25, 2003 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on April 12, 2003] 

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 
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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 Act 

6 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. 

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 Industries 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. Sense of Congress. 

Sec. 17. Definitions. 

Sec. 18. Implementing regulations and procedures. 

Sec. 19. Rule of construction. 

Sec. 20. Effective date and applicability. 

Sec. 21. Clerical amendments.
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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 amend5 ed to read as follows:

6 ‘‘§ 4124. Governmentwide procurement policy relating 

7 to purchases from Federal Prison Indus8 tries 

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 AND

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

16 Federal department or agency has a requirement for a spe17 cific product or service that is authorized to be offered for 

18 sale by Federal Prison Industries, in accordance with sec19 tion 4122 of this title, and is listed in the catalog referred 

20 to in subsection (g), the procurement activity shall solicit 

21 an offer from Federal Prison Industries, if the purchase is 

22 expected to be in excess of the micro-purchase threshold (as 

23 defined by section 32(f) of the Office of Federal Procurement 

24 Policy Act (41 U.S.C. 428(f))). 

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

26 be made using competitive procedures in accordance with 
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1 the applicable evaluation factors, unless a determination is 

2 made by the Attorney General pursuant to paragraph (3) 

3 or an award using other than competitive procedures is au4 thorized pursuant to paragraph (7). 

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

6 Federal Prison Industries on a noncompetitive basis for the 

7 award of a contract if the Attorney General determines 

8 that—

9 ‘‘(A) Federal Prison Industries cannot reason10 ably expect fair consideration to receive the contract 

11 award on a competitive basis; and 

12 ‘‘(B) the contract award is necessary to main13 tain work opportunities otherwise unavailable at the 

14 penal or correctional facility at which the contract is 

15 to be performed to prevent circumstances that could 

16 reasonably be expected to significantly endanger the 

17 safe and effective administration of such facility. 

18 ‘‘(4) Except in the case of an award to be made pursu19 ant to paragraph (3), a contract award shall be made with 

20 Federal Prison Industries only if the contracting officer for 

21 the procurement activity determines that—

22 ‘‘(A) the specific product or service to be fur23 nished will meet the requirements of the procurement 

24 activity (including any applicable prequalification 

25 requirements and all specified commercial or govern-
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1 mental standards pertaining to quality, testing, safe2 ty, serviceability, and warranties); 

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

4 reasonably expected; and 

5 ‘‘(C) the contract price does not exceed a current 

6 market price. 

7 ‘‘(5) A determination by the Attorney General pursu8 ant to paragraph (3) shall be—

9 ‘‘(A) supported by specific findings by the war10 den of the penal or correctional institution at which 

11 a Federal Prison Industries workshop is scheduled to 

12 perform the contract; 

13 ‘‘(B) supported by specific findings by Federal 

14 Prison Industries regarding why it does not expect to 

15 win the contract on a competitive basis; and 

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

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

18 of the Federal Property and Administrative Services 

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

20 ‘‘(6) If the Attorney General has not made the deter21 mination described in paragraph (3) within 30 days after 

22 Federal Prison Industries has been informed of a con23 tracting opportunity by a procurement activity, the pro24 curement activity may proceed to conduct a procurement 

25 for the product or service in accordance with the procedures 
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1 generally applicable to such procurements by the procure2 ment activity. 

3 ‘‘(7) A contract award may be made to Federal Prison 

4 Industries using other than competitive procedures if such 

5 product or service is only available from Federal Prison 

6 Industries and the contract may be awarded under the au7 thority of section 2304(c)(1) of title 10 or section 303(c) 

8 of the Federal Property and Administrative Services Act 

9 of 1949 (41 U.S.C. 252(c)(1)), as may be applicable, and 

10 pursuant to the justification and approval requirements re11 lating to such noncompetitive procurements specified by law 

12 and the Governmentwide Federal Acquisition Regulation. 

13 ‘‘(c) OFFERS FROM FEDERAL PRISON INDUSTRIES.—

14 A timely offer received from Federal Prison Industries to 

15 furnish a product or service to a Federal department or 

16 agency shall be considered for award without limitation as 

17 to the dollar value of the proposed purchase. 

18 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS19 TRIES.—Federal Prison Industries shall perform its con20 tractual obligations under a contract awarded by a Federal 

21 department or agency to the same extent as any other con22 tractor. 

23 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI24 SION.—(1) A decision by a contracting officer regarding the 

25 award of a contract to Federal Prison Industries or relating 
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1 to the performance of such contract shall be final, unless 

2 reversed on appeal pursuant to paragraph (2) or (3). 

3 ‘‘(2) The Chief Executive Officer of Federal Prison In4 dustries may appeal to the head of a Federal department 

5 or agency a decision by a contracting officer not to award 

6 a contract to Federal Prison Industries pursuant to sub7 section (b)(4). The decision of the head of a Federal depart8 ment or agency on appeal shall be final. 

9 ‘‘(3) A dispute between Federal Prison Industries and 

10 a procurement activity regarding performance of a contract 

11 shall be subject to—

12 ‘‘(A) alternative means of dispute resolution pur13 suant to subchapter IV of chapter 5 of title 5; or 

14 ‘‘(B) final resolution by the board of contract ap15 peals having jurisdiction over the procurement activi16 ty’s contract performance disputes pursuant to the 

17 Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.). 

18 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de19 partment or agency shall report purchases from Federal 

20 Prison Industries to the Federal Procurement Data System 

21 (as referred to in section 6(d)(4) of the Office of Federal 

22 Procurement Policy Act (41 U.S.C. 405(d)(4))) in the same 

23 manner as it reports to such System any acquisition in 

24 an amount in excess of the simplified acquisition threshold 
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1 (as defined by section 4(11) of the Office of Federal Procure2 ment Policy Act (41 U.S.C. 403(11))). 

3 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison Indus4 tries shall publish and maintain a catalog of all specific 

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

6 Such catalog shall be periodically revised as products and 

7 services are added or deleted by its board of directors (in 

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

9 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Prison 

10 Industries shall comply with Federal occupational, health, 

11 and safety standards with respect to the operation of its 

12 industrial operations.’’. 

13 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

14 PROPOSALS BY FEDERAL PRISON INDUS15 TRIES. 

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

17 amended—

18 (1) by redesignating paragraph (6) as para19 graph (12); and 

20 (2) by striking paragraphs (4) and (5) and in21 serting the following new paragraphs: 

22 ‘‘(4) A decision to authorize Federal Prison Industries 

23 to offer a new specific product or specific service or to ex24 pand the production of an existing product or service shall 

25 be made by its board of directors in conformance with the 
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1 requirements of subsections (b), (c), (d), and (e) of section 

2 553 of title 5, and this chapter. 

3 ‘‘(5)(A) Whenever Federal Prison Industries proposes 

4 to offer for sale a new specific product or specific service 

5 or to expand production of a currently authorized product 

6 or service, the Chief Operating Officer of Federal Prison 

7 Industries shall submit an appropriate proposal to the 

8 board of directors and obtain the board’s approval before 

9 initiating any such expansion. The proposal submitted to 

10 the board shall include a detailed analysis of the probable 

11 impact of the proposed expansion of sales within the Fed12 eral market by Federal Prison Industries on private sector 

13 firms and their non-inmate workers. 

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

15 shall be performed by an interagency team on a reimburs16 able basis or by a private contractor paid by Federal Prison 

17 Industries. 

18 ‘‘(ii) If the analysis is to be performed by an inter19 agency team, such team shall be led by the Administrator 

20 of the Small Business Administration or the designee of 

21 such officer with representatives of the Department of 

22 Labor, the Department of Commerce, and the Federal Pro23 curement Data Center. 

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

25 contractor, the selection of the contractor and the adminis-
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1 tration of the contract shall be conducted by one of the enti2 ties referenced in clause (ii) as an independent executive 

3 agent for the board of directors. Maximum consideration 

4 shall be given to any proposed statement of work furnished 

5 by the Chief Operating Officer of Federal Prison Industries. 

6 ‘‘(C) The analysis required by subparagraph (A) shall 

7 identify and consider—

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

9 the requirements of the Federal Government for the 

10 specific product or specific service; 

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

12 market for the specific product or specific service cur13 rently furnished by small businesses during the pre14 vious 3 fiscal years; 

15 ‘‘(iii) the share of the Federal market for the spe16 cific product or specific service projected for Federal 

17 Prison Industries for the fiscal year in which produc18 tion or performance will commence or expand and the 

19 subsequent 4 fiscal years; 

20 ‘‘(iv) whether the industry producing the specific 

21 product or specific service in the private sector—

22 ‘‘(I) has an unemployment rate higher than 

23 the national average; or 
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1 ‘‘(II) has a rate of unemployment for work2 ers that has consistently shown an increase dur3 ing the previous 5 years; 

4 ‘‘(v) whether the specific product is an import5 sensitive product; 

6 ‘‘(vi) the requirements of the Federal Government 

7 and the demands of entities other than the Federal 

8 Government for the specific product or service during 

9 the previous 3 fiscal years; 

10 ‘‘(vii) the projected growth or decline in the de11 mand of the Federal Government for the specific prod12 uct or specific service; 

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

14 the Federal Government for the specific product or 

15 service to sustain both Federal Prison Industries and 

16 private vendors; and 

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

18 new product or performance of a new service will pro19 vide inmates with the maximum opportunity to ac20 quire knowledge and skill in trades and occupations 

21 that will provide them with a means of earning a 

22 livelihood upon release. 

23 ‘‘(D)(i) The board of directors may not approve a pro24 posal to authorize the production and sale of a new specific 
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1 product or continued sale of a previously authorized prod2 uct unless—

3 ‘‘(I) the product to be furnished is a prison-made 

4 product; or 

5 ‘‘(II) the service to be furnished is to be per6 formed by inmate workers. 

7 ‘‘(ii) The board of directors may not approve a pro8 posal to authorize the production and sale of a new prison9 made product or to expand production of a currently au10 thorized product if the product is—

11 ‘‘(I) produced in the private sector by an indus12 try which has reflected during the previous year an 

13 unemployment rate above the national average; or 

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

15 ‘‘(iii) The board of directors may not approve a pro16 posal for inmates to provide a service in which an inmate 

17 worker has access to—

18 ‘‘(I) personal or financial information about in19 dividual private citizens, including information relat20 ing to such person’s real property, however described, 

21 without giving prior notice to such persons or class 

22 of persons to the greatest extent practicable; 

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

24 surface and subsurface infrastructure providing com25 munications, water and electrical power distribution, 
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1 pipelines for the distribution of natural gas, bulk pe2 troleum products and other commodities, and other 

3 utilities; or 

4 ‘‘(III) data that is classified. 

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

6 furnishing through inmate labor construction services, un7 less to be performed within a Federal correctional institu8 tion pursuant to the participation of an inmate in an ap9 prenticeship or other vocational education program teach10 ing the skills of the various building trades. 

11 ‘‘(II) For purposes of this clause, the term ‘construc12 tion’ has the meaning given such term by section 2.101 of 

13 the Federal Acquisition Regulation (48 C.F.R. part 2.101), 

14 as in effect on June 1, 2002, including the repair, alter15 ation, or maintenance of real property in being. 

16 ‘‘(6) To provide further opportunities for participation 

17 by interested parties, the board of directors shall—

18 ‘‘(A) give additional notice of a proposal to au19 thorize the production and sale of a new product or 

20 service, or expand the production of a currently au21 thorized product or service, in a publication designed 

22 to most effectively provide notice to private vendors 

23 and labor unions representing private sector workers 

24 who could reasonably be expected to be affected by ap25 proval of the proposal, which notice shall offer to fur-
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1 nish copies of the analysis required by paragraph (5) 

2 and shall solicit comment on the analysis; 

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

4 by paragraph (5) from trade associations representing 

5 vendors and labor unions representing private sector 

6 workers who could reasonably be expected to be af7 fected by approval of the proposal to authorize the 

8 production and sale of a new product or service (or 

9 expand the production of a currently authorized prod10 uct or service); and 

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

12 representative of an established trade association, 

13 labor union, or other private sector representatives to 

14 present comments on the proposal directly to the 

15 board of directors. 

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

17 all comments received on the expansion proposal. 

18 ‘‘(8) Based on the comments received on the initial ex19 pansion proposal, the Chief Operating Officer of Federal 

20 Prison Industries may provide the board of directors a re21 vised expansion proposal. If such revised proposal provides 

22 for expansion of inmate work opportunities in an industry 

23 different from that initially proposed, such revised proposal 

24 shall reflect the analysis required by paragraph (5)(C) and 
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1 be subject to the public comment requirements of paragraph 

2 (6). 

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

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

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

6 authorized product or service) and take any action with re7 spect to such proposal, during a meeting that is open to 

8 the public, unless closed pursuant to section 552(b) of title 

9 5. 

10 ‘‘(10) In conformity with the requirements of para11 graphs (5) through (9) of this subsection, the board of direc12 tors may—

13 ‘‘(A) authorize the donation of products produced 

14 or services furnished by Federal industries and avail15 able for sale; 

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

17 product or the furnishing of a new specific service for 

18 donation; or 

19 ‘‘(C) authorize a proposal to expand production 

20 of a currently authorized specific product or specific 

21 service in an amount in excess of a reasonable share 

22 of the market for such product or service, if—

23 ‘‘(i) a Federal agency or department, pur24 chasing such product or service, has requested 

25 that Federal Prison Industries be authorized to 
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1 furnish such product or service in amounts that 

2 are needed by such agency or department; or 

3 ‘‘(ii) the proposal is justified for other good 

4 cause and supported by at least eight members of 

5 the board.’’. 

6 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

7 (a) IN GENERAL.—Notwithstanding the requirements 

8 of section 4124 of title 18, United States Code (as amended 

9 by section 2 of this Act), a Federal department or agency

10 having a requirement for a product that is authorized for 

11 sale by Federal Prison Industries and is listed in its catalog 

12 (referred to in section 4124(g) of title 18, United States 

13 Code) shall first solicit an offer from Federal Prison Indus14 tries and make purchases on a noncompetitive basis in ac15 cordance with this section. 

16 (b) PREFERENTIAL SOURCE STATUS.—Subject to the 

17 limitations of subsection (d), a contract award shall be 

18 made on a noncompetitive basis to Federal Prison Indus19 tries if the contracting officer for the procurement activity 

20 determines that—

21 (1) the product offered by Federal Prison Indus22 tries will meet the requirements of the procurement 

23 activity (including commercial or governmental 

24 standards or specifications pertaining to design, per25 formance, testing, safety, serviceability, and warran-
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1 ties as may be imposed upon a private sector supplier 

2 of the type being offered by Federal Prison Indus3 tries); 

4 (2) timely performance of the contract by Fed5 eral Prison Industries can be reasonably expected; 

6 and 

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

8 and reasonable price. 

9 (c) CONTRACTUAL TERMS.—The terms and conditions 

10 of the contract and the price to be paid to Federal Prison 

11 Industries shall be determined by negotiation between Fed12 eral Prison Industries and the Federal agency making the 

13 purchase. The negotiated price shall not exceed a fair and 

14 reasonable price determined in accordance with the proce15 dures of the Federal Acquisition Regulation. 

16 (d) PERFORMANCE OF CONTRACTUAL OBLIGATIONS.—

17 (1) IN GENERAL.—Federal Prison Industries 

18 shall perform the obligations of the contract nego19 tiated pursuant to subsection (c). 

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

21 contracting activity and the Chief Operating Officer 

22 of Federal Prison Industries are unable to resolve a 

23 contract performance dispute to their mutual satisfac24 tion, such dispute shall be resolved pursuant to sec-
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1 tion 4124(e)(3) of title 18, United States Code (as 

2 added by section 2 of this Act). 

3 (e) LIMITATIONS ON USE OF AUTHORITY.—

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

5 made by Federal Prison Industries during the base 

6 period, the total dollar value of sales to the Govern7 ment made pursuant to subsection (b) and subsection 

8 (c) of this section shall not exceed—

9 (A) 90 percent in fiscal year 2005; 

10 (B) 85 percent in fiscal year 2006; 

11 (C) 70 percent in fiscal year 2007; 

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

13 (E) 40 percent in fiscal year 2009. 

14 (2) SALES WITHIN VARIOUS BUSINESS SEC15 TORS.—Use of the authority provided by subsections 

16 (b) and (c) shall not result in sales by Federal Prison 

17 Industries to the Government that are in excess of its 

18 total sales during the base year for each business sec19 tor. 

20 (3) LIMITATIONS RELATING TO SPECIFIC PROD21 UCTS.—Use of the authorities provided by subsections 

22 (b) and (c) shall not result in contract awards to Fed23 eral Prison Industries that are in excess of its total 

24 sales during the base period for such product. 
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1 (4) CHANGES IN DESIGN SPECIFICATIONS.—The 

2 limitations on sales specified in paragraphs (2) and 

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

4 cost of production of a specific product arising from 

5 changes in the design specification of such product di6 rected by the buying agency. 

7 (f) DURATION OF AUTHORITY.—The preferential con8 tracting authorities authorized by subsection (b) may not 

9 be used on or after October 1, 2009, and become effective 

10 on the effective date of the final regulations issued pursuant 

11 to section 18. 

12 (g) DEFINITIONS.—For the purposes of this section—

13 (1) the term ‘‘base period’’ means the total sales 

14 of Federal Prison Industries during the period Octo15 ber 1, 2001, and September 30, 2002 (Fiscal Year 

16 2002); 

17 (2) the term ‘‘business sectors’’ means the eight 

18 product/service business groups identified in the 2002 

19 Federal Prison Industries annual report as the Cloth20 ing and Textiles Business Group, the Electronics 

21 Business Group, the Fleet Management and Vehicular 

22 Components Business Group, the Graphics Business 

23 Group, the Industrial Products Business Group, the 

24 Office Furniture Business Group, the Recycling Ac-
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1 tivities Business Group, and the Services Business 

2 Group; and 

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

4 given the same meaning as, and be determined pursu5 ant to, part 15.8 of the Federal Acquisition Regula6 tion (48 C.F.R. 15.8). 

7 (h) FINDING BY ATTORNEY GENERAL WITH RESPECT

8 TO PUBLIC SAFETY.—(1) Not later than 60 days prior to 

9 the end of each fiscal year specified in subsection (e)(1), 

10 the Attorney General shall make a finding regarding the 

11 effects of the percentage limitation imposed by such sub12 section for such fiscal year and the likely effects of the limi13 tation imposed by such subsection for the following fiscal 

14 year. 

15 (2) The Attorney General’s finding shall include a de16 termination whether such limitation has resulted or is like17 ly to result in a substantial reduction in inmate industrial 

18 employment and whether such reductions, if any, present 

19 a significant risk of adverse effects on safe prison operation 

20 or public safety. 

21 (3) If the Attorney General finds a significant risk of 

22 adverse effects on either safe prison management or public 

23 safety, he shall so advise the Congress. 

24 (4) In advising the Congress pursuant to paragraph 

25 (3), the Attorney General shall make recommendations for 
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1 additional authorizations of appropriations to provide ad2 ditional alternative inmate rehabilitative opportunities and 

3 additional correctional staffing, as may be appropriate. 

4 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON5 TRACTOR. 

6 (a) IN GENERAL.—Federal Prison Industries is au7 thorized to enter into a contract with a Federal contractor 

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

9 produce products as a subcontractor or supplier in the per10 formance of a Federal procurement contract. The use of

11 Federal Prison Industries as a subcontractor or supplier 

12 shall be a wholly voluntary business decision by the Federal 

13 prime contractor or subcontractor, subject to any prior ap14 proval of subcontractors or suppliers by the contracting offi15 cer which may be imposed by the Federal Acquisition Regu16 lation or by the contract. 

17 (b) COMMERCIAL SALES PROHIBITED.—The authority 

18 provided by subsection (a) shall not result, either directly 

19 or indirectly, in the sale in the commercial market of a 

20 product or service resulting from the labor of Federal in21 mate workers in violation of section 1761(a) of title 18, 

22 United States Code. A Federal contractor (or subcontractor 

23 at any tier) using Federal Prison Industries as a subcon24 tractor or supplier in furnishing a commercial product pur25 suant to a Federal contract shall implement appropriate 
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1 management procedures to prevent introducing an inmate2 produced product into the commercial market. 

3 (c) PROHIBITIONS ON MANDATING SUBCONTRACTING

4 WITH FEDERAL PRISON INDUSTRIES.—Except as author5 ized under the Federal Acquisition Regulation, the use of 

6 Federal Prison Industries as a subcontractor or supplier 

7 of products or provider of services shall not be imposed upon 

8 prospective or actual Federal prime contractors or a sub9 contractors at any tier by means of—

10 (1) a contract solicitation provision requiring a 

11 contractor to offer to make use of Federal Prison In12 dustries, its products or services; 

13 (2) specifications requiring the contractor to use 

14 specific products or services (or classes of products or 

15 services) offered by Federal Prison Industries in the 

16 performance of the contract; 

17 (3) any contract modification directing the use 

18 of Federal Prison Industries, its products or services; 

19 or 

20 (4) any other means. 

21 SEC. 6. INMATE WAGES AND DEDUCTIONS. 

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

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

24 adding after paragraph (10) a new paragraph (11) as fol25 lows: 
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1 ‘‘(11)(A) The Board of Directors of Federal Prison In2 dustries shall prescribe the rates of hourly wages to be paid 

3 inmates performing work for or through Federal Prison In4 dustries. The Director of the Federal Bureau of Prisons 

5 shall prescribe the rates of hourly wages for other work as6 signments within the various Federal correctional institu7 tions. 

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

9 and considered for increase on not less than a biannual 

10 basis. 

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

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

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

14 the wages due for—

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

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

17 to court order; 

18 ‘‘(iii) payment of additional restitution for vic19 tims of the inmate’s crimes (at a rate not less than 

20 10 percent of gross wages); 

21 ‘‘(iv) allocations for support of the inmate’s fam22 ily pursuant to statute, court order, or agreement 

23 with the inmate; 
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1 ‘‘(v) allocations to a fund in the inmate’s name 

2 to facilitate such inmate’s assimilation back into soci3 ety, payable at the conclusion of incarceration; and 

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

5 by the Director of the Bureau of Prisons. 

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

7 Industries shall indicate in writing that such person—

8 ‘‘(i) is participating voluntarily; and 

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

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

11 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 

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

13 States Code, is amended in subsection (a), by striking ‘‘any 

14 goods, wares, or merchandise manufactured, produced, or 

15 mined’’ and inserting ‘‘products manufactured, services fur16 nished, or minerals mined’’. 

17 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

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

19 State or local jurisdiction of a State which is providing 

20 services for the commercial market through inmate labor on 

21 October 1, 2002, may continue to provide such commercial 

22 services until—

23 (1) the expiration date specified in the contract 

24 or other agreement with a commercial partner on Oc25 tober 1, 2002, or 
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1 (2) until September 30, 2005, if the prison work 

2 program is directly furnishing the services to the com3 mercial market. 

4 (c) APPROVAL REQUIRED FOR LONG-TERM OPER5 ATION.—A prison work program operated by a correctional 

6 institution operated by a State or local jurisdiction of a 

7 State may continue to provide inmate labor to furnish serv8 ices for sale in the commercial market after the dates speci9 fied in subsection (b) if such program has been certified 

10 pursuant to section 1761(c)(1) of title 18, United States 

11 Code, and is in compliance with the requirements of such 

12 subsection and its implementing regulations. 

13 SEC. 8. CONFORMING AMENDMENT. 

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

15 amended by striking ‘‘production of commodities’’ and in16 serting ‘‘production of products or furnishing of services’’. 

17 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

18 307. 

19 Chapter 307 of title 18, United States Code, is further 

20 amended by adding the following: 

21 ‘‘§ 4130. Construction of provisions 

22 ‘‘Nothing in this chapter shall be construed—

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

24 to—
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1 ‘‘(A) employment in a Federal Prison In2 dustries facility; or 

3 ‘‘(B) any particular wage, compensation, or 

4 benefit on demand, except as otherwise specifi5 cally provided by law or regulation; 

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

7 the purposes of any law or program; or

8 ‘‘(3) to establish any cause of action by or on be9 half of any inmate against the United States or any 

10 officer, employee, or contractor thereof.’’. 

11 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR12 TUNITIES FOR INMATES. 

13 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE14 LEASE-PREPARATION OPPORTUNITIES.—

15 (1) PROGRAM ESTABLISHED.—There is hereby 

16 established the Enhanced In-Prison Educational and 

17 Vocational Assessment and Training Program within 

18 the Federal Bureau of Prisons. 

19 (2) COMPREHENSIVE PROGRAM.—In addition to 

20 such other components as the Director of the Bureau 

21 of Prisons deems appropriate to reduce inmate idle22 ness and better prepare inmates for a successful re23 entry into the community upon release, the program 

24 shall provide—
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1 (A) in-prison assessments of inmates’ needs 

2 and aptitudes; 

3 (B) a full range of educational opportuni4 ties; 

5 (C) vocational training and apprentice6 ships; and 

7 (D) comprehensive release-readiness prepa8 ration. 

9 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

10 the purposes of carrying out the program established 

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

12 fiscal year after fiscal year 2003, to remain available 

13 until expended. Funds shall be allocated from the 

14 gross profits within the Federal Prison Industries 

15 Fund, and, to the extent such amounts are inad16 equate, from the General Treasury. 

17 (4) SCHEDULE FOR IMPLEMENTATION.—All com18 ponents of the program shall be established—

19 (A) in at least 25 percent of all Federal 

20 prisons not later than 2 years after the date of 

21 the enactment of this Act; 

22 (B) in at least 50 percent of all Federal 

23 prisons not later than 4 years after such date of 

24 enactment; 
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1 (C) in at least 75 percent of all Federal 

2 prisons not later than 6 years after such date of 

3 enactment; and 

4 (D) in all Federal prisons not later than 8 

5 years after such date of enactment. 

6 (b) INMATE WORK OPPORTUNITIES IN SUPPORT OF

7 NOT-FOR-PROFIT ENTITIES.—

8 (1) PROPOSALS FOR DONATION PROGRAMS.—The 

9 Chief Operating Officer of Federal Prison Industries 

10 shall develop and present to the Board of Directors of 

11 Federal Prison Industries proposals to have Federal 

12 Prison Industries donate products and services to eli13 gible entities that provide goods or services to low-in14 come individuals who would likely otherwise have dif15 ficulty purchasing such products or services in the 

16 commercial market. 

17 (2) SCHEDULE FOR SUBMISSION AND CONSIDER18 ATION OF DONATION PROGRAMS.—

19 (A) INITIAL PROPOSALS.—The Chief Oper20 ating Officer shall submit the initial group of 

21 proposals for programs of the type described in 

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

23 the enactment of this Act. The Board of Directors 

24 of Federal Prison Industries shall consider such 

25 proposals from the Chief Operating Officer not 
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1 later than the date that is 270 days after the 

2 date of the enactment of this Act. 

3 (B) ANNUAL OPERATING PLAN.—The Board 

4 of Directors of Federal Prison Industries shall 

5 consider proposals by the Chief Operating Officer 

6 for programs of the type described in paragraph 

7 (1) as part of the annual operating plan for Fed8 eral Prison Industries. 

9 (C) OTHER PROPOSALS.—In addition to 

10 proposals submitted by the Chief Operating Offi11 cer, the Board of Directors may, from time to 

12 time, consider proposals presented by prospective 

13 eligible entities. 

14 (3) DEFINITION OF ELIGIBLE ENTITIES.—For the 

15 purposes of this subsection, the term ‘‘eligible entity’’ 

16 means an entity—

17 (A) that is an organization described in sec18 tion 501(c)(3) of the Internal Revenue Code of 

19 1986 and exempt from taxation under section 

20 501(a) of such Code and that has been such an 

21 organization for a period of not less than 36 

22 months prior to inclusion in a proposal of the 

23 type described in paragraph (1), or 

24 (B) that is a religious organization de25 scribed in section 501(d) of such Code and ex-
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1 empt from taxation under section 501(a) of such 

2 Code. 

3 (4) AUTHORIZATION OF APPROPRIATIONS.—

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

5 for each of the fiscal years 2004 through 2008 for the 

6 purposes of paying the wages of inmates and other7 wise carrying out programs of the type described in 

8 paragraph (1). 

9 (c) MAXIMIZING INMATE REHABILITATIVE OPPORTU10 NITIES THROUGH COGNITIVE ABILITIES ASSESSMENTS.—

11 (1) DEMONSTRATION PROGRAM AUTHORIZED.—

12 (A) IN GENERAL.—There is hereby estab13 lished within the Federal Bureau of Prisons a 

14 program to be known as the ‘‘Cognitive Abilities 

15 Assessment Demonstration Program’’. The pur16 pose of the demonstration program is to deter17 mine the effectiveness of a program that assesses 

18 the cognitive abilities and perceptual skills of 

19 Federal inmates to maximize the benefits of var20 ious rehabilitative opportunities designed to pre21 pare each inmate for a successful return to soci22 ety and reduce recidivism. The demonstration 

23 program shall be undertaken by a contractor 

24 with a demonstrated record of enabling the be25 havioral and academic improvement of adults 
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1 through the use of research-based systems that 

2 maximize the development of both the cognitive 

3 and perceptual capabilities of a participating 

4 individual, including adults in a correctional 

5 setting. 

6 (B) SCOPE OF DEMONSTRATION PRO7 GRAM.—The demonstration program shall to the 

8 maximum extent practicable, be—

9 (i) conducted during a period of three 

10 consecutive fiscal years, commencing during 

11 fiscal year 2004; 

12 (ii) conducted at 12 Federal correc13 tional institutions; and 

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

15 categorized as minimum security or less, 

16 and are within five years of release. 

17 (C) REPORT ON RESULTS OF PROGRAM.—

18 Not later than 60 days after completion of the 

19 demonstration program, the Director shall sub20 mit to Congress a report on the results of the 

21 program. At a minimum, the report shall in22 clude an analysis of employment stability, sta23 bility of residence, and rates of recidivism 

24 among inmates who participated in the program 

25 after 18 months of release. 
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1 (2) AUTHORIZATION OF APPROPRIATIONS.—

2 There is authorized to be appropriated $3,000,000 in 

3 each of the three fiscal years after fiscal year 2003, 

4 to remain available until expended, for the purposes 

5 of conducting the demonstration program authorized 

6 by subsection (a). 

7 (d) PRERELEASE EMPLOYMENT ASSISTANCE.—

8 (1) IN GENERAL.—The Director of the Federal 

9 Bureau of Prisons shall, to the maximum extent prac10 ticable, afford to inmates opportunities to participate 

11 in programs and activities designed to help prepare 

12 such inmates to obtain employment upon release. 

13 (2) PRERELEASE EMPLOYMENT PLACEMENT AS14 SISTANCE.—Such prerelease employment placement 

15 assistance required by subsection (a) shall include—

16 (A) training in the preparation of resumes 

17 and job applications; 

18 (B) training in interviewing skills; 

19 (C) training and assistance in job search 

20 techniques; 

21 (D) conduct of job fairs; and 

22 (E) such other methods deemed appropriate 

23 by the Director. 

24 (3) PRIORITY PARTICIPATION.—Priority in pro25 gram participation shall be accorded to inmates who 
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1 are participating in work opportunities afforded by 

2 Federal Prison Industries and are within 24 months 

3 of release from incarceration. 

4 SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS. 

5 Section 4121 of title 18, United States Code, is amend6 ed to read as follows: 

7 ‘‘§ 4121. Federal Prison Industries; Board of Directors: 

8 executive management 

9 ‘‘(a) Federal Prison Industries is a government cor10 poration of the District of Columbia organized to carry on 

11 such industrial operations in Federal correctional institu12 tions as authorized by its Board of Directors. The manner 

13 and extent to which such industrial operations are carried 

14 on in the various Federal correctional institutions shall be 

15 determined by the Attorney General. 

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

17 of 11 directors appointed by the President. 

18 ‘‘(2) In making appointments to the Board, the Presi19 dent shall assure that 3 members represent the business 

20 community, 3 members represent organized labor, 1 member 

21 shall have special expertise in inmate rehabilitation tech22 niques, 1 member represents victims of crime, 1 member 

23 represents the interests of Federal inmate workers, and 2 

24 additional members whose background and expertise the 

25 President deems appropriate. The members of the Board 
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1 representing the business community shall include, to the 

2 maximum extent practicable, representation of firms fur3 nishing services as well as firms producing products, espe4 cially from those industry categories from which Federal 

5 Prison Industries derives substantial sales. The members of 

6 the Board representing organized labor shall, to the max7 imum practicable, include representation from labor unions 

8 whose members are likely to be most affected by the sales 

9 of Federal Prison Industries. 

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

11 5 years, except that of members first appointed—

12 ‘‘(A) 2 members representing the business com13 munity shall be appointed for a term of 3 years; 

14 ‘‘(B) 2 members representing labor shall be ap15 pointed for a term of 3 years; 

16 ‘‘(C) 2 members whose background and expertise 

17 the President deems appropriate for a term of 3 

18 years; 

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

20 shall be appointed for a term of 3 years; 

21 ‘‘(E) 1 member representing the interests of Fed22 eral inmate workers shall be appointed for a term of 

23 3 years; 

24 ‘‘(F) 1 member representing the business commu25 nity shall be appointed for a term of 4 years; 
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1 ‘‘(G) 1 member representing the business commu2 nity shall be appointed for a term of 4 years; and 

3 ‘‘(H) the members having special expertise in in4 mate rehabilitation techniques shall be appointed for 

5 a term of 5 years. 

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

7 Board as Chairperson. The Chairperson may designate a 

8 Vice Chairperson. 

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

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

11 same manner as the original appointment. Any member ap12 pointed to fill a vacancy occurring before the expiration of 

13 the term for which the member’s predecessor was appointed 

14 shall be appointed for the remainder of that term. 

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

16 compensation. The members of the Board shall be allowed 

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

18 at rates authorized for employees of agencies under sub19 chapter I of chapter 57 of title 5, United States Code, to 

20 attend meetings of the Board and, with the advance ap21 proval of the Chairperson of the Board, while otherwise 

22 away from their homes or regular places of business for pur23 poses 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 serve 

13 as Chief Executive Officer of the Corporation. The Director 

14 shall designate a person to serve as Chief Operating Officer 

15 of the Corporation.’’. 

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

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

20 amended—

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

22 and 

23 (2) by adding at the end the following new para24 graphs: 
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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 reduction 

12 in the net income of Federal Prison Industries during any 

13 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 amend25 ed 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 31, 

3 the board of directors of Federal Prison Industries shall sub4 mit an annual report to Congress on the conduct of the busi5 ness of the corporation during each fiscal year and the con6 dition of its funds during the fiscal year. 

7 ‘‘(b) CONTENTS OF REPORT.—In addition to the mat8 ters required by section 9106 of title 31, and such other 

9 matters as the board considers appropriate, a report under 

10 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 serv22 ice; 

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 disputes 

2 submitted to the heads of the Federal depart3 ments and agencies pursuant to section 4124(e) 

4 of this title; 

5 ‘‘(4) an analysis of the inmate workforce that in6 cludes—

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 of 

16 the various specific products and types of serv17 ices authorized for production and sale to Fed18 eral agencies and in the commercial market; and 

19 ‘‘(5) data concerning employment obtained by 

20 former inmates upon release to determine whether the 

21 employment provided by Federal Prison Industries 

22 during incarceration provided such inmates with 

23 knowledge and skill in a trade or occupation that en24 abled such former inmate to earn a livelihood upon 

25 release. 
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1 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re2 port under subsection (a) shall be made available to the 

3 public at a price not exceeding the cost of printing the re4 port.’’. 

5 SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EF6 FECTS OF ELIMINATING THE FEDERAL PRIS7 ON INDUSTRIES MANDATORY SOURCE AU8 THORITY. 

9 (a) STUDY REQUIRED.—The Comptroller General 

10 shall undertake to have an independent study conducted on 

11 the effects of eliminating the Federal Prison Industries 

12 mandatory source authority. 

13 (b) SOLICITATION OF VIEWS.—The Comptroller Gen14 eral shall ensure that in developing the statement of work 

15 and the methodology for the study, the views and input of 

16 private industry, organized labor groups, Members and staff 

17 of the relevant Congressional committees, officials of the ex18 ecutive branch, and the public are solicited. 

19 (c) SUBMISSION.—Not later than June 30, 2004, the 

20 Comptroller General shall submit the results of the study 

21 to Congress, including any recommendations for legislation. 

22 SEC. 16. SENSE OF CONGRESS. 

23 It is the sense of Congress that it is important to study 

24 the concept of implementing a ‘‘good time’’ release program 

25 for non-violent criminals in the Federal prison system. 
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1 SEC. 17. DEFINITIONS. 

2 Chapter 307 of title 18, United States Code, is amend3 ed 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 as 

9 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, with 

13 respect to a specific product, the fair market price of 

14 the product within the meaning of section 15(a) of the 

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

16 that the contract is to be awarded, verified through 

17 appropriate price analysis or cost analysis, including 

18 any costs relating to transportation or the furnishing 

19 of any ancillary services; 

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

21 product which, according to Department of Commerce 

22 data, has experienced competition from imports at an 

23 import to domestic production ratio of 25 percent or 

24 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 of 

5 fabricating from raw or prepared materials, so as to 

6 impart to those materials new forms, qualities, prop7 erties, 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 Federal 

11 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 prod15 uct; and 

16 ‘‘(B) any specific service during the 3 pre17 ceding fiscal years, that does not exceed 5 percent 

18 of the Federal market for the specific service; and 

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

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

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

22 in effect on July 1, 2002.’’. 

23 SEC. 18. IMPLEMENTING REGULATIONS AND PROCEDURES. 

24 (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 less 

6 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 effective 

10 on the date that is 30 days after the date of publica11 tion. 

12 (3) PUBLIC PARTICIPATION.—The proposed regu13 lations required by subsection (a) and the final regu14 lations required by subsection (b) shall afford an op15 portunity for public participation in accordance with 

16 section 22 of the Office of Federal Procurement Policy 

17 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 terms: 

24 (A) Prison-made product. 

25 (B) Prison-furnished service. 
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1 (C) Specific product. 

2 (D) Specific service. 

3 (3) SCHEDULE FOR REGULATORY DEFINI4 TIONS.—

5 (A) Proposed regulations relating to the 

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

7 published not later than 60 days after the date 

8 of enactment of this Act and provide not less 

9 than 60 days for public comment. 

10 (B) Final regulations relating to the mat11 ters described in subsection (b)(2) shall be pub12 lished not less than 180 days after the date of en13 actment of this Act and shall be effective on the 

14 date that is 30 days after the date of publication. 

15 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

16 PARTICIPATION AND SCRUTINY.—

17 (A) ADMINISTRATIVE PROCEDURE ACT.—

18 Regulations issued by the Board of Directors 

19 shall be subject to notice and comment rule20 making pursuant to section 553 of title 5, United 

21 States Code. Unless determined wholly impracti22 cable or unnecessary by the Board of Directors, 

23 the public shall be afforded 60 days for comment 

24 on proposed regulations. 
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1 (B) ENHANCED OUTREACH.—The Board of 

2 Directors shall use means designed to most effec3 tively solicit public comment on proposed regula4 tions, procedures, and policies and to inform the 

5 affected public of final regulations, procedures, 

6 and policies. 

7 (C) OPEN MEETING PROCESSES.—The 

8 Board of Directors shall take all actions relating 

9 to the adoption of regulations, operating proce10 dures, guidelines, and any other matter relating 

11 to the governance and operation of Federal Pris12 on Industries based on deliberations and a re13 corded vote conducted during a meeting open to 

14 the public, unless closed pursuant to section 

15 552(b) of title 5, United States Code. 

16 SEC. 19. RULES OF CONSTRUCTION. 

17 (a) AGENCY BID PROTESTS.—Subsection (e) of section 

18 4124 of title 18, United States Code, as amended by section 

19 2, is not intended to alter any rights of any offeror other 

20 than Federal Prison Industries to file a bid protest in ac21 cordance with other law or regulation in effect on the date 

22 of the enactment of this Act. 

23 (b) JAVITS-WAGNER-O’DAY ACT.—Nothing in this Act 

24 is intended to modify the Javits-Wagner-O’Day Act (41 

25 U.S.C. 46, et seq.). 
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1 SEC. 20. EFFECTIVE DATE AND APPLICABILITY. 

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

4 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 Pris8 on Industries needed by a Federal department or agency 

9 after the effective date of the final regulations issued pursu10 ant to section 18(a)(2), or after September 30, 2004, which11 ever is earlier. 

12 SEC. 21. CLERICAL AMENDMENTS. 

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

14 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
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1 (4) by adding at the end the following new items:

‘‘4130. Construction of provisions. 

‘‘4131. Definitions.’’.

Union Calendar No. 165

108TH CONGRESS 

1ST SESSION H. R. 1829

[Report No. 108–286] 

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. 

SEPTEMBER 25, 2003

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed