II 

109TH CONGRESS 

2D SESSION H. R. 2965 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 15, 2006 

Received; read twice and referred to the Committee on Homeland Security and 

Governmental Affairs 

SEPTEMBER 21, 2006 

Committee discharged; 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 other public service programs, 

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 2006’’. 

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. Re-entry employment preparation through work-based training and apprenticeship. 

Sec. 12. Restructuring the Board of Directors. 

Sec. 13. Management matters. 

Sec. 14. Transitional personnel management authority. 

Sec. 15. Federal Prison Industries report to Congress. 

Sec. 16. Definitions. 

Sec. 17. Implementing regulations and procedures. 

Sec. 18. Rules of construction. 

Sec. 19. Effective date and applicability. 

Sec. 20. Clerical amendments. 

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)(A) If a procurement activ11 ity of a Federal department or agency has a requirement 

12 for a specific product or service that is authorized to be 

13 offered for sale by Federal Prison Industries, in accord14 ance with section 4122 of this title, and is listed in the 

15 catalog referred to in subsection (g), the procurement ac16 tivity shall solicit an offer from Federal Prison Industries, 

17 if the purchase is expected to be in excess of the micro18 purchase threshold (as defined by section 32(f) of the Of19 fice of Federal Procurement Policy Act (41 U.S.C. 

20 428(f))). 

21 ‘‘(B) The requirements of subparagraph (A) shall 

22 also apply to a procurement that a Federal department 

23 or agency intends to meet by placing an order against a 

24 contract maintained by the General Services Administra25 tion under the Multiple Award Schedule Contracts Pro26 gram. 


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1 ‘‘(C) Federal Prison Industries, upon its request, 

2 shall be listed on any Schedule, referred to in subpara3 graph (B), as offering products or services which Federal 

4 Prison Industries believes to be comparable to those prod5 ucts and services being offered by commercial contractors 

6 through the Multiple Award Schedule Contracts Program. 

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

8 shall be made using competitive procedures in accordance 

9 with the applicable evaluation factors, unless a determina10 tion is made by the Attorney General pursuant to para11 graph (3) or an award using other than competitive proce12 dures is authorized pursuant to paragraph (7). 

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

14 Federal Prison Industries on a noncompetitive basis for 

15 the award of a contract if the Attorney General determines 

16 that— 

17 ‘‘(A) Federal Prison Industries cannot reason18 ably expect fair consideration to receive the contract 

19 award on a competitive basis; and 

20 ‘‘(B) the contract award is necessary to main21 tain work opportunities otherwise unavailable at the 

22 penal or correctional facility at which the contract is 

23 to be performed to prevent circumstances that could 

24 reasonably be expected to significantly endanger the 

25 safe and effective administration of such facility. 


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1 ‘‘(4) Except in the case of an award to be made pur2 suant to paragraph (3), a contract award shall be made 

3 with Federal Prison Industries only if the contracting offi4 cer for the procurement activity determines that— 

5 ‘‘(A) the specific product or service to be fur6 nished will meet the requirements of the procure7 ment activity (including any applicable 

8 prequalification requirements and all specified com9 mercial or governmental standards pertaining to 

10 quality, testing, safety, serviceability, and warran11 ties); 

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

13 reasonably expected; and 

14 ‘‘(C) the contract price does not exceed a cur15 rent market price. 

16 ‘‘(5) A determination by the Attorney General pursu17 ant to paragraph (3) shall be— 

18 ‘‘(A) supported by specific findings by the war19 den of the penal or correctional institution at which 

20 a Federal Prison Industries workshop is scheduled 

21 to perform the contract; 

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

23 Prison Industries regarding why it does not expect 

24 to win the contract on a competitive basis; and 


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

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

3 of the Federal Property and Administrative Services 

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

5 ‘‘(6) If the Attorney General has not made the deter6 mination described in paragraph (3) within 30 days after 

7 Federal Prison Industries has been informed of a con8 tracting opportunity by a procurement activity, the pro9 curement activity may proceed to conduct a procurement 

10 for the product or service in accordance with the proce11 dures generally applicable to such procurements by the 

12 procurement activity. 

13 ‘‘(7) A contract award may be made to Federal Pris14 on Industries using other than competitive procedures if 

15 such product or service is only available from Federal 

16 Prison Industries and the contract may be awarded under 

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

18 303(c) of the Federal Property and Administrative Serv19 ices Act of 1949 (41 U.S.C. 253(c)(1)), as may be applica20 ble, and pursuant to the justification and approval re21 quirements relating to such noncompetitive procurements 

22 specified by law and the Governmentwide Federal Acquisi23 tion Regulation. 


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1 ‘‘(8) A contract award may be made to Federal Pris2 on Industries using other than competitive procedures by 

3 the Federal Bureau of Prisons. 

4 ‘‘(9) A solicitation for a contract shall first be made 

5 to Federal Prison Industries using other than competitive 

6 procedures if the product or service to be acquired would 

7 otherwise be furnished by a contractor performing the 

8 work outside of the United States. 

9 ‘‘(c) OFFERS FROM FEDERAL PRISON INDUS10 TRIES.—(1) A timely offer received from Federal Prison 

11 Industries to furnish a product or service to a Federal de12 partment or agency shall be considered for award without 

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

14 unless the contract opportunity has been reserved for com15 petition exclusively among small business concerns pursu16 ant to section 15(a) of the Small Business Act (15 U.S.C. 

17 644(a)) and its implementing regulations. 

18 ‘‘(2)(A) Any offer made by Federal Prison Industries 

19 to furnish a product or service may exclude from the of20 fered price the following: 

21 ‘‘(i) The costs related to security of the facili22 ties at which the contract will be performed. 

23 ‘‘(ii) The costs of educating and training the 

24 prison work force performing the contract. 


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1 ‘‘(iii) Excess capital costs of machinery and ex2 cess inventories used within a prison environment 

3 that are the result of the unique environment of 

4 prison life. 

5 ‘‘(iv) Other costs of performing the contract re6 sulting from the unique environment of prison facili7 ties. 

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

12 contractor. 

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

15 the award of a contract to Federal Prison Industries or 

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

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

18 (3). 

19 ‘‘(2)(A) The Chief Operating Officer of Federal Pris20 on Industries may protest a decision by a contracting offi21 cer not to award a contract to Federal Prison Industries 

22 pursuant to subsection (b)(4), in accordance with section 

23 33.103, (Protests to the agency) of the Federal Acquisi24 tion Regulation (48 C.F.R. part 33.103). 


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1 ‘‘(B) In the event of an adverse decision of a protest 

2 filed pursuant to subparagraph (A), the Assistant Attor3 ney General for Administration may request a reconsider4 ation of such adverse decision by the head of the Federal 

5 agency or department, which shall be considered de novo 

6 and the decision issued by such agency head on a non7 delegable basis. Such decision upon reconsideration by the 

8 agency head shall be final. 

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

10 and a procurement activity regarding performance of a 

11 contract shall be subject to— 

12 ‘‘(A) alternative means of dispute resolution 

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

14 or 

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

16 appeals having jurisdiction over the procurement ac17 tivity’s contract performance disputes pursuant to 

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

19 et seq.). 

20 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de21 partment or agency shall report purchases from Federal 

22 Prison Industries to the Federal Procurement Data Sys23 tem (as referred to in section 6(d)(4) of the Office of Fed24 eral Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 

25 same manner as it reports to such System any acquisition 


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1 in an amount in excess of the simplified acquisition thresh2 old (as defined by section 4(11) of the Office of Federal 

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

4 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In5 dustries shall publish and maintain a catalog of all specific 

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

7 Such catalog shall be periodically revised as products and 

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

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

10 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Pris11 on Industries shall be subject to Federal occupational, 

12 health, and safety standards with respect to the operation 

13 of its industrial operations.’’. 

14 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

15 PROPOSALS BY FEDERAL PRISON INDUS16 TRIES. 

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

18 amended— 

19 (1) by redesignating paragraph (6) as para20 graph (13); and 

21 (2) by striking paragraphs (4) and (5) and in22 serting the following new paragraphs: 

23 ‘‘(4)(A) Federal Prison Industries is authorized to 

24 offer a new specific product or furnish a new specific serv25 ice in response to a competitive solicitation or other purVerDate Aug 31 2005 03:20 Sep 22, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2965.RCS H2965

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1 chase request issued by a Federal department or agency. 

2 No subsequent offering of such product or service may be 

3 made by Federal Prison Industries until the board of di4 rectors has approved the offering for sale of such new spe5 cific product or new specific service, in conformance with 

6 the requirements of paragraphs (5) through (9). 

7 ‘‘(B) Federal Prison Industries may produce a prod8 uct or furnish a service in excess of the authorized level 

9 of production for such product or service, in response to 

10 an order placed pursuant to an existing contract with a 

11 Federal department or agency, if the agency’s need for 

12 the product or service is of such an urgency that it would 

13 justify the use of procedures other than competitive proce14 dures pursuant to section 2304(c)(2) of title 10 or section 

15 303(c)(2) of the Federal Property and Administrative 

16 Services Act of 1949 (41 U.S.C. 253(c)(2)), as may be 

17 applicable. 

18 ‘‘(5) A decision to authorize Federal Prison Indus19 tries to offer a new specific product or specific service or 

20 to expand the production of an existing product or service 

21 for sale to the Federal Government shall be made by its 

22 board of directors in conformance with the requirements 

23 of subsections (b), (c), (d), and (e) of section 553 of title 

24 5, and this chapter. 


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1 ‘‘(6)(A) Whenever Federal Prison Industries pro2 poses to offer for sale a new specific product or specific 

3 service or to expand production of a currently authorized 

4 product or service, the Chief Operating Officer of Federal 

5 Prison Industries shall submit an appropriate proposal to 

6 the board of directors and obtain the board’s approval be7 fore initiating any such expansion. The proposal submitted 

8 to the board shall include a detailed analysis of the prob9 able impact of the proposed expansion of sales within the 

10 Federal market by Federal Prison Industries on private 

11 sector firms and their non-inmate workers. 

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

13 shall be performed by an interagency team on a reimburs14 able basis or by a private contractor paid by Federal Pris15 on Industries. 

16 ‘‘(ii) If the analysis is to be performed by an inter17 agency team, such team shall be led by the Administrator 

18 of the Small Business Administration or the designee of 

19 such officer with representatives of the Department of 

20 Labor, the Department of Commerce, and the Federal 

21 Procurement Data Center. 

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

23 contractor, the selection of the contractor and the admin24 istration of the contract shall be conducted by one of the 

25 entities referenced in clause (ii) as an independent execuVerDate Aug 31 2005 03:20 Sep 22, 2006 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2965.RCS H2965

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1 tive agent for the board of directors. Maximum consider2 ation shall be given to any proposed statement of work 

3 furnished by the Chief Operating Officer of Federal Prison 

4 Industries. 

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

6 identify and consider— 

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

8 the requirements of the Federal Government for the 

9 specific product or specific service; 

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

11 market for the specific product or specific service 

12 currently furnished by small businesses during the 

13 previous 3 fiscal years; 

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

15 specific product or specific service projected for Fed16 eral Prison Industries for the fiscal year in which 

17 production or performance will commence or expand 

18 and the subsequent 4 fiscal years; 

19 ‘‘(iv) whether the industry producing the spe20 cific product or specific service in the private sec21 tor— 

22 ‘‘(I) has an unemployment rate higher 

23 than the national average; or 


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

2 workers that has consistently shown an increase 

3 during the previous 5 years; 

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

6 ‘‘(vi) the requirements of the Federal Govern7 ment and the demands of entities other than the 

8 Federal Government for the specific product or serv9 ice during the previous 3 fiscal years; 

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

12 product 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 

16 and private vendors; and 

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

18 new product or performance of a new service will 

19 provide inmates with the maximum opportunity to 

20 acquire knowledge and skill in trades and occupa21 tions that will provide them with a means of earning 

22 a livelihood upon release. 

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

24 proposal to authorize the production and sale of a new 


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1 specific product or continued sale of a previously author2 ized product unless— 

3 ‘‘(I) the product to be furnished is a prison4 made 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 de21 scribed, without giving prior notice to such persons 

22 or class 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 

13 of the Federal Acquisition Regulation (48 C.F.R. part 

14 2.101), as in effect on June 1, 2004, including the repair, 

15 alteration, or maintenance of real property in being. 

16 ‘‘(7) To provide further opportunities for participa17 tion 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 

25 approval of the proposal, which notice shall offer to 


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1 furnish copies of the analysis required by paragraph 

2 (6) and shall solicit comment on the analysis; 

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

4 by paragraph (6) from trade associations rep5 resenting vendors and labor unions representing pri6 vate sector workers who could reasonably be ex7 pected to be affected by approval of the proposal to 

8 authorize the production and sale of a new product 

9 or service (or expand the production of a currently 

10 authorized product 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 

14 to present comments on the proposal directly to the 

15 board of directors. 

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

17 of all comments received on the expansion proposal. 

18 ‘‘(9) Based on the comments received on the initial 

19 expansion 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 pro24 posal shall reflect the analysis required by paragraph 


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1 (6)(C) and be subject to the public comment requirements 

2 of paragraph (7). 

3 ‘‘(10) 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 

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

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

9 title 5. 

10 ‘‘(11) In conformance with the requirements of para11 graph (10) of this subsection, the board of directors 

12 may— 

13 ‘‘(A) authorize the donation of products pro14 duced or services furnished by Federal industries 

15 and available for sale; 

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

17 product or the furnishing of a new specific service 

18 for 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 two-thirds of 

5 the appointed members of the board.’’. 

6 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

7 (a) IN GENERAL.—Notwithstanding the require8 ments of section 4124 of title 18, United States Code (as 

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

10 or agency having a requirement for a product that is au11 thorized for sale by Federal Prison Industries and is listed 

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

13 United States Code) shall first solicit an offer from Fed14 eral Prison Industries and make purchases on a non15 competitive basis in accordance with this section or in ac16 cordance with section 2410n of title 10, United States 

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

18 and Administrative Services Act of 1949 (as added by sub19 section (j)). 

20 (b) PREFERENTIAL SOURCE STATUS.—Subject to 

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

22 be made on a noncompetitive basis to Federal Prison In23 dustries if the contracting officer for the procurement ac24 tivity determines that— 


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1 (1) the product offered by Federal Prison In2 dustries will meet the requirements of the procure3 ment activity (including commercial or governmental 

4 standards or specifications pertaining to design, per5 formance, testing, safety, serviceability, and warran6 ties as may be imposed upon a private sector sup7 plier of the type being offered by Federal Prison In8 dustries); 

9 (2) timely performance of the contract by Fed10 eral Prison Industries can be reasonably expected; 

11 and 

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

13 and reasonable price. 

14 (c) CONTRACTUAL TERMS.—The terms and condi15 tions of the contract and the price to be paid to Federal 

16 Prison Industries shall be determined by negotiation be17 tween Federal Prison Industries and the Federal agency 

18 making the purchase. The negotiated price shall not ex19 ceed a fair and reasonable price determined in accordance 

20 with the procedures of the Federal Acquisition Regulation. 

21 (d) PERFORMANCE OF CONTRACTUAL OBLIGA22 TIONS.— 

23 (1) IN GENERAL.—Federal Prison Industries 

24 shall perform the obligations of the contract nego25 tiated pursuant to subsection (c). 


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

2 the contracting activity and the Chief Operating Of3 ficer of Federal Prison Industries are unable to re4 solve a contract performance dispute to their mutual 

5 satisfaction, such dispute shall be resolved pursuant 

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

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

8 (e) LIMITATIONS ON USE OF AUTHORITY.— 

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

10 made by Federal Prison Industries during the base 

11 period, the total dollar value of sales to the Govern12 ment made pursuant to subsection (b) and sub13 section (c) of this section shall not exceed— 

14 (A) 90 percent in fiscal year 2008; 

15 (B) 85 percent in fiscal year 2009; 

16 (C) 70 percent in fiscal year 2010; 

17 (D) 55 percent in fiscal year 2011; and 

18 (E) 40 percent in fiscal year 2012. 

19 (2) SALES WITHIN VARIOUS BUSINESS SEC20 TORS.—Use of the authority provided by subsections 

21 (b) and (c) shall not result in sales by Federal Pris22 on Industries to the Government that are in excess 

23 of its total sales during the base year for each busi24 ness sector. 


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1 (3) LIMITATIONS RELATING TO SPECIFIC PROD2 UCTS.—Use of the authorities provided by sub3 sections (b) and (c) shall not result in contract 

4 awards to Federal Prison Industries that are in ex5 cess of its total sales during the base period for such 

6 product. 

7 (4) CHANGES IN DESIGN SPECIFICATIONS.—If a 

8 buying agency directs a change to the design speci9 fication for a specific product, the costs associated 

10 with the implementation of such specification change 

11 by Federal Prison Industries shall not be considered 

12 for the purposes of computing sales by Federal Pris13 on Industries for the purposes of paragraphs (2) and 

14 (3). 

15 (f) ADDITIONAL AUTHORITY TO SUSTAIN INMATE

16 EMPLOYMENT.—During the period specified in subsection 

17 (g), the authority of section 4122(b)(11)(C)(ii) of title 18, 

18 United States Code (as added by section 3), may be used 

19 by the Board to sustain inmate employment. 

20 (g) DURATION OF AUTHORITY.—The preferential 

21 contracting authorities authorized by subsection (b) may 

22 not be used on or after October 1, 2012, and become effec23 tive on the effective date of the final regulations issued 

24 pursuant to section 17. 


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1 (h) DEFINITIONS.—For the purposes of this sec2 tion— 

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

4 sales of Federal Prison Industries during the period 

5 October 1, 2003, and September 30, 2004 (Fiscal 

6 Year 2004); 

7 (2) the term ‘‘business sectors’’ means the 

8 seven product/service business groups identified in 

9 the 2004 Federal Prison Industries annual report as 

10 the Clothing and Textiles Business Group, the Elec11 tronics Business Group, the Fleet Management and 

12 Vehicular Components Business Group, the Indus13 trial Products Business Group, the Office Furniture 

14 Business Group, the Recycling Activities Business 

15 Group, and the Services Business Group; and 

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

17 be given the same meaning as, and be determined 

18 pursuant to, part 15.8 of the Federal Acquisition 

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

20 (i) FINDING BY ATTORNEY GENERAL WITH RE21 SPECT TO PUBLIC SAFETY.—(1) Not later than 60 days 

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

23 (e)(1), the Attorney General shall make a finding regard24 ing the effects of the percentage limitation imposed by 

25 such subsection for such fiscal year and the likely effects 


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1 of the limitation imposed by such subsection for the fol2 lowing fiscal year. 

3 (2) The Attorney General’s finding shall include a de4 termination whether such limitation has resulted or is like5 ly to result in a substantial reduction in inmate industrial 

6 employment and whether such reductions, if any, present 

7 a significant risk of adverse effects on safe prison oper8 ation or public safety. 

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

10 of adverse effects on either safe prison management or 

11 public safety, he shall so advise the Congress. 

12 (4) In advising the Congress pursuant to paragraph 

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

14 additional authorizations of appropriations to provide ad15 ditional alternative inmate rehabilitative opportunities and 

16 additional correctional staffing, as may be appropriate. 

17 (j) PROCEDURAL REQUIREMENTS FOR CIVILIAN

18 AGENCIES RELATING TO PRODUCTS OF FEDERAL PRISON

19 INDUSTRIES.—Title III of the Federal Property and Ad20 ministrative Services Act of 1949 (41 U.S.C. 251 et seq.) 

21 is amended by adding at the end the following new section: 

22 ‘‘SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: 

23 PROCEDURAL REQUIREMENTS. 

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

25 product listed in the latest edition of the Federal Prison 


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1 Industries catalog under section 4124(g) of title 18, 

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

3 conduct market research to determine whether the Federal 

4 Prison Industries product is comparable to products avail5 able from the private sector that best meet the executive 

6 agency’s needs in terms of price, quality, and time of deliv7 ery. 

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

9 the executive agency determines that a Federal Prison In10 dustries product is not comparable in price, quality, or 

11 time of delivery to products available from the private sec12 tor that best meet the executive agency’s needs in terms 

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

14 shall use competitive procedures for the procurement of 

15 the product or shall make an individual purchase under 

16 a multiple award contract. In conducting such a competi17 tion or making such a purchase, the agency head shall 

18 consider a timely offer from Federal Prison Industries. 

19 ‘‘(c) IMPLEMENTATION BY HEAD OF EXECUTIVE

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

21 that— 

22 ‘‘(1) the executive agency does not purchase a 

23 Federal Prison Industries product or service unless 

24 a contracting officer of the agency determines that 

25 the product or service is comparable to products or 


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1 services available from the private sector that best 

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

3 and time of delivery; and 

4 ‘‘(2) Federal Prison Industries performs its 

5 contractual obligations to the same extent as any 

6 other contractor for the executive agency. 

7 ‘‘(d) MARKET RESEARCH DETERMINATION NOT

8 SUBJECT TO REVIEW.—A determination by a contracting 

9 officer regarding whether a product or service offered by 

10 Federal Prison Industries is comparable to products or 

11 services available from the private sector that best meet 

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

13 time of delivery shall not be subject to review pursuant 

14 to section 4124(b) of title 18. 

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

16 contractor or potential contractor of an executive agency 

17 may not be required to use Federal Prison Industries as 

18 a subcontractor or supplier of products or provider of serv19 ices for the performance of a contract of the executive 

20 agency by any means, including means such as— 

21 ‘‘(A) a contract solicitation provision requiring 

22 a contractor to offer to make use of products or 

23 services of Federal Prison Industries in the perform24 ance of the contract; 


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1 ‘‘(B) a contract specification requiring the con2 tractor to use specific products or services (or class3 es of products or services) offered by Federal Prison 

4 Industries in the performance of the contract; or 

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

6 of products or services of Federal Prison Industries 

7 in the performance of the contract. 

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

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

10 under the contract. 

11 ‘‘(f) PROTECTION OF CLASSIFIED AND SENSITIVE

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

13 enter into any contract with Federal Prison Industries 

14 under which an inmate worker would have access to— 

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

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

17 of— 

18 ‘‘(A) surface and subsurface infrastructure 

19 providing communications or water or electrical 

20 power distribution; 

21 ‘‘(B) pipelines for the distribution of nat22 ural gas, bulk petroleum products, or other 

23 commodities; or 

24 ‘‘(C) other utilities; or 


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1 ‘‘(3) any personal or financial information 

2 about any individual private citizen, including infor3 mation relating to such person’s real property how4 ever described, without the prior consent of the indi5 vidual. 

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

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

8 meaning given such term in section 4(5) of the Of9 fice of Federal Procurement Policy Act (41 U.S.C. 

10 403(5)). 

11 ‘‘(2) The term ‘market research’ means obtain12 ing specific information about the price, quality, and 

13 time of delivery of products available in the private 

14 sector through a variety of means, which may in15 clude— 

16 ‘‘(A) contacting knowledgeable individuals 

17 in government and industry; 

18 ‘‘(B) interactive communication among in19 dustry, acquisition personnel, and customers; 

20 and 

21 ‘‘(C) interchange meetings or pre-solicita22 tion conferences with potential offerors.’’. 


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1 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON2 TRACTOR. 

3 (a) IN GENERAL.—Federal Prison Industries is au4 thorized to enter into a contract with a Federal contractor 

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

6 produce products as a subcontractor or supplier in the per7 formance of a Federal procurement contract. The use of 

8 Federal Prison Industries as a subcontractor or supplier 

9 shall be a wholly voluntary business decision by the Fed10 eral prime contractor or subcontractor, subject to any 

11 prior approval of subcontractors or suppliers by the con12 tracting officer which may be imposed by the Federal Ac13 quisition Regulation or by the contract. 

14 (b) LIMITATIONS ON USE.—Federal Prison Indus15 tries is prohibited from being a subcontractor or supplier 

16 at any tier if— 

17 (1) the product or service is to be acquired by 

18 a Federal department or agency pursuant to section 

19 3 of the Javits-Wagner-O’Day Act (41 U.S.C. 48); 

20 or 

21 (2) the product to be acquired by the Federal 

22 department or agency is subject to section 2533a of 

23 title 10, United States Code. 

24 (c) COMMERCIAL SALES PROHIBITED.—The author25 ity provided by subsection (a) shall not result, either di26 rectly or indirectly, in the sale in the commercial market 


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

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

3 United States Code. A Federal contractor (or subcon4 tractor at any tier) using Federal Prison Industries as a 

5 subcontractor or supplier in furnishing a commercial prod6 uct pursuant to a Federal contract shall implement appro7 priate management procedures to prevent introducing an 

8 inmate-produced product into the commercial market. 

9 (d) PROHIBITIONS ON MANDATING SUBCON10 TRACTING WITH FEDERAL PRISON INDUSTRIES.—Except 

11 as authorized under the Federal Acquisition Regulation, 

12 the use of Federal Prison Industries as a subcontractor 

13 or supplier of products or provider of services shall not 

14 be imposed upon prospective or actual Federal prime con15 tractors or a subcontractors at any tier by means of— 

16 (1) a contract solicitation provision requiring a 

17 contractor to offer to make use of Federal Prison 

18 Industries, its products or services; 

19 (2) specifications requiring the contractor to 

20 use specific products or services (or classes of prod21 ucts or services) offered by Federal Prison Indus22 tries in the performance of the contract; 

23 (3) any contract modification directing the use 

24 of Federal Prison Industries, its products or serv25 ices; or 


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1 (4) any other means. 

2 SEC. 6. INMATE WAGES AND DEDUCTIONS. 

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

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

5 adding after paragraph (11) a new paragraph (12) as fol6 lows: 

7 ‘‘(12)(A) The Board of Directors of Federal Prison 

8 Industries shall prescribe the rates of hourly wages to be 

9 paid inmates performing work for or through Federal 

10 Prison Industries. The Director of the Federal Bureau of 

11 Prisons shall prescribe the rates of hourly wages for other 

12 work assignments within the various Federal correctional 

13 institutions. In the case of an inmate whose term of im14 prisonment is to expire in not more than 2 years, wages 

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

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

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

18 shall be held in trust and paid only upon the actual expira19 tion of the term of imprisonment. 

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

21 and considered for increase on not less than a biannual 

22 basis. 

23 ‘‘(C) The Board of Directors of Federal Prison In24 dustries shall— 


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1 ‘‘(i) not later than September 30, 2008, in2 crease the maximum wage rate for inmates per3 forming work for or through Federal Prison Indus4 tries to an amount equal to 50 percent of the min5 imum wage prescribed by section 6(a)(1) of the Fair 

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

7 206(a)(1)); and 

8 ‘‘(ii) not later than September 30, 2013, in9 crease such maximum wage rate to an amount equal 

10 to such minimum wage. 

11 ‘‘(D) 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 

22 family pursuant to statute, court order, or agree23 ment 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 so3 ciety, 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 ‘‘(E) 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) and (c) by strik14 ing ‘‘goods, wares, or merchandise manufactured, pro15 duced, or mined’’ each place it appears and inserting 

16 ‘‘products manufactured, services furnished, or minerals 

17 mined’’. 

18 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

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

20 State or local jurisdiction of a State which is providing 

21 services for the commercial market through inmate labor 

22 on October 1, 2006, may continue to provide such com23 mercial services until— 


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1 (1) the expiration date specified in the contract 

2 or other agreement with a commercial partner on 

3 October 1, 2006, or 

4 (2) until September 30, 2011, if the prison 

5 work program is directly furnishing the services to 

6 the commercial market. 

7 (c) APPROVAL REQUIRED FOR LONG-TERM OPER8 ATION.—A prison work program operated by a correc9 tional institution operated by a State or local jurisdiction 

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

11 services for sale in the commercial market after the dates 

12 specified in subsection (b) if such program has been cer13 tified pursuant to section 1761(c)(1) of title 18, United 

14 States Code, and is in compliance with the requirements 

15 of such subsection and its implementing regulations. 

16 (d) EXISTING WORK OPPORTUNITIES FOR FEDERAL

17 INMATES.—Any private for-profit business entity having 

18 an agreement with Federal Prison Industries in effect on 

19 the date of enactment of this Act, under which Federal 

20 inmates are furnishing services that are being introduced 

21 into the commercial market, may continue to furnish such 

22 services for the duration of the term of such agreement. 

23 (e) ADDITIONAL AMENDMENT.—Section 1761 of title 

24 18, United States Code, is further amended— 


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1 (1) by redesignating subsection (d) as sub2 section (e); and 

3 (2) by inserting after subsection (c) the fol4 lowing new subsection: 

5 ‘‘(d) This section shall not apply to services per6 formed as part of an inmate work program conducted by 

7 a State or local government to disassemble, scrap, and re8 cycle products, other than electronic products, that would 

9 otherwise be disposed of in a landfill. Recovered scrap 

10 from such program may be sold.’’. 

11 SEC. 8. CONFORMING AMENDMENT. 

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

13 amended by striking ‘‘production of commodities’’ and in14 serting ‘‘production of products or furnishing of services’’. 

15 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

16 307. 

17 Chapter 307 of title 18, United States Code, is fur18 ther amended by adding at the end the following: 

19 ‘‘§ 4130. Construction of provisions 

20 ‘‘Nothing in this chapter shall be construed— 

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

22 to— 

23 ‘‘(A) employment in a Federal Prison In24 dustries facility; or 


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

2 or benefit on demand, except as otherwise spe3 cifically provided by law or regulation; 

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

5 the purposes of any law or program; or 

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

7 behalf of any inmate against the United States or 

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

9 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR10 TUNITIES FOR INMATES. 

11 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE12 LEASE-PREPARATION OPPORTUNITIES.— 

13 (1) PROGRAM ESTABLISHED.—There is hereby 

14 established the Enhanced In-Prison Educational and 

15 Vocational Assessment and Training Program within 

16 the Federal Bureau of Prisons. 

17 (2) COMPREHENSIVE PROGRAM.—In addition to 

18 such other components as the Director of the Bu19 reau of Prisons deems appropriate to reduce inmate 

20 idleness and better prepare inmates for a successful 

21 reentry into the community upon release, the pro22 gram shall provide— 

23 (A) in-prison assessments of inmates’ 

24 needs and aptitudes; 


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1 (B) a full range of educational opportuni2 ties; 

3 (C) vocational training and apprentice4 ships; and 

5 (D) comprehensive release-readiness prepa6 ration. 

7 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

8 the purposes of carrying out the program established 

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

10 each fiscal year after fiscal year 2007, to remain 

11 available until expended. It is the sense of Congress 

12 that Federal Prison Industries should use some of 

13 its net earnings to accomplish the purposes of the 

14 program. 

15 (4) SCHEDULE FOR IMPLEMENTATION.—All 

16 components of the program shall be established— 

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

18 prisons not later than 2 years after the date of 

19 the enactment of this Act; 

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

21 prisons not later than 4 years after such date 

22 of enactment; 

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

24 prisons not later than 6 years after such date 

25 of enactment; and 


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

2 years after such date of enactment. 

3 (b) ADDITIONAL INMATE WORK OPPORTUNITIES

4 THROUGH PUBLIC SERVICE ACTIVITIES.— 

5 (1) IN GENERAL.—Chapter 307 of title 18, 

6 United States Code, is further amended by inserting 

7 after section 4124 the following new section: 

8 ‘‘§ 4124a. Additional inmate work opportunities 

9 through public service activities 

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

11 within Federal Prison Industries may perform work for 

12 an eligible entity pursuant to an agreement between such 

13 entity and the Inmate Work Training Administrator in ac14 cordance with the requirements of this section. 

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

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

17 an entity— 

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

19 501(c)(3) of the Internal Revenue Code of 1986 and 

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

21 Code and that has been such an organization for a 

22 period of not less than 36 months prior to inclusion 

23 in an agreement under this section; 


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

2 in section 501(d) of such Code and exempt from tax3 ation under section 501(a) of such Code; or 

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

5 district, or another special purpose district. 

6 ‘‘(c) INMATE WORK TRAINING ADMINISTRATOR.— 

7 There is hereby established the position of Inmate Work 

8 Training Administrator, who shall be responsible for fos9 tering the creation of alternative inmate work opportuni10 ties authorized by this section. The Administrator shall 

11 be designated by the Chief Executive Officer of Federal 

12 Prison Industries, with the approval of the Board of Di13 rectors, and be under the supervision of the Chief Oper14 ating Officer, but may directly report to the Board. 

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

16 seeking to enter into an agreement pursuant to subsection 

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

18 Training Administrator. Each such agreement shall speci19 fy— 

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

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

22 specified in terms of a base year and number of op23 tion years; 


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

2 be employed in the specified types of work during 

3 the various phases of the agreement; 

4 ‘‘(4) the wage rates proposed to be paid to var5 ious classes of inmate workers; and 

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

7 than correctional personnel dedicated to the security 

8 of the inmate workers) to be furnished by Federal 

9 Prison Industries or the Bureau of Prisons and the 

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

11 services, and personnel. 

12 ‘‘(e) REPRESENTATIONS.— 

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

14 proposed agreement shall be accompanied by a writ15 ten certification by the chief executive officer of the 

16 eligible entity that— 

17 ‘‘(A) the work to be performed by the in18 mate workers will be limited to the eleemosy19 nary work of such entity in the case of an enti20 ty described in paragraph (1) or (2) of sub21 section (b); 

22 ‘‘(B) the work would not be performed in 

23 the United States but for the availability of the 

24 inmate workers; and 


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

2 workers will not result, either directly or indi3 rectly, in the production of a new product or 

4 the furnishing of a service that is to be offered 

5 for other than resale or donation by the eligible 

6 entity or any affiliate of the such entity. 

7 ‘‘(2) PROTECTIONS FOR NON-INMATE WORK8 ERS.—Each proposed agreement shall also be ac9 companied by a written certification by the chief ex10 ecutive officer of the eligible entity that— 

11 ‘‘(A) no non-inmate employee (including 

12 any person performing work activities for such 

13 governmental entity pursuant to section 607 of 

14 subchapter IV of the Social Security Act (42 

15 U.S.C. 607)) of the eligible entity (or any affil16 iate of the entity) working in the United States 

17 will have his or her job abolished or work hours 

18 reduced as a result of the entity being author19 ized to utilize inmate workers; and 

20 ‘‘(B) the work to be performed by the in21 mate workers will not supplant work currently 

22 being performed in the United States by a con23 tractor of the eligible entity. 

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


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1 ‘‘(1) IN GENERAL.—Each such proposed agree2 ment shall be presented to the Board of Directors, 

3 be subject to the same opportunities for public com4 ment, and be publicly considered and acted upon by 

5 the Board in a manner comparable to that required 

6 by paragraphs (7) and (8) of section 4122(b). 

7 ‘‘(2) MATTERS TO BE CONSIDERED.—In deter8 mining whether to approve a proposed agreement, 

9 the Board shall— 

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

11 provides inmate work opportunities that will 

12 provide participating inmates with the best 

13 prospects of obtaining employment paying a liv14 able wage upon release; 

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

16 provides for maximum reimbursement for in17 mate wages and for the costs of supplies and 

18 equipment needed to perform the types of work 

19 to be performed; 

20 ‘‘(C) not approve an agreement that will 

21 result in the displacement of non-inmate work22 ers contrary to the representations required by 

23 subsection (e)(2) as determined by the Board or 

24 by the Secretary of Labor (pursuant to sub25 section (i)); and 


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

2 result, either directly or indirectly, in the pro3 duction of a new product or the furnishing of 

4 a service for other than resale by an eligible en5 tity described in paragraph (1) or (2) of sub6 section (b) or donation. 

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

8 WAGES.— 

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

10 paid wages for work under the agreement at a basic 

11 hourly rate to be negotiated between the eligible en12 tity and Federal Prison Industries and specified in 

13 the agreement. The wage rates set by the Director 

14 of the Federal Bureau of Prisons to be paid inmates 

15 for various institutional work assignments are spe16 cifically authorized. 

17 ‘‘(2) PAYMENT TO INMATE WORKER AND AU18 THORIZED DEDUCTIONS.—Wages shall be paid and 

19 deductions taken pursuant to section 

20 4122(b)(12)(D). 

21 ‘‘(3) VOLUNTARY PARTICIPATION BY INMATE.— 

22 Each inmate worker to be utilized by an eligible en23 tity shall indicate in writing that such person— 

24 ‘‘(A) is participating voluntarily; and 


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

2 to be paid and deductions to be taken from 

3 such wages. 

4 ‘‘(h) ASSIGNMENT TO WORK OPPORTUNITIES.—As5 signment of inmates to work under an approved agree6 ment with an eligible entity shall be subject to the Bureau 

7 of Prisons Program Statement Number 1040.10 (Non8 Discrimination Toward Inmates), as contained in section 

9 551.90 of title 28 of the Code of Federal Regulations (or 

10 any successor document). 

11 ‘‘(i) ENFORCEMENT OF PROTECTIONS FOR NON-IN12 MATE WORKERS.— 

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

14 request of any interested person, the Secretary of 

15 Labor may promptly verify a certification made pur16 suant subsection (e)(2) with respect to the displace17 ment of non-inmate workers so as to make the re18 sults of such inquiry available to the Board of Direc19 tors prior to the Board’s consideration of the pro20 posed agreement. The Secretary and the person re21 questing the inquiry may make recommendations to 

22 the Board regarding modifications to the proposed 

23 agreement. 

24 ‘‘(2) DURING PERFORMANCE.— 


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1 ‘‘(A) IN GENERAL.—Whenever the Sec2 retary deems appropriate, upon request or oth3 erwise, the Secretary may verify whether the 

4 actual performance of the agreement is result5 ing in the displacement of non-inmate workers 

6 or the use of inmate workers in a work activity 

7 not authorized under the approved agreement. 

8 ‘‘(B) SANCTIONS.—Whenever the Sec9 retary determines that performance of the 

10 agreement has resulted in the displacement of 

11 non-inmate workers or employment of an in12 mate worker in an unauthorized work activity, 

13 the Secretary may— 

14 ‘‘(i) direct the Inmate Work Training 

15 Administrator to terminate the agreement 

16 for default, subject to the processes and 

17 appeals available to a Federal contractor 

18 whose procurement contract has been ter19 minated for default; and 

20 ‘‘(ii) initiate proceedings to impose 

21 upon the person furnishing the certifi22 cation regarding non-displacement of non23 inmate workers required by subsection 

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

25 criminal sanctions as may be available.’’. 


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1 (2) AUTHORIZATION OF APPROPRIATION.— 

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

3 for each of the fiscal years 2008 through 2012 for 

4 the purposes of paying the wages of inmates and 

5 otherwise undertaking the maximum number of 

6 agreements with eligible entities pursuant to section 

7 4124a of title 18, United States Code, as added by 

8 paragraph (1). 

9 (3) SENSE OF CONGRESS.—For purposes of 

10 sections 4124a and 4124b of title 18, United States 

11 Code, as added by sections 10(b) and 11, respec12 tively, it is the sense of Congress that an inmate 

13 training wage that is at least 50 percent of the min14 imum wage prescribed pursuant to section 6(a)(1) of 

15 the Fair Labor Standards Act of 1938 (29 U.S.C. 

16 206(a)(1)) will facilitate successful achievement of 

17 the goals of the work-based training and apprentice18 ship program authorized under such section 4124a. 

19 (c) INMATE WORK OPPORTUNITIES IN SUPPORT OF

20 NOT-FOR-PROFIT ENTITIES.— 

21 (1) PROPOSALS FOR DONATION PROGRAMS.— 

22 The Chief Operating Officer of Federal Prison In23 dustries shall develop and present to the Board of 

24 Directors of Federal Prison Industries proposals to 

25 have Federal Prison Industries donate products and 


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1 services to eligible entities that provide goods or 

2 services to low-income individuals who would likely 

3 otherwise have difficulty purchasing such products 

4 or services in the commercial market. 

5 (2) SCHEDULE FOR SUBMISSION AND CONSID6 ERATION OF DONATION PROGRAMS.— 

7 (A) INITIAL PROPOSALS.—The Chief Oper8 ating Officer shall submit the initial group of 

9 proposals for programs of the type described in 

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

11 the enactment of this Act. The Board of Direc12 tors of Federal Prison Industries shall consider 

13 such proposals from the Chief Operating Officer 

14 not later than the date that is 270 days after 

15 the date of the enactment of this Act. 

16 (B) ANNUAL OPERATING PLAN.—The 

17 Board of Directors of Federal Prison Industries 

18 shall consider proposals by the Chief Operating 

19 Officer for programs of the type described in 

20 paragraph (1) as part of the annual operating 

21 plan for Federal Prison Industries. 

22 (C) OTHER PROPOSALS.—In addition to 

23 proposals submitted by the Chief Operating Of24 ficer, the Board of Directors may, from time to 


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1 time, consider proposals presented by prospec2 tive eligible entities. 

3 (3) DEFINITION OF ELIGIBLE ENTITIES.—For 

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

5 entity’’ means an entity— 

6 (A) that is an organization described in 

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

8 of 1986 and exempt from taxation under sec9 tion 501(a) of such Code and that has been 

10 such an organization for a period of not less 

11 than 36 months prior to inclusion in a proposal 

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

13 (B) that is a religious organization de14 scribed in section 501(d) of such Code and ex15 empt from taxation under section 501(a) of 

16 such Code. 

17 (4) AUTHORIZATION OF APPROPRIATIONS.— 

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

19 for each of the fiscal years 2008 through 2012 for 

20 the purposes of paying the wages of inmates and 

21 otherwise carrying out programs of the type de22 scribed in paragraph (1). 

23 (d) MAXIMIZING INMATE REHABILITATIVE OPPOR24 TUNITIES THROUGH COGNITIVE ABILITIES ASSESS25 MENTS.— 


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1 (1) DEMONSTRATION PROGRAM AUTHORIZED.— 

2 (A) IN GENERAL.—There is hereby estab3 lished within the Federal Bureau of Prisons a 

4 program to be known as the ‘‘Cognitive Abili5 ties Assessment Demonstration Program’’. The 

6 purpose of the demonstration program is to de7 termine the effectiveness of a program that as8 sesses the cognitive abilities and perceptual 

9 skills of Federal inmates to maximize the bene10 fits of various rehabilitative opportunities de11 signed to prepare each inmate for a successful 

12 return to society and reduce recidivism. The 

13 demonstration program shall be undertaken by 

14 a contractor with a demonstrated record of ena15 bling the behavioral and academic improvement 

16 of adults through the use of research-based sys17 tems that maximize the development of both the 

18 cognitive and perceptual capabilities of a par19 ticipating individual, including adults in a cor20 rectional setting. 

21 (B) SCOPE OF DEMONSTRATION PRO22 GRAM.—The demonstration program shall to 

23 the maximum extent practicable, be— 


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1 (i) conducted during a period of three 

2 consecutive fiscal years, commencing dur3 ing fiscal year 2008; 

4 (ii) conducted at 12 Federal correc5 tional institutions; and 

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

7 categorized as minimum security or less, 

8 and are within five years of release. 

9 (C) REPORT ON RESULTS OF PROGRAM.— 

10 Not later than 60 days after completion of the 

11 demonstration program, the Director shall sub12 mit to Congress a report on the results of the 

13 program. At a minimum, the report shall in14 clude an analysis of employment stability, sta15 bility of residence, and rates of recidivism 

16 among inmates who participated in the program 

17 after 18 months of release. 

18 (2) AUTHORIZATION OF APPROPRIATIONS.— 

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

20 in each of the three fiscal years after fiscal year 

21 2007, to remain available until expended, for the 

22 purposes of conducting the demonstration program 

23 authorized by subsection (a). 

24 (e) PRERELEASE EMPLOYMENT ASSISTANCE.— 


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

2 Bureau of Prisons shall, to the maximum extent 

3 practicable, afford to inmates opportunities to par4 ticipate in programs and activities designed to help 

5 prepare such inmates to obtain employment upon re6 lease. 

7 (2) PRERELEASE EMPLOYMENT PLACEMENT

8 ASSISTANCE.—Such prerelease employment place9 ment assistance required by subsection (a) shall in10 clude— 

11 (A) training in the preparation of resumes 

12 and job applications; 

13 (B) training in interviewing skills; 

14 (C) training and assistance in job search 

15 techniques; 

16 (D) conduct of job fairs; and 

17 (E) such other methods deemed appro18 priate by the Director. 

19 (3) PRIORITY PARTICIPATION.—Priority in pro20 gram participation shall be accorded to inmates who 

21 are participating in work opportunities afforded by 

22 Federal Prison Industries and are within 24 months 

23 of release from incarceration. 


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1 SEC. 11. RE-ENTRY EMPLOYMENT PREPARATION THROUGH 

2 WORK-BASED TRAINING AND APPRENTICE3 SHIP. 

4 (a) IN GENERAL.—Chapter 307 of title 18, United 

5 States Code, is further amended by inserting after section 

6 4124a, as added by section 10(b), the following new sec7 tion: 

8 ‘‘§ 4124b. Re-entry employment preparation through 

9 work-based training and apprenticeship 

10 ‘‘(a) PARTICIPATION AUTHORIZED.—A private for11 profit business entity shall be an eligible entity for partici12 pation in the program authorized by section 4124a of this 

13 title, if such participation conforms with the requirements 

14 and limitations of this section. 

15 ‘‘(b) REQUIREMENTS RELATING TO PRODUCTS AND

16 SERVICES.—A private for-profit business entity is eligible 

17 for such participation if such business entity proposes to 

18 train participating inmates, pursuant to subsection (c), by 

19 producing a product or performing a service, if such prod20 uct or service is of a type for which there is no production 

21 or performance within the United States by noninmate 

22 workers. 

23 ‘‘(c) REQUIREMENTS RELATING TO TRAINING.— 

24 ‘‘(1) IN GENERAL.—For purposes of this sec25 tion, the training of participating inmates shall be 

26 work-based training that provides to a participating 


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1 inmate apprenticeship training or a functionally 

2 equivalent structured program that combines hands3 on work experience with conceptual understanding of 

4 the work being performed. Other inmates with reg5 ular work assignments within Federal Prison Indus6 tries may be assigned to support the program. 

7 ‘‘(2) DOCUMENTATION OF PROGRAM PARTICIPA8 TION.— 

9 ‘‘(A) Each inmate who successfully com10 pletes participation in training undertaken pur11 suant to this section shall be provided a certifi12 cate or other written document memorializing 

13 such successful completion, providing a market14 able summary of the skills learned and an over15 all assessment of performance. 

16 ‘‘(B) Copies of such documents shall be 

17 furnished to perspective employers upon the re18 quest of the participant for a period of not less 

19 than 24 months from the date of such partici20 pant’s release from incarceration. 

21 ‘‘(3) DOCUMENTS REQUIRED FOR EMPLOY22 MENT.—The Federal Bureau of Prisons, in coopera23 tion with a business entity providing an inmate 

24 work-based training at the time of his or her sched25 uled release, shall make every reasonable effort to 


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1 help the inmate timely obtain such documentation 

2 (including a State government-issued photo identi3 fication card) as a person may be required to pro4 vide to a prospective employer, after such person 

5 completes an Employment Eligibility Verification 

6 (ICE Form I–9). 

7 ‘‘(d) WAGE RATES.— 

8 ‘‘(1) IN GENERAL.—Business entities partici9 pating in the program authorized by subsection (a) 

10 shall propose wages for inmates participating in the 

11 program at rates not less than the inmate training 

12 wage promulgated pursuant to section 17(c) of the 

13 Federal Prison Industries Competition in Con14 tracting Act of 2006. 

15 ‘‘(2) INMATE TRAINING WAGE.—Not more than 

16 30 days after the date of enactment of this section, 

17 the Board of Directors of Federal Prison Industries 

18 shall request the Secretary of Labor to promulgate 

19 an inmate training wage pursuant to section 14(a) 

20 of the Fair Labor Standards Act of 1938 (29 U.S.C. 

21 214(a)). 

22 ‘‘(e) SUPPORT FOR OTHER RELEASE PREPARATION

23 PROGRAMS.—In addition to the matters listed in section 

24 4124a(d) of this title, a proposal for an agreement re25 ferred to in such section submitted by an eligible business 


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1 entity shall specify an amount of any supplemental fund2 ing, specified as a per-capita amount for each inmate par3 ticipating pursuant to the agreement, that the business 

4 entity will provide for the purpose of supporting remedial, 

5 vocational, and other release preparation programs for 

6 other nonparticipating inmates. 

7 ‘‘(f) ADDITIONAL STANDARDS APPLICABLE.—In con8 sidering a proposed agreement pursuant to section 

9 4124a(f)(1) of this title, the Board of Directors shall— 

10 ‘‘(1) give preference to an agreement that pro11 poses— 

12 ‘‘(A) work-based training opportunities 

13 that provide the participating inmate the best 

14 prospects for obtaining employment paying a 

15 livable wage upon release; 

16 ‘‘(B) the highest per-capita amount pursu17 ant to subsection (e) relating to providing fi18 nancial support for release preparation for 

19 other inmates; and 

20 ‘‘(C) the highest inmate wage rates; 

21 ‘‘(2) not approve any agreement with respect to 

22 furnishing services of the type described in section 

23 4122(b)(6)(D)(iii) of this title; 

24 ‘‘(3) not approve any agreement with respect to 

25 furnishing construction services described in section 


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1 4122(b)(6)(D)(iv) of this title, unless to be per2 formed within a Federal correctional institution; 

3 ‘‘(4) not approve an agreement that does not 

4 meet the standards of subsection (b); and 

5 ‘‘(5) request a determination from the Depart6 ment of Commerce (and such other executive branch 

7 entities as may be appropriate), regarding whether a 

8 product or service is of the type being produced or 

9 performed in the United States by noninmate work10 ers, whenever the Board determines that such an ad11 ditional assessment is warranted, including upon a 

12 request from an interested party presenting informa13 tion that the Board deems to warrant such addi14 tional assessment prior to the Board’s consideration 

15 of the proposed agreement. 

16 ‘‘(g) LIMITATIONS ON THE USE OF THE AUTHOR17 ITY.— 

18 ‘‘(1) NO SALES BY FEDERAL PRISON INDUS19 TRIES.—Federal Prison Industries is prohibited 

20 from directly offering for commercial sale products 

21 produced or services furnished by Federal inmates, 

22 including through any form of electronic commerce. 

23 ‘‘(2) DURATION.— 


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1 ‘‘(A) No proposed agreement pursuant to 

2 this subsection may be approved by the Board 

3 of Directors after September 30, 2016. 

4 ‘‘(B) Performance of all such agreements 

5 shall be concluded prior to October 1, 2021.’’. 

6 (b) REVIEW AND REPORTING BY THE ATTORNEY

7 GENERAL.—Not less than biannually, beginning in fiscal 

8 year 2008, the Attorney General shall meet in person 

9 jointly with the Chairman of the Board of Directors and 

10 the Chief Executive Officer of Federal Prison Industries 

11 to review the progress that Federal Prison Industries is 

12 making in maximizing the use of the authority provided 

13 by sections 4124a and 4124b of title 18, United States 

14 Code. The Attorney General shall provide annually a writ15 ten report to the Committees on the Judiciary and Appro16 priations of the House of Representatives and the Senate 

17 addressing such progress by Federal Prison Industries. 

18 (c) GAO ASSESSMENT OF WORK-BASED TRAINING

19 PROGRAM.— 

20 (1) IN GENERAL.—The Comptroller General of 

21 the United States shall undertake an on-going as22 sessment of the authority granted by section 4124b 

23 of title 18, United States Code, as added by sub24 section (a). 


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1 (2) MATTERS TO BE ASSESSED.—In addition to 

2 such other matters as the Comptroller General 

3 deems appropriate, the assessment shall include— 

4 (A) efforts to recruit private for-profit 

5 business entities to participate; 

6 (B) the quality of training provided to in7 mates; 

8 (C) the amounts and types of products and 

9 services that have been produced incident to the 

10 work-based training programs; 

11 (D) the types of worksite arrangement that 

12 encourage business concerns to voluntarily enter 

13 into such partnerships; 

14 (E) the extent and manner of the partici15 pation of supervisory, quality assurance, and 

16 other management employees of the partici17 pating business entity in worksites within cor18 rectional facilities of various levels of security; 

19 (F) the extent of the facilities, utilities, 

20 equipment, and personnel (other than security 

21 personnel) provided by the host correctional 

22 agency, and extent to which such resources are 

23 provided on a nonreimbursable basis; 

24 (G) the rates of wages paid to inmate 

25 workers and the effect that such wage rates 


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1 have on willingness of business entities to par2 ticipate; 

3 (H) any complaints filed regarding the dis4 placement of noninmate workers or of inmate 

5 workers being paid less than required wages 

6 and the disposition of those complaints; 

7 (I) any sanctions recommended relating to 

8 displacement of noninmate workers or payment 

9 of less than the required wages, and the dis10 position of such proposed sanctions; 

11 (J) the extent to which the new authority 

12 provided additional inmate work opportunities 

13 assisting the Bureau of Prisons in attaining its 

14 objective of providing 25 percent of the work15 eligible inmates with work opportunities within 

16 Federal Prison Industries; 

17 (K) measures of any adverse impacts of 

18 implementation of the new authority on busi19 ness concerns using noninmate workers that are 

20 engaged in providing similar types of products 

21 and services in direct competition; and 

22 (L) a compilation of data relating work op23 portunities for Federal inmates with work as24 signments with Federal Prison Industries pro25 vided by— 


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1 (i) sales to Federal agencies pursuant 

2 to the status of Federal Prison Industries 

3 as a mandatory source of supply during 

4 the period fiscal year 1990 through fiscal 

5 year 2007; 

6 (ii) sales to Federal agencies of serv7 ices, both through non-competitive inter8 agency transfers and as a result of direct 

9 competition from private-sector offerors 

10 during the period fiscal year 1990 though 

11 fiscal year 2007; 

12 (iii) performance as a subcontrator to 

13 a Federal prime contractor or Federal sub14 contractor at a higher tier beginning in fis15 cal year 1990; 

16 (iv) introduction of inmate-furnished 

17 services into the commercial market, begin18 ning in the second quarter of fiscal year 

19 1998; 

20 (v) alternative inmate work opportuni21 ties, beginning in fiscal year 2007, pro22 vided by agreements with— 

23 (I) non-profit organizations, pur24 suant to section 4124a(b)(1) of title 


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1 18, United States Code, as added by 

2 section 10(b), and section 10(c); 

3 (II) religious organizations, pur4 suant to section 4124a(b)(2) of title 

5 18, United States Code; 

6 (III) units of local governments, 

7 school districts, or other special pur8 pose districts, pursuant to section 

9 4124a(b)(3) of title 18, United States 

10 Code; 

11 (IV) work-based Employment 

12 Preparation Programs for Federal in13 mates, pursuant to section 4124b of 

14 title 18, United States Code, as added 

15 by section 11; or 

16 (V) other means. 

17 (3) OPPORTUNITY FOR PUBLIC COMMENT.— 

18 The Comptroller General shall provide an oppor19 tunity for public comment on the proposed scope 

20 and methodology for the assessment required by 

21 paragraph (1), making such modifications in re22 sponse to such comments as he deems appropriate. 

23 (4) REPORTS AND RECOMMENDATIONS.— 

24 (A) IN GENERAL.—The Comptroller Gen25 eral shall submit to the Congress in accordance 


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1 with this subsection two interim reports and a 

2 final report of the assessment of implementa3 tion of the new authority, including such rec4 ommendations as the Comptroller General may 

5 deem appropriate. 

6 (B) INTERIM REPORTS.—The two interim 

7 reports shall encompass the assessment of the 

8 implementation of the new authority— 

9 (i) from the effective date of the au10 thority through the end of fiscal year 

11 2009; and 

12 (ii) from the effective date of the au13 thority through the end of fiscal year 

14 2012. 

15 (C) FINAL REPORT.—The final report 

16 shall assess the implementation of the new au17 thority from the effective date of the authority 

18 through the end of fiscal year 2014. 

19 (D) SUBMISSION TO CONGRESS.—The 

20 Comptroller General shall submit the reports 

21 required by this paragraph within 6 months 

22 after the end of the fiscal years referred to in 

23 subparagraphs (B) and (C). 


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1 (d) CONFORMING AMENDMENT.—Section 1761 of 

2 title 18, United States Code, as amended by section 7, 

3 is further amended— 

4 (1) by redesignating subsection (e) as sub5 section (f); and 

6 (2) inserting after subsection (d) the following 

7 new subsection: 

8 ‘‘(e) This section shall not apply to products produced 

9 or services furnished with inmate labor incidental to the 

10 work-based training program authorized pursuant to sec11 tion 4124b of this title.’’. 

12 SEC. 12. RESTRUCTURING THE BOARD OF DIRECTORS. 

13 (a) IN GENERAL.—Section 4121 of title 18, United 

14 States Code, is amended to read as follows: 

15 ‘‘§ 4121. Federal Prison Industries; Board of Direc16 tors: executive management 

17 ‘‘(a) Federal Prison Industries is a government cor18 poration of the District of Columbia organized to carry 

19 on such industrial operations in Federal correctional insti20 tutions as authorized by its Board of Directors. The man21 ner and extent to which such industrial operations are car22 ried on in the various Federal correctional institutions 

23 shall be determined by the Attorney General. 

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

25 of 11 directors appointed by the President. 


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

2 President shall assure that 3 members represent the busi3 ness community, 3 members represent organized labor, 1 

4 member shall have special expertise in inmate rehabilita5 tion techniques, 1 member represents victims of crime, 1 

6 member represents the interests of Federal inmate work7 ers, and 2 additional members whose background and ex8 pertise the President deems appropriate. The members of 

9 the Board representing the business community shall in10 clude, to the maximum extent practicable, representation 

11 of firms furnishing services as well as firms producing 

12 products, especially from those industry categories from 

13 which Federal Prison Industries derives substantial sales. 

14 The members of the Board representing organized labor 

15 shall, to the maximum practicable, include representation 

16 from labor unions whose members are likely to be most 

17 affected by the sales of Federal Prison Industries. 

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

19 5 years, except that of members first appointed— 

20 ‘‘(A) 2 members representing the business com21 munity shall be appointed for a term of 3 years; 

22 ‘‘(B) 2 members representing labor shall be ap23 pointed for a term of 3 years; 


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1 ‘‘(C) 2 members whose background and exper2 tise the President deems appropriate for a term of 

3 3 years; 

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

5 shall be appointed for a term of 3 years; 

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

7 Federal inmate workers shall be appointed for a 

8 term of 3 years; 

9 ‘‘(F) 1 member representing the business com10 munity shall be appointed for a term of 4 years; 

11 ‘‘(G) 1 member representing the business com12 munity shall be appointed for a term of 4 years; and 

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

14 inmate rehabilitation techniques shall be appointed 

15 for a term of 5 years. 

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

17 Board as Chairperson. The Chairperson may designate a 

18 Vice Chairperson. 

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

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

21 same manner as the original appointment. Any member 

22 appointed to fill a vacancy occurring before the expiration 

23 of the term for which the member’s predecessor was ap24 pointed shall be appointed for the remainder of that term. 


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

2 compensation. The members of the Board shall be allowed 

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

4 at rates authorized for employees of agencies under sub5 chapter I of chapter 57 of title 5, United States Code, 

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

7 approval of the Chairperson of the Board, while otherwise 

8 away from their homes or regular places of business for 

9 purposes of duties as a member of the Board. 

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

11 and terminate any personnel that may be necessary to en12 able the Board to perform its duties. 

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

14 a Federal agency may detail a Federal Government em15 ployee to the Board without reimbursement. Such detail 

16 shall be without interruption or loss of civil service status 

17 or privilege. 

18 ‘‘(9) The Chairperson of the Board may procure tem19 porary and intermittent services under section 3109(b) of 

20 title 5, United States Code. 

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

22 serve as Chief Executive Officer of the Corporation. The 

23 Director shall designate a person to serve as Chief Oper24 ating Officer of the Corporation.’’. 


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1 (b) CONTINUED GOVERNANCE.—The members of the 

2 Board of Directors serving on the date of enactment of 

3 this Act, and the person selected by them as Chairman, 

4 shall continue to exercise the duties and responsibilities 

5 of the Board until the earlier of— 

6 (1) the date on which the President has ap7 pointed at least 6 members of the Board and des8 ignated a new Chairman, pursuant to section 4121 

9 of title 18, United States Code (as added by section 

10 12(a) of this Act); or 

11 (2) the date that is 365 days after the date of 

12 enactment of this Act. 

13 SEC. 13. MANAGEMENT MATTERS. 

14 (a) ADDITIONAL FLEXIBILITIES.—Section 

15 4122(b)(3) of title 18, United States Code, is amended— 

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

17 and 

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

19 paragraphs: 

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

21 one workshop at a Federal correctional facility. 

22 ‘‘(C) Federal Prison Industries may operate a work23 shop outside of a correctional facility if all of the inmates 

24 working in such workshop are classified as minimum secu25 rity inmates.’’. 


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1 (b) COST ACCOUNTING SYSTEM.— 

2 (1) ESTABLISHMENT.—Federal Prison Indus3 tries shall establish a cost accounting system that 

4 meets the requirements of part 30 (Cost Accounting 

5 Standards Administration) of the Federal Acquisi6 tion Regulation (48 C.F.R. part 30). The compliance 

7 of the cost accounting system with such standards 

8 shall be annually verified as part of the independent 

9 audit of Federal Prison Industries, Inc., pursuant to 

10 section 9106(b) of title 31, United States Code. 

11 (2) APPLICATION OF RELATED PROVISION.— 

12 Section 4124(c)(2) of title 18, United States Code, 

13 shall apply when Federal Prison Industries has been 

14 found to have a complaint cost accounting system 

15 pursuant to paragraph (1). 

16 SEC. 14. TRANSITIONAL PERSONNEL MANAGEMENT AU17 THORITY. 

18 Any correctional officer or other employee of Federal 

19 Prison Industries being paid with nonappropriated funds 

20 who would be separated from service because of a reduc21 tion in the net income of Federal Prison Industries during 

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

23 (1) eligible for appointment (or reappointment) 

24 in the competitive service pursuant to title 5, United 

25 States Code; 


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1 (2) registered on a Bureau of Prisons reemploy2 ment priority list; and 

3 (3) given priority for any other position within 

4 the Bureau of Prisons for which such employee is 

5 qualified. 

6 SEC. 15. FEDERAL PRISON INDUSTRIES REPORT TO CON7 GRESS. 

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

9 amended to read as follows: 

10 ‘‘§ 4127. Federal Prison Industries report to Congress 

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

12 31, the board of directors of Federal Prison Industries 

13 shall submit an annual report to Congress on the conduct 

14 of the business of the corporation during each fiscal year 

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

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

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

18 other matters as the board considers appropriate, a report 

19 under subsection (a) shall include— 

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

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

22 the fiscal year; 

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

24 that will be issued in the following fiscal year; 

25 ‘‘(3) an analysis of— 


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

2 specific product and type of service sold to the 

3 Federal agencies and the commercial market; 

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

5 agency of each specific product and type of 

6 service; 

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

8 Federal Government purchases by specific prod9 uct and type of service; and 

10 ‘‘(D) the number and disposition of dis11 putes submitted to the heads of the Federal de12 partments and agencies pursuant to section 

13 4124(e) of this title; 

14 ‘‘(4) an allocation of the profits of the corpora15 tion, both gross and net, to— 

16 ‘‘(A) educational, training, release-prepara17 tion opportunities for inmates; 

18 ‘‘(B) opening new factories; and 

19 ‘‘(C) improving the productivity and com20 petitiveness of existing factories; 

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

22 includes— 

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


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

2 produce products or furnish services sold in the 

3 commercial market; 

4 ‘‘(C) the number and percentage of em5 ployed inmates by the term of their incarcer6 ation; and 

7 ‘‘(D) the various hourly wages paid to in8 mates employed with respect to the production 

9 of the various specific products and types of 

10 services authorized for production and sale to 

11 Federal agencies and in the commercial market; 

12 and 

13 ‘‘(6) data concerning employment obtained by 

14 former inmates upon release to determine whether 

15 the employment provided by Federal Prison Indus16 tries during incarceration provided such inmates 

17 with knowledge and skill in a trade or occupation 

18 that enabled such former inmate to earn a livelihood 

19 upon release. 

20 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re21 port under subsection (a) shall be made available to the 

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

23 report.’’. 


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1 SEC. 16. DEFINITIONS. 

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

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

4 ‘‘§ 4131. Definitions 

5 ‘‘As used in this chapter— 

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

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

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

10 without necessarily changing or altering the compo11 nent parts; 

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

13 with respect to a specific product, the fair market 

14 price of the product within the meaning of section 

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

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

17 verified through appropriate price analysis or cost 

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

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

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

24 25 percent or greater; 

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

26 means a manufacturing activity in which the value 


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1 of inmate labor constitutes at least 10 percent of the 

2 estimate unit cost to produce the item by Federal 

3 Prison Industries; 

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

5 of fabricating from raw or prepared materials, so as 

6 to impart to those materials new forms, qualities, 

7 properties, and combinations; 

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

9 means a share of the total purchases by the Federal 

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

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

15 product; and 

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

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

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

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

23 as in effect on July 1, 2004.’’. 

24 SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES. 

25 (a) FEDERAL ACQUISITION REGULATION.— 


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1 (1) PROPOSED REVISIONS.—Proposed revisions 

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

4 shall be published not later than 60 days after the 

5 date of the enactment of this Act and provide not 

6 less than 60 days for public comment. 

7 (2) FINAL REGULATIONS.—Final regulations 

8 shall be published not later than 180 days after the 

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

11 publication. 

12 (3) PUBLIC PARTICIPATION.—The proposed 

13 regulations required by subsection (a) and the final 

14 regulations required by subsection (b) shall afford 

15 an opportunity for public participation in accordance 

16 with section 22 of the Office of Federal Procurement 

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

18 (b) BOARD OF DIRECTORS.— 

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

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

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

24 terms: 

25 (A) Prison-made product. 


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1 (B) Prison-furnished service. 

2 (C) Specific product. 

3 (D) Specific service. 

4 (3) SCHEDULE FOR REGULATORY DEFINI5 TIONS.— 

6 (A) Proposed regulations relating to the 

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

8 published not later than 60 days after the date 

9 of enactment of this Act and provide not less 

10 than 60 days for public comment. 

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

14 enactment of this Act and shall be effective on 

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

17 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

18 PARTICIPATION AND SCRUTINY.— 

19 (A) ADMINISTRATIVE PROCEDURE ACT.— 

20 Regulations issued by the Board of Directors 

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

23 United States Code. Unless determined wholly 

24 impracticable or unnecessary by the Board of 


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1 Directors, the public shall be afforded 60 days 

2 for comment on proposed regulations. 

3 (B) ENHANCED OUTREACH.—The Board 

4 of Directors shall use means designed to most 

5 effectively solicit public comment on proposed 

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

8 procedures, and policies. 

9 (C) OPEN MEETING PROCESSES.—The 

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

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

15 and a recorded vote conducted during a meeting 

16 open to the public, unless closed pursuant to 

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

18 (c) SECRETARY OF LABOR.— 

19 (1) SCHEDULE FOR REGULATORY ACTION.— 

20 Upon receipt of a request from the Federal Prison 

21 Industries Board of Directors, pursuant to section 

22 11(d)(2), to establish an inmate training wage pur23 suant to section 14(a) of the Fair Labor Standards 

24 Act of 1938 (29 U.S.C. 214(a)), the Secretary of 


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1 Labor, in consultation with the Attorney General, 

2 shall issue— 

3 (A) an advanced notice of proposed rule4 making within 60 days; 

5 (B) an interim regulation with concurrent 

6 request for public comments within 180 days; 

7 and 

8 (C) a final regulation within 365 days. 

9 (2) ALTERNATIVE TO TIMELY ISSUANCE.—In 

10 the event that the Secretary of Labor fails to issue 

11 an interim inmate training wage by the date re12 quired by paragraph (1)(B), the Federal Prison In13 dustries Board of Directors may prescribe an in14 terim inmate training wage, which shall be in an 

15 amount not less than 50 percent of the amount of 

16 the minimum wage prescribed pursuant to section 

17 6(a)(1) of such Act (29 U.S.C. 206(a)(1)). 

18 (3) CONTINUED USE OF INTERIM INMATE

19 TRAINING WAGE.— 

20 (A) The interim inmate training wage 

21 issued pursuant to paragraph (1)(B) or pre22 scribed under paragraph (2) shall remain in ef23 fect until the effective date of a final regulation, 

24 issued pursuant to paragraph (1)(C). 


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1 (B) An eligible entity having an approved 

2 agreement with Federal Prison Industries pur3 suant to section 4124b of title 18, United 

4 States Code, may continue to pay participating 

5 inmates at the wages prescribed in the agree6 ment for the duration of the agreement, if those 

7 wages comply with the standards of the interim 

8 inmate training wage issued pursuant to para9 graph (1)(B) or prescribed under paragraph 

10 (2). 

11 (4) EXISTING AGREEMENTS WITH NONCON12 FORMING WAGES.—Any for-profit business concern 

13 having an agreement with Federal Prison Industries 

14 in effect on the date of enactment of this Act, under 

15 which Federal inmates are furnishing services that 

16 are being introduced into the commercial market, 

17 may continue to pay wages at rates specified in the 

18 agreement for the duration of the term of such 

19 agreement. 

20 SEC. 18. RULES OF CONSTRUCTION. 

21 (a) AGENCY BID PROTESTS.—Subsection (e) of sec22 tion 4124 of title 18, United States Code, as amended by 

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

24 other than Federal Prison Industries to file a bid protest 


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

2 date of the enactment of this Act. 

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

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

5 (41 U.S.C. 46 et seq.). 

6 SEC. 19. EFFECTIVE DATE AND APPLICABILITY. 

7 (a) EFFECTIVE DATE.—Except as provided in sub8 section (b), this Act and the amendments made by this 

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

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

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

12 requirement for a product or service offered by Federal 

13 Prison Industries needed by a Federal department or 

14 agency after the effective date of the final regulations 

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

16 30, 2007, whichever is earlier. 

17 SEC. 20. CLERICAL AMENDMENTS. 

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

19 United States Code, is amended— 

20 (1) by amending the item relating to section 

21 4121 to read as follows: 

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

22 (2) by amending the item relating to section 

23 4124 to read as follows: 

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

Prison Industries.’’; 


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1 (3) by inserting after the item relating to sec2 tion 4124 the following new items: 

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

‘‘4124b. Re-entry employment preparation through work-based training and apprenticeship.’’; 

3 (4) by amending the item relating to section 

4 4127 to read as follows: 

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

5 and 

6 (5) by adding at the end the following new 

7 items: 

‘‘4130. Construction of provisions. 

‘‘4131. Definitions.’’. 

Passed the House of Representatives September 14, 

2006. 

Attest: KAREN L. HAAS, 

Clerk. 


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