I

107TH CONGRESS

1ST SESSION H. R. 1577

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

to compete for its contracts minimizing its unfair competition with noninmate workers and the firms that employ them and increasing the

likelihood that Federal agencies get the best value for taxpayers dollars,

to require that Federal Prison Industries fully and timely perform its

Government contracts by empowering Federal contracting officers with

the contract administration tools generally available to assure full and

timely performance of other Government contracts, to enhance the opportunities for effective public participation in decisions to expand the activities of Federal Prison Industries, to provide to Federal agencies temporary preferential contract award authority to ease the transition of

Federal Prison Industries to obtaining inmate work opportunities through

other than its mandatory source status, to provide additional work opportunities for Federal inmates by authorizing Federal Prison Industries

to provide inmate workers to nonprofit entities with protections against

commercial activities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 24, 2001

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

New York, Mr. SENSENBRENNER, Mr. COBLE, Mr. HILLEARY, Ms.

BALDWIN, Mr. JENKINS, Mr. KLECZKA, Mr. TOM DAVIS of Virginia, Mr.

RAHALL, Ms. HART, Mr. MCGOVERN, Mr. BLUNT, Mr. GORDON, Mr.

BURR of North Carolina, Mr. SMITH of Washington, Mr. LAHOOD, Mr.

NEY, Mr. HILLIARD, Mr. LOBIONDO, Mr. JONES of North Carolina, Mr.

ENGLISH, Mr. DOYLE, Mr. MCHUGH, Mr. EHLERS, Ms. CARSON of Indiana, Mr. SESSIONS, Mr. CAMP, Mr. KUCINICH, Mr. ROYCE, Mr. SOUDER,

and Mr. TANNER) introduced the following bill; which was referred to the

Committee on the Judiciary
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A BILL

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

Prison Industries to compete for its contracts minimizing

its unfair competition with non-inmate workers and the

firms that employ them and increasing the likelihood

that Federal agencies get the best value for taxpayers

dollars, to require that Federal Prison Industries fully

and timely perform its Government contracts by empowering Federal contracting officers with the contract administration tools generally available to assure full and

timely performance of other Government contracts, to

enhance the opportunities for effective public participation in decisions to expand the activities of Federal Prison Industries, to provide to Federal agencies temporary

preferential contract award authority to ease the transition of Federal Prison Industries to obtaining inmate

work opportunities through other than its mandatory

source status, to provide additional work opportunities

for Federal inmates by authorizing Federal Prison Industries to provide inmate workers to nonprofit entities with

protections against commercial activities, and for other

purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Prison Indus5 tries Competition in Contracting Act of 2001’’.
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1 SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT2 ING TO PURCHASES FROM FEDERAL PRISON

3 INDUSTRIES.

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

5 amended to read as follows:

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

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

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

12 be made by a Federal department or agency only in ac13 cordance with this section.

14 ‘‘(b) SOLICITATION AND EVALUATION OF OFFERS

15 AND CONTRACT AWARDS.—(1) When a procurement ac16 tivity of a Federal department or agency has a require17 ment for a specific product or service that is authorized

18 to be offered for sale by Federal Prison Industries, in ac19 cordance with section 4122 of this title, and is listed in

20 the catalog referred to in subsection (g), the procurement

21 activity shall solicit an offer from Federal Prison Indus22 tries, if the purchase is expected to be in excess of the

23 micro-purchase threshold (as defined by section 32(f) of

24 the Office of Federal Procurement Policy Act (41 U.S.C.

25 428(f))).
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1 ‘‘(2) A contract award for such product or service

2 shall be made using competitive procedures in accordance

3 with the specifications and evaluation factors specified in

4 the solicitation (or other request for offers), unless a de5 termination is made by the Attorney General pursuant to

6 paragraph (3).

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

8 Federal Prison Industries on a noncompetitive basis for

9 the award of a contract if the Attorney General determines

10 that—

11 ‘‘(A) Federal Prison Industries cannot reason12 ably expect to receive the contract award on a com13 petitive basis; and

14 ‘‘(B) the contract award is necessary to main15 tain work opportunities otherwise unavailable at the

16 penal or correctional facility at which the contract is

17 to be performed to prevent circumstances that could

18 reasonably be expected to significantly endanger the

19 safe and effective administration of such facility.

20 ‘‘(4) A contract award shall be made with Federal

21 Prison Industries if the contracting officer for the procure22 ment activity determines that—

23 ‘‘(A) the prison-made product or service to be

24 furnished will meet the requirements of the procure25 ment activity (including any applicable
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1 prequalification requirements and all specified com2 mercial or governmental standards pertaining to

3 quality, testing, safety, serviceability, and warran4 ties);

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

6 reasonably expected; and

7 ‘‘(C) the contract price does not exceed a cur8 rent market price.

9 ‘‘(5) A determination by the Attorney General pursu10 ant to paragraph (3) shall be—

11 ‘‘(A) supported by specific findings by the war12 den of the penal or correctional institution at which

13 a Federal Prison Industries workshop is scheduled

14 to perform the contract;

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

16 Prison Industries regarding why it does not expect

17 to win the contract on a competitive basis; and

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

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

20 of the Federal Property and Administrative Services

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

22 ‘‘(6) If the Attorney General has not made the deter23 mination described in paragraph (3) within 30 days after

24 Federal Prison Industries has been informed of a con25 tracting opportunity by a procurement activity, the pro-
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1 curement activity shall conduct a procurement for the

2 product in accordance with the procedures generally appli3 cable to such procurements by the procurement activity.

4 ‘‘(c) COMPETITIVE OFFERS FROM FEDERAL PRISON

5 INDUSTRIES.—A timely offer made by Federal Prison In6 dustries shall be considered for award in accordance with

7 the applicable specification and evaluation factors speci8 fied in any solicitation (or other request for offers).

9 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS10 TRIES.—Federal Prison Industries shall perform its con11 tractual obligations under a contract awarded by a Fed12 eral department or agency to the same extent as any other

13 contractor.

14 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI15 SION.—(1) A decision by a contracting officer regarding

16 the award of a contract to Federal Prison Industries or

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

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

19 (3).

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

21 Industries may appeal to the head of a Federal depart22 ment or agency a decision by a contracting officer not to

23 award a contract to Federal Prison Industries pursuant

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

25 department or agency on appeal shall be final.
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1 ‘‘(3) A dispute between Federal Prison Industries

2 and a procurement activity regarding performance of a

3 contract shall be subject to—

4 ‘‘(A) alternative means of dispute resolution

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

6 or

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

8 appeals having jurisdiction over the procurement ac9 tivity’s contract performance disputes pursuant to

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

11 et seq.).

12 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de13 partment or agency shall report purchases from Federal

14 Prison Industries to the Federal Procurement Data Sys15 tem (as referred to in section 6(d)(4) of the Office of Fed16 eral Procurement Policy Act (41 U.S.C. 405(d)(4))) in the

17 same manner as it reports to such System any acquisition

18 in an amount in excess of the simplified acquisition thresh19 old (as defined by section 4(11) of the Office of Federal

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

21 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In22 dustries shall publish and maintain a catalog of all specific

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

24 Such catalog shall be periodically revised as products and
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1 services are added or deleted by its board of directors (in

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

3 ‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Pris4 on Industries shall comply with Federal occupational,

5 health, and safety standards with respect to the operation

6 of its industrial operations.’’.

7 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION

8 PROPOSALS BY FEDERAL PRISON INDUS9 TRIES.

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

11 amended—

12 (1) by redesignating paragraph (6) as para13 graph (11); and

14 (2) by striking paragraphs (4) and (5) and in15 serting the following new paragraphs:

16 ‘‘(4) A decision to authorize Federal Prison Indus17 tries to offer a new specific product or service or to expand

18 the production of an existing product or service shall be

19 made by its board of directors in conformance with the

20 requirements of subsections (b), (c), (d), and (e) of section

21 553 of title 5, and this chapter.

22 ‘‘(5)(A) Whenever Federal Prison Industries pro23 poses to offer for sale a new specific product or service

24 or to expand production of a currently authorized product

25 or service, the Chief Operating Officer of Federal Prison
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1 Industries shall submit an appropriate proposal to the

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

3 initiating any such expansion. The proposal submitted to

4 the board shall include a detailed analysis of the probable

5 impact of the proposed expansion of inmate-work activities

6 by Federal Prison Industries on private sector firms and

7 their non inmate workers.

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

9 shall be performed by an interagency team on a reimburs10 able basis or by a private contractor paid by Federal Pris11 on Industries.

12 ‘‘(ii) If the analysis is to be performed by an inter13 agency team, such team shall be led by the Federal Pro14 curement Data Center with representatives of the Depart15 ment of Labor, the Department of Commerce, and the

16 Small Business Administration.

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

18 contractor, the selection of the contractor and the admin19 istration of the contract shall be conducted by one of the

20 entities referenced in clause (ii) as an independent execu21 tive agent for the board of directors.

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

23 identify and consider—
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1 ‘‘(i) the number of vendors that currently meet

2 the requirements of the Federal Government for the

3 specific product or service;

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

5 market for the specific product or service currently

6 furnished by small businesses during the previous 3

7 fiscal years;

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

9 specific product or service projected for Federal

10 Prison Industries for the fiscal year in which pro11 duction or performance will commence or expand

12 and the subsequent 3 fiscal years;

13 ‘‘(iv) whether the industry producing the spe14 cific product or service in the private sector—

15 ‘‘(I) has an unemployment rate higher

16 than the national average;

17 ‘‘(II) has a rate of employment for workers

18 that has consistently shown an increase during

19 the previous 5 years; or

20 ‘‘(III) has an import to domestic produc21 tion ratio of 25 percent or greater;

22 ‘‘(v) the total volume of domestic production

23 during each of the 5 previous years in the industry

24 producing the specific product or service in the pri25 vate sector;
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1 ‘‘(vi) whether the specific product is an import2 sensitive product;

3 ‘‘(vii) the requirements of the Federal Govern4 ment and the demands of entities other than the

5 Federal Government for the specific product or serv6 ice during the previous 3 fiscal years;

7 ‘‘(viii) the projected growth or decline in the de8 mand of the Federal Government for the specific

9 product or service;

10 ‘‘(ix) the capability of the projected demand of

11 the Federal Government for the specific product or

12 service to sustain both Federal Prison Industries

13 and private vendors; and

14 ‘‘(x) whether authorizing the production of the

15 new product or performance of a new service will

16 provide inmates with the maximum opportunity to

17 acquire knowledge and skill in trades and occupa18 tions that will provide them with a means of earning

19 a livelihood upon release.

20 ‘‘(C)(i) The board of directors may not approve a pro21 posal to authorize the production and sale of a new spe22 cific product or continued sales of a previously authorized

23 product unless—

24 ‘‘(I) the product to be furnished is a prison25 made product; or
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1 ‘‘(II) the service to be furnished is to be per2 formed by inmate workers.

3 ‘‘(ii) The board of directors may not approve a pro4 posal to authorize the production and sale of a new prison5 made product or to expand production of a currently au6 thorized product if the product is—

7 ‘‘(I) produced in the private sector by an indus8 try which has reflected during the previous year an

9 unemployment rate above the national average; or

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

11 ‘‘(iii) The board of directors may not approve a pro12 posal for inmates to provide a service in which an inmate

13 worker has access to—

14 ‘‘(I) personal or financial information about in15 dividual private citizens, including information relat16 ing to such person’s real property, however de17 scribed, without giving prior notice to such persons;

18 or

19 ‘‘(II) data that is classified, or that will become

20 classified after being merged with other data.

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

22 furnishing construction services relating to buildings,

23 structures, or other real property.

24 ‘‘(II) Geographic data regarding the location of sur25 face and subsurface infrastructure providing communica-
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1 tions, water and electrical power distribution, pipelines for

2 the distribution of natural gas, bulk petroleum products

3 and other commodities, and other utilities.

4 ‘‘(III) For purposes of this clause, the term ‘construc5 tion’ has the meaning given such term by section 2.101

6 of the Federal Acquisition Regulation (48 CFR part

7 2.101), as in effect on June 1, 2000, including the repair,

8 alteration, or maintenance of real property in being.

9 ‘‘(6) To provide further opportunities for participa10 tion by interested parties, the board of directors shall—

11 ‘‘(A) give additional notice of a proposal to au12 thorize the production and sale of a new product or

13 expand the production of a currently authorized

14 product in a publication designed to most effectively

15 provide notice to private vendors and labor unions

16 representing private sector workers who could rea17 sonably be expected to be affected by approval of the

18 proposal, which notice shall offer to furnish copies of

19 the analysis required by paragraph (5) and shall so20 licit comment on the analysis;

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

22 by paragraph (5) from trade associations rep23 resenting vendors and labor unions representing pri24 vate sector workers who could reasonably be ex25 pected to be affected by approval of the proposal to
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1 authorize the production and sale of a new product

2 or expand the production of a currently authorized

3 product; and

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

5 representative of an established trade association,

6 labor union, or other representatives of private in7 dustry to present comments on the proposal directly

8 to the board of directors.

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

10 of all comments received on the expansion proposal.

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

12 expansion proposal, the Chief Operating Officer of Federal

13 Prison Industries may provide the board of directors a re14 vised expansion proposal. If such revised proposal provides

15 for expansion of inmate work opportunities in an industry

16 different from that initially proposed, such revised pro17 posal shall be subject to the public comment requirements

18 of paragraph (6).

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

20 to authorize the sale of a new product or service (or to

21 modify the volume of sales for a currently authorized prod22 uct or service) and take any action with respect to such

23 proposal, during a meeting that is open to the public, un24 less closed pursuant to section 5526 of title 5.
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1 ‘‘(10) In conformity with the requirements of para2 graphs (5) through (9) of this subsection, the board of

3 directors may—

4 ‘‘(A) authorize the donation of products pro5 duced by Federal industries and available for sale;

6 or

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

8 product for donation.’’.

9 SEC. 4. TRANSITIONAL PREFERENTIAL CONTRACTING AU10 THORITIES.

11 (a) PREFERRED SOURCE STATUS.—

12 (1) IN GENERAL.—Subject to the limitations of

13 paragraph (3) and subsection (c), a Federal depart14 ment or agency having a requirement for a product

15 or service that is authorized for sale by Federal

16 Prison Industries and is listed in its catalog (re17 ferred to in section 4124(g) of title 18, United

18 States Code) shall first solicit an offer from Federal

19 Prison Industries on a noncompetitive basis during

20 the period specified in subsection (d).

21 (2) CONTRACT AWARD AUTHORITY.—A contract

22 award shall be made to Federal Prison Industries if

23 the contracting officer for the procurement activity

24 determines that—
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1 (A) the prison-made product or service to

2 be furnished will meet the requirements of the

3 procurement activity (including commercial or

4 governmental standards pertaining to quality,

5 testing, safety, serviceability, and warranties as

6 may be imposed upon a private sector supplier

7 of such product or service);

8 (B) timely performance of the contract can

9 be reasonably expected; and

10 (C) the negotiated contract price does not

11 exceed a fair and reasonable price.

12 (3) LIMITATION ON USE OF AUTHORITY.—As a

13 percentage of the total sales made by Federal Prison

14 Industries during the base period, the total dollar

15 value of contract awards made pursuant to this sec16 tion shall not exceed—

17 (A) 90 percent in fiscal year 2002;

18 (B) 85 percent in fiscal year 2003;

19 (C) 70 percent in fiscal year 2004;

20 (D) 55 percent in fiscal year 2005; and

21 (E) 40 percent in fiscal year 2006.

22 (b) ADDITIONAL LIMITATIONS ON USE OF TRANSI23 TIONAL PREFERENTIAL CONTRACTING AUTHORITIES.—

24 (1) SALES WITHIN VARIOUS BUSINESS SEC25 TORS.—Use of the authority provided by subsection
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1 (a) shall not result in contract awards to Federal

2 Prison Industries that are in excess of its total sales

3 during the base year for each of its business sectors.

4 (2) LIMITATIONS RELATING TO SPECIFIC PROD5 UCTS AND SERVICES.—Use of the authority provided

6 by subsection (a) shall not result in contract awards

7 to Federal Prison Industries for any specific product

8 or service that are in excess of its total sales during

9 the base period for such product or service.

10 (3) TOTAL SALES DURING EACH COVERED FIS11 CAL YEAR.—The preferential contracting authority

12 provided by subsection (a) shall not be available to

13 make additional noncompetitive contract awards

14 whenever the dollar value of sales made by Federal

15 Prison Industries through competitive means exceed

16 the annual percentages specified in subsection

17 (a)(3).

18 (c) DURATION OF AUTHORITY.—The preferential

19 contracting authority authorized by subsection (a) may

20 not be used on or after October 1, 2007, and becomes

21 effective on the effective date of the final regulations

22 issued pursuant to section 16(b).

23 (d) DEFINITIONS.—For the purposes of this

24 section—
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1 (1) the term ‘‘base period’’ means the total

2 sales of Federal Prison Industries during the period

3 October 1, 1999 and September 30, 2000 (Fiscal

4 Year 2000).

5 (2) the term ‘‘business sectors’’ means the 5

6 product/service groups identified in the 1999 Fed7 eral Prison Industries annual report as Textile Prod8 ucts, Furniture Products, Electronic Products,

9 Metal Products, and Graphics/Services.

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

11 be given the same meaning as, and be determined

12 pursuant to, part 15.8 of the Federal Acquisition

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

14 SEC. 5. INMATE WAGES AND DEDUCTIONS.

15 (a) IN GENERAL.—The Director of the Federal Bu16 reau of Prisons shall prescribe the rates of hourly wages

17 to be paid inmates performing work for Federal Prison

18 Industries and in other work assignments within the var19 ious Federal correctional institutions.

20 (b) PERIODIC ADJUSTMENTS TO WAGE RATES.—The

21 various inmate wage rates shall be reviewed and consid22 ered for increase on not less than a biannual basis.

23 (c) PAYMENT OF WAGES AND DEDUCTIONS.—Wages

24 earned by an inmate worker shall be paid in the name

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

2 due for—

3 (1) applicable taxes (Federal, State, and local);

4 (2) payment of fines and restitution pursuant

5 to court order;

6 (3) payment of additional restitution for victims

7 of the inmate’s crimes (at a rate not less than 10

8 percent of gross wages);

9 (4) allocations for support of the inmate’s fam10 ily pursuant to statute, court order, or agreement

11 with the inmate;

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

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

15 (6) such other deductions as may be specified

16 by the Director of the Bureau of Prisons.

17 (d) VOLUNTARY PARTICIPATION IN FEDERAL PRIS18 ON INDUSTRIES.—Each inmate worker working for Fed19 eral Prison Industries shall indicate in writing that such

20 person—

21 (1) is participating voluntarily; and

22 (2) understands and agrees to the wages to be

23 paid and deductions to be taken from such wages.
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1 SEC. 6. CLARIFYING AMENDMENT.

2 Section 1761 of title 18, United States Code, is

3 amended in subsection (a), by striking ‘‘any goods, and

4 wares, or merchandise manufactured, produced, mined’’

5 and inserting ‘‘products manufactured, services furnished,

6 or minerals mined’’.

7 SEC. 7. CONFORMING AMENDMENT.

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

9 amended by striking ‘‘production of commodities’’ and in10 serting ‘‘production of products or furnishing of services’’.

11 SEC. 8. AUTHORITY TO PERFORM AS A FEDERAL SUBCON12 TRACTOR.

13 (a) IN GENERAL.—Federal Prison Industries is au14 thorized to enter into a contract with a Federal contractor

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

16 produce products as a subcontractor or supplier in the per17 formance of a Federal procurement contract. The use of

18 Federal Prison Industries as a subcontractor or supplier

19 shall be a wholly voluntary business decision by the Fed20 eral prime contractor or subcontractor, subject to any

21 prior approval of subcontractors or suppliers by the con22 tracting officer which may be imposed by the Federal Ac23 quisition Regulation or by the contract.

24 (b) COMMERCIAL SALES PROHIBITED.—The author25 ity provided by subsection (a) shall not result, either di26 rectly or indirectly, in the sale in the commercial market
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1 of a product or service resulting from the labor of Federal

2 inmate workers in violation of section 1762(a) of title 18,

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

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

8 inmate-produced product into the commercial market.

9 (c) PROHIBITIONS ON MANDATING SUBCONTRACTING

10 WITH FEDERAL PRISON INDUSTRIES.—The use of Fed11 eral Prison Industries as a subcontractor or supplier of

12 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 (A) a contract solicitation provision requir16 ing a contractor to offer to make use of Federal

17 Prison Industries, its products or services;

18 (B) specifications requiring the contractor

19 to use specific products or services (or classes

20 of products or services) offered by Federal Pris21 on Industries in the performance of the con22 tract;

23 (C) any contract modification directing the

24 use of Federal Prison Industries, its products

25 or services; or
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1 (D) any other means.

2 (d) DURATION OF AUTHORITY.—

3 (1) IN GENERAL.—The authority provided by

4 subsection (a) may not be used to enter into a con5 tract to perform as a subcontractor or supplier on

6 or after October 1, 2007, and becomes effective on

7 the effective date of the final regulations issued pur8 suant to section 16(b).

9 (2) COMPLETION OF EXISTING AGREEMENTS.—

10 Any agreement entered into prior to the expiration

11 date specified in paragraph (1) may continue for the

12 term specified in such agreement.

13 SEC. 9. PROVIDING ADDITIONAL OPPORTUNITIES FOR VO14 CATIONAL AND REMEDIAL EDUCATIONAL OP15 PORTUNITIES FOR INMATES.

16 (a) AMENDMENT TO THE DEPARTMENT OF JUSTICE

17 ASSETS FORFEITURE FUND.—Section 524(c)(1) of title

18 28, United States Code, is amended—

19 (1) in subparagraph (I), by inserting ‘‘and’’

20 after the semicolon;

21 (2) by redesignating the second appearance of

22 subparagraph (I) as subparagraph (J); and

23 (3) by amending subparagraph (J) (as redesig24 nated by paragraph (2)) to read as follows:
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1 ‘‘(J) payments to the Bureau of Prisons

2 exclusively for the purpose of providing, either

3 directly or through contract, additional voca4 tional training and remedial educational train5 ing for inmates during that fiscal year.’’.

6 (b) PRIORITY ESTABLISHED.—During each fiscal

7 after fiscal year 2002, the Attorney General shall allocate

8 not less than 10 percent of the excess unobligated balance

9 in the Department of Justice Assets Forfeiture Fund to

10 the purpose specified in section 524(c)(1)(J) of title 28,

11 United States Code.

12 SEC. 10. ALLOCATION OF PROFITS TO VOCATIONAL TRAIN13 ING.

14 Section 4126 of title 18, United States Code (as

15 amended by section 5) is further amended by adding at

16 the end the following new subsection:

17 ‘‘(h) Not less than 20 percent of the gross profits

18 of the corporation at the end of each fiscal year shall be

19 allocated to fund vocational training for inmates without

20 regard to the type of work activities to which they are as21 signed.’’.

22 SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS.

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

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

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

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

9 shall be determined by the Attorney General.

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

11 of 7 directors appointed by the President with the advise

12 and consent of the Senate.

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

14 President shall assure that 3 members represent the busi15 ness community, 3 members represent organized labor,

16 and 1 member shall have special expertise in inmate reha17 bilitation techniques. The members of the Board rep18 resenting the business community shall include, to the

19 maximum extent practicable, representation of firms fur20 nishing services as well as firms producing products, espe21 cially from those industry categories from which Federal

22 Prison Industries derives substantial sales. The members

23 of the Board representing organized labor shall, to the

24 maximum practicable, include representation from labor

25 unions whose members are likely to be most affected by

26 the sales of Federal Prison Industries.
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1 ‘‘(3) Each member shall be appointed for a term of

2 5 years, except that of members first appointed—

3 ‘‘(A) 2 members representing the business com4 munity shall be appointed for a term of 3 years;

5 ‘‘(B) 2 members representing labor shall be ap6 pointed for a term of 3 years;

7 ‘‘(C) 1 member representing the business com8 munity shall be appointed for a term of 4 years;

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

11 ‘‘(E) the members having special expertise in

12 inmate rehabilitation techniques shall be appointed

13 for a term of 5 years.

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

15 Board as Chairperson. The Chairperson may designate a

16 Vice Chairperson.

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

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

19 same manner as the original appointment. Any member

20 appointed to fill a vacancy occurring before the expiration

21 of the term for which the member’s predecessor was ap22 pointed shall be appointed for the remainder of that term.

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

24 compensation. The members of the Oversight Board shall

25 be allowed travel expenses, including per diem in lieu of
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1 subsistence, at rates authorized for employees of agencies

2 under subchapter I of chapter 57 of title 5, United States

3 Code, to attend meetings of the Board and, with the ad4 vance approval of the Chairperson of the Board, while oth5 erwise away from their homes or regular places of business

6 for purposes of duties as a member of the Board.

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

8 and terminate any personnel that may be necessary to en9 able the Board to perform its duties.

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

11 a Federal agency may detail a Federal Government em12 ployee to the Board without reimbursement. Such detail

13 shall be without interruption or loss of civil service status

14 or privilege.

15 ‘‘(9) The Chairperson of the Board may procure tem16 porary and intermittent services under section 3109(b) of

17 title 5, United States Code.

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

19 serve as Chief Executive Officer of the Corporation. The

20 Director shall designate a person to serve as Chief Oper21 ating Officer of the Corporation.’’.

22 SEC. 12. POST-RELEASE EMPLOYMENT ASSISTANCE.

23 (a) IN GENERAL.—The Director of the Bureau of

24 Prisons shall, to the maximum extent practicable, afford

25 to inmates opportunities to participate in programs and
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1 activities designed to help prepare such inmates to obtain

2 employment upon release.

3 (b) POST-RELEASE EMPLOYMENT PLACEMENT AS4 SISTANCE.—Such post-release employment placement as5 sistance required by subsection (a) shall include—

6 (1) training in the preparation of resumes and

7 job applications;

8 (2) training in interviewing skills;

9 (3) training and assistance in job search tech10 niques;

11 (4) conduct of job fairs; and

12 (5) such other methods deemed appropriate by

13 the Director of the Bureau of Prisons.

14 (c) PRIORITY PARTICIPATION.—Priority in program

15 participation shall be accorded to inmates who are partici16 pating in work opportunities afforded by Federal Prison

17 Industries and are within 12 months of release from incar18 ceration.

19 SEC. 13. PROVIDING ADDITIONAL MANAGEMENT FLEXI20 BILITY TO FEDERAL PRISON INDUSTRY OP21 ERATIONS.

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

23 is amended—

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

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

2 paragraphs:

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

4 one workshop at a Federal correctional facility.

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

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

9 SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CON10 GRESS.

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

12 amended to read as follows:

13 ‘‘§ 4127. Federal Prison Industries report to Congress

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

15 31, the board of directors of Federal Prison Industries

16 shall submit an annual report to Congress on the conduct

17 of the business of the corporation during each fiscal year

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

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

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

21 other matters as the board considers appropriate, a report

22 under subsection (a) shall include—

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

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

25 the fiscal year;
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1 ‘‘(2) an estimate of the amount of obligations

2 that will be issued in the following fiscal year;

3 ‘‘(3) an analysis of—

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

5 specific product and type of service sold to the

6 Federal agencies and the commercial market;

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

8 agency of each specific product and type of

9 service;

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

11 Federal Government purchases by specific prod12 uct and type of service; and

13 ‘‘(D) the number and disposition of dis14 putes submitted to the heads of the Federal de15 partments and agencies pursuant to section

16 4124(e) of this title;

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

18 includes—

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

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

21 produce products or furnish services sold in the

22 commercial market;

23 ‘‘(C) the number and percentage of em24 ployed inmates by the term of their incarcer25 ation; and
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1 ‘‘(D) the various hourly wages paid to in2 mates employed with respect to the production

3 of the various specific products and types of

4 services authorized for production and sale to

5 Federal agencies and in the commercial market;

6 and

7 ‘‘(5) data concerning employment obtained by

8 former inmates upon release to determine whether

9 the employment provided by Federal Prison Indus10 tries during incarceration provided such inmates

11 with knowledge and skill in a trade or occupation

12 that enabled such former inmate to earn a livelihood

13 upon release.

14 ‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re15 port under subsection (a) shall be made available to the

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

17 report.’’.

18 SEC. 15. DEFINITIONS.

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

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

21 ‘‘§ 4130. Definitions

22 ‘‘As used in this chapter—

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

24 uniting or combining articles or components (includ25 ing ancillary finished components or assemblies) so
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1 as to produce a significant change in form or utility,

2 without necessarily changing or altering the compo3 nent parts;

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

5 with respect to a specific product, the fair market

6 price of the product within the meaning of section

7 15(a) of the Small Business Act (15 U.S.C. 644(a)),

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

9 verified through appropriate price analysis or cost

10 analysis, including any costs relating to transpor11 tation or the furnishing of any ancillary services;

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

13 a product which, according to Department of Com14 merce data, has experienced competition from im15 ports at an import to domestic production ratio of

16 25 percent or greater;

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

18 means a manufacturing activity in the private sector

19 in which the ratio of the value of direct labor to the

20 value of the product prior to shipment exceeds 20

21 percent;

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

23 of fabricating from raw or prepared materials, so as

24 to impart to those materials new forms, qualities,

25 properties, and combinations;
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1 ‘‘(6) the term ‘prison-made products’ means

2 specific products that require labor-intensive manu3 facture or assembly employing Federal prison in4 mates for not less than 75 percent of the hours of

5 direct labor required for the production of the prod6 uct;

7 ‘‘(7) the term ‘reasonable share of the market’

8 means a share of the total purchases by the Federal

9 departments and agencies, as reported to the Fed10 eral Procurement Data System for—

11 ‘‘(A) any specific product during the 3 pre12 ceding fiscal years, that does not exceed 20 per13 cent of the Federal market for the specific

14 product; and

15 ‘‘(B) any specific service during the 3 pre16 ceding fiscal years, that does not exceed 5 per17 cent of the Federal market for the specific serv18 ice;

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

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

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

22 as in effect on July 1, 1997;

23 ‘‘(9) the term ‘specific product’ means a prod24 uct that is designed and manufactured to meet re25 quirements distinct in function and predominant ma-
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1 terial of manufacture from another product, as de2 scribed by—

3 ‘‘(A) the 6-digit classification for the prod4 uct in the 1997 North American Industry Clas5 sification System (or any revisions to such sys6 tem) published by the Office of Management

7 and Budget; and

8 ‘‘(B) for purposes of reporting on sales by

9 Federal Prison Industries, the current National

10 Stock Number assigned to such product under

11 the Federal Stock Classification System (includ12 ing group, part number and section), as deter13 mined by the General Services Administration;

14 and

15 ‘‘(10) the term ‘specific service’ means a type of

16 service included within one of the categories of serv17 ices used by Federal agencies in reporting to the

18 Federal Procurement Data System, as described in

19 the current edition of the Product and Service Code

20 Manual issued by the Federal Procurement Data

21 Center of the General Services Administration as

22 Executive Agent for the Administrator for Federal

23 Procurement Policy (as referred to in section 6(d)(4)

24 of the Office of Federal Procurement Policy Act (41

25 U.S.C. 405(d)(4))).’’.
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1 SEC. 16. IMPLEMENTATION IN THE FEDERAL ACQUISITION

2 REGULATION.

3 (a) PROPOSED REVISIONS.—Proposed revisions to

4 the Governmentwide Federal Acquisition Regulation to

5 implement the amendments made by this Act shall be pub6 lished not later than 60 days after the date of the enact7 ment of this Act and provide not less than 60 days for

8 public comment.

9 (b) FINAL REGULATIONS.—Final regulations shall be

10 published not later than 180 days after the date of the

11 enactment of this Act and shall be effective on the date

12 that is 30 days after the date of publication.

13 (c) PUBLIC PARTICIPATION.—The proposed regula14 tions required by subsection (a) and the final regulations

15 required by subsection (b) shall afford an opportunity for

16 public participation in accordance with section 22 of the

17 Office of Federal Procurement Policy Act (41 U.S.C.

18 418b).

19 SEC. 17. RULE OF CONSTRUCTION.

20 Subsection (e) of section 4124 of title 18, United

21 States Code, as amended by section 2, is not intended to

22 alter any rights of any offeror other than Federal Prison

23 Industries to file a bid protest in accordance with other

24 law or regulation in effect on the date of the enactment

25 of this Act.
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1 SEC. 18. EFFECTIVE DATE AND APPLICABILITY.

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

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

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

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

7 requirement for a product or service offered by Federal

8 Prison Industries needed by a Federal department or

9 agency after the effective date of the final regulations

10 issued pursuant to section 16(b), or after September 30,

11 2002, whichever is earlier.

12 SEC. 19. CLERICAL AMENDMENTS.

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

14 United States Code, is amended—

15 (1) by amending the item relating to section

16 4124 to read as follows:

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

Prison Industries.’’;

17 (2) by amending the item relating to section

18 4127 to read as follows:

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

19 and

20 (3) by adding at the end the following new

21 item:

‘‘4130. Definitions.’’.

Æ