IB 

Union Calendar No. 342 

109TH CONGRESS 

2D SESSION H. R. 2965 

[Report No. 109–591] 

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) 


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

Judiciary 

JULY 21, 2006 

Additional sponsors: Mr. GONZALEZ, Mrs. NORTHUP, Mr. FRANKS of Arizona, 

Mr. OXLEY, Mr. NUNES, Mrs. CUBIN, Ms. PRYCE of Ohio, Mr. TIAHRT, 

Mr. BRADY of Texas, Mr. GOHMERT, Mr. WATT, Mr. ENGLISH of Pennsylvania, Mr. GOODE, Mr. SMITH of New Jersey, Mr. MARCHANT, Ms. 

WATERS, and Mr. GEORGE MILLER of California 

JULY 21, 2006 

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

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

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

[For text of introduced bill, see copy of bill as introduced on June 17, 2005] 

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. 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Federal Prison Industries Competition in Contracting Act 

4 of 2006’’. 

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

6 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. Providing additional management flexibility to Federal Prison Industries operations. 

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. 

7 SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT8 ING TO PURCHASES FROM FEDERAL PRISON 

9 INDUSTRIES. 

10 Section 4124 of title 18, United States Code, is amend11 ed to read as follows: 


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1 ‘‘§ 4124. Governmentwide procurement policy relating 

2 to purchases from Federal Prison Indus3 tries 

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 AND

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

11 a Federal department or agency has a requirement for a 

12 specific product or service that is authorized to be offered 

13 for sale by Federal Prison Industries, in accordance with 

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

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

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

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

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

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

20 ‘‘(B) The requirements of subparagraph (A) shall also 

21 apply to a procurement that a Federal department or agen22 cy intends to meet by placing an order against a contract 

23 maintained by the General Services Administration under 

24 the Multiple Award Schedule Contracts Program. 

25 ‘‘(C) Federal Prison Industries, upon its request, shall 

26 be listed on any Schedule, referred to in subparagraph (B), 


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1 as offering products or services which Federal Prison Indus2 tries believes to be comparable to those products and services 

3 being offered by commercial contractors through the Mul4 tiple Award Schedule Contracts Program. 

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

6 be made using competitive procedures in accordance with 

7 the applicable evaluation factors, unless a determination is 

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

9 or an award using other than competitive procedures is au10 thorized pursuant to paragraph (7). 

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

12 Federal Prison Industries on a noncompetitive basis for the 

13 award of a contract if the Attorney General determines 

14 that— 

15 ‘‘(A) Federal Prison Industries cannot reason16 ably expect fair consideration to receive the contract 

17 award on a competitive basis; and 

18 ‘‘(B) the contract award is necessary to main19 tain work opportunities otherwise unavailable at the 

20 penal or correctional facility at which the contract is 

21 to be performed to prevent circumstances that could 

22 reasonably be expected to significantly endanger the 

23 safe and effective administration of such facility. 

24 ‘‘(4) Except in the case of an award to be made pursu25 ant to paragraph (3), a contract award shall be made with 


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1 Federal Prison Industries only if the contracting officer for 

2 the procurement activity determines that— 

3 ‘‘(A) the specific product or service to be fur4 nished will meet the requirements of the procurement 

5 activity (including any applicable prequalification 

6 requirements and all specified commercial or govern7 mental standards pertaining to quality, testing, safe8 ty, serviceability, and warranties); 

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

10 reasonably expected; and 

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

12 market price. 

13 ‘‘(5) A determination by the Attorney General pursu14 ant to paragraph (3) shall be— 

15 ‘‘(A) supported by specific findings by the war16 den of the penal or correctional institution at which 

17 a Federal Prison Industries workshop is scheduled to 

18 perform the contract; 

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

20 Prison Industries regarding why it does not expect to 

21 win the contract on a competitive basis; and 

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

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

24 of the Federal Property and Administrative Services 

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


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1 ‘‘(6) If the Attorney General has not made the deter2 mination described in paragraph (3) within 30 days after 

3 Federal Prison Industries has been informed of a con4 tracting opportunity by a procurement activity, the pro5 curement activity may proceed to conduct a procurement 

6 for the product or service in accordance with the procedures 

7 generally applicable to such procurements by the procure8 ment activity. 

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

10 Industries using other than competitive procedures if such 

11 product or service is only available from Federal Prison 

12 Industries and the contract may be awarded under the au13 thority of section 2304(c)(1) of title 10 or section 303(c) 

14 of the Federal Property and Administrative Services Act 

15 of 1949 (41 U.S.C. 253(c)(1)), as may be applicable, and 

16 pursuant to the justification and approval requirements re17 lating to such noncompetitive procurements specified by law 

18 and the Governmentwide Federal Acquisition Regulation. 

19 ‘‘(8) A contract award may be made to Federal Prison 

20 Industries using other than competitive procedures by the 

21 Federal Bureau of Prisons. 

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

23 to Federal Prison Industries using other than competitive 

24 procedures if the product or service to be acquired would 


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1 otherwise be furnished by a contractor performing the work 

2 outside of the United States. 

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

4 (1) A timely offer received from Federal Prison Industries 

5 to furnish a product or service to a Federal department or 

6 agency shall be considered for award without limitation as 

7 to the dollar value of the proposed purchase, unless the con8 tract opportunity has been reserved for competition exclu9 sively among small business concerns pursuant to section 

10 15(a) of the Small Business Act (15 U.S.C. 644(a)) and 

11 its implementing regulations. 

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

13 to furnish a product or service may exclude from the offer 

14 the price of the following: 

15 ‘‘(i) The costs related to security of the facilities 

16 at which the contract will be performed. 

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

18 prison work force performing the contract. 

19 ‘‘(iii) Excess capital costs of machinery and ex20 cess inventories used within a prison environment 

21 that are the result of the unique environment of pris22 on life. 

23 ‘‘(iv) Other costs of performing the contract re24 sulting from the unique environment of prison facili25 ties. 


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1 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS2 TRIES.—Federal Prison Industries shall perform its con3 tractual obligations under a contract awarded by a Federal 

4 department or agency to the same extent as any other con5 tractor. 

6 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI7 SION.—(1) A decision by a contracting officer regarding the 

8 award of a contract to Federal Prison Industries or relating 

9 to the performance of such contract shall be final, unless 

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

11 ‘‘(2)(A) The Chief Operating Officer of Federal Prison 

12 Industries may protest a decision by a contracting officer 

13 not to award a contract to Federal Prison Industries pursu14 ant to subsection (b)(4), in accordance with section 33.103, 

15 (Protests to the agency) of the Federal Acquisition Regula16 tion (48 C.F.R. part 33.103). 

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

18 filed pursuant to subparagraph (A), the Assistant Attorney 

19 General for Administration may request a reconsideration 

20 of such adverse decision by the head of the Federal agency 

21 or department, which shall be considered de novo and the 

22 decision issued by such agency head on a non-delegable 

23 basis. Such decision upon reconsideration by the agency 

24 head shall be final. 


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

2 a procurement activity regarding performance of a contract 

3 shall be subject to— 

4 ‘‘(A) alternative means of dispute resolution pur5 suant to subchapter IV of chapter 5 of title 5; or 

6 ‘‘(B) final resolution by the board of contract ap7 peals having jurisdiction over the procurement activi8 ty’s contract performance disputes pursuant to the 

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

10 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de11 partment or agency shall report purchases from Federal 

12 Prison Industries to the Federal Procurement Data System 

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

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

15 manner as it reports to such System any acquisition in 

16 an amount in excess of the simplified acquisition threshold 

17 (as defined by section 4(11) of the Office of Federal Procure18 ment Policy Act (41 U.S.C. 403(11))). 

19 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison Indus20 tries shall publish and maintain a catalog of all specific 

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

22 Such catalog shall be periodically revised as products and 

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

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


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

2 Industries shall be subject to Federal occupational, health, 

3 and safety standards with respect to the operation of its 

4 industrial operations.’’. 

5 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 

6 PROPOSALS BY FEDERAL PRISON INDUS7 TRIES. 

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

9 amended— 

10 (1) by redesignating paragraph (6) as para11 graph (13); and 

12 (2) by striking paragraphs (4) and (5) and in13 serting the following new paragraphs: 

14 ‘‘(4)(A) Federal Prison Industries is authorized to offer 

15 a new specific product or furnish a new specific service in 

16 response to a competitive solicitation or other purchase re17 quest issued by a Federal department or agency. No subse18 quent offering of such product or service may be made by 

19 Federal Prison Industries until the board of directors has 

20 approved the offering for sale of such new specific product 

21 or new specific service, in conformance with the require22 ments of paragraphs (5) through (9). 

23 ‘‘(B) Federal Prison Industries may produce a product 

24 or furnish a service in excess of the authorized level of pro25 duction for such product or service, in response to an order 


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1 placed pursuant to an existing contract with a Federal de2 partment or agency, if the agency’s need for the product 

3 or service is of such an urgency that it would justify the 

4 use of procedures other than competitive procedures pursu5 ant to section 2304(c)(2) of title 10 or section 303(c)(2) of 

6 the Federal Property and Administrative Services Act of 

7 1949 (41 U.S.C. 253(c)(2)), as may be applicable. 

8 ‘‘(5) A decision to authorize Federal Prison Industries 

9 to offer a new specific product or specific service or to ex10 pand the production of an existing product or service for 

11 sale to the Federal Government shall be made by its board 

12 of directors in conformance with the requirements of sub13 sections (b), (c), (d), and (e) of section 553 of title 5, and 

14 this chapter. 

15 ‘‘(6)(A) Whenever Federal Prison Industries proposes 

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

17 or to expand production of a currently authorized product 

18 or service, the Chief Operating Officer of Federal Prison 

19 Industries shall submit an appropriate proposal to the 

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

21 initiating any such expansion. The proposal submitted to 

22 the board shall include a detailed analysis of the probable 

23 impact of the proposed expansion of sales within the Fed24 eral market by Federal Prison Industries on private sector 

25 firms and their non-inmate workers. 


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

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

4 Industries. 

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

7 of the Small Business Administration or the designee of 

8 such officer with representatives of the Department of 

9 Labor, the Department of Commerce, and the Federal Pro10 curement Data Center. 

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

12 contractor, the selection of the contractor and the adminis13 tration of the contract shall be conducted by one of the enti14 ties referenced in clause (ii) as an independent executive 

15 agent for the board of directors. Maximum consideration 

16 shall be given to any proposed statement of work furnished 

17 by the Chief Operating Officer of Federal Prison Industries. 

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

19 identify and consider— 

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

21 the requirements of the Federal Government for the 

22 specific product or specific service; 

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

24 market for the specific product or specific service curVerDate Aug 31 2005 22:05 Jul 21, 2006 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6203 E:\BILLS\H2965.RH H2965

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1 rently furnished by small businesses during the pre2 vious 3 fiscal years; 

3 ‘‘(iii) the share of the Federal market for the spe4 cific product or specific service projected for Federal 

5 Prison Industries for the fiscal year in which produc6 tion or performance will commence or expand and the 

7 subsequent 4 fiscal years; 

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

9 product or specific service in the private sector— 

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

11 the national average; or 

12 ‘‘(II) has a rate of unemployment for work13 ers that has consistently shown an increase dur14 ing the previous 5 years; 

15 ‘‘(v) whether the specific product is an import16 sensitive product; 

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

18 and the demands of entities other than the Federal 

19 Government for the specific product or service during 

20 the previous 3 fiscal years; 

21 ‘‘(vii) the projected growth or decline in the de22 mand of the Federal Government for the specific prod23 uct or specific service; 

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

25 the Federal Government for the specific product or 


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1 service to sustain both Federal Prison Industries and 

2 private vendors; and 

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

4 new product or performance of a new service will pro5 vide inmates with the maximum opportunity to ac6 quire knowledge and skill in trades and occupations 

7 that will provide them with a means of earning a 

8 livelihood upon release. 

9 ‘‘(D)(i) The board of directors may not approve a pro10 posal to authorize the production and sale of a new specific 

11 product or continued sale of a previously authorized prod12 uct unless— 

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

14 product; or 

15 ‘‘(II) the service to be furnished is to be per16 formed by inmate workers. 

17 ‘‘(ii) The board of directors may not approve a pro18 posal to authorize the production and sale of a new prison19 made product or to expand production of a currently au20 thorized product if the product is— 

21 ‘‘(I) produced in the private sector by an indus22 try which has reflected during the previous year an 

23 unemployment rate above the national average; or 

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


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1 ‘‘(iii) The board of directors may not approve a pro2 posal for inmates to provide a service in which an inmate 

3 worker has access to— 

4 ‘‘(I) personal or financial information about in5 dividual private citizens, including information relat6 ing to such person’s real property, however described, 

7 without giving prior notice to such persons or class 

8 of persons to the greatest extent practicable; 

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

10 surface and subsurface infrastructure providing com11 munications, water and electrical power distribution, 

12 pipelines for the distribution of natural gas, bulk pe13 troleum products and other commodities, and other 

14 utilities; or 

15 ‘‘(III) data that is classified. 

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

17 furnishing through inmate labor construction services, un18 less to be performed within a Federal correctional institu19 tion pursuant to the participation of an inmate in an ap20 prenticeship or other vocational education program teach21 ing the skills of the various building trades. 

22 ‘‘(II) For purposes of this clause, the term ‘construc23 tion’ has the meaning given such term by section 2.101 of 

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


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1 as in effect on June 1, 2004, including the repair, alter2 ation, or maintenance of real property in being. 

3 ‘‘(7) To provide further opportunities for participation 

4 by interested parties, the board of directors shall— 

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

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

9 to most effectively provide notice to private vendors 

10 and labor unions representing private sector workers 

11 who could reasonably be expected to be affected by ap12 proval of the proposal, which notice shall offer to fur13 nish copies of the analysis required by paragraph (6) 

14 and shall solicit comment on the analysis; 

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

16 by paragraph (6) from trade associations representing 

17 vendors and labor unions representing private sector 

18 workers who could reasonably be expected to be af19 fected by approval of the proposal to authorize the 

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

21 expand the production of a currently authorized prod22 uct or service); and 

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

24 representative of an established trade association, 

25 labor union, or other private sector representatives to 


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1 present comments on the proposal directly to the 

2 board of directors. 

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

4 all comments received on the expansion proposal. 

5 ‘‘(9) Based on the comments received on the initial ex6 pansion proposal, the Chief Operating Officer of Federal 

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

9 for expansion of inmate work opportunities in an industry 

10 different from that initially proposed, such revised proposal 

11 shall reflect the analysis required by paragraph (6)(C) and 

12 be subject to the public comment requirements of paragraph 

13 (7). 

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

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

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

17 authorized product or service) and take any action with re18 spect to such proposal, during a meeting that is open to 

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

20 5. 

21 ‘‘(11) In conformance with the requirements of para22 graph (10) of this subsection, the board of directors may— 

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

24 or services furnished by Federal industries and avail25 able for sale; 


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

2 product or the furnishing of a new specific service for 

3 donation; or 

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

5 of a currently authorized specific product or specific 

6 service in an amount in excess of a reasonable share 

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

8 ‘‘(i) a Federal agency or department, pur9 chasing such product or service, has requested 

10 that Federal Prison Industries be authorized to 

11 furnish such product or service in amounts that 

12 are needed by such agency or department; or 

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

14 cause and supported by at least two-thirds of the 

15 appointed members of the board.’’. 

16 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 

17 (a) IN GENERAL.—Notwithstanding the requirements 

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

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

20 having a requirement for a product that is authorized for 

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

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

23 Code) shall first solicit an offer from Federal Prison Indus24 tries and make purchases on a noncompetitive basis in ac25 cordance with this section or in accordance with section 


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1 2410n of title 10, United States Code, or section 318 of title 

2 III of the Federal Property and Administrative Services Act 

3 of 1949 (as added by subsection (i)). 

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

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

6 made on a noncompetitive basis to Federal Prison Indus7 tries if the contracting officer for the procurement activity 

8 determines that— 

9 (1) the product offered by Federal Prison Indus10 tries will meet the requirements of the procurement 

11 activity (including commercial or governmental 

12 standards or specifications pertaining to design, per13 formance, testing, safety, serviceability, and warran14 ties as may be imposed upon a private sector supplier 

15 of the type being offered by Federal Prison Indus16 tries); 

17 (2) timely performance of the contract by Fed18 eral Prison Industries can be reasonably expected; 

19 and 

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

21 and reasonable price. 

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

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

24 Industries shall be determined by negotiation between Fed25 eral Prison Industries and the Federal agency making the 


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

2 reasonable price determined in accordance with the proce3 dures of the Federal Acquisition Regulation. 

4 (d) PERFORMANCE OF CONTRACTUAL OBLIGATIONS.— 

5 (1) IN GENERAL.—Federal Prison Industries 

6 shall perform the obligations of the contract nego7 tiated pursuant to subsection (c). 

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

9 contracting activity and the Chief Operating Officer 

10 of Federal Prison Industries are unable to resolve a 

11 contract performance dispute to their mutual satisfac12 tion, such dispute shall be resolved pursuant to sec13 tion 4124(e)(3) of title 18, United States Code (as 

14 added by section 2 of this Act). 

15 (e) LIMITATIONS ON USE OF AUTHORITY.— 

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

17 made by Federal Prison Industries during the base 

18 period, the total dollar value of sales to the Govern19 ment made pursuant to subsection (b) and subsection 

20 (c) of this section shall not exceed— 

21 (A) 90 percent in fiscal year 2007; 

22 (B) 85 percent in fiscal year 2008; 

23 (C) 70 percent in fiscal year 2009; 

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

25 (E) 40 percent in fiscal year 2011. 


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1 (2) SALES WITHIN VARIOUS BUSINESS SEC2 TORS.—Use of the authority provided by subsections 

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

4 Industries to the Government that are in excess of its 

5 total sales during the base year for each business sec6 tor. 

7 (3) LIMITATIONS RELATING TO SPECIFIC PROD8 UCTS.—Use of the authorities provided by subsections 

9 (b) and (c) shall not result in contract awards to Fed10 eral Prison Industries that are in excess of its total 

11 sales during the base period for such product. 

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

13 buying agency directs a change to the design speci14 fication for a specific product, the costs associated 

15 with the implementation of such specification change 

16 by Federal Prison Industries shall not be considered 

17 for the purposes of computing sales by Federal Prison 

18 Industries for the purposes of paragraphs (2) and (3). 

19 (f) ADDITIONAL AUTHORITY TO SUSTAIN INMATE EM20 PLOYMENT.—During the period specified in subsection (g), 

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

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

23 by the Board to sustain inmate employment. 

24 (g) DURATION OF AUTHORITY.—The preferential con25 tracting authorities authorized by subsection (b) may not 


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1 be used on or after October 1, 2011, and become effective 

2 on the effective date of the final regulations issued pursuant 

3 to section 17. 

4 (h) DEFINITIONS.—For the purposes of this section— 

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

6 of Federal Prison Industries during the period Octo7 ber 1, 2003, and September 30, 2004 (Fiscal Year 

8 2004); 

9 (2) the term ‘‘business sectors’’ means the seven 

10 product/service business groups identified in the 2004 

11 Federal Prison Industries annual report as the Cloth12 ing and Textiles Business Group, the Electronics 

13 Business Group, the Fleet Management and Vehicular 

14 Components Business Group, the Industrial Products 

15 Business Group, the Office Furniture Business Group, 

16 the Recycling Activities Business Group, and the 

17 Services Business Group; and 

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

19 given the same meaning as, and be determined pursu20 ant to, part 15.8 of the Federal Acquisition Regula21 tion (48 C.F.R. 15.8). 

22 (i) FINDING BY ATTORNEY GENERAL WITH RESPECT

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

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

25 the Attorney General shall make a finding regarding the 


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1 effects of the percentage limitation imposed by such sub2 section for such fiscal year and the likely effects of the limi3 tation imposed by such subsection for the following fiscal 

4 year. 

5 (2) The Attorney General’s finding shall include a de6 termination whether such limitation has resulted or is like7 ly to result in a substantial reduction in inmate industrial 

8 employment and whether such reductions, if any, present 

9 a significant risk of adverse effects on safe prison operation 

10 or public safety. 

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

12 adverse effects on either safe prison management or public 

13 safety, he shall so advise the Congress. 

14 (4) In advising the Congress pursuant to paragraph 

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

16 additional authorizations of appropriations to provide ad17 ditional alternative inmate rehabilitative opportunities and 

18 additional correctional staffing, as may be appropriate. 

19 (j) PROCEDURAL REQUIREMENTS FOR CIVILIAN AGEN20 CIES RELATING TO PRODUCTS OF FEDERAL PRISON INDUS21 TRIES.—Title III of the Federal Property and Administra22 tive Services Act of 1949 (41 U.S.C. 251 et seq.) is amended 

23 by adding at the end the following new section: 


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

2 PROCEDURAL REQUIREMENTS. 

3 ‘‘(a) MARKET RESEARCH.—Before purchasing a prod4 uct listed in the latest edition of the Federal Prison Indus5 tries catalog under section 4124(g) of title 18, United States 

6 Code, the head of an executive agency shall conduct market 

7 research to determine whether the Federal Prison Industries 

8 product is comparable to products available from the pri9 vate sector that best meet the executive agency’s needs in 

10 terms of price, quality, and time of delivery. 

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

12 executive agency determines that a Federal Prison Indus13 tries product is not comparable in price, quality, or time 

14 of delivery to products available from the private sector that 

15 best meet the executive agency’s needs in terms of price, 

16 quality, and time of delivery, the agency head shall use 

17 competitive procedures for the procurement of the product 

18 or shall make an individual purchase under a multiple 

19 award contract. In conducting such a competition or mak20 ing such a purchase, the agency head shall consider a timely 

21 offer from Federal Prison Industries. 

22 ‘‘(c) IMPLEMENTATION BY HEAD OF EXECUTIVE AGEN23 CY.—The head of an executive agency shall ensure that— 

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

25 Federal Prison Industries product or service unless a 

26 contracting officer of the agency determines that the 


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1 product or service is comparable to products or serv2 ices available from the private sector that best meet 

3 the agency’s needs in terms of price, quality, and time 

4 of delivery; and 

5 ‘‘(2) Federal Prison Industries performs its con6 tractual obligations to the same extent as any other 

7 contractor for the executive agency. 

8 ‘‘(d) MARKET RESEARCH DETERMINATION NOT SUB9 JECT TO REVIEW.—A determination by a contracting offi10 cer regarding whether a product or service offered by Fed11 eral Prison Industries is comparable to products or services 

12 available from the private sector that best meet an executive 

13 agency’s needs in terms of price, quality, and time of deliv14 ery shall not be subject to review pursuant to section 

15 4124(b) of title 18. 

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

17 contractor or potential contractor of an executive agency 

18 may not be required to use Federal Prison Industries as 

19 a subcontractor or supplier of products or provider of serv20 ices for the performance of a contract of the executive agency 

21 by any means, including means such as— 

22 ‘‘(A) a contract solicitation provision requiring 

23 a contractor to offer to make use of products or serv24 ices of Federal Prison Industries in the performance 

25 of the contract; 


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1 ‘‘(B) a contract specification requiring the con2 tractor to use specific products or services (or classes 

3 of products or services) offered by Federal Prison In4 dustries in the performance of the contract; or 

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

6 of products or services of Federal Prison Industries in 

7 the performance of the contract. 

8 ‘‘(2) In this subsection, the term ‘contractor’, with re9 spect to a contract, includes a subcontractor at any tier 

10 under the contract. 

11 ‘‘(f) PROTECTION OF CLASSIFIED AND SENSITIVE IN12 FORMATION.—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 com23 modities; 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 Office 

9 of Federal Procurement Policy Act (41 U.S.C. 

10 403(5)). 

11 ‘‘(2) The term ‘market research’ means obtaining 

12 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 Federal 

10 prime contractor or subcontractor, subject to any prior ap11 proval of subcontractors or suppliers by the contracting offi12 cer which may be imposed by the Federal Acquisition Regu13 lation or by the contract. 

14 (b) LIMITATIONS ON USE.—Federal Prison Industries 

15 is prohibited from being a subcontractor or supplier at any 

16 tier if— 

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

18 Federal department or agency pursuant to section 3 

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

20 (2) the product to be acquired by the Federal de21 partment or agency is subject to section 2533a of title 

22 10, United States Code. 

23 (c) COMMERCIAL SALES PROHIBITED.—The authority 

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

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

26 product or service resulting from the labor of Federal inVerDate Aug 31 2005 22:05 Jul 21, 2006 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6203 E:\BILLS\H2965.RH H2965

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1 mate workers in violation of section 1761(a) of title 18, 

2 United States Code. A Federal contractor (or subcontractor 

3 at any tier) using Federal Prison Industries as a subcon4 tractor or supplier in furnishing a commercial product pur5 suant to a Federal contract shall implement appropriate 

6 management procedures to prevent introducing an inmate7 produced product into the commercial market. 

8 (d) PROHIBITIONS ON MANDATING SUBCONTRACTING

9 WITH FEDERAL PRISON INDUSTRIES.—Except as author10 ized under the Federal Acquisition Regulation, the use of 

11 Federal Prison Industries as a subcontractor or supplier 

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

13 prospective or actual Federal prime contractors or a sub14 contractors at any tier by means of— 

15 (1) a contract solicitation provision requiring a 

16 contractor to offer to make use of Federal Prison In17 dustries, its products or services; 

18 (2) specifications requiring the contractor to use 

19 specific products or services (or classes of products or 

20 services) offered by Federal Prison Industries in the 

21 performance of the contract; 

22 (3) any contract modification directing the use 

23 of Federal Prison Industries, its products or services; 

24 or 

25 (4) any other means. 


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1 SEC. 6. INMATE WAGES AND DEDUCTIONS. 

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

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

4 adding after paragraph (11) a new paragraph (12) as fol5 lows: 

6 ‘‘(12)(A) The Board of Directors of Federal Prison In7 dustries shall prescribe the rates of hourly wages to be paid 

8 inmates performing work for or through Federal Prison In9 dustries. The Director of the Federal Bureau of Prisons 

10 shall prescribe the rates of hourly wages for other work as11 signments within the various Federal correctional institu12 tions. In the case of an inmate whose term of imprisonment 

13 is to expire in not more than 2 years, wages shall be earned 

14 at an hourly rate of not less than $2.50, but paid at the 

15 same rate and in the same manner as to any other inmate, 

16 and any amount earned but not paid shall be held in trust 

17 and paid only upon the actual expiration of the term of 

18 imprisonment. 

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

20 and considered for increase on not less than a biannual 

21 basis. 

22 ‘‘(C) The Board of Directors of Federal Prison Indus23 tries shall— 

24 ‘‘(i) not later than September 30, 2008, increase 

25 the maximum wage rate for inmates performing work 

26 for or through Federal Prison Industries to an 


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1 amount equal to 50 percent of the minimum wage 

2 prescribed by section 6(a)(1) of the Fair Labor Stand3 ards Act of 1938 (29 U.S.C. 206(a)(1)); and 

4 ‘‘(ii) not later than September 30, 2013, increase 

5 such maximum wage rate to an amount equal to such 

6 minimum wage. 

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

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

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

10 the wages due for— 

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

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

13 to court order; 

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

16 10 percent of gross wages); 

17 ‘‘(iv) allocations for support of the inmate’s fam18 ily pursuant to statute, court order, or agreement 

19 with the inmate; 

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

21 to facilitate such inmate’s assimilation back into soci22 ety, payable at the conclusion of incarceration; and 

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

24 by the Director of the Bureau of Prisons. 


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

2 Industries shall indicate in writing that such person— 

3 ‘‘(i) is participating voluntarily; and 

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

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

6 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 

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

8 States Code, is amended in subsection (a) and (c) by strik9 ing ‘‘goods, wares, or merchandise manufactured, produced, 

10 or mined’’ each place it appears and inserting ‘‘products 

11 manufactured, services furnished, or minerals mined’’. 

12 (b) COMPLETION OF EXISTING AGREEMENTS.—Any 

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

14 State or local jurisdiction of a State which is providing 

15 services for the commercial market through inmate labor on 

16 October 1, 2004, may continue to provide such commercial 

17 services until— 

18 (1) the expiration date specified in the contract 

19 or other agreement with a commercial partner on Oc20 tober 1, 2004, or 

21 (2) until September 30, 2010, if the prison work 

22 program is directly furnishing the services to the com23 mercial market. 

24 (c) APPROVAL REQUIRED FOR LONG-TERM OPER25 ATION.—A prison work program operated by a correctional 


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1 institution operated by a State or local jurisdiction of a 

2 State may continue to provide inmate labor to furnish serv3 ices for sale in the commercial market after the dates speci4 fied in subsection (b) if such program has been certified 

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

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

7 subsection and its implementing regulations. 

8 (d) EXISTING WORK OPPORTUNITIES FOR FEDERAL

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

10 an agreement with Federal Prison Industries in effect on 

11 the date of enactment of this Act, under which Federal in12 mates are furnishing services that are being introduced into 

13 the commercial market, may continue to furnish such serv14 ices for the duration of the term of such agreement. 

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

16 18, United States Code, is further amended— 

17 (1) by redesignating subsection (d) as subsection 

18 (e); and 

19 (2) by inserting after subsection (c) the following 

20 new subsection: 

21 ‘‘(d) This section shall not apply to services performed 

22 as part of an inmate work program conducted by a State 

23 or local government to disassemble, scrap, and recycle prod24 ucts, other than electronic products, that would otherwise 


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1 be disposed of in a landfill. Recovered scrap from such pro2 gram may be sold.’’. 

3 SEC. 8. CONFORMING AMENDMENT. 

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

5 amended by striking ‘‘production of commodities’’ and in6 serting ‘‘production of products or furnishing of services’’. 

7 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 

8 307. 

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

10 amended by adding at the end the following: 

11 ‘‘§ 4130. Construction of provisions 

12 ‘‘Nothing in this chapter shall be construed— 

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

14 to— 

15 ‘‘(A) employment in a Federal Prison In16 dustries facility; or 

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

18 benefit on demand, except as otherwise specifi19 cally provided by law or regulation; 

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

21 the purposes of any law or program; or 

22 ‘‘(3) to establish any cause of action by or on be23 half of any inmate against the United States or any 

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


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1 SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR2 TUNITIES FOR INMATES. 

3 (a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE4 LEASE-PREPARATION OPPORTUNITIES.— 

5 (1) PROGRAM ESTABLISHED.—There is hereby 

6 established the Enhanced In-Prison Educational and 

7 Vocational Assessment and Training Program within 

8 the Federal Bureau of Prisons. 

9 (2) COMPREHENSIVE PROGRAM.—In addition to 

10 such other components as the Director of the Bureau 

11 of Prisons deems appropriate to reduce inmate idle12 ness and better prepare inmates for a successful re13 entry into the community upon release, the program 

14 shall provide— 

15 (A) in-prison assessments of inmates’ needs 

16 and aptitudes; 

17 (B) a full range of educational opportuni18 ties; 

19 (C) vocational training and apprentice20 ships; and 

21 (D) comprehensive release-readiness prepa22 ration. 

23 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

24 the purposes of carrying out the program established 

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

26 fiscal year after fiscal year 2008, to remain available 


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1 until expended. It is the sense of Congress that Fed2 eral Prison Industries should use some of its net earn3 ings to accomplish the purposes of the program. 

4 (4) SCHEDULE FOR IMPLEMENTATION.—All com5 ponents of the program shall be established— 

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

7 prisons not later than 2 years after the date of 

8 the enactment of this Act; 

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

10 prisons not later than 4 years after such date of 

11 enactment; 

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

13 prisons not later than 6 years after such date of 

14 enactment; and 

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

16 years after such date of enactment. 

17 (b) ADDITIONAL INMATE WORK OPPORTUNITIES

18 THROUGH PUBLIC SERVICE ACTIVITIES.— 

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

20 United States Code, is further amended by inserting 

21 after section 4124 the following new section: 

22 ‘‘§ 4124a. Additional inmate work opportunities 

23 through public service activities 

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

25 within Federal Prison Industries may perform work for an 


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1 eligible entity pursuant to an agreement between such enti2 ty and the Inmate Work Training Administrator in accord3 ance with the requirements of this section. 

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

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

6 entity— 

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

8 501(c)(3) of the Internal Revenue Code of 1986 and 

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

10 Code and that has been such an organization for a 

11 period of not less than 36 months prior to inclusion 

12 in an agreement under this section; 

13 ‘‘(2) that is a religious organization described in 

14 section 501(d) of such Code and exempt from taxation 

15 under section 501(a) of such Code; or 

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

17 district, or another special purpose district. 

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

19 There is hereby established the position of Inmate Work 

20 Training Administrator, who shall be responsible for fos21 tering the creation of alternative inmate work opportunities 

22 authorized by this section. The Administrator shall be des23 ignated by the Chief Executive Officer of Federal Prison 

24 Industries, with the approval of the Board of Directors, and 


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1 be under the supervision of the Chief Operating Officer, but 

2 may directly report to the Board. 

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

4 seeking to enter into an agreement pursuant to subsection 

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

6 Training Administrator. Each such agreement shall speci7 fy— 

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

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

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

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

13 employed in the specified types of work during the 

14 various phases of the agreement; 

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

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

18 than correctional personnel dedicated to the security 

19 of the inmate workers) to be furnished by Federal 

20 Prison Industries or the Bureau of Prisons and the 

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

22 services, and personnel. 

23 ‘‘(e) REPRESENTATIONS.— 

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

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1 ten certification by the chief executive officer of the el2 igible entity that— 

3 ‘‘(A) the work to be performed by the in4 mate workers will be limited to the eleemosynary 

5 work of such entity in the case of an entity de6 scribed in paragraph (1) or (2) of subsection (b); 

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

8 the United States but for the availability of the 

9 inmate workers; and 

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

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

13 furnishing of a service that is to be offered for 

14 other than resale or donation by the eligible enti15 ty or any affiliate of the such entity. 

16 ‘‘(2) PROTECTIONS FOR NON-INMATE WORK17 ERS.—Each proposed agreement shall also be accom18 panied by a written certification by the chief execu19 tive officer of the eligible entity that— 

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

21 any person performing work activities for such 

22 governmental entity pursuant to section 607 of 

23 subchapter IV of the Social Security Act (42 

24 U.S.C. 607)) of the eligible entity (or any affil25 iate of the entity) working in the United States 


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1 will have his or her job abolished or work hours 

2 reduced as a result of the entity being authorized 

3 to utilize inmate workers; and 

4 ‘‘(B) the work to be performed by the in5 mate workers will not supplant work currently 

6 being performed in the United States by a con7 tractor of the eligible entity. 

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

9 ‘‘(1) IN GENERAL.—Each such proposed agree10 ment shall be presented to the Board of Directors, be 

11 subject to the same opportunities for public comment, 

12 and be publicly considered and acted upon by the 

13 Board in a manner comparable to that required by 

14 paragraphs (7) and (8) of section 4122(b). 

15 ‘‘(2) MATTERS TO BE CONSIDERED.—In deter16 mining whether to approve a proposed agreement, the 

17 Board shall— 

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

19 provides inmate work opportunities that will 

20 provide participating inmates with the best pros21 pects of obtaining employment paying a livable 

22 wage upon release; 

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

24 provides for maximum reimbursement for in25 mate wages and for the costs of supplies and 


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1 equipment needed to perform the types of work 

2 to be performed; 

3 ‘‘(C) not approve an agreement that will re4 sult in the displacement of non-inmate workers 

5 contrary to the representations required by sub6 section (e)(2) as determined by the Board or by 

7 the Secretary of Labor (pursuant to subsection 

8 (i)); and 

9 ‘‘(D) not approve an agreement that will re10 sult, either directly or indirectly, in the produc11 tion of a new product or the furnishing of a serv12 ice for other than resale by an eligible entity de13 scribed in paragraph (1) or (2) of subsection (b) 

14 or donation. 

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

16 WAGES.— 

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

18 wages for work under the agreement at a basic hourly 

19 rate to be negotiated between the eligible entity and 

20 Federal Prison Industries and specified in the agree21 ment. The wage rates set by the Director of the Fed22 eral Bureau of Prisons to be paid inmates for various 

23 institutional work assignments are specifically au24 thorized. 


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1 ‘‘(2) PAYMENT TO INMATE WORKER AND AU2 THORIZED DEDUCTIONS.—Wages shall be paid and 

3 deductions taken pursuant to section 4122(b)(12)(D). 

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

5 Each inmate worker to be utilized by an eligible enti6 ty shall indicate in writing that such person— 

7 ‘‘(A) is participating voluntarily; and 

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

9 be paid and deductions to be taken from such 

10 wages. 

11 ‘‘(h) ASSIGNMENT TO WORK OPPORTUNITIES.—As12 signment of inmates to work under an approved agreement 

13 with an eligible entity shall be subject to the Bureau of Pris14 ons Program Statement Number 1040.10 (Non-Discrimina15 tion Toward Inmates), as contained in section 551.90 of 

16 title 28 of the Code of Federal Regulations (or any successor 

17 document). 

18 ‘‘(i) ENFORCEMENT OF PROTECTIONS FOR NON-IN19 MATE WORKERS.— 

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

21 request of any interested person, the Secretary of 

22 Labor may promptly verify a certification made pur23 suant subsection (e)(2) with respect to the displace24 ment of non-inmate workers so as to make the results 

25 of such inquiry available to the Board of Directors 


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1 prior to the Board’s consideration of the proposed 

2 agreement. The Secretary and the person requesting 

3 the inquiry may make recommendations to the Board 

4 regarding modifications to the proposed agreement. 

5 ‘‘(2) DURING PERFORMANCE.— 

6 ‘‘(A) IN GENERAL.—Whenever the Secretary 

7 deems appropriate, upon request or otherwise, 

8 the Secretary may verify whether the actual per9 formance of the agreement is resulting in the dis10 placement of non-inmate workers or the use of 

11 inmate workers in a work activity not author12 ized under the approved agreement. 

13 ‘‘(B) SANCTIONS.—Whenever the Secretary 

14 determines that performance of the agreement 

15 has resulted in the displacement of non-inmate 

16 workers or employment of an inmate worker in 

17 an unauthorized work activity, the Secretary 

18 may— 

19 ‘‘(i) direct the Inmate Work Training 

20 Administrator to terminate the agreement 

21 for default, subject to the processes and ap22 peals available to a Federal contractor 

23 whose procurement contract has been termi24 nated for default; and 


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1 ‘‘(ii) initiate proceedings to impose 

2 upon the person furnishing the certification 

3 regarding non-displacement of non-inmate 

4 workers required by subsection (d)(2)(B) 

5 any administrative, civil, and criminal 

6 sanctions as may be available.’’. 

7 (2) AUTHORIZATION OF APPROPRIATION.—There 

8 is authorized to be appropriated $5,000,000 for each 

9 of the fiscal years 2008 through 2012 for the purposes 

10 of paying the wages of inmates and otherwise under11 taking the maximum number of agreements with eli12 gible entities pursuant to section 4124a of title 18, 

13 United States Code, as added by paragraph (1). 

14 (3) SENSE OF CONGRESS.—For purposes of sec15 tions 4124a and 4124b of title 18, United States 

16 Code, as added by sections 10(b) and 11, respectively, 

17 it is the sense of Congress that an inmate training 

18 wage that is at least 50 percent of the minimum wage 

19 prescribed pursuant to section 6(a)(1) of the Fair 

20 Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 

21 will facilitate successful achievement of the goals of 

22 the work-based training and apprenticeship program 

23 authorized under such section 4124a. 

24 (c) INMATE WORK OPPORTUNITIES IN SUPPORT OF

25 NOT-FOR-PROFIT ENTITIES.— 


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1 (1) PROPOSALS FOR DONATION PROGRAMS.—The 

2 Chief Operating Officer of Federal Prison Industries 

3 shall develop and present to the Board of Directors of 

4 Federal Prison Industries proposals to have Federal 

5 Prison Industries donate products and services to eli6 gible entities that provide goods or services to low-in7 come individuals who would likely otherwise have dif8 ficulty purchasing such products or services in the 

9 commercial market. 

10 (2) SCHEDULE FOR SUBMISSION AND CONSIDER11 ATION OF DONATION PROGRAMS.— 

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

14 proposals for programs of the type described in 

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

16 the enactment of this Act. The Board of Directors 

17 of Federal Prison Industries shall consider such 

18 proposals from the Chief Operating Officer not 

19 later than the date that is 270 days after the 

20 date of the enactment of this Act. 

21 (B) ANNUAL OPERATING PLAN.—The Board 

22 of Directors of Federal Prison Industries shall 

23 consider proposals by the Chief Operating Officer 

24 for programs of the type described in paragraph 


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1 (1) as part of the annual operating plan for Fed2 eral Prison Industries. 

3 (C) OTHER PROPOSALS.—In addition to 

4 proposals submitted by the Chief Operating Offi5 cer, the Board of Directors may, from time to 

6 time, consider proposals presented by prospective 

7 eligible entities. 

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

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

10 means an entity— 

11 (A) that is an organization described in sec12 tion 501(c)(3) of the Internal Revenue Code of 

13 1986 and exempt from taxation under section 

14 501(a) of such Code and that has been such an 

15 organization for a period of not less than 36 

16 months prior to inclusion in a proposal of the 

17 type described in paragraph (1), or 

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

21 Code. 

22 (4) AUTHORIZATION OF APPROPRIATIONS.— 

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

24 for each of the fiscal years 2008 through 2012 for the 

25 purposes of paying the wages of inmates and otherVerDate Aug 31 2005 22:05 Jul 21, 2006 Jkt 049200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6203 E:\BILLS\H2965.RH H2965

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1 wise carrying out programs of the type described in 

2 paragraph (1). 

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

5 (1) DEMONSTRATION PROGRAM AUTHORIZED.— 

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

8 program to be known as the ‘‘Cognitive Abilities 

9 Assessment Demonstration Program’’. The pur10 pose of the demonstration program is to deter11 mine the effectiveness of a program that assesses 

12 the cognitive abilities and perceptual skills of 

13 Federal inmates to maximize the benefits of var14 ious rehabilitative opportunities designed to pre15 pare each inmate for a successful return to soci16 ety and reduce recidivism. The demonstration 

17 program shall be undertaken by a contractor 

18 with a demonstrated record of enabling the be19 havioral and academic improvement of adults 

20 through the use of research-based systems that 

21 maximize the development of both the cognitive 

22 and perceptual capabilities of a participating 

23 individual, including adults in a correctional 

24 setting. 


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1 (B) SCOPE OF DEMONSTRATION PRO2 GRAM.—The demonstration program shall to the 

3 maximum extent practicable, be— 

4 (i) conducted during a period of three 

5 consecutive fiscal years, commencing during 

6 fiscal year 2008; 

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

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

10 categorized as minimum security or less, 

11 and are within five years of release. 

12 (C) REPORT ON RESULTS OF PROGRAM.— 

13 Not later than 60 days after completion of the 

14 demonstration program, the Director shall sub15 mit to Congress a report on the results of the 

16 program. At a minimum, the report shall in17 clude an analysis of employment stability, sta18 bility of residence, and rates of recidivism 

19 among inmates who participated in the program 

20 after 18 months of release. 

21 (2) AUTHORIZATION OF APPROPRIATIONS.— 

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

23 each of the three fiscal years after fiscal year 2007, 

24 to remain available until expended, for the purposes 


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1 of conducting the demonstration program authorized 

2 by subsection (a). 

3 (e) PRERELEASE EMPLOYMENT ASSISTANCE.— 

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

5 Bureau of Prisons shall, to the maximum extent prac6 ticable, afford to inmates opportunities to participate 

7 in programs and activities designed to help prepare 

8 such inmates to obtain employment upon release. 

9 (2) PRERELEASE EMPLOYMENT PLACEMENT AS10 SISTANCE.—Such prerelease employment placement 

11 assistance required by subsection (a) shall include— 

12 (A) training in the preparation of resumes 

13 and job applications; 

14 (B) training in interviewing skills; 

15 (C) training and assistance in job search 

16 techniques; 

17 (D) conduct of job fairs; and 

18 (E) such other methods deemed appropriate 

19 by the Director. 

20 (3) PRIORITY PARTICIPATION.—Priority in pro21 gram participation shall be accorded to inmates who 

22 are participating in work opportunities afforded by 

23 Federal Prison Industries and are within 24 months 

24 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 section: 

7 ‘‘§ 4124b. Re-entry employment preparation through 

8 work-based training and apprenticeship. 

9 ‘‘(a) PARTICIPATION AUTHORIZED.—A private for10 profit business entity shall be an eligible entity for partici11 pation in the program authorized by section 4124a of this 

12 title, if such participation conforms with the requirements 

13 and limitations of this section. 

14 ‘‘(b) REQUIREMENTS RELATING TO PRODUCTS AND

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

16 for such participation if such business entity proposes to 

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

18 producing a product or performing a service, if such prod19 uct or service is of a type for which there is no production 

20 or performance within the United States by noninmate 

21 workers. 

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

23 ‘‘(1) IN GENERAL.—For purposes of this section, 

24 the training of participating inmates shall be work25 based training that provides to a participating in26 mate apprenticeship training or a functionally equivVerDate Aug 31 2005 22:05 Jul 21, 2006 Jkt 049200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6203 E:\BILLS\H2965.RH H2965

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1 alent structured program that combines hands-on 

2 work experience with conceptual understanding of the 

3 work being performed. Other inmates with regular 

4 work assignments within Federal Prison Industries 

5 may be assigned to support the program. 

6 ‘‘(2) DOCUMENTATION OF PROGRAM PARTICIPA7 TION.— 

8 ‘‘(A) Each inmate who successfully com9 pletes participation in training undertaken pur10 suant to this section shall be provided a certifi11 cate or other written document memorializing 

12 such successful completion, providing a market13 able summary of the skills learned and an over14 all assessment of performance. 

15 ‘‘(B) Copies of such documents shall be fur16 nished to perspective employers upon the request 

17 of the participant for a period of not less than 

18 24 months from the date of such participant’s re19 lease from incarceration. 

20 ‘‘(3) DOCUMENTS REQUIRED FOR EMPLOY21 MENT.—The Federal Bureau of Prisons, in coopera22 tion with a business entity providing an inmate 

23 work-based training at the time of his or her sched24 uled release, shall make every reasonable effort to help 

25 the inmate timely obtain such documentation (includVerDate Aug 31 2005 22:05 Jul 21, 2006 Jkt 049200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6203 E:\BILLS\H2965.RH H2965

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1 ing a State government-issued photo identification 

2 card) as a person may be required to provide to a 

3 prospective employer, after such person completes an 

4 Employment Eligibility Verification (ICE Form I-9). 

5 ‘‘(d) WAGE RATES.— 

6 ‘‘(1) IN GENERAL.—Business entities partici7 pating in the program authorized by subsection (a) 

8 shall propose wages for inmates participating in the 

9 program at rates not less than the inmate training 

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

11 Federal Prison Industries Competition in Contracting 

12 Act of 2006. 

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

14 30 days after the date of enactment of this section, the 

15 Board of Directors of Federal Prison Industries shall 

16 request the Secretary of Labor to promulgate an in17 mate training wage pursuant to section 14(a) of the 

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

19 214(a)). 

20 ‘‘(e) SUPPORT FOR OTHER RELEASE PREPARATION

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

22 4124a(d) of this title, a proposal for an agreement referred 

23 to in such section submitted by an eligible business entity 

24 shall specify an amount of any supplemental funding, spec25 ified as a per-capita amount for each inmate participating 


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1 pursuant to the agreement, that the business entity will pro2 vide for the purpose of supporting remedial, vocational, and 

3 other release preparation programs for other nonpartici4 pating inmates. 

5 ‘‘(f) ADDITIONAL STANDARDS APPLICABLE.—In con6 sidering a proposed agreement pursuant to section 

7 4124a(f)(1) of this title, the Board of Directors shall— 

8 ‘‘(1) give preference to an agreement that pro9 poses— 

10 ‘‘(A) work-based training opportunities that 

11 provide the participating inmate the best pros12 pects for obtaining employment paying a livable 

13 wage upon release; 

14 ‘‘(B) the highest per-capita amount pursu15 ant to subsection (e) relating to providing finan16 cial support for release preparation for other in17 mates; and 

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

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

20 furnishing services of the type described in section 

21 4122(b)(6)(D)(iii) of this title; 

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

23 furnishing construction services described in section 

24 4122(b)(6)(D)(iv) of this title, unless to be performed 

25 within a Federal correctional institution; 


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

2 meet the standards of subsection (b); and 

3 ‘‘(5) request a determination from the Inter4 national Trade Commission (and such other executive 

5 branch entities as may be appropriate), regarding 

6 whether a product or service is of the type being pro7 duced or performed in the United States by non8 inmate workers, whenever the Board determines that 

9 such an additional assessment is warranted, includ10 ing upon a request from an interested party pre11 senting information that the Board deems to warrant 

12 such additional assessment prior to the Board’s con13 sideration of the proposed agreement. 

14 ‘‘(g) LIMITATIONS ON THE USE OF THE AUTHORITY.— 

15 ‘‘(1) NO SALES BY FEDERAL PRISON INDUS16 TRIES.—Federal Prison Industries is prohibited from 

17 directly offering for commercial sale products pro18 duced or services furnished by Federal inmates, in19 cluding through any form of electronic commerce. 

20 ‘‘(2) DURATION.— 

21 ‘‘(A) No proposed agreement pursuant to 

22 this subsection may be approved by the Board of 

23 Directors after September 30, 2016. 

24 ‘‘(B) Performance of all such agreements 

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


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1 (b) REVIEW AND REPORTING BY THE ATTORNEY GEN2 ERAL.—Not less than biannually, beginning in fiscal year 

3 2008, the Attorney General shall meet in person jointly with 

4 the Chairman of the Board of Directors and the Chief Exec5 utive Officer of Federal Prison Industries to review the 

6 progress that Federal Prison Industries is making in maxi7 mizing the use of the authority provided by sections 4124a 

8 and 4124b of title 18, United States Code. The Attorney 

9 General shall provide annually a written report to the Com10 mittees on the Judiciary and Appropriations of the House 

11 of Representatives and the Senate addressing such progress 

12 by Federal Prison Industries. 

13 (c) GAO ASSESSMENT OF WORK-BASED TRAINING

14 PROGRAM.— 

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

16 the United States shall undertake an on-going assess17 ment of the authority granted by section 4124b of title 

18 18, United States Code, as added by subsection (a). 

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

20 such other matters as the Comptroller General deems 

21 appropriate, the assessment shall include— 

22 (A) efforts to recruit private for-profit busi23 ness entities to participate; 

24 (B) the quality of training provided to in25 mates; 


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1 (C) the amounts and types of products and 

2 services that have been produced incident to the 

3 work-based training programs; 

4 (D) the types of worksite arrangement that 

5 encourage business concerns to voluntarily enter 

6 into such partnerships; 

7 (E) the extent and manner of the participa8 tion of supervisory, quality assurance, and other 

9 management employees of the participating busi10 ness entity in worksites within correctional fa11 cilities of various levels of security; 

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

13 equipment, and personnel (other than security 

14 personnel) provided by the host correctional 

15 agency, and extent to which such resources are 

16 provided on a nonreimbursable basis; 

17 (G) the rates of wages paid to inmate work18 ers and the effect that such wage rates have on 

19 willingness of business entities to participate; 

20 (H) any complaints filed regarding the dis21 placement of noninmate workers or of inmate 

22 workers being paid less than required wages and 

23 the disposition of those complaints; 

24 (I) any sanctions recommended relating to 

25 displacement of noninmate workers or payment 


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1 of less than the required wages, and the disposi2 tion of such proposed sanctions; 

3 (J) the extent to which the new authority 

4 provided additional inmate work opportunities 

5 assisting the Bureau of Prisons in attaining its 

6 objective of providing 25 percent of the work-eli7 gible inmates with work opportunities within 

8 Federal Prison Industries; 

9 (K) measures of any adverse impacts of im10 plementation of the new authority on business 

11 concerns using noninmate workers that are en12 gaged in providing similar types of products and 

13 services in direct competition; and 

14 (L) a compilation of data relating work op15 portunities for Federal inmates with work as16 signments with Federal Prison Industries pro17 vided by— 

18 (i) sales to Federal agencies pursuant 

19 to the status of Federal Prison Industries as 

20 a mandatory source of supply during the 

21 period fiscal year 1990 through fiscal year 

22 2007; 

23 (ii) sales to Federal agencies of serv24 ices, both through non-competitive inter25 agency transfers and as a result of direct 


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1 competition from private-sector offerors dur2 ing the period fiscal year 1990 though fiscal 

3 year 2007; 

4 (iii) performance as a subcontrator to 

5 a Federal prime contractor or Federal sub6 contractor at a higher tier beginning in fis7 cal year 1990; 

8 (iv) introduction of inmate-furnished 

9 services into the commercial market, begin10 ning in the second quarter of fiscal year 

11 1998; 

12 (v) alternative inmate work opportuni13 ties, beginning in fiscal year 2007, provided 

14 by agreements with— 

15 (I) non-profit organizations, pur16 suant to section 4124a(b)(1) of title 18, 

17 United States Code, as added by sec18 tion 10(b), and section 10(c); 

19 (II) religious organizations, pur20 suant to section 4124a(b)(2) of title 18, 

21 United States Code; 

22 (III) units of local governments, 

23 school districts, or other special pur24 pose districts, pursuant to section 


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1 4124a(b)(3) of title 18, United States 

2 Code; 

3 (IV) work-based Employment 

4 Preparation Programs for Federal in5 mates, pursuant to section 4124b of 

6 title 18, United States Code, as added 

7 by section 11; or 

8 (V) other means. 

9 (3) OPPORTUNITY FOR PUBLIC COMMENT.—The 

10 Comptroller General shall provide an opportunity for 

11 public comment on the proposed scope and method12 ology for the assessment required by paragraph (1), 

13 making such modifications in response to such com14 ments as he deems appropriate. 

15 (4) REPORTS AND RECOMMENDATIONS.— 

16 (A) IN GENERAL.—The Comptroller General 

17 shall submit to the Congress in accordance with 

18 this subsection two interim reports and a final 

19 report of the assessment of implementation of the 

20 new authority, including such recommendations 

21 as the Comptroller General may deem appro22 priate. 

23 (B) INTERIM REPORTS.—The two interim 

24 reports shall encompass the assessment of the im25 plementation of the new authority— 


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1 (i) from the effective date of the author2 ity through the end of fiscal year 2007; and 

3 (ii) from the effective date of the au4 thority through the end of fiscal year 2010. 

5 (C) FINAL REPORT.—The final report shall 

6 assess the implementation of the new authority 

7 from the effective date of the authority through 

8 the end of fiscal year 2013. 

9 (D) SUBMISSION TO CONGRESS.—The 

10 Comptroller General shall submit the reports re11 quired by this paragraph within 6 months after 

12 the end of the fiscal years referred to in subpara13 graphs (B) and (C). 

14 (d) CONFORMING AMENDMENT.—Section 1761 of title 

15 18, United States Code, as amended by section 7, is further 

16 amended— 

17 (1) by redesignating subsection (e) as subsection 

18 (f); and 

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

20 new subsection: 

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

22 or services furnished with inmate labor incidental to the 

23 work-based training program authorized pursuant to sec24 tion 4124b of this title.’’. 


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1 SEC. 12. RESTRUCTURING THE BOARD OF DIRECTORS. 

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

3 States Code, is amended to read as follows: 

4 ‘‘§ 4121. Federal Prison Industries; Board of Directors: 

5 executive management 

6 ‘‘(a) Federal Prison Industries is a government cor7 poration of the District of Columbia organized to carry on 

8 such industrial operations in Federal correctional institu9 tions as authorized by its Board of Directors. The manner 

10 and extent to which such industrial operations are carried 

11 on in the various Federal correctional institutions shall be 

12 determined by the Attorney General. 

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

14 of 11 directors appointed by the President. 

15 ‘‘(2) In making appointments to the Board, the Presi16 dent shall assure that 3 members represent the business 

17 community, 3 members represent organized labor, 1 member 

18 shall have special expertise in inmate rehabilitation tech19 niques, 1 member represents victims of crime, 1 member 

20 represents the interests of Federal inmate workers, and 2 

21 additional members whose background and expertise the 

22 President deems appropriate. The members of the Board 

23 representing the business community shall include, to the 

24 maximum extent practicable, representation of firms fur25 nishing services as well as firms producing products, espe26 cially from those industry categories from which Federal 


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1 Prison Industries derives substantial sales. The members of 

2 the Board representing organized labor shall, to the max3 imum practicable, include representation from labor unions 

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

5 of Federal Prison Industries. 

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

7 5 years, except that of members first appointed— 

8 ‘‘(A) 2 members representing the business com9 munity shall be appointed for a term of 3 years; 

10 ‘‘(B) 2 members representing labor shall be ap11 pointed for a term of 3 years; 

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

13 the President deems appropriate for a term of 3 

14 years; 

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

16 shall be appointed for a term of 3 years; 

17 ‘‘(E) 1 member representing the interests of Fed18 eral inmate workers shall be appointed for a term of 

19 3 years; 

20 ‘‘(F) 1 member representing the business commu21 nity shall be appointed for a term of 4 years; 

22 ‘‘(G) 1 member representing the business commu23 nity shall be appointed for a term of 4 years; and 


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1 ‘‘(H) the members having special expertise in in2 mate rehabilitation techniques shall be appointed for 

3 a term of 5 years. 

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

5 Board as Chairperson. The Chairperson may designate a 

6 Vice Chairperson. 

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

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

9 same manner as the original appointment. Any member ap10 pointed to fill a vacancy occurring before the expiration of 

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

12 shall be appointed for the remainder of that term. 

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

14 compensation. The members of the Board shall be allowed 

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

16 at rates authorized for employees of agencies under sub17 chapter I of chapter 57 of title 5, United States Code, to 

18 attend meetings of the Board and, with the advance ap19 proval of the Chairperson of the Board, while otherwise 

20 away from their homes or regular places of business for pur21 poses of duties as a member of the Board. 

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

23 and terminate any personnel that may be necessary to en24 able the Board to perform its duties. 


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

2 a Federal agency may detail a Federal Government em3 ployee to the Board without reimbursement. Such detail 

4 shall be without interruption or loss of civil service status 

5 or privilege. 

6 ‘‘(9) The Chairperson of the Board may procure tem7 porary and intermittent services under section 3109(b) of 

8 title 5, United States Code. 

9 ‘‘(c) The Director of the Bureau of Prisons shall serve 

10 as Chief Executive Officer of the Corporation. The Director 

11 shall designate a person to serve as Chief Operating Officer 

12 of the Corporation.’’. 

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

14 Board of Directors serving on the date of enactment of this 

15 Act, and the person selected by them as Chairman, shall 

16 continue to exercise the duties and responsibilities of the 

17 Board until the earlier of— 

18 (1) the date on which the President has ap19 pointed at least 6 members of the Board and des20 ignated a new Chairman, pursuant to section 4121 of 

21 title 18, United States Code (as added by section 

22 12(a) of this Act); or 

23 (2) the date that is 365 days after the date of en24 actment of this Act. 


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1 SEC. 13. PROVIDING ADDITIONAL MANAGEMENT FLEXI2 BILITY TO FEDERAL PRISON INDUSTRIES OP3 ERATIONS. 

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

5 amended— 

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

7 and 

8 (2) by adding at the end the following new para9 graphs: 

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

11 one workshop at a Federal correctional facility. 

12 ‘‘(C) Federal Prison Industries may operate a work13 shop outside of a correctional facility if all of the inmates 

14 working in such workshop are classified as minimum secu15 rity inmates.’’. 

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 reduction 

21 in the net income of Federal Prison Industries during any 

22 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 amend9 ed to read as follows: 

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

11 ‘‘(a) IN GENERAL.—Pursuant to chapter 91 of title 31, 

12 the board of directors of Federal Prison Industries shall sub13 mit an annual report to Congress on the conduct of the busi14 ness of the corporation during each fiscal year and the con15 dition of its funds during the fiscal year. 

16 ‘‘(b) CONTENTS OF REPORT.—In addition to the mat17 ters required by section 9106 of title 31, and such other 

18 matters as the board considers appropriate, a report under 

19 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 serv6 ice; 

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 disputes 

11 submitted to the heads of the Federal depart12 ments and agencies pursuant to section 4124(e) 

13 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 in22 cludes— 

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 of 

9 the various specific products and types of serv10 ices authorized for production and sale to Fed11 eral agencies and in the commercial market; and 

12 ‘‘(6) data concerning employment obtained by 

13 former inmates upon release to determine whether the 

14 employment provided by Federal Prison Industries 

15 during incarceration provided such inmates with 

16 knowledge and skill in a trade or occupation that en17 abled such former inmate to earn a livelihood upon 

18 release. 

19 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re20 port under subsection (a) shall be made available to the 

21 public at a price not exceeding the cost of printing the re22 port.’’. 

23 SEC. 16. DEFINITIONS. 

24 Chapter 307 of title 18, United States Code, is amend25 ed by adding at the end the following new section: 


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1 ‘‘§ 4131. Definitions 

2 ‘‘As used in this chapter— 

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

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

6 to produce a significant change in form or utility, 

7 without necessarily changing or altering the compo8 nent parts; 

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

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

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

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

13 that the contract is to be awarded, verified through 

14 appropriate price analysis or cost analysis, including 

15 any costs relating to transportation or the furnishing 

16 of any ancillary services; 

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

18 product which, according to Department of Commerce 

19 data, has experienced competition from imports at an 

20 import to domestic production ratio of 25 percent or 

21 greater; 

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

23 means a manufacturing activity in which the value 

24 of inmate labor constitutes at least 10 percent of the 

25 estimate unit cost to produce the item by Federal 

26 Prison Industries; 


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1 ‘‘(5) the term ‘manufacture’ means the process of 

2 fabricating from raw or prepared materials, so as to 

3 impart to those materials new forms, qualities, prop4 erties, and combinations; 

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

6 means a share of the total purchases by the Federal 

7 departments and agencies, as reported to the Federal 

8 Procurement Data System for— 

9 ‘‘(A) any specific product during the 3 pre10 ceding fiscal years, that does not exceed 20 per11 cent of the Federal market for the specific prod12 uct; and 

13 ‘‘(B) any specific service during the 3 pre14 ceding fiscal years, that does not exceed 5 percent 

15 of the Federal market for the specific service; and 

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

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

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

19 in effect on July 1, 2004.’’. 

20 SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES. 

21 (a) FEDERAL ACQUISITION REGULATION.— 

22 (1) PROPOSED REVISIONS.—Proposed revisions 

23 to the Governmentwide Federal Acquisition Regula24 tion to implement the amendments made by this Act 

25 shall be published not later than 60 days after the 


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1 date of the enactment of this Act and provide not less 

2 than 60 days for public comment. 

3 (2) FINAL REGULATIONS.—Final regulations 

4 shall be published not later than 180 days after the 

5 date of the enactment of this Act and shall be effective 

6 on the date that is 30 days after the date of publica7 tion. 

8 (3) PUBLIC PARTICIPATION.—The proposed regu9 lations required by subsection (a) and the final regu10 lations required by subsection (b) shall afford an op11 portunity for public participation in accordance with 

12 section 22 of the Office of Federal Procurement Policy 

13 Act (41 U.S.C. 418b). 

14 (b) BOARD OF DIRECTORS.— 

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

16 Federal Prison Industries shall issue regulations de17 fining the terms specified in paragraph (2). 

18 (2) TERMS TO BE DEFINED.—The Board of Di19 rectors shall issue regulations for the following terms: 

20 (A) Prison-made product. 

21 (B) Prison-furnished service. 

22 (C) Specific product. 

23 (D) Specific service. 

24 (3) SCHEDULE FOR REGULATORY DEFINI25 TIONS.— 


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1 (A) Proposed regulations relating to the 

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

3 published not later than 60 days after the date 

4 of enactment of this Act and provide not less 

5 than 60 days for public comment. 

6 (B) Final regulations relating to the mat7 ters described in subsection (b)(2) shall be pub8 lished not less than 180 days after the date of en9 actment of this Act and shall be effective on the 

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

11 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

12 PARTICIPATION AND SCRUTINY.— 

13 (A) ADMINISTRATIVE PROCEDURE ACT.— 

14 Regulations issued by the Board of Directors 

15 shall be subject to notice and comment rule16 making pursuant to section 553 of title 5, United 

17 States Code. Unless determined wholly impracti18 cable or unnecessary by the Board of Directors, 

19 the public shall be afforded 60 days for comment 

20 on proposed regulations. 

21 (B) ENHANCED OUTREACH.—The Board of 

22 Directors shall use means designed to most effec23 tively solicit public comment on proposed regula24 tions, procedures, and policies and to inform the 


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1 affected public of final regulations, procedures, 

2 and policies. 

3 (C) OPEN MEETING PROCESSES.—The 

4 Board of Directors shall take all actions relating 

5 to the adoption of regulations, operating proce6 dures, guidelines, and any other matter relating 

7 to the governance and operation of Federal Pris8 on Industries based on deliberations and a re9 corded vote conducted during a meeting open to 

10 the public, unless closed pursuant to section 

11 552(b) of title 5, United States Code. 

12 (c) SECRETARY OF LABOR.— 

13 (1) SCHEDULE FOR REGULATORY ACTION.— 

14 Upon receipt of a request from the Federal Prison In15 dustries Board of Directors, pursuant to section 

16 11(d)(2), to establish an inmate training wage pursu17 ant to section 14(a) of the Fair Labor Standards Act 

18 of 1938 (29 U.S.C. 214(a)), the Secretary of Labor, 

19 in consultation with the Attorney General, shall 

20 issue— 

21 (A) an advanced notice of proposed rule22 making within 60 days; 

23 (B) an interim regulation with concurrent 

24 request for public comments within 180 days; 

25 and 


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1 (C) a final regulation within 365 days. 

2 (2) ALTERNATIVE TO TIMELY ISSUANCE.—In the 

3 event that the Secretary of Labor fails to issue an in4 terim inmate training wage by the date required by 

5 paragraph (1)(B), the Federal Prison Industries 

6 Board of Directors may prescribe an interim inmate 

7 training wage, which shall be in an amount not less 

8 than 50 percent of the amount of the minimum wage 

9 prescribed pursuant to section 6(a)(1) of such Act (29 

10 U.S.C. 206(a)(1)). 

11 (3) CONTINUED USE OF INTERIM INMATE TRAIN12 ING WAGE.— 

13 (A) The interim inmate training wage 

14 issued pursuant to paragraph (1)(B) or pre15 scribed under paragraph (2) shall remain in ef16 fect until the effective date of a final regulation, 

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

18 (B) An eligible entity having an approved 

19 agreement with Federal Prison Industries pursu20 ant to section 4124b of title 18, United States 

21 Code, may continue to pay participating in22 mates at the wages prescribed in the agreement 

23 for the duration of the agreement, if those wages 

24 comply with the standards of the interim inmate 


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1 training wage issued pursuant to paragraph 

2 (1)(B) or prescribed under paragraph (2). 

3 (4) EXISTING AGREEMENTS WITH NONCON4 FORMING WAGES.—Any for-profit business concern 

5 having an agreement with Federal Prison Industries 

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

7 which Federal inmates are furnishing services that 

8 are being introduced into the commercial market, 

9 may continue to pay wages at rates specified in the 

10 agreement for the duration of the term of such agree11 ment. 

12 SEC. 18. RULES OF CONSTRUCTION. 

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

14 4124 of title 18, United States Code, as amended by section 

15 2, is not intended to alter any rights of any offeror other 

16 than Federal Prison Industries to file a bid protest in ac17 cordance with other law or regulation in effect on the date 

18 of the enactment of this Act. 

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

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

21 U.S.C. 46 et seq.). 

22 SEC. 19. EFFECTIVE DATE AND APPLICABILITY. 

23 (a) EFFECTIVE DATE.—Except as provided in sub24 section (b), this Act and the amendments made by this Act 

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


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

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

3 requirement for a product or service offered by Federal Pris4 on Industries needed by a Federal department or agency 

5 after the effective date of the final regulations issued pursu6 ant to section 17(a)(2), or after September 30, 2007, which7 ever is earlier. 

8 SEC. 20. CLERICAL AMENDMENTS. 

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

10 States Code, is amended— 

11 (1) by amending the item relating to section 

12 4121 to read as follows: 

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

13 (2) by amending the item relating to section 

14 4124 to read as follows: 

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

Prison Industries.’’; 

15 (3) by inserting after the item relating to section 

16 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.’’; 

17 (4) by amending the item relating to section 

18 4127 to read as follows: 

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

19 and 

20 (5) by adding at the end the following new items: 

‘‘4130. Construction of provisions. 


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‘‘4131. Definitions.’’. 


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Union Calendar No. 342 

109TH CONGRESS 

2D SESSION H. R. 2965 

[Report No. 109

–591] 

A BILL 

To amend title 18, United States Code, to require 

grams, and for other purposes. profit organizations and other public service proinmate work opportunities in support of noncessful return to society, to authorize alternative portunities to better prepare inmates for a suctional opportunities and other rehabilitative opto enhance inmate access to remedial and vocathrough other than its mandatory source status, adjusts to obtaining inmate work opportunities period during which Federal Prison Industries value for taxpayers’ dollars, to provide a five-year and empowering Federal agencies to get the best vate sector firms and their non-inmate workers tracts minimizing its unfair competition with priFederal Prison Industries to compete for its conJULY 21, 2006 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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