IB

Union Calendar No. 349

107TH CONGRESS

2D SESSION H. R. 1577

[Report No. 107–583]

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

JULY 16, 2002

Additional sponsors: Mr. NORWOOD, Mr. DEAL of Georgia, Ms. SANCHEZ, Mr.

CHAMBLISS, Mr. BARTLETT of Maryland, Mr. TOOMEY, Ms. GRANGER,
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Mr. GILLMOR, Mr. FERGUSON, Mr. CALLAHAN, Mr. MALONEY of Connecticut, Mr. HOSTETTLER, Mr. COYNE, Mrs. MYRICK, Mr. HEFLEY, Mr.

BRADY of Texas, Mr. SMITH of New Jersey, Mr. BORSKI, Mr. KNOLLENBERG, Mr. ROGERS of Michigan, Mr. FILNER, Mr. UPTON, Mr. HILL,

Mr. BALDACCI, Mr. MCINTYRE, Mr. STUMP, Mr. FROST, Mr. KIRK, Mr.

MANZULLO, Mr. OLVER, Ms. MCKINNEY, Mr. DUNCAN, Mr. BARCIA, Mr.

ISTOOK, Mr. CLAY, Mr. LANTOS, Mr. GRUCCI, Mr. MCINNIS, Mr. ROEMER, Mr. SHADEGG, Mr. SCHAFFER, Mr. NADLER, Ms. WOOLSEY, Mr.

RANGEL, Mr. THORNBERRY, Mr. LATOURETTE, Mrs. NORTHUP, Mr.

LEACH, Mr. BURTON of Indiana, Mr. DEMINT, Mr. BALLENGER, Mrs.

EMERSON, Mr. CANTOR, Mr. PENCE, Mr. KERNS, Mr. BRYANT, Mr. TAYLOR of North Carolina, Mr. WAMP, Mrs. JONES of Ohio, Mr. PICKERING,

Ms. VELA ́ZQUEZ, Mr. NETHERCUTT, Mr. FLETCHER, Mr. RYAN of Wisconsin, Mr. CLEMENT, Mrs. CAPITO, Mrs. CUBIN, Mr. KINGSTON, Mr.

QUINN, Mr. PLATTS, Ms. PRYCE of Ohio, Mr. TIAHRT, Mr. MCKEON,

Mrs. WILSON of New Mexico, Mr. CRAMER, Mr. DOOLITTLE, Mr.

FORBES, Mr. TERRY, Mr. EDWARDS, Mr. BARR of Georgia, Mrs. DAVIS

of California, Mr. LATHAM, Ms. LEE, Mr. LANGEVIN, Ms. SCHAKOWSKY,

Mr. GANSKE, Mr. BONIOR, Mr. FLAKE, Mr. WELDON of Florida, Mr.

HAYES, Mr. BOEHLERT, Mr. GOODE, Mr. OXLEY, Mr. STENHOLM, Mr.

DINGELL, Mr. CONYERS, Mr. WATT of North Carolina, Ms. JACKSONLEE of Texas, Mr. GEKAS, Mr. ISAKSON, Mr. OSBORNE, Mr. BRADY of

Pennsylvania, Mr. UDALL of Colorado, and Mr. NUSSLE

Deleted sponsors: Mr. LUCAS of Oklahoma (added June 28, 2001; deleted

July 15, 2002) and Mr. SANDLIN (added September 13, 2001; deleted

May 22, 2002)

JULY 16, 2002

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 April 24, 2001]

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 empow-
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ering 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 2002’’.

6 SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT7 ING TO PURCHASES FROM FEDERAL PRISON

8 INDUSTRIES.

9 Section 4124 of title 18, United States Code, is amend10 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) If a procurement activity of a

11 Federal department or agency has a requirement for a spe12 cific product or service that is authorized to be offered for

13 sale by Federal Prison Industries, in accordance with sec14 tion 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 ‘‘(2) A contract award for such product or service shall

21 be made using competitive procedures in accordance with

22 the applicable evaluation factors, unless a determination is

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

24 or an award using other than competitive procedures is au25 thorized pursuant to paragraph (7).
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1 ‘‘(3) The procurement activity shall negotiate with

2 Federal Prison Industries on a noncompetitive basis for the

3 award of a contract if the Attorney General determines

4 that—

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

7 award on a competitive basis; and

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

10 penal or correctional facility at which the contract is

11 to be performed to prevent circumstances that could

12 reasonably be expected to significantly endanger the

13 safe and effective administration of such facility.

14 ‘‘(4) Except in the case of an award to be made pursu15 ant to paragraph (3), a contract award shall be made with

16 Federal Prison Industries only if the contracting officer for

17 the procurement activity determines that—

18 ‘‘(A) the specific product or service to be fur19 nished will meet the requirements of the procurement

20 activity (including any applicable prequalification

21 requirements and all specified commercial or govern22 mental standards pertaining to quality, testing, safe23 ty, serviceability, and warranties);

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

25 reasonably expected; and
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1 ‘‘(C) the contract price does not exceed a current

2 market price.

3 ‘‘(5) A determination by the Attorney General pursu4 ant to paragraph (3) shall be—

5 ‘‘(A) supported by specific findings by the war6 den of the penal or correctional institution at which

7 a Federal Prison Industries workshop is scheduled to

8 perform the contract;

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

10 Prison Industries regarding why it does not expect to

11 win the contract on a competitive basis; and

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

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

14 of the Federal Property and Administrative Services

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

16 ‘‘(6) If the Attorney General has not made the deter17 mination described in paragraph (3) within 30 days after

18 Federal Prison Industries has been informed of a con19 tracting opportunity by a procurement activity, the pro20 curement activity may proceed to conduct a procurement

21 for the product or service in accordance with the procedures

22 generally applicable to such procurements by the procure23 ment activity.

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

25 Industries using other than competitive procedures if such
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1 product or service is only available from Federal Prison

2 Industries and the contract may be awarded under the au3 thority of section 2304(c)(1) of title 10 or section 303(c)

4 of the Federal Property and Administrative Services Act

5 of 1949 (41 U.S.C. 252(c)(1)), as may be applicable, and

6 pursuant to the justification and approval requirements re7 lating to such noncompetitive procurements specified by law

8 and the Governmentwide Federal Acquisition Regulation.

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

10 A timely offer received from Federal Prison Industries to

11 furnish a product or service to a Federal department or

12 agency shall be considered for award without limitation as

13 to the dollar value of the proposed purchase.

14 ‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS15 TRIES.—Federal Prison Industries shall perform its con16 tractual obligations under a contract awarded by a Federal

17 department or agency to the same extent as any other con18 tractor.

19 ‘‘(e) FINALITY OF CONTRACTING OFFICER’S DECI20 SION.—(1) A decision by a contracting officer regarding the

21 award of a contract to Federal Prison Industries or relating

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

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

24 ‘‘(2) The Chief Executive Officer of Federal Prison In25 dustries may appeal to the head of a Federal department
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1 or agency a decision by a contracting officer not to award

2 a contract to Federal Prison Industries pursuant to sub3 section (b)(4). The decision of the head of a Federal depart4 ment or agency on appeal shall be final.

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

6 a procurement activity regarding performance of a contract

7 shall be subject to—

8 ‘‘(A) alternative means of dispute resolution pur9 suant to subchapter IV of chapter 5 of title 5; or

10 ‘‘(B) final resolution by the board of contract ap11 peals having jurisdiction over the procurement activi12 ty’s contract performance disputes pursuant to the

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

14 ‘‘(f) REPORTING OF PURCHASES.—Each Federal de15 partment or agency shall report purchases from Federal

16 Prison Industries to the Federal Procurement Data System

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

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

19 manner as it reports to such System any acquisition in

20 an amount in excess of the simplified acquisition threshold

21 (as defined by section 4(11) of the Office of Federal Procure22 ment Policy Act (41 U.S.C. 403(11))).

23 ‘‘(g) CATALOG OF PRODUCTS.—Federal Prison Indus24 tries shall publish and maintain a catalog of all specific

25 products and services that it is authorized to offer for sale.
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1 Such catalog shall be periodically revised as products and

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

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

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

5 Industries shall comply with Federal occupational, health,

6 and safety standards with respect to the operation of its

7 industrial operations.’’.

8 SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION

9 PROPOSALS BY FEDERAL PRISON INDUS10 TRIES.

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

12 amended—

13 (1) by redesignating paragraph (6) as para14 graph (12); and

15 (2) by striking paragraphs (4) and (5) and in16 serting the following new paragraphs:

17 ‘‘(4) A decision to authorize Federal Prison Industries

18 to offer a new specific product or specific service or to ex19 pand the production of an existing product or service shall

20 be made by its board of directors in conformance with the

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

22 553 of title 5, and this chapter.

23 ‘‘(5)(A) Whenever Federal Prison Industries proposes

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

25 or to expand production of a currently authorized product
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1 or service, the Chief Operating Officer of Federal Prison

2 Industries shall submit an appropriate proposal to the

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

4 initiating any such expansion. The proposal submitted to

5 the board shall include a detailed analysis of the probable

6 impact of the proposed expansion of sales within the Fed7 eral market by Federal Prison Industries on private sector

8 firms and their noninmate workers.

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

10 shall be performed by an interagency team on a reimburs11 able basis or by a private contractor paid by Federal Prison

12 Industries.

13 ‘‘(ii) If the analysis is to be performed by an inter14 agency team, such team shall be led by the Administrator

15 of the Small Business Administration or the designee of

16 such officer with representatives of the Department of

17 Labor, the Department of Commerce, and the Federal Pro18 curement Data Center.

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

20 contractor, the selection of the contractor and the adminis21 tration of the contract shall be conducted by one of the enti22 ties referenced in clause (ii) as an independent executive

23 agent for the board of directors. Maximum consideration

24 shall be given to any proposed statement of work furnished

25 by the Chief Operating Officer of Federal Prison Industries.
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1 ‘‘(C) The analysis required by subparagraph (A) shall

2 identify and consider—

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

4 the requirements of the Federal Government for the

5 specific product or specific service;

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

7 market for the specific product or specific service cur8 rently furnished by small businesses during the pre9 vious 3 fiscal years;

10 ‘‘(iii) the share of the Federal market for the spe11 cific product or specific service projected for Federal

12 Prison Industries for the fiscal year in which produc13 tion or performance will commence or expand and the

14 subsequent 4 fiscal years;

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

16 product or specific service in the private sector—

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

18 the national average; or

19 ‘‘(II) has a rate of unemployment for work20 ers that has consistently shown an increase dur21 ing the previous 5 years;

22 ‘‘(v) whether the specific product is an import23 sensitive product;

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

25 and the demands of entities other than the Federal
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1 Government for the specific product or service during

2 the previous 3 fiscal years;

3 ‘‘(vii) the projected growth or decline in the de4 mand of the Federal Government for the specific prod5 uct or specific service;

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

7 the Federal Government for the specific product or

8 service to sustain both Federal Prison Industries and

9 private vendors; and

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

11 new product or performance of a new service will pro12 vide inmates with the maximum opportunity to ac13 quire knowledge and skill in trades and occupations

14 that will provide them with a means of earning a

15 livelihood upon release.

16 ‘‘(D)(i) The board of directors may not approve a pro17 posal to authorize the production and sale of a new specific

18 product or continued sales of a previously authorized prod19 uct unless—

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

21 product; or

22 ‘‘(II) the service to be furnished is to be per23 formed by inmate workers.

24 ‘‘(ii) The board of directors may not approve a pro25 posal to authorize the production and sale of a new prison-
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1 made product or to expand production of a currently au2 thorized product if the product is—

3 ‘‘(I) produced in the private sector by an indus4 try which has reflected during the previous year an

5 unemployment rate above the national average; or

6 ‘‘(II) an import-sensitive product.

7 ‘‘(iii) The board of directors may not approve a pro8 posal for inmates to provide a service in which an inmate

9 worker has access to—

10 ‘‘(I) personal or financial information about in11 dividual private citizens, including information relat12 ing to such person’s real property, however described,

13 without giving prior notice to such persons or class

14 of persons to the greatest extent practicable;

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

16 surface and subsurface infrastructure providing com17 munications, water and electrical power distribution,

18 pipelines for the distribution of natural gas, bulk pe19 troleum products and other commodities, and other

20 utilities; or

21 ‘‘(III) data that is classified.

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

23 furnishing through inmate labor construction services, un24 less to be performed within a Federal correctional institu25 tion pursuant to the participation of an inmate in an ap-
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1 prenticeship or other vocational education program teach2 ing the skills of the various building trades.

3 ‘‘(II) For purposes of this clause, the term ‘construc4 tion’ has the meaning given such term by section 2.101 of

5 the Federal Acquisition Regulation (48 CFR part 2.101),

6 as in effect on June 1, 2001, including the repair, alter7 ation, or maintenance of real property in being.

8 ‘‘(6) To provide further opportunities for participation

9 by interested parties, the board of directors shall—

10 ‘‘(A) give additional notice of a proposal to au11 thorize the production and sale of a new product or

12 service, or expand the production of a currently au13 thorized product or service, in a publication designed

14 to most effectively provide notice to private vendors

15 and labor unions representing private sector workers

16 who could reasonably be expected to be affected by ap17 proval of the proposal, which notice shall offer to fur18 nish copies of the analysis required by paragraph (5)

19 and shall solicit comment on the analysis;

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

21 by paragraph (5) from trade associations representing

22 vendors and labor unions representing private sector

23 workers who could reasonably be expected to be af24 fected by approval of the proposal to authorize the

25 production and sale of a new product or service (or
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1 expand the production of a currently authorized prod2 uct or service); and

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

4 representative of an established trade association,

5 labor union, or other private sector representatives to

6 present comments on the proposal directly to the

7 board of directors.

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

9 all comments received on the expansion proposal.

10 ‘‘(8) Based on the comments received on the initial ex11 pansion proposal, the Chief Operating Officer of Federal

12 Prison Industries may provide the board of directors a re13 vised expansion proposal. If such revised proposal provides

14 for expansion of inmate work opportunities in an industry

15 different from that initially proposed, such revised proposal

16 shall reflect the analysis required by paragraph (5)(C) and

17 be subject to the public comment requirements of paragraph

18 (6).

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

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

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

22 authorized product or service) and take any action with re23 spect to such proposal, during a meeting that is open to

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

25 5.
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1 ‘‘(10) In conformity with the requirements of para2 graphs (5) through (9) of this subsection, the board of direc3 tors may—

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

5 or services furnished by Federal industries and avail6 able for sale; or

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

8 product or the furnishing of a new specific service for

9 donation.’’.

10 SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY.

11 (a) IN GENERAL.—Notwithstanding the requirements

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

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

14 having a requirement for a product that is authorized for

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

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

17 Code) shall first solicit an offer from Federal Prison Indus18 tries and make purchases on a noncompetitive basis in ac19 cordance with this section.

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

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

22 made on a noncompetitive basis to Federal Prison Indus23 tries if the contracting officer for the procurement activity

24 determines that—
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1 (1) the product offered by Federal Prison Indus2 tries will meet the requirements of the procurement

3 activity (including commercial or governmental

4 standards or specifications pertaining to design, per5 formance, testing, safety, serviceability, and warran6 ties as may be imposed upon a private sector supplier

7 of the type being offered by Federal Prison Indus8 tries);

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

11 and

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

13 and reasonable price.

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

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

16 Industries shall be determined by negotiation between Fed17 eral Prison Industries and the Federal agency making the

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

19 reasonable price determined in accordance with the proce20 dures of the Federal Acquisition Regulation.

21 (d) PERFORMANCE OF CONTRACTUAL OBLIGATIONS.—

22 (1) IN GENERAL.—Federal Prison Industries

23 shall perform the obligations of the contract nego24 tiated pursuant to subsection (c).
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1 (2) PERFORMANCE DISPUTES.—If the head of the

2 contracting activity and the Chief Operating Officer

3 of Federal Prison Industries are unable to resolve a

4 contract performance dispute to their mutual satisfac5 tion, such dispute shall be resolved pursuant to sec6 tion 4124(e)(3) of title 18, United States Code (as

7 added by section 2 of this Act).

8 (e) LIMITATIONS ON USE OF AUTHORITY.—

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

10 made by Federal Prison Industries during the base

11 period, the total dollar value of sales to the Govern12 ment made pursuant to subsection (b) and subsection

13 (c) of this section shall not exceed—

14 (A) 90 percent in fiscal year 2004;

15 (B) 85 percent in fiscal year 2005;

16 (C) 70 percent in fiscal year 2006;

17 (D) 55 percent in fiscal year 2007; and

18 (E) 40 percent in fiscal year 2008.

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

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

22 Industries to the Government that are in excess of its

23 total sales during the base year for each business sec24 tor.
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1 (3) LIMITATIONS RELATING TO SPECIFIC PROD2 UCTS.—Use of the authorities provided by subsections

3 (b) and (c) shall not result in contract awards to Fed4 eral Prison Industries that are in excess of its total

5 sales during the base period for such product.

6 (4) CHANGES IN DESIGN SPECIFICATIONS.—The

7 limitations on sales specified in paragraphs (2) and

8 (3) shall not be affected by any increases in the unit

9 cost of production of a specific product arising from

10 changes in the design specification of such product di11 rected by the buying agency.

12 (f) DURATION OF AUTHORITY.—The preferential con13 tracting authorities authorized by subsection (b) may not

14 be used on or after October 1, 2008, and become effective

15 on the effective date of the final regulations issued pursuant

16 to section 17.

17 (g) DEFINITIONS.—For the purposes of this section—

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

19 of Federal Prison Industries during the period Octo20 ber 1, 2000, and September 30, 2001 (Fiscal Year

21 2001);

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

23 product/service business groups identified in the 2001

24 Federal Prison Industries annual report as the Cloth25 ing and Textile Business Group, the Electronics Busi-
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1 ness Group, the Fleet Management and Vehicular

2 Components Business Group, the Furniture Business

3 Group, the Graphics Business Group, the Industrial

4 Products Business Group, the Recycled Electronics

5 Products and Services Business Group, and the Serv6 ices Business Group; and

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

8 given the same meaning as, and be determined pursu9 ant to, part 15.8 of the Federal Acquisition Regula10 tion (48 C.F.R. 15.8).

11 (h) FINDING BY ATTORNEY GENERAL WITH RESPECT

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

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

14 the Attorney General shall make a finding regarding the

15 effects of the percentage limitation imposed by such sub16 section for such fiscal year and the likely effects of the limi17 tation imposed by such subsection for the following fiscal

18 year.

19 (2) The Attorney General’s finding shall include a de20 termination whether such limitation has resulted or is like21 ly to result in a substantial reduction in inmate industrial

22 employment and whether such reductions, if any, present

23 a significant risk of adverse effects on safe prison operation

24 or public safety.
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1 (3) If the Attorney General finds a significant risk of

2 adverse effects on either safe prison management or public

3 safety, he shall so advise the Congress.

4 (4) In advising the Congress pursuant to paragraph

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

6 additional authorizations of appropriations to provide ad7 ditional alternative inmate rehabilitative opportunities and

8 additional correctional staffing, as may be appropriate.

9 SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON10 TRACTOR.

11 (a) IN GENERAL.—Federal Prison Industries is au12 thorized to enter into a contract with a Federal contractor

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

14 produce products as a subcontractor or supplier in the per15 formance of a Federal procurement contract. The use of

16 Federal Prison Industries as a subcontractor or supplier

17 shall be a wholly voluntary business decision by the Federal

18 prime contractor or subcontractor, subject to any prior ap19 proval of subcontractors or suppliers by the contracting offi20 cer which may be imposed by the Federal Acquisition Regu21 lation or by the contract.

22 (b) COMMERCIAL SALES PROHIBITED.—The authority

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

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

25 product or service resulting from the labor of Federal in-
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1 mate workers in violation of section 1762(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 (c) 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 a new paragraph (11) as follows:

5 ‘‘(11)(A) The Board of Directors of Federal Prison In6 dustries shall prescribe the rates of hourly wages to be paid

7 inmates performing work for or through Federal Prison In8 dustries. The Director of the Federal Bureau of Prisons

9 shall prescribe the rates of hourly wages for other work as10 signments within the various Federal correctional institu11 tions.

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

13 and considered for increase on not less than a biannual

14 basis.

15 ‘‘(C) Wages earned by an inmate worker shall be paid

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

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

18 the wages due for—

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

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

21 to court order;

22 ‘‘(iii) payment of additional restitution for vic23 tims of the inmate’s crimes (at a rate not less than

24 10 percent of gross wages);
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1 ‘‘(iv) allocations for support of the inmate’s fam2 ily pursuant to statute, court order, or agreement

3 with the inmate;

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

5 to facilitate such inmate’s assimilation back into soci6 ety, payable at the conclusion of incarceration; and

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

8 by the Director of the Bureau of Prisons.

9 ‘‘(D) Each inmate worker working for Federal Prison

10 Industries shall indicate in writing that such person—

11 ‘‘(i) is participating voluntarily; and

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

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

14 SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES.

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

16 States Code, is amended in subsection (a), by striking ‘‘any

17 goods, wares, or merchandise manufactured, produced, or

18 mined’’ and inserting ‘‘products manufactured, services fur19 nished, or minerals mined’’.

20 (b) COMPLETION OF EXISTING AGREEMENTS.—Any

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

22 State or local jurisdiction of a State which is providing

23 services for the commercial market through inmate labor on

24 October 1, 2001, may continue to provide such commercial

25 services until—
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1 (1) the expiration date specified in the contract

2 or other agreement with a commercial partner on Oc3 tober 1, 2001, or

4 (2) until September 30, 2004, if the prison work

5 program is directly furnishing the services to the com6 mercial market.

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

10 a State may continue to provide inmate labor to furnish

11 services for sale in the commercial market after the dates

12 specified in subsection (b) if such program has been certified

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

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

15 subsection and its implementing regulations.

16 SEC. 8. CONFORMING AMENDMENT.

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

18 amended by striking ‘‘production of commodities’’ and in19 serting ‘‘production of products or furnishing of services’’.

20 SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER

21 307.

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

23 amended by adding the following:

24 ‘‘§ 4130. Construction of provisions

25 ‘‘Nothing in this chapter shall be construed—
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1 ‘‘(1) to establish an entitlement of any inmate

2 to—

3 ‘‘(A) employment in a Federal Prison In4 dustries facility; or

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

6 benefit on demand, except as otherwise specifi7 cally provided by law or regulation;

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

9 the purposes of any law or program; or

10 ‘‘(3) to establish any cause of action by or on be11 half of any inmate against the United States or any

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

13 SEC. 10. PROVIDING ADDITIONAL OPPORTUNITIES FOR

14 POST INCARCERATION VOCATIONAL AND RE15 MEDIAL EDUCATIONAL OPPORTUNITIES FOR

16 INMATES.

17 (a) FEDERAL REENTRY CENTER DEMONSTRATION.—

18 (1) AUTHORITY AND ESTABLISHMENT OF DEM19 ONSTRATION PROJECT.—From funds made available

20 to carry out this section, the Attorney General, in

21 consultation with the Director of the Administrative

22 Office of the United States Courts, shall establish the

23 Federal Reentry Center Demonstration project. The

24 project shall involve appropriate prisoners from the

25 Federal prison population and shall utilize commu-
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1 nity corrections facilities, home confinement, and a

2 coordinated response by Federal agencies to assist

3 participating prisoners in preparing for and adjust4 ing to reentry into the community.

5 (2) PROJECT ELEMENTS.—The project author6 ized by paragraph (1) shall include the following core

7 elements:

8 (A) A Reentry Review Team for each pris9 oner, consisting of representative from the Bu10 reau of Prisons, the United States Probation

11 System, the United States Parole Commission,

12 and the relevant community corrections facility,

13 who shall initially meet with the prisoner to de14 velop a reentry plan tailored to the needs of the

15 prisoner.

16 (B) A system of graduated levels of super17 vision within the community corrections facility

18 to promote community safety, provide incentives

19 for prisoners to complete the reentry plan, in20 cluding victim restitution, and provide a reason21 able method for imposing sanctions for a pris22 oner’s violation of the conditions of participation

23 in the project.

24 (C) Substance abuse treatment and

25 aftercare, mental and medical health treatment
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1 and aftercare, vocational and educational train2 ing, life skills instruction, conflict resolution

3 skills training, batterer intervention programs,

4 assistance obtaining suitable affordable housing,

5 and other programming to promote effective re6 integration into the community as needed.

7 (3) PROBATION OFFICERS.—From funds made

8 available to carry out this section, the Director of the

9 Administrative Office of the United States Courts

10 shall assign one or more probation officers from each

11 participating judicial district to the Reentry Dem12 onstration project. Such officers shall be assigned to

13 and stationed at the community corrections facility

14 and shall serve on the Reentry Review Teams.

15 (4) PROJECT DURATION.—The Reentry Center

16 Demonstration project shall begin not later than 6

17 months following the availability of funds to carry

18 out this subsection, and shall last 3 years.

19 (b) DEFINITIONS.—For the purposes of this section,

20 ‘‘Appropriate prisoner’’ shall mean a person who is consid21 ered by prison authorities—

22 (1) to pose a medium to high risk of committing

23 a criminal act upon reentering the community, and
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1 (2) to lack the skills and family support network

2 that facilitate successful reintegration into the com3 munity.

4 (c) AUTHORIZATION OF APPROPRIATIONS.—To carry

5 out this section, there are authorized to be appropriated,

6 to remain available until expended—

7 (1) to the Federal Bureau of Prisons—

8 (A) $1,375,000 for fiscal year 2003;

9 (B) $1,110,000 for fiscal year 2004;

10 (C) $1,130,000 for fiscal year 2005;

11 (D) $1,155,000 for fiscal year 2006; and

12 (E) $1,230,000 for fiscal year 2007;

13 (2) to the Federal Judiciary—

14 (A) $3,380,000 for fiscal year 2003;

15 (B) $3,540,000 for fiscal year 2004;

16 (C) $3,720,000 for fiscal year 2005;

17 (D) $3,910,000 for fiscal year 2006; and

18 (E) $4,100,000 for fiscal year 2007.

19 SEC. 11. PROVIDING ADDITIONAL TRAINING AND EDU20 CATIONAL OPPORTUNITIES FOR INMATES.

21 (a) AMENDMENT REGARDING THE DEPARTMENT OF

22 JUSTICE ASSETS FORFEITURE FUND.—Section 524(c)(1) of

23 title 28, United States Code, is amended—

24 (1) by redesignating the second appearance of

25 subparagraph (I) as subparagraph (J);
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1 (2) by amending subparagraph (J) (as redesig2 nated by paragraph (1)) to read as follows:

3 ‘‘(J) payments to the Bureau of Prisons exclu4 sively for the purpose of establishing the Federal En5 hanced In-Prison Vocational Assessment and Train6 ing Program in all Federal institutions, which shall

7 provide in-prison assessments of prisoners’ needs and

8 aptitudes, enhanced work skills developed, enhanced

9 release readiness programming, and other components

10 as appropriate to reduce inmate idleness and prepare

11 Federal prisoners for release and reentry into the

12 community;’’; and

13 (3) by adding at the end the following new sub14 paragraph:

15 ‘‘(K) payments to the Bureau of Prisons exclu16 sively for the purpose of establishing a nonprofit com17 ponent for inmate work in all Federal institutions, in

18 carrying out which Federal Prison Industries shall (i)

19 work actively to identify and donate to nonprofit or20 ganizations that provide goods and services to low in21 come individuals who can use Federal Prison Indus22 try products and have difficulty purchasing these

23 products on their own, and (ii) focus on organizations

24 that would not otherwise be available to purchase

25 such products.’’.
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1 (b) PRIORITY ESTABLISHED.—During each fiscal year

2 after fiscal year 2002, the Attorney General shall, to carry

3 out the programs described in subparagraphs (J) and (K)

4 of section 524(c)(1) of title 28, United States Code (as added

5 by subsection (a)), allocate such funds as may be appro6 priate, but in no event less than $75,000,000, from the ex7 cess unobligated balance in the Department of Justice Assets

8 Forfeiture Fund. If the unobligated balance of the Fund is

9 less than such amount or such funds are otherwise unavail10 able from the Fund, such allocation shall be made from the

11 General Treasury.

12 SEC. 12. RESTRUCTURING THE BOARD OF DIRECTORS.

13 Section 4121 of title 18, United States Code, is amend14 ed to read as follows:

15 ‘‘§ 4121. Federal Prison Industries; Board of Directors:

16 executive management

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

19 such industrial operations in Federal correctional institu20 tions as authorized by its Board of Directors. The manner

21 and extent to which such industrial operations are carried

22 on in the various Federal correctional institutions shall be

23 determined by the Attorney General.

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

25 of 11 directors appointed by the President.
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1 ‘‘(2) In making appointments to the Board, the Presi2 dent shall assure that 3 members represent the business

3 community, 3 members represent organized labor, 1 member

4 shall have special expertise in inmate rehabilitation tech5 niques, 1 member represents victims of crime, 1 member

6 represents the interests of Federal inmate workers, and 2

7 additional members whose background and expertise the

8 President deems appropriate. The members of the Board

9 representing the business community shall include, to the

10 maximum extent practicable, representation of firms fur11 nishing services as well as firms producing products, espe12 cially from those industry categories from which Federal

13 Prison Industries derives substantial sales. The members of

14 the Board representing organized labor shall, to the max15 imum practicable, include representation from labor unions

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

17 of Federal Prison Industries.

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

19 5 years, except that of members first appointed—

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

22 ‘‘(B) 2 members representing labor shall be ap23 pointed for a term of 3 years;
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1 ‘‘(C) 2 members whose background and expertise

2 the President deems appropriate for a term of 3

3 years;

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

5 shall be appointed for a term of 3 years;

6 ‘‘(E) 1 member representing the interests of Fed7 eral inmate workers shall be appointed for a term of

8 3 years;

9 ‘‘(F) 1 member representing the business commu10 nity shall be appointed for a term of 4 years;

11 ‘‘(G) 1 member representing the business commu12 nity shall be appointed for a term of 4 years; and

13 ‘‘(H) the members having special expertise in in14 mate rehabilitation techniques shall be appointed for

15 a term of 5 years.

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

17 Board as Chairperson. The Chairperson may designate a

18 Vice Chairperson.

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

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

21 same manner as the original appointment. Any member ap22 pointed to fill a vacancy occurring before the expiration of

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

24 shall be appointed for the remainder of that term.
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1 ‘‘(7) The members of the Board shall serve without

2 compensation. The members of the Oversight Board shall

3 be allowed travel expenses, including per diem in lieu of

4 subsistence, at rates authorized for employees of agencies

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

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

7 approval of the Chairperson of the Board, while otherwise

8 away from their homes or regular places of business for pur9 poses of duties as a member of the Board.

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

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

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

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

16 shall be without interruption or loss of civil service status

17 or privilege.

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

20 title 5, United States Code.

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

22 as Chief Executive Officer of the Corporation. The Director

23 shall designate a person to serve as Chief Operating Officer

24 of the Corporation.’’.
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1 SEC. 13. PRE-RELEASE EMPLOYMENT ASSISTANCE.

2 (a) IN GENERAL.—The Director of the Bureau of Pris3 ons shall, to the maximum extent practicable, afford to in4 mates opportunities to participate in programs and activi5 ties designed to help prepare such inmates to obtain em6 ployment upon release.

7 (b) PRE-RELEASE EMPLOYMENT PLACEMENT ASSIST8 ANCE.—Such pre-release employment placement assistance

9 required by subsection (a) shall include—

10 (1) training in the preparation of resumes and

11 job applications;

12 (2) training in interviewing skills;

13 (3) training and assistance in job search tech14 niques;

15 (4) conduct of job fairs; and

16 (5) such other methods deemed appropriate by

17 the Director of the Bureau of Prisons.

18 (c) PRIORITY PARTICIPATION.—Priority in program

19 participation shall be accorded to inmates who are partici20 pating in work opportunities afforded by Federal Prison

21 Industries and are within 12 months of release from incar22 ceration.
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1 SEC. 14. PROVIDING ADDITIONAL MANAGEMENT FLEXI2 BILITY TO FEDERAL PRISON INDUSTRY OPER3 ATIONS.

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. 15. FEDERAL PRISON INDUSTRIES REPORT TO CON17 GRESS.

18 Section 4127 of title 18, United States Code, is amend19 ed to read as follows:

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

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

22 the board of directors of Federal Prison Industries shall sub23 mit an annual report to Congress on the conduct of the busi24 ness of the corporation during each fiscal year and the con25 dition of its funds during the fiscal year.
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1 ‘‘(b) CONTENTS OF REPORT.—In addition to the mat2 ters required by section 9106 of title 31, and such other

3 matters as the board considers appropriate, a report under

4 subsection (a) shall include—

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

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

7 the fiscal year;

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

9 that will be issued in the following fiscal year;

10 ‘‘(3) an analysis of—

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

12 specific product and type of service sold to the

13 Federal agencies and the commercial market;

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

15 agency of each specific product and type of serv16 ice;

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

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

20 ‘‘(D) the number and disposition of disputes

21 submitted to the heads of the Federal depart22 ments and agencies pursuant to section 4124(e)

23 of this title;

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

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

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

3 produce products or furnish services sold in the

4 commercial market;

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

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

10 the various specific products and types of serv11 ices authorized for production and sale to Fed12 eral agencies and in the commercial market; and

13 ‘‘(5) data concerning employment obtained by

14 former inmates upon release to determine whether the

15 employment provided by Federal Prison Industries

16 during incarceration provided such inmates with

17 knowledge and skill in a trade or occupation that en18 abled such former inmate to earn a livelihood upon

19 release.

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

22 public at a price not exceeding the cost of printing the re23 port.’’.
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1 SEC. 16. DEFINITIONS.

2 Chapter 307 of title 18, United States Code, is amend3 ed by adding at the end the following new section:

4 ‘‘§ 4131. Definitions

5 ‘‘As used in this chapter—

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

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

9 to produce a significant change in form or utility,

10 without necessarily changing or altering the compo11 nent parts;

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

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

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

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

16 that the contract is to be awarded, verified through

17 appropriate price analysis or cost analysis, including

18 any costs relating to transportation or the furnishing

19 of any ancillary services;

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

21 product which, according to Department of Commerce

22 data, has experienced competition from imports at an

23 import to domestic production ratio of 25 percent or

24 greater;

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

26 means a manufacturing activity in which the value
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1 of inmate labor constitutes at least 10 percent of the

2 estimate unit cost to produce the item by Federal

3 Prison Industries;

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

5 fabricating from raw or prepared materials, so as to

6 impart to those materials new forms, qualities, prop7 erties, and combinations;

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

9 means a share of the total purchases by the Federal

10 departments and agencies, as reported to the Federal

11 Procurement Data System for—

12 ‘‘(A) any specific product during the 3 pre13 ceding fiscal years, that does not exceed 20 per14 cent of the Federal market for the specific prod15 uct; and

16 ‘‘(B) any specific service during the 3 pre17 ceding fiscal years, that does not exceed 5 percent

18 of the Federal market for the specific service; and

19 ‘‘(7) 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), as

22 in effect on July 1, 2001.’’.

23 SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES.

24 (a) FEDERAL ACQUISITION REGULATION.—
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1 (1) PROPOSED REVISIONS.—Proposed revisions

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

4 shall be published not later than 60 days after the

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

6 than 60 days for public comment.

7 (2) FINAL REGULATIONS.—Final regulations

8 shall be published not later than 180 days after the

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

10 on the date that is 30 days after the date of publica11 tion.

12 (3) PUBLIC PARTICIPATION.—The proposed regu13 lations required by subsection (a) and the final regu14 lations required by subsection (b) shall afford an op15 portunity for public participation in accordance with

16 section 22 of the Office of Federal Procurement Policy

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

18 (b) BOARD OF DIRECTORS.—

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

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

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

24 (A) Prison-made product.

25 (B) Prison-furnished service.
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1 (C) Specific product.

2 (D) Specific service.

3 (3) SCHEDULE FOR REGULATORY DEFINI4 TIONS.—

5 (A) Proposed regulations relating to the

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

7 published not later than 60 days after the date

8 of enactment of this Act and provide not less

9 than 60 days for public comment.

10 (B) Final regulations relating to the mat11 ters described in subsection (b)(2) shall be pub12 lished not less than 180 days after the date of en13 actment of this Act and shall be effective on the

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

15 (4) ENHANCED OPPORTUNITIES FOR PUBLIC

16 PARTICIPATION AND SCRUTINY.—

17 (A) ADMINISTRATIVE PROCEDURE ACT.—

18 Regulations issued by the Board of Directors

19 shall be subject to notice and comment rule20 making pursuant to section 553 of title 5, United

21 States Code. Unless determined wholly impracti22 cable or unnecessary by the Board of Directors,

23 the public shall be afforded 60 days for comment

24 on proposed regulations.
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1 (B) ENHANCED OUTREACH.—The Board of

2 Directors shall use means designed to most effec3 tively solicit public comment on proposed regula4 tions, procedures, and policies and to inform the

5 affected public of final regulations, procedures,

6 and policies.

7 (C) OPEN MEETING PROCESSES.—The

8 Board of Directors shall take all actions relating

9 to the adoption of regulations, operating proce10 dures, guidelines, and any other matter relating

11 to the governance and operation of Federal Pris12 on Industries based on deliberations and a re13 corded vote conducted during a meeting open to

14 the public, unless closed pursuant to section

15 552(b) of title 5, United States Code.

16 SEC. 18. RULE OF CONSTRUCTION.

17 Subsection (e) of section 4124 of title 18, United States

18 Code, as amended by section 2, is not intended to alter any

19 rights of any offeror other than Federal Prison Industries

20 to file a bid protest in accordance with other law or regula21 tion in effect on the date of the enactment of this Act.

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 16(a)(2), or after September 30, 2003, 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 amending the item relating to section

16 4127 to read as follows:

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

17 and

18 (4) by adding at the end the following new items:

‘‘4130. Construction of provisions.

‘‘4131. Definitions.’’.
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1 SEC. 21. INDEPENDENT STUDY TO DETERMINE THE EF2 FECTS OF ELIMINATING THE FEDERAL PRIS3 ON INDUSTRIES MANDATORY SOURCE AU4 THORITY.

5 (a) STUDY REQUIRED.—The Comptroller General

6 shall undertake to have an independent study conducted on

7 the effects of eliminating the Federal Prison Industries

8 mandatory source authority.

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

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

12 private industry, organized labor groups, Members and staff

13 of the relevant Congressional committees, officials of the ex14 ecutive branch, and the public are solicited.

15 (c) SUBMISSION.—Not later than January 31, 2003,

16 the Comptroller General shall submit the results of the study

17 to Congress, including any recommendations for legislation.
Union Calendar No. 349

107TH CONGRESS

2D SESSION H. R. 1577

[Report No. 107–583]

A BILL

To amend title 18, United States Code, to require

Federal Prison Industries to compete for its contracts minimizing its unfair competition withnon-inmate workers and the firms that employthem and increasing the likelihood that Federalagencies get the best value for taxpayers dollars,to require that Federal Prison Industries fullyand timely perform its Government contracts byempowering Federal contracting officers with thecontract administration tools generally availableto assure full and timely performance of otherGovernment contracts, to enhance the opportunities for effective public participation in decisionsto expand the activities of Federal Prison Industries, to provide to Federal agencies temporarypreferential contract award authority to ease thetransition of Federal Prison Industries to obtaining inmate work opportunities through otherthan its mandatory source status, to provide additional work opportunities for Federal inmatesby authorizing Federal Prison Industries to provide inmate workers to nonprofit entities withprotections against commercial activities, and forother purposes.

JULY 16, 2002

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union,

and ordered to be printed