I 

109TH CONGRESS 

1ST SESSION H. R. 2965 

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

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

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

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

and other rehabilitative opportunities to better prepare inmates for a 

successful return to society, to authorize alternative inmate work opportunities in support of non-profit organizations and other public service 

programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2005 

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

Mr. SENSENBRENNER, Mr. CONYERS, Mr. COBLE, Mr. MANZULLO, Mr. 

NADLER, Mr. EHLERS, Mr. TOM DAVIS of Virginia, Mr. DINGELL, Mr. 

JENKINS, Mr. EVERETT, Mr. RANGEL, Mr. HOSTETTLER, Mr. FEENEY, 

Mr. KINGSTON, Ms. BALDWIN, Mr. INGLIS of South Carolina, Mr. 

UPTON, Mr. EMANUEL, Mr. BARTLETT of Maryland, Mr. KNOLLENBERG, 

Mr. FORBES, Mr. FLAKE, Mr. SESSIONS, Mr. OLVER, Mr. LOBIONDO, 

Mrs. MYRICK, Mr. ROYCE, Mr. LANTOS, Mr. MCGOVERN, Mr. PENCE, 

Mr. SOUDER, Mr. CAMP, Mr. DOYLE, Mr. BOEHNER, Mr. NEY, Mr. 

CARTER, Mr. NUSSLE, Mr. WEINER, Mr. NORWOOD, Mr. ROGERS of 

Michigan, Mr. BRADY of Pennsylvania, Mr. DUNCAN, Mr. MCCOTTER, 

Mr. MCKEON, Ms. HART, Mr. KUCINICH, Mr. THORNBERRY, Mr. RYAN

of Wisconsin, Mr. LATHAM, Mrs. MILLER of Michigan, Mr. LEACH, Mr. 

SHADEGG, Ms. WOOLSEY, Mrs. BLACKBURN, Mr. CULBERSON, Mr. 

GINGREY, Mr. TERRY, Mr. WAMP, Mr. FERGUSON, Mrs. MUSGRAVE, Mr. 

CHOCOLA, Mr. BEAUPREZ, Mr. PORTER, Mr. OSBORNE, Mr. TIBERI, 

Mrs. BIGGERT, Mr. WILSON of South Carolina, Mr. SHUSTER, Mr. 

MORAN of Kansas, Mr. HAYES, Mr. KING of Iowa, Mrs. WILSON of New 

Mexico, Mr. BARRETT of South Carolina, Mr. PLATTS, and Mr. CANTOR) 

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

Judiciary 
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A BILL 

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

Prison Industries to compete for its contracts minimizing 

its unfair competition with private sector firms and their 

non-inmate workers and empowering Federal agencies 

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

a five-year period during which Federal Prison Industries 

adjusts to obtaining inmate work opportunities through 

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

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

alternative inmate work opportunities in support of nonprofit organizations and other public service programs, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Federal Prison Industries Competition in Contracting 

6 Act of 2005’’. 

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. 
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Sec. 10. Providing additional rehabilitative opportunities for inmates. 

Sec. 11. Restructuring the Board of Directors. 

Sec. 12. Providing additional management flexibility to Federal Prison Industries operations. 

Sec. 13. Transitional personnel management authority. 

Sec. 14. Federal Prison Industries report to Congress. 

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

Prison Industries mandatory source authority. 

Sec. 16. Sense of Congress. 

Sec. 17. Definitions. 

Sec. 18. Implementing regulations and procedures. 

Sec. 19. Rules of construction. 

Sec. 20. Effective date and applicability. 

Sec. 21. Clerical amendments. 

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

3 INDUSTRIES. 

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

5 amended to read as follows: 

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

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

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

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

13 accordance with this section. 

14 ‘‘(b) SOLICITATION AND EVALUATION OF OFFERS

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

16 of a Federal department or agency has a requirement for 

17 a specific product or service that is authorized to be of18 fered for sale by Federal Prison Industries, in accordance 

19 with section 4122 of this title, and is listed in the catalog 
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1 referred to in subsection (g), the procurement activity 

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

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

4 threshold (as defined by section 32(f) of the Office of Fed5 eral Procurement Policy Act (41 U.S.C. 428(f))). 

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

7 shall be made using competitive procedures in accordance 

8 with the applicable evaluation factors, unless a determina9 tion is made by the Attorney General pursuant to para10 graph (3) or an award using other than competitive proce11 dures is authorized pursuant to paragraph (7). 

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

13 Federal Prison Industries on a noncompetitive basis for 

14 the award of a contract if the Attorney General determines 

15 that— 

16 ‘‘(A) Federal Prison Industries cannot reason17 ably expect fair consideration to receive the contract 

18 award on a competitive basis; and 

19 ‘‘(B) the contract award is necessary to main20 tain work opportunities otherwise unavailable at the 

21 penal or correctional facility at which the contract is 

22 to be performed to prevent circumstances that could 

23 reasonably be expected to significantly endanger the 

24 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. 252(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 contract award may be made to Federal Pris5 on Industries using other than competitive procedures if 

6 the product or service to be acquired would otherwise be 

7 furnished by a contractor preforming the work outside of 

8 the United States. 

9 ‘‘(c) OFFERS FROM FEDERAL PRISON INDUS10 TRIES.—A timely offer received from Federal Prison In11 dustries 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 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS19 TRIES.—Federal Prison Industries shall perform its con20 tractual obligations under a contract awarded by a Fed21 eral department or agency to the same extent as any other 

22 contractor. 

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

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

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

3 (3). 

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

5 Industries may appeal to the head of a Federal depart6 ment or agency a decision by a contracting officer not to 

7 award a contract to Federal Prison Industries pursuant 

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

9 department or agency on appeal shall be final. 

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

11 and a procurement activity regarding performance of a 

12 contract shall be subject to— 

13 ‘‘(A) alternative means of dispute resolution 

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

15 or 

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

17 appeals having jurisdiction over the procurement ac18 tivity’s contract performance disputes pursuant to 

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

20 et seq.). 

21 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de22 partment or agency shall report purchases from Federal 

23 Prison Industries to the Federal Procurement Data Sys24 tem (as referred to in section 6(d)(4) of the Office of Fed25 eral Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 
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1 same manner as it reports to such System any acquisition 

2 in an amount in excess of the simplified acquisition thresh3 old (as defined by section 4(11) of the Office of Federal 

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

5 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In6 dustries shall publish and maintain a catalog of all specific 

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

8 Such catalog shall be periodically revised as products and 

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

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

11 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Pris12 on Industries shall be subject to Federal occupational, 

13 health, and safety standards with respect to the operation 

14 of its industrial operations.’’. 

15 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

16 PROPOSALS BY FEDERAL PRISON INDUS17 TRIES. 

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

19 amended— 

20 (1) by redesignating paragraph (6) as para21 graph (12); and 

22 (2) by striking paragraphs (4) and (5) and in23 serting the following new paragraphs: 

24 ‘‘(4) A decision to authorize Federal Prison Indus25 tries to offer a new specific product or specific service or 
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1 to expand the production of an existing product or service 

2 shall be made by its board of directors in conformance 

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

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

5 ‘‘(5)(A) Whenever Federal Prison Industries pro6 poses to offer for sale a new specific product or specific 

7 service or to expand production of a currently authorized 

8 product or service, the Chief Operating Officer of Federal 

9 Prison Industries shall submit an appropriate proposal to 

10 the board of directors and obtain the board’s approval be11 fore initiating any such expansion. The proposal submitted 

12 to the board shall include a detailed analysis of the prob13 able impact of the proposed expansion of sales within the 

14 Federal market by Federal Prison Industries on private 

15 sector firms and their non-inmate workers. 

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

17 shall be performed by an interagency team on a reimburs18 able basis or by a private contractor paid by Federal Pris19 on Industries. 

20 ‘‘(ii) If the analysis is to be performed by an inter21 agency team, such team shall be led by the Administrator 

22 of the Small Business Administration or the designee of 

23 such officer with representatives of the Department of 

24 Labor, the Department of Commerce, and the Federal 

25 Procurement Data Center. 
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1 ‘‘(iii) If the analysis is to be performed by a private 

2 contractor, the selection of the contractor and the admin3 istration of the contract shall be conducted by one of the 

4 entities referenced in clause (ii) as an independent execu5 tive agent for the board of directors. Maximum consider6 ation shall be given to any proposed statement of work 

7 furnished by the Chief Operating Officer of Federal Prison 

8 Industries. 

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

10 identify and consider— 

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

12 the requirements of the Federal Government for the 

13 specific product or specific service; 

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

15 market for the specific product or specific service 

16 currently furnished by small businesses during the 

17 previous 3 fiscal years; 

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

19 specific product or specific service projected for Fed20 eral Prison Industries for the fiscal year in which 

21 production or performance will commence or expand 

22 and the subsequent 4 fiscal years; 

23 ‘‘(iv) whether the industry producing the spe24 cific product or specific service in the private sec25 tor— 
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1 ‘‘(I) has an unemployment rate higher 

2 than the national average; or 

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

4 workers that has consistently shown an increase 

5 during the previous 5 years; 

6 ‘‘(v) whether the specific product is an import7 sensitive product; 

8 ‘‘(vi) the requirements of the Federal Govern9 ment and the demands of entities other than the 

10 Federal Government for the specific product or serv11 ice during the previous 3 fiscal years; 

12 ‘‘(vii) the projected growth or decline in the de13 mand of the Federal Government for the specific 

14 product or specific service; 

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

16 the Federal Government for the specific product or 

17 service to sustain both Federal Prison Industries 

18 and private vendors; and 

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

20 new product or performance of a new service will 

21 provide inmates with the maximum opportunity to 

22 acquire knowledge and skill in trades and occupa23 tions that will provide them with a means of earning 

24 a livelihood upon release. 
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1 ‘‘(D)(i) The board of directors may not approve a 

2 proposal to authorize the production and sale of a new 

3 specific product or continued sale of a previously author4 ized product unless— 

5 ‘‘(I) the product to be furnished is a prison6 made product; or 

7 ‘‘(II) the service to be furnished is to be per8 formed by inmate workers. 

9 ‘‘(ii) The board of directors may not approve a pro10 posal to authorize the production and sale of a new prison11 made product or to expand production of a currently au12 thorized product if the product is— 

13 ‘‘(I) produced in the private sector by an indus14 try which has reflected during the previous year an 

15 unemployment rate above the national average; or 

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

17 ‘‘(iii) The board of directors may not approve a pro18 posal for inmates to provide a service in which an inmate 

19 worker has access to— 

20 ‘‘(I) personal or financial information about in21 dividual private citizens, including information relat22 ing to such person’s real property, however de23 scribed, without giving prior notice to such persons 

24 or class of persons to the greatest extent practicable; 
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1 ‘‘(II) geographic data regarding the location of 

2 surface and subsurface infrastructure providing com3 munications, water and electrical power distribution, 

4 pipelines for the distribution of natural gas, bulk pe5 troleum products and other commodities, and other 

6 utilities; or 

7 ‘‘(III) data that is classified. 

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

9 furnishing through inmate labor construction services, un10 less to be performed within a Federal correctional institu11 tion pursuant to the participation of an inmate in an ap12 prenticeship or other vocational education program teach13 ing the skills of the various building trades. 

14 ‘‘(II) For purposes of this clause, the term ‘construc15 tion’ has the meaning given such term by section 2.101 

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

17 2.101), as in effect on June 1, 2004, including the repair, 

18 alteration, or maintenance of real property in being. 

19 ‘‘(6) To provide further opportunities for participa20 tion by interested parties, the board of directors shall— 

21 ‘‘(A) give additional notice of a proposal to au22 thorize the production and sale of a new product or 

23 service, or expand the production of a currently au24 thorized product or service, in a publication designed 

25 to most effectively provide notice to private vendors 
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1 and labor unions representing private sector workers 

2 who could reasonably be expected to be affected by 

3 approval of the proposal, which notice shall offer to 

4 furnish copies of the analysis required by paragraph 

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

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

7 by paragraph (5) from trade associations rep8 resenting vendors and labor unions representing pri9 vate sector workers who could reasonably be ex10 pected to be affected by approval of the proposal to 

11 authorize the production and sale of a new product 

12 or service (or expand the production of a currently 

13 authorized product or service); and 

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

15 representative of an established trade association, 

16 labor union, or other private sector representatives 

17 to present comments on the proposal directly to the 

18 board of directors. 

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

20 of all comments received on the expansion proposal. 

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

22 expansion proposal, the Chief Operating Officer of Federal 

23 Prison Industries may provide the board of directors a re24 vised expansion proposal. If such revised proposal provides 

25 for expansion of inmate work opportunities in an industry 
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1 different from that initially proposed, such revised pro2 posal shall reflect the analysis required by paragraph 

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

4 of paragraph (6). 

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

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

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

8 authorized product or service) and take any action with 

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

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

11 title 5. 

12 ‘‘(10) In conformity with the requirements of para13 graphs (5) through (9) of this subsection, the board of 

14 directors may— 

15 ‘‘(A) authorize the donation of products pro16 duced or services furnished by Federal industries 

17 and available for sale; 

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

19 product or the furnishing of a new specific service 

20 for donation; or 

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

22 of a currently authorized specific product or specific 

23 service in an amount in excess of a reasonable share 

24 of the market for such product or service, if— 
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1 ‘‘(i) a Federal agency or department, pur2 chasing such product or service, has requested 

3 that Federal Prison Industries be authorized to 

4 furnish such product or service in amounts that 

5 are needed by such agency or department; or 

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

7 cause and supported by at least eight members 

8 of the board.’’. 

9 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

10 (a) IN GENERAL.—Notwithstanding the require11 ments of section 4124 of title 18, United States Code (as 

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

13 or agency having a requirement for a product that is au14 thorized for sale by Federal Prison Industries and is listed 

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

16 United States Code) shall first solicit an offer from Fed17 eral Prison Industries and make purchases on a non18 competitive basis in accordance with this section or in ac19 cordance with section 2410n of title 10, United States 

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

21 and Administrative Services Act of 1949 (as added by sub22 section (i)). 

23 (b) PREFERENTIAL SOURCE STATUS.—Subject to 

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

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

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

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

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

13 and 

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

15 and reasonable price. 

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

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

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

22 with the procedures of the Federal Acquisition Regulation. 

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

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

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

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

8 satisfaction, such dispute shall be resolved pursuant 

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

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

11 (e) LIMITATIONS ON USE OF AUTHORITY.— 

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

13 made by Federal Prison Industries during the base 

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

17 (A) 90 percent in fiscal year 2007; 

18 (B) 85 percent in fiscal year 2008; 

19 (C) 70 percent in fiscal year 2009; 

20 (D) 55 percent in fiscal year 2010; and 

21 (E) 40 percent in fiscal year 2011. 

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

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

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

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

8 product. 

9 (4) CHANGES IN DESIGN SPECIFICATIONS.— 

10 The limitations on sales specified in paragraphs (2) 

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

12 unit cost of production of a specific product arising 

13 from changes in the design specification of such 

14 product directed by the buying agency. 

15 (f) DURATION OF AUTHORITY.—The preferential 

16 contracting authorities authorized by subsection (b) may 

17 not be used on or after October 1, 2011, and become effec18 tive on the effective date of the final regulations issued 

19 pursuant to section 18. 

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

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

23 sales of Federal Prison Industries during the period 

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

25 Year 2004); 
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1 (2) the term ‘‘business sectors’’ means the eight 

2 product/service business groups identified in the 

3 2002 Federal Prison Industries annual report as the 

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

6 Vehicular Components Business Group, the Graphics 

7 Business Group, the Industrial Products Business 

8 Group, the Office Furniture Business Group, the 

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

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

12 be given the same meaning as, and be determined 

13 pursuant to, part 15.8 of the Federal Acquisition 

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

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

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

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

20 such subsection for such fiscal year and the likely effects 

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

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

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

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

5 of adverse effects on either safe prison management or 

6 public safety, he shall so advise the Congress. 

7 (4) In advising the Congress pursuant to paragraph 

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

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

11 additional correctional staffing, as may be appropriate. 

12 (i) PROCEDURAL REQUIREMENTS FOR CIVILIAN

13 AGENCIES RELATING TO PRODUCTS OF FEDERAL PRISON

14 INDUSTRIES.—Title III of the Federal Property and Ad15 ministrative Services Act of 1949 (41 U.S.C. 251 et seq.) 

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

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

18 PROCEDURAL REQUIREMENTS. 

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

20 product listed in the latest edition of the Federal Prison 

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

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

23 conduct market research to determine whether the Federal 

24 Prison Industries product is comparable to products avail25 able from the private sector that best meet the executive 
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1 agency’s needs in terms of price, quality, and time of deliv2 ery. 

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

4 the executive agency determines that a Federal Prison In5 dustries product is not comparable in price, quality, or 

6 time of delivery to products available from the private sec7 tor that best meet the executive agency’s needs in terms 

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

9 shall use competitive procedures for the procurement of 

10 the product or shall make an individual purchase under 

11 a multiple award contract. In conducting such a competi12 tion or making such a purchase, the agency head shall 

13 consider a timely offer from Federal Prison Industries. 

14 ‘‘(c) IMPLEMENTATION BY HEAD OF EXECUTIVE

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

16 that— 

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

18 Federal Prison Industries product or service unless 

19 a contracting officer of the agency determines that 

20 the product or service is comparable to products or 

21 services available from the private sector that best 

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

23 and time of delivery; and 
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1 ‘‘(2) Federal Prison Industries performs its 

2 contractual obligations to the same extent as any 

3 other contractor for the executive agency. 

4 ‘‘(d) MARKET RESEARCH DETERMINATION NOT SUB5 JECT TO REVIEW.—A determination by a contracting offi6 cer regarding whether a product or service offered by Fed7 eral Prison Industries is comparable to products or serv8 ices available from the private sector that best meet an 

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

10 time of delivery shall not be subject to review pursuant 

11 to section 4124(b) of title 18. 

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

13 contractor or potential contractor of an executive agency 

14 may not be required to use Federal Prison Industries as 

15 a subcontractor or supplier of products or provider of serv16 ices for the performance of a contract of the executive 

17 agency by any means, including means such as— 

18 ‘‘(A) a contract solicitation provision requiring 

19 a contractor to offer to make use of products or 

20 services of Federal Prison Industries in the perform21 ance of the contract; 

22 ‘‘(B) a contract specification requiring the con23 tractor to use specific products or services (or class24 es of products or services) offered by Federal Prison 

25 Industries in the performance of the contract; or 
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1 ‘‘(C) any contract modification directing the use 

2 of products or services of Federal Prison Industries 

3 in the performance of the contract. 

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

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

6 under the contract. 

7 ‘‘(f) PROTECTION OF CLASSIFIED AND SENSITIVE

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

9 enter into any contract with Federal Prison Industries 

10 under which an inmate worker would have access to— 

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

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

13 of— 

14 ‘‘(A) surface and subsurface infrastructure 

15 providing communications or water or electrical 

16 power distribution; 

17 ‘‘(B) pipelines for the distribution of nat18 ural gas, bulk petroleum products, or other 

19 commodities; or 

20 ‘‘(C) other utilities; or 

21 ‘‘(3) any personal or financial information 

22 about any individual private citizen, including infor23 mation relating to such person’s real property how24 ever described, without the prior consent of the indi25 vidual. 
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1 ‘‘(g) DEFINITIONS.—In this section: 

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

3 meaning given such term in section 4(5) of the Of4 fice of Federal Procurement Policy Act (41 U.S.C. 

5 403(5)). 

6 ‘‘(2) The term ‘market research’ means obtain7 ing specific information about the price, quality, and 

8 time of delivery of products available in the private 

9 sector through a variety of means, which may in10 clude— 

11 ‘‘(A) contacting knowledgeable individuals 

12 in government and industry; 

13 ‘‘(B) interactive communication among in14 dustry, acquisition personnel, and customers; 

15 and 

16 ‘‘(C) interchange meetings or pre-solicita17 tion conferences with potential offerors.’’. 

18 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON19 TRACTOR. 

20 (a) IN GENERAL.—Federal Prison Industries is au21 thorized to enter into a contract with a Federal contractor 

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

23 produce products as a subcontractor or supplier in the per24 formance of a Federal procurement contract. The use of 

25 Federal Prison Industries as a subcontractor or supplier 
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1 shall be a wholly voluntary business decision by the Fed2 eral prime contractor or subcontractor, subject to any 

3 prior approval of subcontractors or suppliers by the con4 tracting officer which may be imposed by the Federal Ac5 quisition Regulation or by the contract. 

6 (b) COMMERCIAL SALES PROHIBITED.—The author7 ity provided by subsection (a) shall not result, either di8 rectly or indirectly, in the sale in the commercial market 

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

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

11 United States Code. A Federal contractor (or subcon12 tractor at any tier) using Federal Prison Industries as a 

13 subcontractor or supplier in furnishing a commercial prod14 uct pursuant to a Federal contract shall implement appro15 priate management procedures to prevent introducing an 

16 inmate-produced product into the commercial market. 

17 (c) PROHIBITIONS ON MANDATING SUBCONTRACTING

18 WITH FEDERAL PRISON INDUSTRIES.—Except as author19 ized under the Federal Acquisition Regulation, the use of 

20 Federal Prison Industries as a subcontractor or supplier 

21 of products or provider of services shall not be imposed 

22 upon prospective or actual Federal prime contractors or 

23 a subcontractors at any tier by means of— 
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1 (1) a contract solicitation provision requiring a 

2 contractor to offer to make use of Federal Prison 

3 Industries, its products or services; 

4 (2) specifications requiring the contractor to 

5 use specific products or services (or classes of prod6 ucts or services) offered by Federal Prison Indus7 tries in the performance of the contract; 

8 (3) any contract modification directing the use 

9 of Federal Prison Industries, its products or serv10 ices; or 

11 (4) any other means. 

12 SEC. 6. INMATE WAGES AND DEDUCTIONS. 

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

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

15 adding after paragraph (10) a new paragraph (11) as fol16 lows: 

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

18 Industries shall prescribe the rates of hourly wages to be 

19 paid inmates performing work for or through Federal 

20 Prison Industries. The Director of the Federal Bureau of 

21 Prisons shall prescribe the rates of hourly wages for other 

22 work assignments within the various Federal correctional 

23 institutions. In the case of an inmate whose term of im24 prisonment is to expire in not more than 2 years, wages 

25 shall be earned at an hourly rate of not less than $2.50, 
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1 but paid at the same rate and in the same manner as to 

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

3 shall be held in trust and paid only upon the actual expira4 tion of the term of imprisonment. 

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

6 and considered for increase on not less than a biannual 

7 basis. 

8 ‘‘(C) The Board of Directors of Federal Prison In9 dustries shall— 

10 ‘‘(i) not later than September 30, 2005, in11 crease the maximum wage rate for inmates per12 forming work for or through Federal Prison Indus13 tries to an amount equal to 50 percent of the min14 imum wage prescribed by section 6(a)(1) of the Fair 

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

16 206(a)(1)); 

17 ‘‘(ii) not later than September 30, 2010, in18 crease such maximum wage rate to an amount equal 

19 to such minimum wage; and 

20 ‘‘(iii) request the Secretary of Labor to estab21 lish, not later than October 1, 2005, an ‘inmate 

22 training wage’ pursuant to that Act. 

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

24 in the name of the inmate. Deductions, aggregating to not 
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1 more than 80 percent of gross wages, shall be taken from 

2 the wages due for— 

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

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

5 to court order; 

6 ‘‘(iii) payment of additional restitution for vic7 tims of the inmate’s crimes (at a rate not less than 

8 10 percent of gross wages); 

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

10 family pursuant to statute, court order, or agree11 ment with the inmate; 

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

13 to facilitate such inmate’s assimilation back into so14 ciety, payable at the conclusion of incarceration; and 

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

16 by the Director of the Bureau of Prisons. 

17 ‘‘(E) Each inmate worker working for Federal Prison 

18 Industries shall indicate in writing that such person— 

19 ‘‘(i) is participating voluntarily; and 

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

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

22 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 

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

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

25 ‘‘any goods, wares, or merchandise manufactured, pro-
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1 duced, or mined’’ and inserting ‘‘products manufactured, 

2 services furnished, or minerals mined’’. 

3 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

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

5 State or local jurisdiction of a State which is providing 

6 services for the commercial market through inmate labor 

7 on October 1, 2004, may continue to provide such com8 mercial services until— 

9 (1) the expiration date specified in the contract 

10 or other agreement with a commercial partner on 

11 October 1, 2004, or 

12 (2) until September 30, 2008, if the prison 

13 work program is directly furnishing the services to 

14 the commercial market. 

15 (c) APPROVAL REQUIRED FOR LONG-TERM OPER16 ATION.—A prison work program operated by a correc17 tional institution operated by a State or local jurisdiction 

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

19 services for sale in the commercial market after the dates 

20 specified in subsection (b) if such program has been cer21 tified pursuant to section 1761(c)(1) of title 18, United 

22 States Code, and is in compliance with the requirements 

23 of such subsection and its implementing regulations. 
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1 SEC. 8. CONFORMING AMENDMENT. 

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

3 amended by striking ‘‘production of commodities’’ and in4 serting ‘‘production of products or furnishing of services’’. 

5 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

6 307. 

7 Chapter 307 of title 18, United States Code, is fur8 ther amended by adding the following: 

9 ‘‘§ 4130. Construction of provisions 

10 ‘‘Nothing in this chapter shall be construed— 

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

12 to— 

13 ‘‘(A) employment in a Federal Prison In14 dustries facility; or 

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

16 or benefit on demand, except as otherwise spe17 cifically provided by law or regulation; 

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

19 the purposes of any law or program; or 

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

21 behalf of any inmate against the United States or 

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

23 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR24 TUNITIES FOR INMATES. 

25 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE26 LEASE-PREPARATION OPPORTUNITIES.— 
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1 (1) PROGRAM ESTABLISHED.—There is hereby 

2 established the Enhanced In-Prison Educational and 

3 Vocational Assessment and Training Program within 

4 the Federal Bureau of Prisons. 

5 (2) COMPREHENSIVE PROGRAM.—In addition to 

6 such other components as the Director of the Bu7 reau of Prisons deems appropriate to reduce inmate 

8 idleness and better prepare inmates for a successful 

9 reentry into the community upon release, the pro10 gram shall provide— 

11 (A) in-prison assessments of inmates’ 

12 needs and aptitudes; 

13 (B) a full range of educational opportuni14 ties; 

15 (C) vocational training and apprentice16 ships; and 

17 (D) comprehensive release-readiness prepa18 ration. 

19 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

20 the purposes of carrying out the program established 

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

22 each fiscal year after fiscal year 2005, to remain 

23 available until expended. Funds shall be allocated 

24 from the gross profits within the Federal Prison In-
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1 dustries Fund, and, to the extent such amounts are 

2 inadequate, from the General Treasury. 

3 (4) SCHEDULE FOR IMPLEMENTATION.—All 

4 components of the program shall be established— 

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

6 prisons not later than 2 years after the date of 

7 the enactment of this Act; 

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

9 prisons not later than 4 years after such date 

10 of enactment; 

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

12 prisons not later than 6 years after such date 

13 of enactment; and 

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

15 years after such date of enactment. 

16 (b) ADDITIONAL INMATE WORK OPPORTUNITIES

17 THROUGH PUBLIC SERVICE ACTIVITIES.— 

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

19 United States Code, is further amended by inserting 

20 after section 4124 the following new section: 

21 ‘‘§ 4124a. Additional inmate work opportunities 

22 through public service activities 

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

24 within Federal Prison Industries may perform work for 

25 an eligible entity pursuant to an agreement between such 
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1 entity and the Inmate Work Training Administrator in ac2 cordance with the requirements of this section. 

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

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

5 an entity— 

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

7 501(c)(3) of the Internal Revenue Code of 1986 and 

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

9 Code and that has been such an organization for a 

10 period of not less than 36 months prior to inclusion 

11 in an agreement under this section; 

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

13 in section 501(d) of such Code and exempt from tax14 ation under section 501(a) of such Code; or 

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

16 district, or another special purpose district. 

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

18 ‘‘(1) The Federal Prison Industries Board of 

19 Directors shall designate an entity as the Inmate 

20 Work Training Administrator to administer the 

21 work-based training program authorized by this sec22 tion. 

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

24 Administrator, the Board of Directors shall select an 

25 entity— 
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1 ‘‘(A) that is an organization described in 

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

3 of 1986 and exempt from taxation under sec4 tion 501(a) of such Code; and 

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

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

7 and practice of fostering inmate rehabilitation 

8 through work-based programs in cooperation 

9 with private sector firms. 

10 ‘‘(3) With respect to the formation and per11 formance of an agreement authorized by this section, 

12 the Director of the Bureau of Prisons and the Chief 

13 Operating Officer of Federal Prison Industries shall 

14 be responsible only for— 

15 ‘‘(A) maintaining appropriate institutional 

16 and inmate security; and 

17 ‘‘(B) matters relating to the selection and 

18 payment of participating inmates. 

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

20 seeking to enter into an agreement pursuant to subsection 

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

22 Training Administrator. Each such agreement shall speci23 fy— 

24 ‘‘(1) types of work to be performed; 
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1 ‘‘(2) the proposed duration of the agreement, 

2 specified in terms of a base year and number of op3 tion years; 

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

5 be employed in the specified types of work during 

6 the various phases of the agreement; 

7 ‘‘(4) the wage rates proposed to be paid to var8 ious classes of inmate workers; and 

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

10 than correctional personnel dedicated to the security 

11 of the inmate workers) to be furnished by Federal 

12 Prison Industries or the Bureau of Prisons and the 

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

14 services, and personnel. 

15 ‘‘(e) REPRESENTATIONS.— 

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

17 proposed agreement shall be accompanied by a writ18 ten certification by the chief executive officer of the 

19 eligible entity that— 

20 ‘‘(A) the work to be performed by the in21 mate workers will be limited to the eleemosy22 nary work of such entity in the case of an enti23 ty described in paragraph (1) or (2) of sub24 section (b); 
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1 ‘‘(B) the work would not be performed but 

2 for the availability of the inmate workers; 

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

4 workers will not result, either directly or indi5 rectly, in the production of a new product or 

6 the furnishing of a service that is to be offered 

7 for other than resale or donation by the eligible 

8 entity or any affiliate of the such entity. 

9 ‘‘(2) PROTECTIONS FOR NON-INMATE WORK10 ERS.—Each proposed agreement shall also be ac11 companied by a written certification by the chief ex12 ecutive officer of the eligible entity that— 

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

14 of the eligible entity (or any affiliate of the enti15 ty) will have his or her job abolished or work 

16 hours reduced as a result of the entity being 

17 authorized to utilize inmate workers; and 

18 ‘‘(B) the work to be performed by the in19 mate workers will not supplant work currently 

20 being performed by a contractor of the eligible 

21 entity. 

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

23 ‘‘(1) IN GENERAL.—Each such proposed agree24 ment shall be –presented to the Board of Directors, 

25 be subject to the same opportunities for public com-
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1 ment, and be publicly considered and acted upon by 

2 the Board in a manner comparable to that required 

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

4 ‘‘(2) MATTERS TO BE CONSIDERED.—In deter5 mining whether to approve a proposed agreement, 

6 the Board shall— 

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

8 provides inmate work opportunities that will 

9 provide participating inmates with the best 

10 prospects of obtaining employment paying a liv11 able wage upon release; 

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

13 provides for maximum reimbursement for in14 mate wages and for the costs of supplies and 

15 equipment needed to perform the types of work 

16 to be performed; 

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

18 result in the displacement of non-inmate work19 ers or volunteers contrary to the representa20 tions required by subsection (e)(2) as deter21 mined by the Board or by the Secretary of 

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

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

24 result, either directly or indirectly, in the pro-
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1 duction of a new product or the furnishing of 

2 a service for other than resale or donation. 

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

4 WAGES.— 

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

6 paid wages for work under the agreement at a basic 

7 hourly rate to be negotiated between the eligible en8 tity and Federal Prison Industries and specified in 

9 the agreement. The wage rates set by the Director 

10 of the Federal Bureau of Prisons to be paid inmates 

11 for various institutional work assignments are spe12 cifically authorized. 

13 ‘‘(2) PAYMENT TO INMATE WORKER AND AU14 THORIZED DEDUCTIONS.—Wages shall be paid and 

15 deductions taken pursuant to section 

16 4122(b)(11)(C). 

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

18 Each inmate worker to be utilized by an eligible en19 tity shall indicate in writing that such person— 

20 ‘‘(A) is participating voluntarily; and 

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

22 to be paid and deductions to be taken from 

23 such wages. 

24 ‘‘(h) ASSIGNMENT TO WORK OPPORTUNITIES.—As25 signment of inmates to work under an approved agree-
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1 ment with an eligible entity shall be subject to the Bureau 

2 of Prisons Program Statement Number 1040.10 (Non3 Discrimination Toward Inmates), as contained in section 

4 551.90 of title 28 of the Code of Federal Regulations (or 

5 any successor document). 

6 ‘‘(i) ENFORCEMENT OF PROTECTIONS FOR NON-IN7 MATE WORKERS.— 

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

9 request of any interested person, the Secretary of 

10 Labor may promptly verify a certification made pur11 suant subsection (e)(2) with respect to the displace12 ment of non-inmate workers so as to make the re13 sults of such inquiry available to the Board of Direc14 tors prior to the Board’s consideration of the pro15 posed agreement. The Secretary and the person re16 questing the inquiry may make recommendations to 

17 the Board regarding modifications to the proposed 

18 agreement. 

19 ‘‘(2) DURING PERFORMANCE.— 

20 ‘‘(A) IN GENERAL.—Whenever the Sec21 retary deems appropriate, upon request or oth22 erwise, the Secretary may verify whether the 

23 actual performance of the agreement is result24 ing in the –displacement of non-inmate workers 
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1 or the use of inmate workers in –a work activity 

2 not authorized under the approved agreement. 

3 ‘‘(B) SANCTIONS.—Whenever the Sec4 retary determines that performance of the 

5 agreement has resulted in the displacement of 

6 non-inmate workers or employment of an in7 mate worker in an unauthorized work activity, 

8 the Secretary may— 

9 ‘‘(i) direct the Inmate Work Training 

10 Administrator to terminate the agreement 

11 for default, subject to the processes and 

12 appeals available to a Federal contractor 

13 whose procurement contract has been ter14 minated for default; and 

15 ‘‘(ii) initiate proceedings to impose 

16 upon the person furnishing the certifi17 cation regarding non-displacement of non18 inmate workers required by subsection 

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

20 criminal sanctions as may be available.’’. 

21 (2) AUTHORIZATION OF APPROPRIATION.— 

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

23 for each of the fiscal years 2006 through 2010 for 

24 the purposes of paying the wages of inmates and 

25 otherwise undertaking the maximum number of 
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1 agreements with eligible entities pursuant to section 

2 4124a of title 18, United States Code, as added by 

3 paragraph (1). 

4 (3) CLERICAL AMENDMENT.—The table of sec5 tions for chapter 307 of title 18, United States 

6 Code, is amended by inserting after the item relating 

7 to section 4124 the following new item: 

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

8 (c) INMATE WORK OPPORTUNITIES IN SUPPORT OF

9 NOT-FOR-PROFIT ENTITIES.— 

10 (1) PROPOSALS FOR DONATION PROGRAMS.— 

11 The Chief Operating Officer of Federal Prison In12 dustries shall develop and present to the Board of 

13 Directors of Federal Prison Industries proposals to 

14 have Federal Prison Industries donate products and 

15 services to eligible entities that provide goods or 

16 services to low-income individuals who would likely 

17 otherwise have difficulty purchasing such products 

18 or services in the commercial market. 

19 (2) SCHEDULE FOR SUBMISSION AND CONSID20 ERATION OF DONATION PROGRAMS.— 

21 (A) INITIAL PROPOSALS.—The Chief Oper22 ating Officer shall submit the initial group of 

23 proposals for programs of the type described in 

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

25 the enactment of this Act. The Board of Direc-
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1 tors of Federal Prison Industries shall consider 

2 such proposals from the Chief Operating Officer 

3 not later than the date that is 270 days after 

4 the date of the enactment of this Act. 

5 (B) ANNUAL OPERATING PLAN.—The 

6 Board of Directors of Federal Prison Industries 

7 shall consider proposals by the Chief Operating 

8 Officer for programs of the type described in 

9 paragraph (1) as part of the annual operating 

10 plan for Federal Prison Industries. 

11 (C) OTHER PROPOSALS.—In addition to 

12 proposals submitted by the Chief Operating Of13 ficer, the Board of Directors may, from time to 

14 time, consider proposals presented by prospec15 tive eligible entities. 

16 (3) DEFINITION OF ELIGIBLE ENTITIES.—For 

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

18 entity’’ means an entity— 

19 (A) that is an organization described in 

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

21 of 1986 and exempt from taxation under sec22 tion 501(a) of such Code and that has been 

23 such an organization for a period of not less 

24 than 36 months prior to inclusion in a proposal 

25 of the type described in paragraph (1), or 
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1 (B) that is a religious organization de2 scribed in section 501(d) of such Code and ex3 empt from taxation under section 501(a) of 

4 such Code. 

5 (4) AUTHORIZATION OF APPROPRIATIONS.— 

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

7 for each of the fiscal years 2006 through 2010 for 

8 the purposes of paying the wages of inmates and 

9 otherwise carrying out programs of the type de10 scribed in paragraph (1). 

11 (d) MAXIMIZING INMATE REHABILITATIVE OPPOR12 TUNITIES THROUGH COGNITIVE ABILITIES ASSESS13 MENTS.— 

14 (1) DEMONSTRATION PROGRAM AUTHORIZED.— 

15 (A) IN GENERAL.—There is hereby estab16 lished within the Federal Bureau of Prisons a 

17 program to be known as the ‘‘Cognitive Abili18 ties Assessment Demonstration Program’’. The 

19 purpose of the demonstration program is to de20 termine the effectiveness of a program that as21 sesses the cognitive abilities and perceptual 

22 skills of Federal inmates to maximize the bene23 fits of various rehabilitative opportunities de24 signed to prepare each inmate for a successful 

25 return to society and reduce recidivism. The 
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1 demonstration program shall be undertaken by 

2 a contractor with a demonstrated record of ena3 bling the behavioral and academic improvement 

4 of adults through the use of research-based sys5 tems that maximize the development of both the 

6 cognitive and perceptual capabilities of a par7 ticipating individual, including adults in a cor8 rectional setting. 

9 (B) SCOPE OF DEMONSTRATION PRO10 GRAM.—The demonstration program shall to 

11 the maximum extent practicable, be— 

12 (i) conducted during a period of three 

13 consecutive fiscal years, commencing dur14 ing fiscal year 2006; 

15 (ii) conducted at 12 Federal correc16 tional institutions; and 

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

18 categorized as minimum security or less, 

19 and are within five years of release. 

20 (C) REPORT ON RESULTS OF PROGRAM.— 

21 Not later than 60 days after completion of the 

22 demonstration program, the Director shall sub23 mit to Congress a report on the results of the 

24 program. At a minimum, the report shall in25 clude an analysis of employment stability, sta-
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1 bility of residence, and rates of recidivism 

2 among inmates who participated in the program 

3 after 18 months of release. 

4 (2) AUTHORIZATION OF APPROPRIATIONS.— 

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

6 in each of the three fiscal years after fiscal year 

7 2005, to remain available until expended, for the 

8 purposes of conducting the demonstration program 

9 authorized by subsection (a). 

10 (e) PRERELEASE EMPLOYMENT ASSISTANCE.— 

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

12 Bureau of Prisons shall, to the maximum extent 

13 practicable, afford to inmates opportunities to par14 ticipate in programs and activities designed to help 

15 prepare such inmates to obtain employment upon re16 lease. 

17 (2) PRERELEASE EMPLOYMENT PLACEMENT

18 ASSISTANCE.—Such prerelease employment place19 ment assistance required by subsection (a) shall in20 clude— 

21 (A) training in the preparation of resumes 

22 and job applications; 

23 (B) training in interviewing skills; 

24 (C) training and assistance in job search 

25 techniques; 
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1 (D) conduct of job fairs; and 

2 (E) such other methods deemed appro3 priate by the Director. 

4 (3) PRIORITY PARTICIPATION.—Priority in pro5 gram participation shall be accorded to inmates who 

6 are participating in work opportunities afforded by 

7 Federal Prison Industries and are within 24 months 

8 of release from incarceration. 

9 SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS. 

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

11 amended to read as follows: 

12 ‘‘§ 4121. Federal Prison Industries; Board of Direc13 tors: executive management 

14 ‘‘(a) Federal Prison Industries is a government cor15 poration of the District of Columbia organized to carry 

16 on such industrial operations in Federal correctional insti17 tutions as authorized by its Board of Directors. The man18 ner and extent to which such industrial operations are car19 ried on in the various Federal correctional institutions 

20 shall be determined by the Attorney General. 

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

22 of 11 directors appointed by the President. 

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

24 President shall assure that 3 members represent the busi25 ness community, 3 members represent organized labor, 1 
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1 member shall have special expertise in inmate rehabilita2 tion techniques, 1 member represents victims of crime, 1 

3 member represents the interests of Federal inmate work4 ers, and 2 additional members whose background and ex5 pertise the President deems appropriate. The members of 

6 the Board representing the business community shall in7 clude, to the maximum extent practicable, representation 

8 of firms furnishing services as well as firms producing 

9 products, especially from those industry categories from 

10 which Federal Prison Industries derives substantial sales. 

11 The members of the Board representing organized labor 

12 shall, to the maximum practicable, include representation 

13 from labor unions whose members are likely to be most 

14 affected by the sales of Federal Prison Industries. 

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

16 5 years, except that of members first appointed— 

17 ‘‘(A) 2 members representing the business com18 munity shall be appointed for a term of 3 years; 

19 ‘‘(B) 2 members representing labor shall be ap20 pointed for a term of 3 years; 

21 ‘‘(C) 2 members whose background and exper22 tise the President deems appropriate for a term of 

23 3 years; 

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

25 shall be appointed for a term of 3 years; 
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1 ‘‘(E) 1 member representing the interests of 

2 Federal inmate workers shall be appointed for a 

3 term of 3 years; 

4 ‘‘(F) 1 member representing the business com5 munity shall be appointed for a term of 4 years; 

6 ‘‘(G) 1 member representing the business com7 munity shall be appointed for a term of 4 years; and 

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

9 inmate rehabilitation techniques shall be appointed 

10 for a term of 5 years. 

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

12 Board as Chairperson. The Chairperson may designate a 

13 Vice Chairperson. 

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

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

16 same manner as the original appointment. Any member 

17 appointed to fill a vacancy occurring before the expiration 

18 of the term for which the member’s predecessor was ap19 pointed shall be appointed for the remainder of that term. 

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

21 compensation. The members of the Board shall be allowed 

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

23 at rates authorized for employees of agencies under sub24 chapter I of chapter 57 of title 5, United States Code, 

25 to attend meetings of the Board and, with the advance 
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1 approval of the Chairperson of the Board, while otherwise 

2 away from their homes or regular places of business for 

3 purposes of duties as a member of the Board. 

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

5 and terminate any personnel that may be necessary to en6 able the Board to perform its duties. 

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

8 a Federal agency may detail a Federal Government em9 ployee to the Board without reimbursement. Such detail 

10 shall be without interruption or loss of civil service status 

11 or privilege. 

12 ‘‘(9) The Chairperson of the Board may procure tem13 porary and intermittent services under section 3109(b) of 

14 title 5, United States Code. 

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

16 serve as Chief Executive Officer of the Corporation. The 

17 Director shall designate a person to serve as Chief Oper18 ating Officer of the Corporation.’’. 

19 SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXI20 BILITY TO FEDERAL PRISON INDUSTRIES OP21 ERATIONS. 

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

23 is amended— 

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

25 and 
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1 (2) by adding at the end the following new 

2 paragraphs: 

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

4 one workshop at a Federal correctional facility. 

5 ‘‘(C) Federal Prison Industries may operate a work6 shop outside of a correctional facility if all of the inmates 

7 working in such workshop are classified as minimum secu8 rity inmates.’’. 

9 SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AU10 THORITY. 

11 Any correctional officer or other employee of Federal 

12 Prison Industries being paid with nonappropriated funds 

13 who would be separated from service because of a reduc14 tion in the net income of Federal Prison Industries during 

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

16 (1) eligible for appointment (or reappointment) 

17 in the competitive service pursuant to title 5, United 

18 States Code; 

19 (2) registered on a Bureau of Prisons reemploy20 ment priority list; and 

21 (3) given priority for any other position within 

22 the Bureau of Prisons for which such employee is 

23 qualified. 
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1 SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CON2 GRESS. 

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

4 amended to read as follows: 

5 ‘‘§ 4127. Federal Prison Industries report to Congress 

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

7 31, the board of directors of Federal Prison Industries 

8 shall submit an annual report to Congress on the conduct 

9 of the business of the corporation during each fiscal year 

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

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

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

13 other matters as the board considers appropriate, a report 

14 under subsection (a) shall include— 

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

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

17 the fiscal year; 

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

19 that will be issued in the following fiscal year; 

20 ‘‘(3) an analysis of— 

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

22 specific product and type of service sold to the 

23 Federal agencies and the commercial market; 

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

25 agency of each specific product and type of 

26 service; 
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1 ‘‘(C) the corporation’s share of such total 

2 Federal Government purchases by specific prod3 uct and type of service; and 

4 ‘‘(D) the number and disposition of dis5 putes submitted to the heads of the Federal de6 partments and agencies pursuant to section 

7 4124(e) of this title; 

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

9 includes— 

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

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

12 produce products or furnish services sold in the 

13 commercial market; 

14 ‘‘(C) the number and percentage of em15 ployed inmates by the term of their incarcer16 ation; and 

17 ‘‘(D) the various hourly wages paid to in18 mates employed with respect to the production 

19 of the various specific products and types of 

20 services authorized for production and sale to 

21 Federal agencies and in the commercial market; 

22 and 

23 ‘‘(5) data concerning employment obtained by 

24 former inmates upon release to determine whether 

25 the employment provided by Federal Prison Indus-
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1 tries during incarceration provided such inmates 

2 with knowledge and skill in a trade or occupation 

3 that enabled such former inmate to earn a livelihood 

4 upon release. 

5 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re6 port under subsection (a) shall be made available to the 

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

8 report.’’. 

9 SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EF10 FECTS OF ELIMINATING THE FEDERAL PRIS11 ON INDUSTRIES MANDATORY SOURCE AU12 THORITY. 

13 (a) STUDY REQUIRED.—The Comptroller General 

14 shall undertake to have an independent study conducted 

15 on the effects of eliminating the Federal Prison Industries 

16 mandatory source authority. 

17 (b) SOLICITATION OF VIEWS.—The Comptroller Gen18 eral shall ensure that in developing the statement of work 

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

20 of private industry, organized labor groups, Members and 

21 staff of the relevant Congressional committees, officials of 

22 the executive branch, and the public are solicited. 

23 (c) SUBMISSION.—Not later than June 30, 2006, the 

24 Comptroller General shall submit the results of the study 
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1 to Congress, including any recommendations for legisla2 tion. 

3 SEC. 16. SENSE OF CONGRESS. 

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

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

6 program for non-violent criminals in the Federal prison 

7 system. 

8 SEC. 17. DEFINITIONS. 

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

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

11 ‘‘§ 4131. Definitions 

12 ‘‘As used in this chapter— 

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

14 uniting or combining articles or components (includ15 ing ancillary finished components or assemblies) so 

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

17 without necessarily changing or altering the compo18 nent parts; 

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

20 with respect to a specific product, the fair market 

21 price of the product within the meaning of section 

22 15(a) of the Small Business Act (15 U.S.C. 644(a)), 

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

24 verified through appropriate price analysis or cost 
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1 analysis, including any costs relating to transpor2 tation or the furnishing of any ancillary services; 

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

4 a product which, according to Department of Com5 merce data, has experienced competition from im6 ports at an import to domestic production ratio of 

7 25 percent or greater; 

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

9 means a manufacturing activity in which the value 

10 of inmate labor constitutes at least 10 percent of the 

11 estimate unit cost to produce the item by Federal 

12 Prison Industries; 

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

14 of fabricating from raw or prepared materials, so as 

15 to impart to those materials new forms, qualities, 

16 properties, and combinations; 

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

18 means a share of the total purchases by the Federal 

19 departments and agencies, as reported to the Fed20 eral Procurement Data System for— 

21 ‘‘(A) any specific product during the 3 pre22 ceding fiscal years, that does not exceed 20 per23 cent of the Federal market for the specific 

24 product; and 
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1 ‘‘(B) any specific service during the 3 pre2 ceding fiscal years, that does not exceed 5 per3 cent of the Federal market for the specific serv4 ice; and 

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

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

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

8 as in effect on July 1, 2004.’’. 

9 SEC. 18. IMPLEMENTING REGULATIONS AND PROCEDURES. 

10 (a) FEDERAL ACQUISITION REGULATION.— 

11 (1) PROPOSED REVISIONS.—Proposed revisions 

12 to the Governmentwide Federal Acquisition Regula13 tion to implement the amendments made by this Act 

14 shall be published not later than 60 days after the 

15 date of the enactment of this Act and provide not 

16 less than 60 days for public comment. 

17 (2) FINAL REGULATIONS.—Final regulations 

18 shall be published not later than 180 days after the 

19 date of the enactment of this Act and shall be effec20 tive on the date that is 30 days after the date of 

21 publication. 

22 (3) PUBLIC PARTICIPATION.—The proposed 

23 regulations required by subsection (a) and the final 

24 regulations required by subsection (b) shall afford 

25 an opportunity for public participation in accordance 
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1 with section 22 of the Office of Federal Procurement 

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

3 (b) BOARD OF DIRECTORS.— 

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

5 Federal Prison Industries shall issue regulations de6 fining the terms specified in paragraph (2). 

7 (2) TERMS TO BE DEFINED.—The Board of Di8 rectors shall issue regulations for the following 

9 terms: 

10 (A) Prison-made product. 

11 (B) Prison-furnished service. 

12 (C) Specific product. 

13 (D) Specific service. 

14 (3) SCHEDULE FOR REGULATORY DEFINI15 TIONS.— 

16 (A) Proposed regulations relating to the 

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

18 published not later than 60 days after the date 

19 of enactment of this Act and provide not less 

20 than 60 days for public comment. 

21 (B) Final regulations relating to the mat22 ters described in subsection (b)(2) shall be pub23 lished not less than 180 days after the date of 

24 enactment of this Act and shall be effective on 
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1 the date that is 30 days after the date of publi2 cation. 

3 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

4 PARTICIPATION AND SCRUTINY.— 

5 (A) ADMINISTRATIVE PROCEDURE ACT.— 

6 Regulations issued by the Board of Directors 

7 shall be subject to notice and comment rule8 making pursuant to section 553 of title 5, 

9 United States Code. Unless determined wholly 

10 impracticable or unnecessary by the Board of 

11 Directors, the public shall be afforded 60 days 

12 for comment on proposed regulations. 

13 (B) ENHANCED OUTREACH.—The Board 

14 of Directors shall use means designed to most 

15 effectively solicit public comment on proposed 

16 regulations, procedures, and policies and to in17 form the affected public of final regulations, 

18 procedures, and policies. 

19 (C) OPEN MEETING PROCESSES.—The 

20 Board of Directors shall take all actions relat21 ing to the adoption of regulations, operating 

22 procedures, guidelines, and any other matter re23 lating to the governance and operation of Fed24 eral Prison Industries based on deliberations 

25 and a recorded vote conducted during a meeting 
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1 open to the public, unless closed pursuant to 

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

3 SEC. 19. RULES OF CONSTRUCTION. 

4 (a) AGENCY BID PROTESTS.—Subsection (e) of sec5 tion 4124 of title 18, United States Code, as amended by 

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

7 other than Federal Prison Industries to file a bid protest 

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

9 date of the enactment of this Act. 

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

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

12 (41 U.S.C. 46 et seq.). 

13 SEC. 20. EFFECTIVE DATE AND APPLICABILITY. 

14 (a) EFFECTIVE DATE.—Except as provided in sub15 section (b), this Act and the amendments made by this 

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

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

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

19 requirement for a product or service offered by Federal 

20 Prison Industries needed by a Federal department or 

21 agency after the effective date of the final regulations 

22 issued pursuant to section 18(a)(2), or after September 

23 30, 2006, whichever is earlier. 
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1 SEC. 21. CLERICAL AMENDMENTS. 

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

3 United States Code, is amended— 

4 (1) by amending the item relating to section 

5 4121 to read as follows: 

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

6 (2) by amending the item relating to section 

7 4124 to read as follows: 

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

Prison Industries.’’; 

8 (3) by amending the item relating to section 

9 4127 to read as follows: 

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

10 and 

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

12 items: 

‘‘4130. Construction of provisions. 

‘‘4131. Definitions.’’. 

Æ