IB 
Union Calendar No. 165
108TH CONGRESS 
1ST SESSION H. R. 1829
[Report No. 108–286] 
To amend title 18, United States Code, to require Federal Prison Industries 
to compete for its contracts minimizing its unfair competition with pri-
vate sector firms and their non-inmate workers and empowering Federal 
agencies to get the best value for taxpayers’ dollars, to provide a five-
year period during which Federal Prison Industries adjusts to obtaining 
inmate work opportunities through other than its mandatory source sta-
tus, to enhance inmate access to remedial and vocational opportunities 
and other rehabilitative opportunities to better prepare inmates for a 
successful return to society, to authorize alternative inmate work opportu-
nities in support of non-profit organizations, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 12, 2003
Mr. HOEKSTRA (for himself, Mr. FRANK of Massachusetts, Mr. COLLINS, Mrs. 
MALONEY, Mr. SENSENBRENNER, Mr. CONYERS, Mr. COBLE, Mr. WATT, 
Mr. MANZULLO, Ms. VELA´ZQUEZ, Mr. BOEHNER, Mr. GEORGE MILLER 
of California, Mr. TOM DAVIS of Virginia, Mr. RANGEL, Mr. TOOMEY, 
Mr. NADLER, Mr. EHLERS, Mr. DINGELL, Mr. LOBIONDO, Mr. CANTOR, 
Ms. BALDWIN, Mr. NORWOOD, Ms. WOOLSEY, Mr. SOUDER, Mr. FER-
GUSON, Ms. SCHAKOWSKY, Mr. SHADEGG, Mr. KINGSTON, Ms. HART, 
Ms. LEE, Mr. HOSTETTLER, Mr. FILNER, Mr. BARTLETT of Maryland, 
Mr. OXLEY, Mr. ENGLISH, Mr. MCINTYRE, Mr. DEMINT, Mr. FLAKE, 
Mr. SMITH of New Jersey, Mr. RYAN of Wisconsin, Mr. CULBERSON, Mr. 
EMANUEL, Mr. FORBES, Mr. GOODE, Mrs. NORTHUP, Mr. OLVER, Mr. 
BLUNT, Ms. PRYCE of Ohio, Mrs. MILLER of Michigan, Mr. CRAMER, 
Mr. CAMP, Mr. ROGERS of Michigan, Mr. LEACH, Mr. PENCE, Mr. HILL, 
Mr. UPTON, Mr. MCCOTTER, Mr. LANGEVIN, Mr. NETHERCUTT, Mr. 
OSBORNE, Mr. HAYES, Mr. WAMP, Mr. TERRY, Mr. KLECZKA, Mrs. 
MYRICK, Mr. NEY, Mr. BRADY of Pennsylvania, Mr. BRADY of Texas, 
Mrs. JONES of Ohio, Mr. JONES of North Carolina, Mr. SESSIONS, Mrs. 
CUBIN, Mrs. CAPITO, Mr. BURR, Mr. CLAY, Mr. KNOLLENBERG, Mr. 
MORAN of Kansas, Mr. TIBERI, Mr. PORTER, Mr. MCGOVERN, Mr. 
BALLENGER, Mr. DEAL of Georgia, Mr. EVERETT, Mr. KENNEDY of
Rhode Island, Mr. MCKEON, Mr. ISAKSON, Mr. LATOURETTE, Mr. 
THORNBERRY, Mrs. WILSON of New Mexico, Mr. ROYCE, Mr. KLINE, Mr. 
KUCINICH, Mr. DUNCAN, Mr. TIAHRT, Mr. QUINN, Mr. WILSON of South 
Carolina, Mr. DOOLITTLE, Mr. MCDERMOTT, Mrs. BIGGERT, Mrs. 
MUSGRAVE, Mr. CHOCOLA, Mr. GINGREY, Mr. NUNES, and Mr. BURNS) 
introduced the following bill; which was referred to the Committee on the 
Judiciary 
SEPTEMBER 25, 2003
Additional sponsors: Mr. KING of Iowa, Mr. FROST, Mrs. BLACKBURN, Mr. 
WEINER, Mr. JENKINS, Mr. STENHOLM, Mr. MCINNIS, Mr. GUTIERREZ, 
Mr. LANTOS, Mr. UDALL of Colorado, Mr. GORDON, Mr. ISRAEL, Ms. 
LORETTA SANCHEZ of California, Mr. GONZALEZ, Mr. MILLER of North 
Carolina, Mr. LATHAM, Mr. FEENEY, Mr. MICHAUD, Mr. NUSSLE, Mr. 
HOEFFEL, Mr. MCHUGH, Mr. LEVIN, Mr. BEAUPREZ, Ms. CARSON of In-
diana, Mr. SHUSTER, Mr. STUPAK, Mr. CARTER, Mr. WELDON of Flor-
ida, Ms. LINDA T. SA´NCHEZ of California, Mr. RAHALL, Ms. ESHOO, Mr. 
PLATTS, Mr. MEEHAN, Mr. BARRETT of South Carolina, Mr. DOYLE, Mr. 
FOLEY, Mr. TAYLOR of North Carolina, Mr. KIRK, and Ms. KILPATRICK 
SEPTEMBER 25, 2003 
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 12, 2003] 
A BILL 
To amend title 18, United States Code, to require Federal 
Prison Industries to compete for its contracts minimizing 
its unfair competition with private sector firms and their 
non-inmate workers and empowering Federal agencies 
to get the best value for taxpayers’ dollars, to provide 
a five-year period during which Federal Prison Industries 
adjusts to obtaining inmate work opportunities through 
other than its mandatory source status, to enhance in-
mate access to remedial and vocational opportunities and 
other rehabilitative opportunities to better prepare in-
mates for a successful return to society, to authorize
alternative inmate work opportunities in support of non-
profit organizations, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Federal Prison Industries Competition in Contracting Act 
of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Governmentwide procurement policy relating to purchases from Federal 
Prison Industries. 
Sec. 3. Public participation regarding expansion proposals by Federal Prison In-
dustries. 
Sec. 4. Transitional mandatory source authority. 
Sec. 5. Authority to perform as a Federal subcontractor. 
Sec. 6. Inmate wages and deductions. 
Sec. 7. Clarifying amendment relating to services. 
Sec. 8. Conforming amendment. 
Sec. 9. Rules of construction relating to chapter 307. 
Sec. 10. Providing additional rehabilitative opportunities for inmates. 
Sec. 11. Restructuring the Board of Directors. 
Sec. 12. Providing additional management flexibility to Federal Prison Indus-
tries operations. 
Sec. 13. Transitional personnel management authority. 
Sec. 14. Federal Prison Industries report to Congress. 
Sec. 15. Independent study to determine the effects of eliminating the Federal 
Prison Industries mandatory source authority. 
Sec. 16. Sense of Congress. 
Sec. 17. Definitions. 
Sec. 18. Implementing regulations and procedures. 
Sec. 19. Rule of construction. 
Sec. 20. Effective date and applicability. 
Sec. 21. Clerical amendments.
SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT-
ING TO PURCHASES FROM FEDERAL PRISON 
INDUSTRIES. 
Section 4124 of title 18, United States Code, is amend-
ed to read as follows:
‘‘§ 4124. Governmentwide procurement policy relating 
to purchases from Federal Prison Indus-
tries 
‘‘(a) IN GENERAL.—Purchases from Federal Prison 
Industries, Incorporated, a wholly owned Government cor-
poration, as referred to in section 9101(3)(E) of title 31, 
may be made by a Federal department or agency only in 
accordance with this section. 
‘‘(b) SOLICITATION AND EVALUATION OF OFFERS AND 
CONTRACT AWARDS.—(1) If a procurement activity of a 
Federal department or agency has a requirement for a spe-
cific product or service that is authorized to be offered for 
sale by Federal Prison Industries, in accordance with sec-
tion 4122 of this title, and is listed in the catalog referred 
to in subsection (g), the procurement activity shall solicit 
an offer from Federal Prison Industries, if the purchase is 
expected to be in excess of the micro-purchase threshold (as 
defined by section 32(f) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 428(f))). 
‘‘(2) A contract award for such product or service shall 
be made using competitive procedures in accordance with
the applicable evaluation factors, unless a determination is 
made by the Attorney General pursuant to paragraph (3) 
or an award using other than competitive procedures is au-
thorized pursuant to paragraph (7). 
‘‘(3) The procurement activity shall negotiate with 
Federal Prison Industries on a noncompetitive basis for the 
award of a contract if the Attorney General determines 
that—
‘‘(A) Federal Prison Industries cannot reason-
ably expect fair consideration to receive the contract 
award on a competitive basis; and 
‘‘(B) the contract award is necessary to main-
tain work opportunities otherwise unavailable at the 
penal or correctional facility at which the contract is 
to be performed to prevent circumstances that could 
reasonably be expected to significantly endanger the 
safe and effective administration of such facility. 
‘‘(4) Except in the case of an award to be made pursu-
ant to paragraph (3), a contract award shall be made with 
Federal Prison Industries only if the contracting officer for 
the procurement activity determines that—
‘‘(A) the specific product or service to be fur-
nished will meet the requirements of the procurement 
activity (including any applicable prequalification 
requirements and all specified commercial or govern-
mental standards pertaining to quality, testing, safe-
ty, serviceability, and warranties); 
‘‘(B) timely performance of the contract can be 
reasonably expected; and 
‘‘(C) the contract price does not exceed a current 
market price. 
‘‘(5) A determination by the Attorney General pursu-
ant to paragraph (3) shall be—
‘‘(A) supported by specific findings by the war-
den of the penal or correctional institution at which 
a Federal Prison Industries workshop is scheduled to 
perform the contract; 
‘‘(B) supported by specific findings by Federal 
Prison Industries regarding why it does not expect to 
win the contract on a competitive basis; and 
‘‘(C) made and reported in the same manner as 
a determination made pursuant to section 303(c)(7) 
of the Federal Property and Administrative Services 
Act of 1949 (41 U.S.C. 253(c)(7)). 
‘‘(6) If the Attorney General has not made the deter-
mination described in paragraph (3) within 30 days after 
Federal Prison Industries has been informed of a con-
tracting opportunity by a procurement activity, the pro-
curement activity may proceed to conduct a procurement 
for the product or service in accordance with the procedures
generally applicable to such procurements by the procure-
ment activity. 
‘‘(7) A contract award may be made to Federal Prison 
Industries using other than competitive procedures if such 
product or service is only available from Federal Prison 
Industries and the contract may be awarded under the au-
thority of section 2304(c)(1) of title 10 or section 303(c) 
of the Federal Property and Administrative Services Act 
of 1949 (41 U.S.C. 252(c)(1)), as may be applicable, and 
pursuant to the justification and approval requirements re-
lating to such noncompetitive procurements specified by law 
and the Governmentwide Federal Acquisition Regulation. 
‘‘(c) OFFERS FROM FEDERAL PRISON INDUSTRIES.—
A timely offer received from Federal Prison Industries to 
furnish a product or service to a Federal department or 
agency shall be considered for award without limitation as 
to the dollar value of the proposed purchase. 
‘‘(d) PERFORMANCE
BY FEDERAL PRISON INDUS-
TRIES.—Federal Prison Industries shall perform its con-
tractual obligations under a contract awarded by a Federal 
department or agency to the same extent as any other con-
tractor. 
‘‘(e) FINALITY
OF CONTRACTING OFFICER’S DECI-
SION.—(1) A decision by a contracting officer regarding the 
award of a contract to Federal Prison Industries or relating
to the performance of such contract shall be final, unless 
reversed on appeal pursuant to paragraph (2) or (3). 
‘‘(2) The Chief Executive Officer of Federal Prison In-
dustries may appeal to the head of a Federal department 
or agency a decision by a contracting officer not to award 
a contract to Federal Prison Industries pursuant to sub-
section (b)(4). The decision of the head of a Federal depart-
ment or agency on appeal shall be final. 
‘‘(3) A dispute between Federal Prison Industries and 
a procurement activity regarding performance of a contract 
shall be subject to—
‘‘(A) alternative means of dispute resolution pur-
suant to subchapter IV of chapter 5 of title 5; or 
‘‘(B) final resolution by the board of contract ap-
peals having jurisdiction over the procurement activi-
ty’s contract performance disputes pursuant to the 
Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.). 
‘‘(f) REPORTING OF PURCHASES.—Each Federal de-
partment or agency shall report purchases from Federal 
Prison Industries to the Federal Procurement Data System 
(as referred to in section 6(d)(4) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 405(d)(4))) in the same 
manner as it reports to such System any acquisition in 
an amount in excess of the simplified acquisition threshold
(as defined by section 4(11) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 403(11))). 
‘‘(g) CATALOG OF PRODUCTS.—Federal Prison Indus-
tries shall publish and maintain a catalog of all specific 
products and services that it is authorized to offer for sale.
Such catalog shall be periodically revised as products and 
services are added or deleted by its board of directors (in 
accordance with section 4122(b) of this title). 
‘‘(h) COMPLIANCE WITH STANDARDS.—Federal Prison 
Industries shall comply with Federal occupational, health, 
and safety standards with respect to the operation of its 
industrial operations.’’. 
SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION 
PROPOSALS BY FEDERAL PRISON INDUS-
TRIES. 
Section 4122(b) of title 18, United States Code, is 
amended—
(1) by redesignating paragraph (6) as para-
graph (12); and 
(2) by striking paragraphs (4) and (5) and in-
serting the following new paragraphs: 
‘‘(4) A decision to authorize Federal Prison Industries 
to offer a new specific product or specific service or to ex-
pand the production of an existing product or service shall 
be made by its board of directors in conformance with the
requirements of subsections (b), (c), (d), and (e) of section 
553 of title 5, and this chapter. 
‘‘(5)(A) Whenever Federal Prison Industries proposes 
to offer for sale a new specific product or specific service 
or to expand production of a currently authorized product 
or service, the Chief Operating Officer of Federal Prison 
Industries shall submit an appropriate proposal to the 
board of directors and obtain the board’s approval before 
initiating any such expansion. The proposal submitted to 
the board shall include a detailed analysis of the probable 
impact of the proposed expansion of sales within the Fed-
eral market by Federal Prison Industries on private sector 
firms and their non-inmate workers. 
‘‘(B)(i) The analysis required by subparagraph (A) 
shall be performed by an interagency team on a reimburs-
able basis or by a private contractor paid by Federal Prison 
Industries. 
‘‘(ii) If the analysis is to be performed by an inter-
agency team, such team shall be led by the Administrator 
of the Small Business Administration or the designee of 
such officer with representatives of the Department of 
Labor, the Department of Commerce, and the Federal Pro-
curement Data Center. 
‘‘(iii) If the analysis is to be performed by a private 
contractor, the selection of the contractor and the adminis-
tration of the contract shall be conducted by one of the enti-
ties referenced in clause (ii) as an independent executive 
agent for the board of directors. Maximum consideration 
shall be given to any proposed statement of work furnished 
by the Chief Operating Officer of Federal Prison Industries. 
‘‘(C) The analysis required by subparagraph (A) shall 
identify and consider—
‘‘(i) the number of vendors that currently meet 
the requirements of the Federal Government for the 
specific product or specific service; 
‘‘(ii) the proportion of the Federal Government 
market for the specific product or specific service cur-
rently furnished by small businesses during the pre-
vious 3 fiscal years; 
‘‘(iii) the share of the Federal market for the spe-
cific product or specific service projected for Federal 
Prison Industries for the fiscal year in which produc-
tion or performance will commence or expand and the 
subsequent 4 fiscal years; 
‘‘(iv) whether the industry producing the specific 
product or specific service in the private sector—
‘‘(I) has an unemployment rate higher than 
the national average; or
‘‘(II) has a rate of unemployment for work-
ers that has consistently shown an increase dur-
ing the previous 5 years; 
‘‘(v) whether the specific product is an import-
sensitive product; 
‘‘(vi) the requirements of the Federal Government 
and the demands of entities other than the Federal 
Government for the specific product or service during 
the previous 3 fiscal years; 
‘‘(vii) the projected growth or decline in the de-
mand of the Federal Government for the specific prod-
uct or specific service; 
‘‘(viii) the capability of the projected demand of 
the Federal Government for the specific product or 
service to sustain both Federal Prison Industries and 
private vendors; and 
‘‘(ix) whether authorizing the production of the 
new product or performance of a new service will pro-
vide inmates with the maximum opportunity to ac-
quire knowledge and skill in trades and occupations 
that will provide them with a means of earning a 
livelihood upon release. 
‘‘(D)(i) The board of directors may not approve a pro-
posal to authorize the production and sale of a new specific
product or continued sale of a previously authorized prod-
uct unless—
‘‘(I) the product to be furnished is a prison-made 
product; or 
‘‘(II) the service to be furnished is to be per-
formed by inmate workers. 
‘‘(ii) The board of directors may not approve a pro-
posal to authorize the production and sale of a new prison-
made product or to expand production of a currently au-
thorized product if the product is—
‘‘(I) produced in the private sector by an indus-
try which has reflected during the previous year an 
unemployment rate above the national average; or 
‘‘(II) an import-sensitive product. 
‘‘(iii) The board of directors may not approve a pro-
posal for inmates to provide a service in which an inmate 
worker has access to—
‘‘(I) personal or financial information about in-
dividual private citizens, including information relat-
ing to such person’s real property, however described, 
without giving prior notice to such persons or class 
of persons to the greatest extent practicable; 
‘‘(II) geographic data regarding the location of 
surface and subsurface infrastructure providing com-
munications, water and electrical power distribution,
pipelines for the distribution of natural gas, bulk pe-
troleum products and other commodities, and other 
utilities; or 
‘‘(III) data that is classified. 
‘‘(iv)(I) Federal Prison Industries is prohibited from 
furnishing through inmate labor construction services, un-
less to be performed within a Federal correctional institu-
tion pursuant to the participation of an inmate in an ap-
prenticeship or other vocational education program teach-
ing the skills of the various building trades. 
‘‘(II) For purposes of this clause, the term ‘construc-
tion’ has the meaning given such term by section 2.101 of 
the Federal Acquisition Regulation (48 C.F.R. part 2.101), 
as in effect on June 1, 2002, including the repair, alter-
ation, or maintenance of real property in being. 
‘‘(6) To provide further opportunities for participation 
by interested parties, the board of directors shall—
‘‘(A) give additional notice of a proposal to au-
thorize the production and sale of a new product or 
service, or expand the production of a currently au-
thorized product or service, in a publication designed 
to most effectively provide notice to private vendors 
and labor unions representing private sector workers 
who could reasonably be expected to be affected by ap-
proval of the proposal, which notice shall offer to fur-
nish copies of the analysis required by paragraph (5) 
and shall solicit comment on the analysis; 
‘‘(B) solicit comments on the analysis required 
by paragraph (5) from trade associations representing 
vendors and labor unions representing private sector 
workers who could reasonably be expected to be af-
fected by approval of the proposal to authorize the 
production and sale of a new product or service (or 
expand the production of a currently authorized prod-
uct or service); and 
‘‘(C) afford an opportunity, on request, for a 
representative of an established trade association, 
labor union, or other private sector representatives to 
present comments on the proposal directly to the 
board of directors. 
‘‘(7) The board of directors shall be provided copies of 
all comments received on the expansion proposal. 
‘‘(8) Based on the comments received on the initial ex-
pansion proposal, the Chief Operating Officer of Federal 
Prison Industries may provide the board of directors a re-
vised expansion proposal. If such revised proposal provides 
for expansion of inmate work opportunities in an industry 
different from that initially proposed, such revised proposal 
shall reflect the analysis required by paragraph (5)(C) and
be subject to the public comment requirements of paragraph 
(6). 
‘‘(9) The board of directors shall consider a proposal 
to authorize the sale of a new specific product or specific 
service (or to expand the volume of sales for a currently 
authorized product or service) and take any action with re-
spect to such proposal, during a meeting that is open to 
the public, unless closed pursuant to section 552(b) of title 
5. 
‘‘(10) In conformity with the requirements of para-
graphs (5) through (9) of this subsection, the board of direc-
tors may—
‘‘(A) authorize the donation of products produced 
or services furnished by Federal industries and avail-
able for sale; 
‘‘(B) authorize the production of a new specific 
product or the furnishing of a new specific service for 
donation; or 
‘‘(C) authorize a proposal to expand production 
of a currently authorized specific product or specific 
service in an amount in excess of a reasonable share 
of the market for such product or service, if—
‘‘(i) a Federal agency or department, pur-
chasing such product or service, has requested 
that Federal Prison Industries be authorized to
furnish such product or service in amounts that 
are needed by such agency or department; or 
‘‘(ii) the proposal is justified for other good 
cause and supported by at least eight members of 
the board.’’. 
SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY. 
(a) IN GENERAL.—Notwithstanding the requirements 
of section 4124 of title 18, United States Code (as amended 
by section 2 of this Act), a Federal department or agency
having a requirement for a product that is authorized for 
sale by Federal Prison Industries and is listed in its catalog 
(referred to in section 4124(g) of title 18, United States 
Code) shall first solicit an offer from Federal Prison Indus-
tries and make purchases on a noncompetitive basis in ac-
cordance with this section. 
(b) PREFERENTIAL SOURCE STATUS.—Subject to the 
limitations of subsection (d), a contract award shall be 
made on a noncompetitive basis to Federal Prison Indus-
tries if the contracting officer for the procurement activity 
determines that—
(1) the product offered by Federal Prison Indus-
tries will meet the requirements of the procurement 
activity (including commercial or governmental 
standards or specifications pertaining to design, per-
formance, testing, safety, serviceability, and warran-
ties as may be imposed upon a private sector supplier 
of the type being offered by Federal Prison Indus-
tries); 
(2) timely performance of the contract by Fed-
eral Prison Industries can be reasonably expected; 
and 
(3) the negotiated price does not exceed a fair 
and reasonable price. 
(c) CONTRACTUAL TERMS.—The terms and conditions 
of the contract and the price to be paid to Federal Prison 
Industries shall be determined by negotiation between Fed-
eral Prison Industries and the Federal agency making the 
purchase. The negotiated price shall not exceed a fair and 
reasonable price determined in accordance with the proce-
dures of the Federal Acquisition Regulation. 
(d) PERFORMANCE OF CONTRACTUAL OBLIGATIONS.—
(1) IN
GENERAL.—Federal Prison Industries 
shall perform the obligations of the contract nego-
tiated pursuant to subsection (c). 
(2) PERFORMANCE DISPUTES.—If the head of the 
contracting activity and the Chief Operating Officer 
of Federal Prison Industries are unable to resolve a 
contract performance dispute to their mutual satisfac-
tion, such dispute shall be resolved pursuant to sec-
tion 4124(e)(3) of title 18, United States Code (as 
added by section 2 of this Act). 
(e) LIMITATIONS ON USE OF AUTHORITY.—
(1) IN GENERAL.—As a percentage of the sales 
made by Federal Prison Industries during the base 
period, the total dollar value of sales to the Govern-
ment made pursuant to subsection (b) and subsection 
(c) of this section shall not exceed—
(A) 90 percent in fiscal year 2005; 
(B) 85 percent in fiscal year 2006; 
(C) 70 percent in fiscal year 2007; 
(D) 55 percent in fiscal year 2008; and 
(E) 40 percent in fiscal year 2009. 
(2) SALES
WITHIN
VARIOUS
BUSINESS
SEC-
TORS.—Use of the authority provided by subsections 
(b) and (c) shall not result in sales by Federal Prison 
Industries to the Government that are in excess of its 
total sales during the base year for each business sec-
tor. 
(3) LIMITATIONS RELATING TO SPECIFIC PROD-
UCTS.—Use of the authorities provided by subsections 
(b) and (c) shall not result in contract awards to Fed-
eral Prison Industries that are in excess of its total 
sales during the base period for such product.
(4) CHANGES IN DESIGN SPECIFICATIONS.—The 
limitations on sales specified in paragraphs (2) and 
(3) shall not be affected by any increases in the unit 
cost of production of a specific product arising from 
changes in the design specification of such product di-
rected by the buying agency. 
(f) DURATION OF AUTHORITY.—The preferential con-
tracting authorities authorized by subsection (b) may not 
be used on or after October 1, 2009, and become effective 
on the effective date of the final regulations issued pursuant 
to section 18. 
(g) DEFINITIONS.—For the purposes of this section—
(1) the term ‘‘base period’’ means the total sales 
of Federal Prison Industries during the period Octo-
ber 1, 2001, and September 30, 2002 (Fiscal Year 
2002); 
(2) the term ‘‘business sectors’’ means the eight 
product/service business groups identified in the 2002 
Federal Prison Industries annual report as the Cloth-
ing and Textiles Business Group, the Electronics 
Business Group, the Fleet Management and Vehicular 
Components Business Group, the Graphics Business 
Group, the Industrial Products Business Group, the 
Office Furniture Business Group, the Recycling Ac-
tivities Business Group, and the Services Business 
Group; and 
(3) the term ‘‘fair and reasonable price’’ shall be 
given the same meaning as, and be determined pursu-
ant to, part 15.8 of the Federal Acquisition Regula-
tion (48 C.F.R. 15.8). 
(h) FINDING BY ATTORNEY GENERAL WITH RESPECT 
TO PUBLIC SAFETY.—(1) Not later than 60 days prior to 
the end of each fiscal year specified in subsection (e)(1), 
the Attorney General shall make a finding regarding the 
effects of the percentage limitation imposed by such sub-
section for such fiscal year and the likely effects of the limi-
tation imposed by such subsection for the following fiscal 
year. 
(2) The Attorney General’s finding shall include a de-
termination whether such limitation has resulted or is like-
ly to result in a substantial reduction in inmate industrial 
employment and whether such reductions, if any, present 
a significant risk of adverse effects on safe prison operation 
or public safety. 
(3) If the Attorney General finds a significant risk of 
adverse effects on either safe prison management or public 
safety, he shall so advise the Congress. 
(4) In advising the Congress pursuant to paragraph 
(3), the Attorney General shall make recommendations for
additional authorizations of appropriations to provide ad-
ditional alternative inmate rehabilitative opportunities and 
additional correctional staffing, as may be appropriate. 
SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCON-
TRACTOR. 
(a) IN GENERAL.—Federal Prison Industries is au-
thorized to enter into a contract with a Federal contractor 
(or a subcontractor of such contractor at any tier) to 
produce products as a subcontractor or supplier in the per-
formance of a Federal procurement contract. The use of
Federal Prison Industries as a subcontractor or supplier 
shall be a wholly voluntary business decision by the Federal 
prime contractor or subcontractor, subject to any prior ap-
proval of subcontractors or suppliers by the contracting offi-
cer which may be imposed by the Federal Acquisition Regu-
lation or by the contract. 
(b) COMMERCIAL SALES PROHIBITED.—The authority 
provided by subsection (a) shall not result, either directly 
or indirectly, in the sale in the commercial market of a 
product or service resulting from the labor of Federal in-
mate workers in violation of section 1761(a) of title 18, 
United States Code. A Federal contractor (or subcontractor 
at any tier) using Federal Prison Industries as a subcon-
tractor or supplier in furnishing a commercial product pur-
suant to a Federal contract shall implement appropriate
management procedures to prevent introducing an inmate-
produced product into the commercial market. 
(c) PROHIBITIONS ON MANDATING SUBCONTRACTING 
WITH FEDERAL PRISON INDUSTRIES.—Except as author-
ized under the Federal Acquisition Regulation, the use of 
Federal Prison Industries as a subcontractor or supplier 
of products or provider of services shall not be imposed upon 
prospective or actual Federal prime contractors or a sub-
contractors at any tier by means of—
(1) a contract solicitation provision requiring a 
contractor to offer to make use of Federal Prison In-
dustries, its products or services; 
(2) specifications requiring the contractor to use 
specific products or services (or classes of products or 
services) offered by Federal Prison Industries in the 
performance of the contract; 
(3) any contract modification directing the use 
of Federal Prison Industries, its products or services; 
or 
(4) any other means. 
SEC. 6. INMATE WAGES AND DEDUCTIONS. 
Section 4122(b) of title 18, United States Code (as 
amended by section 3 of this Act), is further amended by 
adding after paragraph (10) a new paragraph (11) as fol-
lows:
‘‘(11)(A) The Board of Directors of Federal Prison In-
dustries shall prescribe the rates of hourly wages to be paid 
inmates performing work for or through Federal Prison In-
dustries. The Director of the Federal Bureau of Prisons 
shall prescribe the rates of hourly wages for other work as-
signments within the various Federal correctional institu-
tions. 
‘‘(B) The various inmate wage rates shall be reviewed 
and considered for increase on not less than a biannual 
basis. 
‘‘(C) Wages earned by an inmate worker shall be paid 
in the name of the inmate. Deductions, aggregating to not 
more than 80 percent of gross wages, shall be taken from 
the wages due for—
‘‘(i) applicable taxes (Federal, State, and local); 
‘‘(ii) payment of fines and restitution pursuant 
to court order; 
‘‘(iii) payment of additional restitution for vic-
tims of the inmate’s crimes (at a rate not less than 
10 percent of gross wages); 
‘‘(iv) allocations for support of the inmate’s fam-
ily pursuant to statute, court order, or agreement 
with the inmate;
‘‘(v) allocations to a fund in the inmate’s name 
to facilitate such inmate’s assimilation back into soci-
ety, payable at the conclusion of incarceration; and 
‘‘(vi) such other deductions as may be specified 
by the Director of the Bureau of Prisons. 
‘‘(D) Each inmate worker working for Federal Prison 
Industries shall indicate in writing that such person—
‘‘(i) is participating voluntarily; and 
‘‘(ii) understands and agrees to the wages to be 
paid and deductions to be taken from such wages.’’. 
SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 
(a) IN GENERAL.—Section 1761 of title 18, United 
States Code, is amended in subsection (a), by striking ‘‘any 
goods, wares, or merchandise manufactured, produced, or 
mined’’ and inserting ‘‘products manufactured, services fur-
nished, or minerals mined’’. 
(b) COMPLETION OF EXISTING AGREEMENTS.—Any 
prisoner work program operated by a prison or jail of a 
State or local jurisdiction of a State which is providing 
services for the commercial market through inmate labor on 
October 1, 2002, may continue to provide such commercial 
services until—
(1) the expiration date specified in the contract 
or other agreement with a commercial partner on Oc-
tober 1, 2002, or
(2) until September 30, 2005, if the prison work 
program is directly furnishing the services to the com-
mercial market. 
(c) APPROVAL REQUIRED
FOR LONG-TERM OPER-
ATION.—A prison work program operated by a correctional 
institution operated by a State or local jurisdiction of a 
State may continue to provide inmate labor to furnish serv-
ices for sale in the commercial market after the dates speci-
fied in subsection (b) if such program has been certified 
pursuant to section 1761(c)(1) of title 18, United States 
Code, and is in compliance with the requirements of such 
subsection and its implementing regulations. 
SEC. 8. CONFORMING AMENDMENT. 
Section 4122(a) of title 18, United States Code, is 
amended by striking ‘‘production of commodities’’ and in-
serting ‘‘production of products or furnishing of services’’. 
SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 
307. 
Chapter 307 of title 18, United States Code, is further 
amended by adding the following: 
‘‘§ 4130. Construction of provisions 
‘‘Nothing in this chapter shall be construed—
‘‘(1) to establish an entitlement of any inmate 
to—
‘‘(A) employment in a Federal Prison In-
dustries facility; or 
‘‘(B) any particular wage, compensation, or 
benefit on demand, except as otherwise specifi-
cally provided by law or regulation; 
‘‘(2) to establish that inmates are employees for 
the purposes of any law or program; or
‘‘(3) to establish any cause of action by or on be-
half of any inmate against the United States or any 
officer, employee, or contractor thereof.’’. 
SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR-
TUNITIES FOR INMATES. 
(a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE-
LEASE-PREPARATION OPPORTUNITIES.—
(1) PROGRAM
ESTABLISHED.—There is hereby 
established the Enhanced In-Prison Educational and 
Vocational Assessment and Training Program within 
the Federal Bureau of Prisons. 
(2) COMPREHENSIVE PROGRAM.—In addition to 
such other components as the Director of the Bureau 
of Prisons deems appropriate to reduce inmate idle-
ness and better prepare inmates for a successful re-
entry into the community upon release, the program 
shall provide—
(A) in-prison assessments of inmates’ needs 
and aptitudes; 
(B) a full range of educational opportuni-
ties; 
(C) vocational training and apprentice-
ships; and 
(D) comprehensive release-readiness prepa-
ration. 
(3) AUTHORIZATION OF APPROPRIATIONS.—For 
the purposes of carrying out the program established 
by paragraph (1), $75,000,000 is authorized for each 
fiscal year after fiscal year 2003, to remain available 
until expended. Funds shall be allocated from the 
gross profits within the Federal Prison Industries 
Fund, and, to the extent such amounts are inad-
equate, from the General Treasury. 
(4) SCHEDULE FOR IMPLEMENTATION.—All com-
ponents of the program shall be established—
(A) in at least 25 percent of all Federal 
prisons not later than 2 years after the date of 
the enactment of this Act; 
(B) in at least 50 percent of all Federal 
prisons not later than 4 years after such date of 
enactment;
(C) in at least 75 percent of all Federal 
prisons not later than 6 years after such date of 
enactment; and 
(D) in all Federal prisons not later than 8 
years after such date of enactment. 
(b) INMATE WORK OPPORTUNITIES IN SUPPORT OF 
NOT-FOR-PROFIT ENTITIES.—
(1) PROPOSALS FOR DONATION PROGRAMS.—The 
Chief Operating Officer of Federal Prison Industries 
shall develop and present to the Board of Directors of 
Federal Prison Industries proposals to have Federal 
Prison Industries donate products and services to eli-
gible entities that provide goods or services to low-in-
come individuals who would likely otherwise have dif-
ficulty purchasing such products or services in the 
commercial market. 
(2) SCHEDULE FOR SUBMISSION AND CONSIDER-
ATION OF DONATION PROGRAMS.—
(A) INITIAL PROPOSALS.—The Chief Oper-
ating Officer shall submit the initial group of 
proposals for programs of the type described in 
paragraph (1) within 180 days after the date of 
the enactment of this Act. The Board of Directors 
of Federal Prison Industries shall consider such 
proposals from the Chief Operating Officer not
later than the date that is 270 days after the 
date of the enactment of this Act. 
(B) ANNUAL OPERATING PLAN.—The Board 
of Directors of Federal Prison Industries shall 
consider proposals by the Chief Operating Officer 
for programs of the type described in paragraph 
(1) as part of the annual operating plan for Fed-
eral Prison Industries. 
(C) OTHER
PROPOSALS.—In addition to 
proposals submitted by the Chief Operating Offi-
cer, the Board of Directors may, from time to 
time, consider proposals presented by prospective 
eligible entities. 
(3) DEFINITION OF ELIGIBLE ENTITIES.—For the 
purposes of this subsection, the term ‘‘eligible entity’’ 
means an entity—
(A) that is an organization described in sec-
tion 501(c)(3) of the Internal Revenue Code of 
1986 and exempt from taxation under section 
501(a) of such Code and that has been such an 
organization for a period of not less than 36 
months prior to inclusion in a proposal of the 
type described in paragraph (1), or 
(B) that is a religious organization de-
scribed in section 501(d) of such Code and ex-