IIB 

108TH CONGRESS 

1ST SESSION H. R. 1829

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 7, 2003

Received; read twice and referred to the Committee on the Judiciary 

AN ACT

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.
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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. 

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. 

Sec. 22. Procurement of goods and services manufactured in the United States.

9 SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT10 ING TO PURCHASES FROM FEDERAL PRISON 

11 INDUSTRIES. 

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

13 amended to read as follows:
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1 ‘‘§ 4124. Governmentwide procurement policy relat2 ing to purchases from Federal Prison In3 dustries 

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

5 Industries, Incorporated, a wholly owned Government cor6 poration, as referred to in section 9101(3)(E) of title 31, 

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

8 accordance with this section. 

9 ‘‘(b) SOLICITATION AND EVALUATION OF OFFERS

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

11 of a Federal department or agency has a requirement for 

12 a specific product or service that is authorized to be of13 fered for sale by Federal Prison Industries, in accordance 

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

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

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

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

18 threshold (as defined by section 32(f) of the Office of Fed19 eral Procurement Policy Act (41 U.S.C. 428(f))). 

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

21 shall be made using competitive procedures in accordance 

22 with the applicable evaluation factors, unless a determina23 tion is made by the Attorney General pursuant to para24 graph (3) or an award using other than competitive proce25 dures is authorized pursuant to paragraph (7). 
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1 ‘‘(3) The procurement activity shall negotiate with 

2 Federal Prison Industries on a noncompetitive basis for 

3 the award of a contract if the Attorney General determines 

4 that—

5 ‘‘(A) Federal Prison Industries cannot reason6 ably expect fair consideration to receive the contract 

7 award on a competitive basis; and 

8 ‘‘(B) the contract award is necessary to main9 tain work opportunities otherwise unavailable at the 

10 penal or correctional facility at which the contract is 

11 to be performed to prevent circumstances that could 

12 reasonably be expected to significantly endanger the 

13 safe and effective administration of such facility. 

14 ‘‘(4) Except in the case of an award to be made pur15 suant to paragraph (3), a contract award shall be made 

16 with Federal Prison Industries only if the contracting offi17 cer for the procurement activity determines that—

18 ‘‘(A) the specific product or service to be fur19 nished will meet the requirements of the procure20 ment activity (including any applicable 

21 prequalification requirements and all specified com22 mercial or governmental standards pertaining to 

23 quality, testing, safety, serviceability, and warran24 ties); 
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1 ‘‘(B) timely performance of the contract can be 

2 reasonably expected; and 

3 ‘‘(C) the contract price does not exceed a cur4 rent market price. 

5 ‘‘(5) A determination by the Attorney General pursu6 ant to paragraph (3) shall be—

7 ‘‘(A) supported by specific findings by the war8 den of the penal or correctional institution at which 

9 a Federal Prison Industries workshop is scheduled 

10 to perform the contract; 

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

12 Prison Industries regarding why it does not expect 

13 to win the contract on a competitive basis; and 

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

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

16 of the Federal Property and Administrative Services 

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

18 ‘‘(6) If the Attorney General has not made the deter19 mination described in paragraph (3) within 30 days after 

20 Federal Prison Industries has been informed of a con21 tracting opportunity by a procurement activity, the pro22 curement activity may proceed to conduct a procurement 

23 for the product or service in accordance with the proce24 dures generally applicable to such procurements by the 

25 procurement activity. 
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1 ‘‘(7) A contract award may be made to Federal Pris2 on Industries using other than competitive procedures if 

3 such product or service is only available from Federal 

4 Prison Industries and the contract may be awarded under 

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

6 303(c) of the Federal Property and Administrative Serv7 ices Act of 1949 (41 U.S.C. 252(c)(1)), as may be applica8 ble, and pursuant to the justification and approval re9 quirements relating to such noncompetitive procurements 

10 specified by law and the Governmentwide Federal Acquisi11 tion Regulation. 

12 ‘‘(8) A contract award may be made to Federal Pris13 on Industries using other than competitive procedures by 

14 the Federal Bureau of Prisons. 

15 ‘‘(c) OFFERS FROM FEDERAL PRISON INDUS16 TRIES.—A timely offer received from Federal Prison In17 dustries to furnish a product or service to a Federal de18 partment or agency shall be considered for award without 

19 limitation as to the dollar value of the proposed purchase, 

20 unless the contract opportunity has been reserved for com21 petition exclusively among small business concerns pursu22 ant to section 15(a) of the Small Business Act (15 U.S.C. 

23 644(a)) and its implementing regulations. 

24 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS25 TRIES.—Federal Prison Industries shall perform its con-
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1 tractual obligations under a contract awarded by a Fed2 eral department or agency to the same extent as any other 

3 contractor. 

4 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI5 SION.—(1) A decision by a contracting officer regarding 

6 the award of a contract to Federal Prison Industries or 

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

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

9 (3). 

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

11 Industries may appeal to the head of a Federal depart12 ment or agency a decision by a contracting officer not to 

13 award a contract to Federal Prison Industries pursuant 

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

15 department or agency on appeal shall be final. 

16 ‘‘(3) A dispute between Federal Prison Industries 

17 and a procurement activity regarding performance of a 

18 contract shall be subject to—

19 ‘‘(A) alternative means of dispute resolution 

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

21 or 

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

23 appeals having jurisdiction over the procurement ac24 tivity’s contract performance disputes pursuant to 
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1 the Contract Disputes Act of 1978 (41 U.S.C. 601 

2 et seq.). 

3 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de4 partment or agency shall report purchases from Federal 

5 Prison Industries to the Federal Procurement Data Sys6 tem (as referred to in section 6(d)(4) of the Office of Fed7 eral Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 

8 same manner as it reports to such System any acquisition 

9 in an amount in excess of the simplified acquisition thresh10 old (as defined by section 4(11) of the Office of Federal 

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

12 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In13 dustries shall publish and maintain a catalog of all specific 

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

15 Such catalog shall be periodically revised as products and 

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

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

18 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Pris19 on Industries shall comply with Federal occupational, 

20 health, and safety standards with respect to the operation 

21 of its industrial operations.’’. 
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1 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

2 PROPOSALS BY FEDERAL PRISON INDUS3 TRIES. 

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

5 amended—

6 (1) by redesignating paragraph (6) as para7 graph (12); and 

8 (2) by striking paragraphs (4) and (5) and in9 serting the following new paragraphs: 

10 ‘‘(4) A decision to authorize Federal Prison Indus11 tries to offer a new specific product or specific service or 

12 to expand the production of an existing product or service 

13 shall be made by its board of directors in conformance 

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

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

16 ‘‘(5)(A) Whenever Federal Prison Industries pro17 poses to offer for sale a new specific product or specific 

18 service or to expand production of a currently authorized 

19 product or service, the Chief Operating Officer of Federal 

20 Prison Industries shall submit an appropriate proposal to 

21 the board of directors and obtain the board’s approval be22 fore initiating any such expansion. The proposal submitted 

23 to the board shall include a detailed analysis of the prob24 able impact of the proposed expansion of sales within the 

25 Federal market by Federal Prison Industries on private 

26 sector firms and their non-inmate workers. 
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1 ‘‘(B)(i) The analysis required by subparagraph (A) 

2 shall be performed by an interagency team on a reimburs3 able basis or by a private contractor paid by Federal Pris4 on Industries. 

5 ‘‘(ii) If the analysis is to be performed by an inter6 agency team, such team shall be led by the Administrator 

7 of the Small Business Administration or the designee of 

8 such officer with representatives of the Department of 

9 Labor, the Department of Commerce, and the Federal 

10 Procurement Data Center. 

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

12 contractor, the selection of the contractor and the admin13 istration of the contract shall be conducted by one of the 

14 entities referenced in clause (ii) as an independent execu15 tive agent for the board of directors. Maximum consider16 ation shall be given to any proposed statement of work 

17 furnished by the Chief Operating Officer of Federal Prison 

18 Industries. 

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

20 identify and consider—

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

22 the requirements of the Federal Government for the 

23 specific product or specific service; 

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

25 market for the specific product or specific service 
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1 currently furnished by small businesses during the 

2 previous 3 fiscal years; 

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

4 specific product or specific service projected for Fed5 eral Prison Industries for the fiscal year in which 

6 production or performance will commence or expand 

7 and the subsequent 4 fiscal years; 

8 ‘‘(iv) whether the industry producing the spe9 cific product or specific service in the private 

10 sector—

11 ‘‘(I) has an unemployment rate higher 

12 than the national average; or 

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

14 workers that has consistently shown an increase 

15 during the previous 5 years; 

16 ‘‘(v) whether the specific product is an import17 sensitive product; 

18 ‘‘(vi) the requirements of the Federal Govern19 ment and the demands of entities other than the 

20 Federal Government for the specific product or serv21 ice during the previous 3 fiscal years; 

22 ‘‘(vii) the projected growth or decline in the de23 mand of the Federal Government for the specific 

24 product or specific service; 
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1 ‘‘(viii) the capability of the projected demand of 

2 the Federal Government for the specific product or 

3 service to sustain both Federal Prison Industries 

4 and private vendors; and 

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

6 new product or performance of a new service will 

7 provide inmates with the maximum opportunity to 

8 acquire knowledge and skill in trades and occupa9 tions that will provide them with a means of earning 

10 a livelihood upon release. 

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

12 proposal to authorize the production and sale of a new 

13 specific product or continued sale of a previously author14 ized product unless—

15 ‘‘(I) the product to be furnished is a prison16 made product; or 

17 ‘‘(II) the service to be furnished is to be per18 formed by inmate workers. 

19 ‘‘(ii) The board of directors may not approve a pro20 posal to authorize the production and sale of a new prison21 made product or to expand production of a currently au22 thorized product if the product is—

23 ‘‘(I) produced in the private sector by an indus24 try which has reflected during the previous year an 

25 unemployment rate above the national average; or 
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1 ‘‘(II) an import-sensitive product. 

2 ‘‘(iii) The board of directors may not approve a pro3 posal for inmates to provide a service in which an inmate 

4 worker has access to—

5 ‘‘(I) personal or financial information about in6 dividual private citizens, including information relat7 ing to such person’s real property, however de8 scribed, without giving prior notice to such persons 

9 or class of persons to the greatest extent practicable; 

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

11 surface and subsurface infrastructure providing com12 munications, water and electrical power distribution, 

13 pipelines for the distribution of natural gas, bulk pe14 troleum products and other commodities, and other 

15 utilities; or 

16 ‘‘(III) data that is classified. 

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

18 furnishing through inmate labor construction services, un19 less to be performed within a Federal correctional institu20 tion pursuant to the participation of an inmate in an ap21 prenticeship or other vocational education program teach22 ing the skills of the various building trades. 

23 ‘‘(II) For purposes of this clause, the term ‘construc24 tion’ has the meaning given such term by section 2.101 

25 of the Federal Acquisition Regulation (48 CFR part 
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1 2.101), as in effect on June 1, 2002, including the repair, 

2 alteration, or maintenance of real property in being. 

3 ‘‘(6) To provide further opportunities for participa4 tion by interested parties, the board of directors shall—

5 ‘‘(A) give additional notice of a proposal to au6 thorize the production and sale of a new product or 

7 service, or expand the production of a currently au8 thorized product or service, in a publication designed 

9 to most effectively provide notice to private vendors 

10 and labor unions representing private sector workers 

11 who could reasonably be expected to be affected by 

12 approval of the proposal, which notice shall offer to 

13 furnish copies of the analysis required by paragraph 

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

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

16 by paragraph (5) from trade associations rep17 resenting vendors and labor unions representing pri18 vate sector workers who could reasonably be ex19 pected to be affected by approval of the proposal to 

20 authorize the production and sale of a new product 

21 or service (or expand the production of a currently 

22 authorized product or service); and 

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

24 representative of an established trade association, 

25 labor union, or other private sector representatives 
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1 to present comments on the proposal directly to the 

2 board of directors. 

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

4 of all comments received on the expansion proposal. 

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

6 expansion proposal, the Chief Operating Officer of Federal 

7 Prison Industries may provide the board of directors a re8 vised expansion proposal. If such revised proposal provides 

9 for expansion of inmate work opportunities in an industry 

10 different from that initially proposed, such revised pro11 posal shall reflect the analysis required by paragraph 

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

13 of paragraph (6). 

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

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

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

17 authorized product or service) and take any action with 

18 respect to such proposal, during a meeting that is open 

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

20 title 5. 

21 ‘‘(10) In conformity with the requirements of para22 graphs (5) through (9) of this subsection, the board of 

23 directors may—
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1 ‘‘(A) authorize the donation of products pro2 duced or services furnished by Federal industries 

3 and available for sale; 

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

5 product or the furnishing of a new specific service 

6 for donation; or 

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

8 of a currently authorized specific product or specific 

9 service in an amount in excess of a reasonable share 

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

11 ‘‘(i) a Federal agency or department, pur12 chasing such product or service, has requested 

13 that Federal Prison Industries be authorized to 

14 furnish such product or service in amounts that 

15 are needed by such agency or department; or 

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

17 cause and supported by at least eight members 

18 of the board.’’. 

19 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

20 (a) IN GENERAL.—Notwithstanding the require21 ments of section 4124 of title 18, United States Code (as 

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

23 or agency having a requirement for a product that is au24 thorized for sale by Federal Prison Industries and is listed 

25 in its catalog (referred to in section 4124(g) of title 18, 
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1 United States Code) shall first solicit an offer from Fed2 eral Prison Industries and make purchases on a non3 competitive basis in accordance with this section or in ac4 cordance with section 2410n of title 10, United States 

5 Code, or section 318 of title III of the Federal Property 

6 and Administrative Services Act of 1949 (as added by sub7 section (i)). 

8 (b) PREFERENTIAL SOURCE STATUS.—Subject to 

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

10 be made on a noncompetitive basis to Federal Prison In11 dustries if the contracting officer for the procurement ac12 tivity determines that—

13 (1) the product offered by Federal Prison In14 dustries will meet the requirements of the procure15 ment activity (including commercial or governmental 

16 standards or specifications pertaining to design, per17 formance, testing, safety, serviceability, and warran18 ties as may be imposed upon a private sector sup19 plier of the type being offered by Federal Prison In20 dustries); 

21 (2) timely performance of the contract by Fed22 eral Prison Industries can be reasonably expected; 

23 and 

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

25 and reasonable price. 
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1 (c) CONTRACTUAL TERMS.—The terms and condi2 tions of the contract and the price to be paid to Federal 

3 Prison Industries shall be determined by negotiation be4 tween Federal Prison Industries and the Federal agency 

5 making the purchase. The negotiated price shall not ex6 ceed a fair and reasonable price determined in accordance 

7 with the procedures of the Federal Acquisition Regulation. 

8 (d) PERFORMANCE OF CONTRACTUAL OBLIGA9 TIONS.—

10 (1) IN GENERAL.—Federal Prison Industries 

11 shall perform the obligations of the contract nego12 tiated pursuant to subsection (c). 

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

14 the contracting activity and the Chief Operating Of15 ficer of Federal Prison Industries are unable to re16 solve a contract performance dispute to their mutual 

17 satisfaction, such dispute shall be resolved pursuant 

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

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

20 (e) LIMITATIONS ON USE OF AUTHORITY.—

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

22 made by Federal Prison Industries during the base 

23 period, the total dollar value of sales to the Govern24 ment made pursuant to subsection (b) and sub25 section (c) of this section shall not exceed—
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1 (A) 90 percent in fiscal year 2005; 

2 (B) 85 percent in fiscal year 2006; 

3 (C) 70 percent in fiscal year 2007; 

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

5 (E) 40 percent in fiscal year 2009. 

6 (2) SALES WITHIN VARIOUS BUSINESS SEC7 TORS.—Use of the authority provided by subsections 

8 (b) and (c) shall not result in sales by Federal Pris9 on Industries to the Government that are in excess 

10 of its total sales during the base year for each busi11 ness sector. 

12 (3) LIMITATIONS RELATING TO SPECIFIC PROD13 UCTS.—Use of the authorities provided by sub14 sections (b) and (c) shall not result in contract 

15 awards to Federal Prison Industries that are in ex16 cess of its total sales during the base period for such 

17 product. 

18 (4) CHANGES IN DESIGN SPECIFICATIONS.—

19 The limitations on sales specified in paragraphs (2) 

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

21 unit cost of production of a specific product arising 

22 from changes in the design specification of such 

23 product directed by the buying agency. 

24 (f) DURATION OF AUTHORITY.—The preferential 

25 contracting authorities authorized by subsection (b) may 
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1 not be used on or after October 1, 2009, and become effec2 tive on the effective date of the final regulations issued 

3 pursuant to section 18. 

4 (g) DEFINITIONS.—For the purposes of this 

5 section—

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

7 sales of Federal Prison Industries during the period 

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

9 Year 2002); 

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

11 product/service business groups identified in the 

12 2002 Federal Prison Industries annual report as the 

13 Clothing and Textiles Business Group, the Elec14 tronics Business Group, the Fleet Management and 

15 Vehicular Components Business Group, the Graphics 

16 Business Group, the Industrial Products Business 

17 Group, the Office Furniture Business Group, the 

18 Recycling Activities Business Group, and the Serv19 ices Business Group; and 

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

21 be given the same meaning as, and be determined 

22 pursuant to, part 15.8 of the Federal Acquisition 

23 Regulation (48 CFR 15.8). 

24 (h) FINDING BY ATTORNEY GENERAL WITH RE25 SPECT TO PUBLIC SAFETY.—(1) Not later than 60 days 
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1 prior to the end of each fiscal year specified in subsection 

2 (e)(1), the Attorney General shall make a finding regard3 ing the effects of the percentage limitation imposed by 

4 such subsection for such fiscal year and the likely effects 

5 of the limitation imposed by such subsection for the fol6 lowing fiscal year. 

7 (2) The Attorney General’s finding shall include a de8 termination whether such limitation has resulted or is like9 ly to result in a substantial reduction in inmate industrial 

10 employment and whether such reductions, if any, present 

11 a significant risk of adverse effects on safe prison oper12 ation or public safety. 

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

14 of adverse effects on either safe prison management or 

15 public safety, he shall so advise the Congress. 

16 (4) In advising the Congress pursuant to paragraph 

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

18 additional authorizations of appropriations to provide ad19 ditional alternative inmate rehabilitative opportunities and 

20 additional correctional staffing, as may be appropriate. 

21 (i) PROCEDURAL REQUIREMENTS FOR CIVILIAN

22 AGENCIES RELATING TO PRODUCTS OF FEDERAL PRISON

23 INDUSTRIES.—Title III of the Federal Property and Ad24 ministrative Services Act of 1949 (41 U.S.C. 251 et seq.) 

25 is amended by adding at the end the following new section: 
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1 ‘‘SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: 

2 PROCEDURAL REQUIREMENTS. 

3 ‘‘(a) MARKET RESEARCH.—Before purchasing a 

4 product listed in the latest edition of the Federal Prison 

5 Industries catalog under section 4124(d) of title 18, 

6 United States Code, the head of an executive agency shall 

7 conduct market research to determine whether the Federal 

8 Prison Industries product is comparable to products avail9 able from the private sector that best meet the executive 

10 agency’s needs in terms of price, quality, and time of deliv11 ery. 

12 ‘‘(b) COMPETITION REQUIREMENT.—If the head of 

13 the executive agency determines that a Federal Prison In14 dustries product is not comparable in price, quality, or 

15 time of delivery to products available from the private sec16 tor that best meet the executive agency’s needs in terms 

17 of price, quality, and time of delivery, the agency head 

18 shall use competitive procedures for the procurement of 

19 the product or shall make an individual purchase under 

20 a multiple award contract. In conducting such a competi21 tion or making such a purchase, the agency head shall 

22 consider a timely offer from Federal Prison Industries. 

23 ‘‘(c) IMPLEMENTATION BY HEAD OF EXECUTIVE

24 AGENCY.—The head of an executive agency shall ensure 

25 that—
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1 ‘‘(1) the executive agency does not purchase a 

2 Federal Prison Industries product or service unless 

3 a contracting officer of the agency determines that 

4 the product or service is comparable to products or 

5 services available from the private sector that best 

6 meet the agency’s needs in terms of price, quality, 

7 and time of delivery; and 

8 ‘‘(2) Federal Prison Industries performs its 

9 contractual obligations to the same extent as any 

10 other contractor for the executive agency. 

11 ‘‘(d) MARKET RESEARCH DETERMINATION NOT

12 SUBJECT TO REVIEW.—A determination by a contracting 

13 officer regarding whether a product or service offered by 

14 Federal Prison Industries is comparable to products or 

15 services available from the private sector that best meet 

16 an executive agency’s needs in terms of price, quality, and 

17 time of delivery shall not be subject to review pursuant 

18 to section 4124(b) of title 18. 

19 ‘‘(e) PERFORMANCE AS A SUBCONTRACTOR.—(1) A 

20 contractor or potential contractor of an executive agency 

21 may not be required to use Federal Prison Industries as 

22 a subcontractor or supplier of products or provider of serv23 ices for the performance of a contract of the executive 

24 agency by any means, including means such as—
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1 ‘‘(A) a contract solicitation provision requiring 

2 a contractor to offer to make use of products or 

3 services of Federal Prison Industries in the perform4 ance of the contract; 

5 ‘‘(B) a contract specification requiring the con6 tractor to use specific products or services (or class7 es of products or services) offered by Federal Prison 

8 Industries in the performance of the contract; or 

9 ‘‘(C) any contract modification directing the use 

10 of products or services of Federal Prison Industries 

11 in the performance of the contract. 

12 ‘‘(2) In this subsection, the term ‘‘contractor’’, with 

13 respect to a contract, includes a subcontractor at any tier 

14 under the contract. 

15 ‘‘(f) PROTECTION OF CLASSIFIED AND SENSITIVE

16 INFORMATION.—The head of an executive agency may not 

17 enter into any contract with Federal Prison Industries 

18 under which an inmate worker would have access to—

19 ‘‘(1) any data that is classified; 

20 ‘‘(2) any geographic data regarding the location 

21 of—

22 ‘‘(A) surface and subsurface infrastructure 

23 providing communications or water or electrical 

24 power distribution; 
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1 ‘‘(B) pipelines for the distribution of nat2 ural gas, bulk petroleum products, or other 

3 commodities; or 

4 ‘‘(C) other utilities; or 

5 ‘‘(3) any personal or financial information 

6 about any individual private citizen, including infor7 mation relating to such person’s real property how8 ever described, without the prior consent of the indi9 vidual. 

10 ‘‘(g) DEFINITIONS.—In this section: 

11 ‘‘(1) The term ‘competitive procedures’ has the 

12 meaning given such term in section 4(5) of the Of13 fice of Federal Procurement Policy Act (41 U.S.C. 

14 403(5)). 

15 ‘‘(2) The term ‘market research’ means obtain16 ing specific information about the price, quality, and 

17 time of delivery of products available in the private 

18 sector through a variety of means, which may 

19 include—

20 ‘‘(A) contacting knowledgeable individuals 

21 in government and industry; 

22 ‘‘(B) interactive communication among in23 dustry, acquisition personnel, and customers; 

24 and 
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1 ‘‘(C) interchange meetings or pre-solicita2 tion conferences with potential offerors.’’. 

3 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON4 TRACTOR. 

5 (a) IN GENERAL.—Federal Prison Industries is au6 thorized to enter into a contract with a Federal contractor 

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

8 produce products as a subcontractor or supplier in the per9 formance of a Federal procurement contract. The use of 

10 Federal Prison Industries as a subcontractor or supplier 

11 shall be a wholly voluntary business decision by the Fed12 eral prime contractor or subcontractor, subject to any 

13 prior approval of subcontractors or suppliers by the con14 tracting officer which may be imposed by the Federal Ac15 quisition Regulation or by the contract. 

16 (b) COMMERCIAL SALES PROHIBITED.—The author17 ity provided by subsection (a) shall not result, either di18 rectly or indirectly, in the sale in the commercial market 

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

20 inmate workers in violation of section 1761(a) of title 18, 

21 United States Code. A Federal contractor (or subcon22 tractor at any tier) using Federal Prison Industries as a 

23 subcontractor or supplier in furnishing a commercial prod24 uct pursuant to a Federal contract shall implement appro-
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1 priate management procedures to prevent introducing an 

2 inmate-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 

8 upon prospective or actual Federal prime contractors or 

9 a subcontractors at any tier by means of—

10 (1) a contract solicitation provision requiring a 

11 contractor to offer to make use of Federal Prison 

12 Industries, its products or services; 

13 (2) specifications requiring the contractor to 

14 use specific products or services (or classes of prod15 ucts or services) offered by Federal Prison Indus16 tries in the performance of the contract; 

17 (3) any contract modification directing the use 

18 of Federal Prison Industries, its products or serv19 ices; 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 

2 Industries shall prescribe the rates of hourly wages to be 

3 paid inmates performing work for or through Federal 

4 Prison Industries. The Director of the Federal Bureau of 

5 Prisons shall prescribe the rates of hourly wages for other 

6 work assignments within the various Federal correctional 

7 institutions. In the case of an inmate whose term of im8 prisonment is to expire in not more than 2 years, wages 

9 shall be earned at an hourly rate of not less than $2.50, 

10 but paid at the same rate and in the same manner as to 

11 any other inmate, and any amount earned but not paid 

12 shall be held in trust and paid only upon the actual expira13 tion of the term of imprisonment. 

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

15 and considered for increase on not less than a biannual 

16 basis. 

17 ‘‘(C) The Board of Directors of Federal Prison In18 dustries shall—

19 ‘‘(i) not later than September 30, 2004, in20 crease the maximum wage rate for inmates per21 forming work for or through Federal Prison Indus22 tries to an amount equal to 50 percent of the min23 imum wage prescribed by section 6(a)(1) of the Fair 

24 Labor Standards Act of 1938 (29 U.S.C. 

25 206(a)(1)); 
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1 ‘‘(ii) not later than September 30, 2009, in2 crease such maximum wage rate to an amount equal 

3 to such minimum wage; and 

4 ‘‘(iii) request the Secretary of Labor to estab5 lish, not later than October 1, 2004, an ‘inmate 

6 training wage’ pursuant to that Act. 

7 ‘‘(D) Wages earned by an inmate worker shall be paid 

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

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

10 the wages due for—

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

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

13 to court order; 

14 ‘‘(iii) payment of additional restitution for vic15 tims of the inmate’s crimes (at a rate not less than 

16 10 percent of gross wages); 

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

18 family pursuant to statute, court order, or agree19 ment with the inmate; 

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

21 to facilitate such inmate’s assimilation back into so22 ciety, payable at the conclusion of incarceration; and 

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

24 by the Director of the Bureau of Prisons. 
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1 ‘‘(E) Each inmate worker working for Federal Prison 

2 Industries shall indicate in writing that such person—

3 ‘‘(i) is participating voluntarily; and 

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

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

6 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 

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

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

9 ‘‘any goods, wares, or merchandise manufactured, pro10 duced, or mined’’ and inserting ‘‘products manufactured, 

11 services furnished, or minerals mined’’. 

12 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

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

14 State or local jurisdiction of a State which is providing 

15 services for the commercial market through inmate labor 

16 on October 1, 2002, may continue to provide such com17 mercial services until—

18 (1) the expiration date specified in the contract 

19 or other agreement with a commercial partner on 

20 October 1, 2002, or 

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

22 work program is directly furnishing the services to 

23 the commercial market. 

24 (c) APPROVAL REQUIRED FOR LONG-TERM OPER25 ATION.—A prison work program operated by a correc-
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1 tional institution operated by a State or local jurisdiction 

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

3 services for sale in the commercial market after the dates 

4 specified in subsection (b) if such program has been cer5 tified pursuant to section 1761(c)(1) of title 18, United 

6 States Code, and is in compliance with the requirements 

7 of such subsection and its implementing regulations. 

8 SEC. 8. CONFORMING AMENDMENT. 

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

10 amended by striking ‘‘production of commodities’’ and in11 serting ‘‘production of products or furnishing of services’’. 

12 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

13 307. 

14 Chapter 307 of title 18, United States Code, is fur15 ther amended by adding the following: 

16 ‘‘§ 4130. Construction of provisions 

17 ‘‘Nothing in this chapter shall be construed—

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

19 to—

20 ‘‘(A) employment in a Federal Prison In21 dustries facility; or 

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

23 or benefit on demand, except as otherwise spe24 cifically provided by law or regulation; 
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1 ‘‘(2) to establish that inmates are employees for 

2 the purposes of any law or program; or

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

4 behalf of any inmate against the United States or 

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

6 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR7 TUNITIES FOR INMATES. 

8 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE9 LEASE-PREPARATION OPPORTUNITIES.—

10 (1) PROGRAM ESTABLISHED.—There is hereby 

11 established the Enhanced In-Prison Educational and 

12 Vocational Assessment and Training Program within 

13 the Federal Bureau of Prisons. 

14 (2) COMPREHENSIVE PROGRAM.—In addition to 

15 such other components as the Director of the Bu16 reau of Prisons deems appropriate to reduce inmate 

17 idleness and better prepare inmates for a successful 

18 reentry into the community upon release, the pro19 gram shall provide—

20 (A) in-prison assessments of inmates’ 

21 needs and aptitudes; 

22 (B) a full range of educational opportuni23 ties; 

24 (C) vocational training and apprentice25 ships; and 
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1 (D) comprehensive release-readiness prepa2 ration. 

3 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

4 the purposes of carrying out the program established 

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

6 each fiscal year after fiscal year 2003, to remain 

7 available until expended. Funds shall be allocated 

8 from the gross profits within the Federal Prison In9 dustries Fund, and, to the extent such amounts are 

10 inadequate, from the General Treasury. 

11 (4) SCHEDULE FOR IMPLEMENTATION.—All 

12 components of the program shall be established—

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

14 prisons not later than 2 years after the date of 

15 the enactment of this Act; 

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

17 prisons not later than 4 years after such date 

18 of enactment; 

19 (C) in at least 75 percent of all Federal 

20 prisons not later than 6 years after such date 

21 of enactment; and 

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

23 years after such date of enactment. 

24 (b) ADDITIONAL INMATE WORK OPPORTUNITIES

25 THROUGH PUBLIC SERVICE ACTIVITIES.—
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1 (1) IN GENERAL.—Chapter 307 of title 18, 

2 United States Code, is further amended by inserting 

3 after section 4124 the following new section: 

4 ‘‘§ 4124a. Additional inmate work opportunities 

5 through public service activities 

6 ‘‘(a) IN GENERAL.—Inmates with work assignments 

7 within Federal Prison Industries may perform work for 

8 an eligible entity pursuant to an agreement between such 

9 entity and the Inmate Work Training Administrator in ac10 cordance with the requirements of this section. 

11 ‘‘(b) DEFINITION OF ELIGIBLE ENTITIES.—For the 

12 purposes of this section, the term ‘eligible entity’ means 

13 an entity—

14 ‘‘(1) that is an organization described in section 

15 501(c)(3) of the Internal Revenue Code of 1986 and 

16 exempt from taxation under section 501(a) of such 

17 Code and that has been such an organization for a 

18 period of not less than 36 months prior to inclusion 

19 in an agreement under this section; 

20 ‘‘(2) that is a religious organization described 

21 in section 501(d) of such Code and exempt from tax22 ation under section 501(a) of such Code; or 

23 ‘‘(3) that is a unit of local government, a school 

24 district, or another special purpose district. 

25 ‘‘(c) INMATE WORK TRAINING ADMINISTRATOR.—
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1 ‘‘(1) The Federal Prison Industries Board of 

2 Directors shall designate an entity as the Inmate 

3 Work Training Administrator to administer the 

4 work-based training program authorized by this sec5 tion. 

6 ‘‘(2) In selecting the Inmate Work Training 

7 Administrator, the Board of Directors shall select an 

8 entity—

9 ‘‘(A) that is an organization described in 

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

11 of 1986 and exempt from taxation under sec12 tion 501(a) of such Code; and 

13 ‘‘(B) that has demonstrated, for a period 

14 of not less than 5 years, expertise in the theory 

15 and practice of fostering inmate rehabilitation 

16 through work-based programs in cooperation 

17 with private sector firms. 

18 ‘‘(3) With respect to the formation and per19 formance of an agreement authorized by this section, 

20 the Director of the Bureau of Prisons and the Chief 

21 Operating Officer of Federal Prison Industries shall 

22 be responsible only for—

23 ‘‘(A) maintaining appropriate institutional 

24 and inmate security; and 
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1 ‘‘(B) matters relating to the selection and 

2 payment of participating inmates. 

3 ‘‘(d) PROPOSED AGREEMENTS.—An eligible entity 

4 seeking to enter into an agreement pursuant to subsection 

5 (a) shall submit a detailed proposal to the Inmate Work 

6 Training Administrator. Each such agreement shall 

7 specify—

8 ‘‘(1) types of work to be performed; 

9 ‘‘(2) the proposed duration of the agreement, 

10 specified in terms of a base year and number of op11 tion years; 

12 ‘‘(3) the number of inmate workers expected to 

13 be employed in the specified types of work during 

14 the various phases of the agreement; 

15 ‘‘(4) the wage rates proposed to be paid to var16 ious classes of inmate workers; and 

17 ‘‘(5) the facilities, services and personnel (other 

18 than correctional personnel dedicated to the security 

19 of the inmate workers) to be furnished by Federal 

20 Prison Industries or the Bureau of Prisons and the 

21 rates of reimbursement, if any, for such facilities, 

22 services, and personnel. 

23 ‘‘(e) REPRESENTATIONS.—

24 ‘‘(1) ELEEMOSYNARY WORK ACTIVITIES.—Each 

25 proposed agreement shall be accompanied by a writ-
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1 ten certification by the chief executive officer of the 

2 eligible entity that—

3 ‘‘(A) the work to be performed by the in4 mate workers will be limited to the eleemosy5 nary work of such entity in the case of an enti6 ty described in paragraph (1) or (2) of sub7 section (b); 

8 ‘‘(B) the work would not be performed but 

9 for the availability of the inmate workers; 

10 ‘‘(C) the work performed by the inmate 

11 workers will not result, either directly or indi12 rectly, in the production of a new product or 

13 the furnishing of a service that is to be offered 

14 for other than resale or donation by the eligible 

15 entity or any affiliate of the such entity. 

16 ‘‘(2) PROTECTIONS FOR NON-INMATE WORK17 ERS.—Each proposed agreement shall also be ac18 companied by a written certification by the chief ex19 ecutive officer of the eligible entity that—

20 ‘‘(A) no non-inmate employee or volunteer 

21 of the eligible entity (or any affiliate of the enti22 ty) will have his or her job abolished or work 

23 hours reduced as a result of the entity being 

24 authorized to utilize inmate workers; and 
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1 ‘‘(B) the work to be performed by the in2 mate workers will not supplant work currently 

3 being performed by a contractor of the eligible 

4 entity. 

5 ‘‘(f) APPROVAL BY BOARD OF DIRECTORS.—

6 ‘‘(1) IN GENERAL.—Each such proposed agree7 ment shall be presented to the Board of Directors, 

8 be subject to the same opportunities for public com9 ment, and be publicly considered and acted upon by 

10 the Board in a manner comparable to that required 

11 by paragraphs (6) and (7) of section 4122(b). 

12 ‘‘(2) MATTERS TO BE CONSIDERED.—In deter13 mining whether to approve a proposed agreement, 

14 the Board shall—

15 ‘‘(A) give priority to an agreement that 

16 provides inmate work opportunities that will 

17 provide participating inmates with the best 

18 prospects of obtaining employment paying a liv19 able wage upon release; 

20 ‘‘(B) give priority to an agreement that 

21 provides for maximum reimbursement for in22 mate wages and for the costs of supplies and 

23 equipment needed to perform the types of work 

24 to be performed; 
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1 ‘‘(C) not approve an agreement that will 

2 result in the displacement of non-inmate work3 ers or volunteers contrary to the representa4 tions required by subsection (e)(2) as deter5 mined by the Board or by the Secretary of 

6 Labor (pursuant to subsection (i)); and 

7 ‘‘(D) not approve an agreement that will 

8 result, either directly or indirectly, in the pro9 duction of a new product or the furnishing of 

10 a service for other than resale or donation. 

11 ‘‘(g) WAGE RATES AND DEDUCTIONS FROM INMATE

12 WAGES.—

13 ‘‘(1) IN GENERAL.—Inmate workers shall be 

14 paid wages for work under the agreement at a basic 

15 hourly rate to be negotiated between the eligible en16 tity and Federal Prison Industries and specified in 

17 the agreement. The wage rates set by the Director 

18 of the Federal Bureau of Prisons to be paid inmates 

19 for various institutional work assignments are spe20 cifically authorized. 

21 ‘‘(2) PAYMENT TO INMATE WORKER AND AU22 THORIZED DEDUCTIONS.—Wages shall be paid and 

23 deductions taken pursuant to section 

24 4122(b)(11)(C). 
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1 ‘‘(3) VOLUNTARY PARTICIPATION BY INMATE.—

2 Each inmate worker to be utilized by an eligible en3 tity shall indicate in writing that such person—

4 ‘‘(A) is participating voluntarily; and 

5 ‘‘(B) understands and agrees to the wages 

6 to be paid and deductions to be taken from 

7 such wages. 

8 ‘‘(h) ASSIGNMENT TO WORK OPPORTUNITIES.—As9 signment of inmates to work under an approved agree10 ment with an eligible entity shall be subject to the Bureau 

11 of Prisons Program Statement Number 1040.10 (Non12 Discrimination Toward Inmates), as contained in section 

13 551.90 of title 28 of the Code of Federal Regulations (or 

14 any successor document). 

15 ‘‘(i) ENFORCEMENT OF PROTECTIONS FOR NON-IN16 MATE WORKERS.—

17 ‘‘(1) PRIOR TO BOARD CONSIDERATION.—Upon 

18 request of any interested person, the Secretary of 

19 Labor may promptly verify a certification made pur20 suant subsection (e)(2) with respect to the displace21 ment of non-inmate workers so as to make the re22 sults of such inquiry available to the Board of Direc23 tors prior to the Board’s consideration of the pro24 posed agreement. The Secretary and the person re25 questing the inquiry may make recommendations to 
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1 the Board regarding modifications to the proposed 

2 agreement. 

3 ‘‘(2) DURING PERFORMANCE.—

4 ‘‘(A) IN GENERAL.—Whenever the Sec5 retary deems appropriate, upon request or oth6 erwise, the Secretary may verify whether the 

7 actual performance of the agreement is result8 ing in the displacement of non-inmate workers 

9 or the use of inmate workers in a work activity 

10 not authorized under the approved agreement. 

11 ‘‘(B) SANCTIONS.—Whenever the Sec12 retary determines that performance of the 

13 agreement has resulted in the displacement of 

14 non-inmate workers or employment of an in15 mate worker in an unauthorized work activity, 

16 the Secretary may—

17 ‘‘(i) direct the Inmate Work Training 

18 Administrator to terminate the agreement 

19 for default, subject to the processes and 

20 appeals available to a Federal contractor 

21 whose procurement contract has been ter22 minated for default; and 

23 ‘‘(ii) initiate proceedings to impose 

24 upon the person furnishing the certifi25 cation regarding non-displacement of non-
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1 inmate workers required by subsection 

2 (d)(2)(B) any administrative, civil, and 

3 criminal sanctions as may be available.’’. 

4 (2) AUTHORIZATION OF APPROPRIATION.—

5 There is authorized to be appropriated $5,000,000 

6 for each of the fiscal years 2004 through 2008 for 

7 the purposes of paying the wages of inmates and 

8 otherwise undertaking the maximum number of 

9 agreements with eligible entities pursuant to section 

10 4124a of title 18, United States Code, as added by 

11 paragraph (1). 

12 (3) CLERICAL AMENDMENT.—The table of sec13 tions for chapter 307 of title 18, United States 

14 Code, is amended by inserting after the item relating 

15 to section 4124 the following new item:

‘‘4124a. Additional inmate work opportunities through public service activities.’’.

16 (c) INMATE WORK OPPORTUNITIES IN SUPPORT OF

17 NOT-FOR-PROFIT ENTITIES.—

18 (1) PROPOSALS FOR DONATION PROGRAMS.—

19 The Chief Operating Officer of Federal Prison In20 dustries shall develop and present to the Board of 

21 Directors of Federal Prison Industries proposals to 

22 have Federal Prison Industries donate products and 

23 services to eligible entities that provide goods or 

24 services to low-income individuals who would likely 
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1 otherwise have difficulty purchasing such products 

2 or services in the commercial market. 

3 (2) SCHEDULE FOR SUBMISSION AND CONSID4 ERATION OF DONATION PROGRAMS.—

5 (A) INITIAL PROPOSALS.—The Chief Oper6 ating Officer shall submit the initial group of 

7 proposals for programs of the type described in 

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

9 the enactment of this Act. The Board of Direc10 tors of Federal Prison Industries shall consider 

11 such proposals from the Chief Operating Officer 

12 not later than the date that is 270 days after 

13 the date of the enactment of this Act. 

14 (B) ANNUAL OPERATING PLAN.—The 

15 Board of Directors of Federal Prison Industries 

16 shall consider proposals by the Chief Operating 

17 Officer for programs of the type described in 

18 paragraph (1) as part of the annual operating 

19 plan for Federal Prison Industries. 

20 (C) OTHER PROPOSALS.—In addition to 

21 proposals submitted by the Chief Operating Of22 ficer, the Board of Directors may, from time to 

23 time, consider proposals presented by prospec24 tive eligible entities. 
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1 (3) DEFINITION OF ELIGIBLE ENTITIES.—For 

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

3 entity’’ means an entity—

4 (A) that is an organization described in 

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

6 of 1986 and exempt from taxation under sec7 tion 501(a) of such Code and that has been 

8 such an organization for a period of not less 

9 than 36 months prior to inclusion in a proposal 

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

11 (B) that is a religious organization de12 scribed in section 501(d) of such Code and ex13 empt from taxation under section 501(a) of 

14 such Code. 

15 (4) AUTHORIZATION OF APPROPRIATIONS.—

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

17 for each of the fiscal years 2004 through 2008 for 

18 the purposes of paying the wages of inmates and 

19 otherwise carrying out programs of the type de20 scribed in paragraph (1). 

21 (d) MAXIMIZING INMATE REHABILITATIVE OPPOR22 TUNITIES THROUGH COGNITIVE ABILITIES ASSESS23 MENTS.—

24 (1) DEMONSTRATION PROGRAM AUTHORIZED.—
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1 (A) IN GENERAL.—There is hereby estab2 lished within the Federal Bureau of Prisons a 

3 program to be known as the ‘‘Cognitive Abili4 ties Assessment Demonstration Program’’. The 

5 purpose of the demonstration program is to de6 termine the effectiveness of a program that as7 sesses the cognitive abilities and perceptual 

8 skills of Federal inmates to maximize the bene9 fits of various rehabilitative opportunities de10 signed to prepare each inmate for a successful 

11 return to society and reduce recidivism. The 

12 demonstration program shall be undertaken by 

13 a contractor with a demonstrated record of ena14 bling the behavioral and academic improvement 

15 of adults through the use of research-based sys16 tems that maximize the development of both the 

17 cognitive and perceptual capabilities of a par18 ticipating individual, including adults in a cor19 rectional setting. 

20 (B) SCOPE OF DEMONSTRATION PRO21 GRAM.—The demonstration program shall to 

22 the maximum extent practicable, be—

23 (i) conducted during a period of three 

24 consecutive fiscal years, commencing dur25 ing fiscal year 2004; 
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1 (ii) conducted at 12 Federal correc2 tional institutions; and 

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

4 categorized as minimum security or less, 

5 and are within five years of release. 

6 (C) REPORT ON RESULTS OF PROGRAM.—

7 Not later than 60 days after completion of the 

8 demonstration program, the Director shall sub9 mit to Congress a report on the results of the 

10 program. At a minimum, the report shall in11 clude an analysis of employment stability, sta12 bility of residence, and rates of recidivism 

13 among inmates who participated in the program 

14 after 18 months of release. 

15 (2) AUTHORIZATION OF APPROPRIATIONS.—

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

17 in each of the three fiscal years after fiscal year 

18 2003, to remain available until expended, for the 

19 purposes of conducting the demonstration program 

20 authorized by subsection (a). 

21 (e) PRERELEASE EMPLOYMENT ASSISTANCE.—

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

23 Bureau of Prisons shall, to the maximum extent 

24 practicable, afford to inmates opportunities to par25 ticipate in programs and activities designed to help 
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1 prepare such inmates to obtain employment upon re2 lease. 

3 (2) PRERELEASE EMPLOYMENT PLACEMENT

4 ASSISTANCE.—Such prerelease employment place5 ment assistance required by subsection (a) shall 

6 include—

7 (A) training in the preparation of resumes 

8 and job applications; 

9 (B) training in interviewing skills; 

10 (C) training and assistance in job search 

11 techniques; 

12 (D) conduct of job fairs; and 

13 (E) such other methods deemed appro14 priate by the Director. 

15 (3) PRIORITY PARTICIPATION.—Priority in pro16 gram participation shall be accorded to inmates who 

17 are participating in work opportunities afforded by 

18 Federal Prison Industries and are within 24 months 

19 of release from incarceration. 

20 SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS. 

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

22 amended to read as follows: 
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1 ‘‘§ 4121. Federal Prison Industries; Board of Direc2 tors: executive management 

3 ‘‘(a) Federal Prison Industries is a government cor4 poration of the District of Columbia organized to carry 

5 on such industrial operations in Federal correctional insti6 tutions as authorized by its Board of Directors. The man7 ner and extent to which such industrial operations are car8 ried on in the various Federal correctional institutions 

9 shall be determined by the Attorney General. 

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

11 of 11 directors appointed by the President. 

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

13 President shall assure that 3 members represent the busi14 ness community, 3 members represent organized labor, 1 

15 member shall have special expertise in inmate rehabilita16 tion techniques, 1 member represents victims of crime, 1 

17 member represents the interests of Federal inmate work18 ers, and 2 additional members whose background and ex19 pertise the President deems appropriate. The members of 

20 the Board representing the business community shall in21 clude, to the maximum extent practicable, representation 

22 of firms furnishing services as well as firms producing 

23 products, especially from those industry categories from 

24 which Federal Prison Industries derives substantial sales. 

25 The members of the Board representing organized labor 

26 shall, to the maximum practicable, include representation 
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1 from labor unions whose members are likely to be most 

2 affected by the sales of Federal Prison Industries. 

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

4 5 years, except that of members first appointed—

5 ‘‘(A) 2 members representing the business com6 munity shall be appointed for a term of 3 years; 

7 ‘‘(B) 2 members representing labor shall be ap8 pointed for a term of 3 years; 

9 ‘‘(C) 2 members whose background and exper10 tise the President deems appropriate for a term of 

11 3 years; 

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

13 shall be appointed for a term of 3 years; 

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

15 Federal inmate workers shall be appointed for a 

16 term of 3 years; 

17 ‘‘(F) 1 member representing the business com18 munity shall be appointed for a term of 4 years; 

19 ‘‘(G) 1 member representing the business com20 munity shall be appointed for a term of 4 years; and 

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

22 inmate rehabilitation techniques shall be appointed 

23 for a term of 5 years. 
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1 ‘‘(4) The President shall designate 1 member of the 

2 Board as Chairperson. The Chairperson may designate a 

3 Vice Chairperson. 

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

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

6 same manner as the original appointment. Any member 

7 appointed to fill a vacancy occurring before the expiration 

8 of the term for which the member’s predecessor was ap9 pointed shall be appointed for the remainder of that term. 

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

11 compensation. The members of the Board shall be allowed 

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

13 at rates authorized for employees of agencies under sub14 chapter I of chapter 57 of title 5, United States Code, 

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

16 approval of the Chairperson of the Board, while otherwise 

17 away from their homes or regular places of business for 

18 purposes of duties as a member of the Board. 

19 ‘‘(8)(A) The Chairperson of the Board may appoint 

20 and terminate any personnel that may be necessary to en21 able the Board to perform its duties. 

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

23 a Federal agency may detail a Federal Government em24 ployee to the Board without reimbursement. Such detail 
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1 shall be without interruption or loss of civil service status 

2 or privilege. 

3 ‘‘(9) The Chairperson of the Board may procure tem4 porary and intermittent services under section 3109(b) of 

5 title 5, United States Code. 

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

7 serve as Chief Executive Officer of the Corporation. The 

8 Director shall designate a person to serve as Chief Oper9 ating Officer of the Corporation.’’. 

10 SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXI11 BILITY TO FEDERAL PRISON INDUSTRIES OP12 ERATIONS. 

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

14 is amended—

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

16 and 

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

18 paragraphs: 

19 ‘‘(B) Federal Prison Industries may locate more than 

20 one workshop at a Federal correctional facility. 

21 ‘‘(C) Federal Prison Industries may operate a work22 shop outside of a correctional facility if all of the inmates 

23 working in such workshop are classified as minimum secu24 rity inmates.’’. 
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1 SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AU2 THORITY. 

3 Any correctional officer or other employee of Federal 

4 Prison Industries being paid with nonappropriated funds 

5 who would be separated from service because of a reduc6 tion in the net income of Federal Prison Industries during 

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

8 (1) eligible for appointment (or reappointment) 

9 in the competitive service pursuant to title 5, United 

10 States Code; 

11 (2) registered on a Bureau of Prisons reemploy12 ment priority list; and 

13 (3) given priority for any other position within 

14 the Bureau of Prisons for which such employee is 

15 qualified. 

16 SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CON17 GRESS. 

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

19 amended to read as follows: 

20 ‘‘§ 4127. Federal Prison Industries report to Congress 

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

22 31, the board of directors of Federal Prison Industries 

23 shall submit an annual report to Congress on the conduct 

24 of the business of the corporation during each fiscal year 

25 and the condition of its funds during the fiscal year. 
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1 ‘‘(b) CONTENTS OF REPORT.—In addition to the 

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

3 other matters as the board considers appropriate, a report 

4 under subsection (a) shall include—

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

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

7 the fiscal year; 

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

9 that will be issued in the following fiscal year; 

10 ‘‘(3) an analysis of—

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

12 specific product and type of service sold to the 

13 Federal agencies and the commercial market; 

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

15 agency of each specific product and type of 

16 service; 

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

18 Federal Government purchases by specific prod19 uct and type of service; and 

20 ‘‘(D) the number and disposition of dis21 putes submitted to the heads of the Federal de22 partments and agencies pursuant to section 

23 4124(e) of this title; 

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

25 includes—
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1 ‘‘(A) the number of inmates employed; 

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

3 produce products or furnish services sold in the 

4 commercial market; 

5 ‘‘(C) the number and percentage of em6 ployed inmates by the term of their incarcer7 ation; and 

8 ‘‘(D) the various hourly wages paid to in9 mates employed with respect to the production 

10 of the various specific products and types of 

11 services authorized for production and sale to 

12 Federal agencies and in the commercial market; 

13 and 

14 ‘‘(5) data concerning employment obtained by 

15 former inmates upon release to determine whether 

16 the employment provided by Federal Prison Indus17 tries during incarceration provided such inmates 

18 with knowledge and skill in a trade or occupation 

19 that enabled such former inmate to earn a livelihood 

20 upon release. 

21 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re22 port under subsection (a) shall be made available to the 

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

24 report.’’. 
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1 SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EF2 FECTS OF ELIMINATING THE FEDERAL PRIS3 ON INDUSTRIES MANDATORY SOURCE AU4 THORITY. 

5 (a) STUDY REQUIRED.—The Comptroller General 

6 shall undertake to have an independent study conducted 

7 on the effects of eliminating the Federal Prison Industries 

8 mandatory source authority. 

9 (b) SOLICITATION OF VIEWS.—The Comptroller Gen10 eral shall ensure that in developing the statement of work 

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

12 of private industry, organized labor groups, Members and 

13 staff of the relevant Congressional committees, officials of 

14 the executive branch, and the public are solicited. 

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

16 Comptroller General shall submit the results of the study 

17 to Congress, including any recommendations for legisla18 tion. 

19 SEC. 16. SENSE OF CONGRESS. 

20 It is the sense of Congress that it is important to 

21 study the concept of implementing a ‘‘good time’’ release 

22 program for non-violent criminals in the Federal prison 

23 system. 

24 SEC. 17. DEFINITIONS. 

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

26 amended by adding at the end the following new section: 
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1 ‘‘§ 4131. Definitions 

2 ‘‘As used in this chapter—

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

4 uniting or combining articles or components (includ5 ing ancillary finished components or assemblies) so 

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

7 without necessarily changing or altering the compo8 nent parts; 

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

10 with respect to a specific product, the fair market 

11 price of the product within the meaning of section 

12 15(a) of the Small Business Act (15 U.S.C. 644(a)), 

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

14 verified through appropriate price analysis or cost 

15 analysis, including any costs relating to transpor16 tation or the furnishing of any ancillary services; 

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

18 a product which, according to Department of Com19 merce data, has experienced competition from im20 ports at an import to domestic production ratio of 

21 25 percent or greater; 

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

23 means a manufacturing activity in which the value 

24 of inmate labor constitutes at least 10 percent of the 

25 estimate unit cost to produce the item by Federal 

26 Prison Industries; 
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1 ‘‘(5) the term ‘manufacture’ means the process 

2 of fabricating from raw or prepared materials, so as 

3 to impart to those materials new forms, qualities, 

4 properties, and combinations; 

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

6 means a share of the total purchases by the Federal 

7 departments and agencies, as reported to the Fed8 eral Procurement Data System for—

9 ‘‘(A) any specific product during the 3 pre10 ceding fiscal years, that does not exceed 20 per11 cent of the Federal market for the specific 

12 product; and 

13 ‘‘(B) any specific service during the 3 pre14 ceding fiscal years, that does not exceed 5 per15 cent of the Federal market for the specific serv16 ice; and 

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

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

19 Federal Acquisition Regulation (48 CFR 36.102), as 

20 in effect on July 1, 2002.’’. 

21 SEC. 18. IMPLEMENTING REGULATIONS AND PROCEDURES. 

22 (a) FEDERAL ACQUISITION REGULATION.—

23 (1) PROPOSED REVISIONS.—Proposed revisions 

24 to the Governmentwide Federal Acquisition Regula25 tion to implement the amendments made by this Act 
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1 shall be published not later than 60 days after the 

2 date of the enactment of this Act and provide not 

3 less than 60 days for public comment. 

4 (2) FINAL REGULATIONS.—Final regulations 

5 shall be published not later than 180 days after the 

6 date of the enactment of this Act and shall be effec7 tive on the date that is 30 days after the date of 

8 publication. 

9 (3) PUBLIC PARTICIPATION.—The proposed 

10 regulations required by subsection (a) and the final 

11 regulations required by subsection (b) shall afford 

12 an opportunity for public participation in accordance 

13 with section 22 of the Office of Federal Procurement 

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

15 (b) BOARD OF DIRECTORS.—

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

17 Federal Prison Industries shall issue regulations de18 fining the terms specified in paragraph (2). 

19 (2) TERMS TO BE DEFINED.—The Board of Di20 rectors shall issue regulations for the following 

21 terms: 

22 (A) Prison-made product. 

23 (B) Prison-furnished service. 

24 (C) Specific product. 

25 (D) Specific service. 
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1 (3) SCHEDULE FOR REGULATORY DEFINI2 TIONS.—

3 (A) Proposed regulations relating to the 

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

5 published not later than 60 days after the date 

6 of enactment of this Act and provide not less 

7 than 60 days for public comment. 

8 (B) Final regulations relating to the mat9 ters described in subsection (b)(2) shall be pub10 lished not less than 180 days after the date of 

11 enactment of this Act and shall be effective on 

12 the date that is 30 days after the date of publi13 cation. 

14 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

15 PARTICIPATION AND SCRUTINY.—

16 (A) ADMINISTRATIVE PROCEDURE ACT.—

17 Regulations issued by the Board of Directors 

18 shall be subject to notice and comment rule19 making pursuant to section 553 of title 5, 

20 United States Code. Unless determined wholly 

21 impracticable or unnecessary by the Board of 

22 Directors, the public shall be afforded 60 days 

23 for comment on proposed regulations. 

24 (B) ENHANCED OUTREACH.—The Board 

25 of Directors shall use means designed to most 
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1 effectively solicit public comment on proposed 

2 regulations, procedures, and policies and to in3 form the affected public of final regulations, 

4 procedures, and policies. 

5 (C) OPEN MEETING PROCESSES.—The 

6 Board of Directors shall take all actions relat7 ing to the adoption of regulations, operating 

8 procedures, guidelines, and any other matter re9 lating to the governance and operation of Fed10 eral Prison Industries based on deliberations 

11 and a recorded vote conducted during a meeting 

12 open to the public, unless closed pursuant to 

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

14 SEC. 19. RULES OF CONSTRUCTION. 

15 (a) AGENCY BID PROTESTS.—Subsection (e) of sec16 tion 4124 of title 18, United States Code, as amended by 

17 section 2, is not intended to alter any rights of any offeror 

18 other than Federal Prison Industries to file a bid protest 

19 in accordance with other law or regulation in effect on the 

20 date of the enactment of this Act. 

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

22 Act is intended to modify the Javits-Wagner-O’Day Act 

23 (41 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 

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 18(a)(2), or after September 

11 30, 2004, whichever is earlier. 

12 SEC. 21. 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
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1 (4) by adding at the end the following new 

2 items:

‘‘4130. Construction of provisions. 

‘‘4131. Definitions.’’.

3 SEC. 22. PROCUREMENT OF GOODS AND SERVICES MANU4 FACTURED IN THE UNITED STATES. 

5 In any case in which a procurement activity proceeds 

6 to conduct a procurement for a product or service as de7 scribed in paragraph (6) of section 4124(b) of title 18, 

8 United States Code, as added by section 2, the procure9 ment must be of goods or services manufactured in the 

10 United States.

Passed the House of Representatives November 6, 

2003. 

Attest: JEFF TRANDAHL, 

Clerk. 

By MARTHA C. MORRISON, 

Deputy Clerk.