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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 Fed-
eral Prison Industries. 
Sec.
3. Public participation regarding expansion proposals by Federal Prison 
Industries. 
Sec.
4. Transitional mandatory source authority. 
Sec.
5. Authority to perform as a Federal subcontractor. 
Sec.
6. Inmate wages and deductions. 
Sec.
7. Clarifying amendment relating to services. 
Sec.
8. Conforming amendment. 
Sec.
9. Rules of construction relating to chapter 307. 
Sec. 10. Providing additional rehabilitative opportunities for inmates. 
Sec. 11. 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. 22. Procurement of goods and services manufactured in the United States.
SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELAT-
ING TO PURCHASES FROM FEDERAL PRISON 
INDUSTRIES. 
Section 4124 of title 18, United States Code, is 
amended to read as follows:
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‘‘§ 4124. Governmentwide procurement policy relat-
ing to purchases from Federal Prison In-
dustries 
‘‘(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 specific product or service that is authorized to be of-
fered for sale by Federal Prison Industries, in accordance 
with section 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 Fed-
eral 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 determina-
tion is made by the Attorney General pursuant to para-
graph (3) or an award using other than competitive proce-
dures is authorized pursuant to paragraph (7).
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‘‘(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 pur-
suant to paragraph (3), a contract award shall be made 
with Federal Prison Industries only if the contracting offi-
cer for the procurement activity determines that—
‘‘(A) the specific product or service to be fur-
nished will meet the requirements of the procure-
ment 
activity 
(including 
any 
applicable 
prequalification requirements and all specified com-
mercial or governmental standards pertaining to 
quality, testing, safety, serviceability, and warran-
ties);
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‘‘(B) timely performance of the contract can be 
reasonably expected; and 
‘‘(C) the contract price does not exceed a cur-
rent 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 proce-
dures generally applicable to such procurements by the 
procurement activity.
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‘‘(7) A contract award may be made to Federal Pris-
on 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 authority of section 2304(c)(1) of title 10 or section 
303(c) of the Federal Property and Administrative Serv-
ices Act of 1949 (41 U.S.C. 252(c)(1)), as may be applica-
ble, and pursuant to the justification and approval re-
quirements relating to such noncompetitive procurements 
specified by law and the Governmentwide Federal Acquisi-
tion Regulation. 
‘‘(8) A contract award may be made to Federal Pris-
on Industries using other than competitive procedures by 
the Federal Bureau of Prisons. 
‘‘(c) OFFERS
FROM
FEDERAL
PRISON
INDUS-
TRIES.—A timely offer received from Federal Prison In-
dustries to furnish a product or service to a Federal de-
partment or agency shall be considered for award without 
limitation as to the dollar value of the proposed purchase, 
unless the contract opportunity has been reserved for com-
petition exclusively among small business concerns pursu-
ant to section 15(a) of the Small Business Act (15 U.S.C. 
644(a)) and its implementing regulations. 
‘‘(d) PERFORMANCE BY FEDERAL PRISON INDUS-
TRIES.—Federal Prison Industries shall perform its con-
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tractual obligations under a contract awarded by a Fed-
eral department or agency to the same extent as any other 
contractor. 
‘‘(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 
Industries may appeal to the head of a Federal depart-
ment or agency a decision by a contracting officer not to 
award a contract to Federal Prison Industries pursuant 
to subsection (b)(4). The decision of the head of a Federal 
department 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 
pursuant to subchapter IV of chapter 5 of title 5; 
or 
‘‘(B) final resolution by the board of contract 
appeals having jurisdiction over the procurement ac-
tivity’s contract performance disputes pursuant to
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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 Sys-
tem (as referred to in section 6(d)(4) of the Office of Fed-
eral 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 thresh-
old (as defined by section 4(11) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403(11))). 
‘‘(g) CATALOG OF PRODUCTS.—Federal Prison In-
dustries 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 Pris-
on Industries shall comply with Federal occupational, 
health, and safety standards with respect to the operation 
of its industrial operations.’’.
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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 Indus-
tries to offer a new specific product or specific service or 
to expand 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 pro-
poses 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 be-
fore initiating any such expansion. The proposal submitted 
to the board shall include a detailed analysis of the prob-
able impact of the proposed expansion of sales within the 
Federal market by Federal Prison Industries on private 
sector firms and their non-inmate workers.
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‘‘(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 Pris-
on 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 
Procurement Data Center. 
‘‘(iii) If the analysis is to be performed by a private 
contractor, the selection of the contractor and the admin-
istration of the contract shall be conducted by one of the 
entities referenced in clause (ii) as an independent execu-
tive agent for the board of directors. Maximum consider-
ation 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
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currently furnished by small businesses during the 
previous 3 fiscal years; 
‘‘(iii) the share of the Federal market for the 
specific product or specific service projected for Fed-
eral Prison Industries for the fiscal year in which 
production or performance will commence or expand 
and the subsequent 4 fiscal years; 
‘‘(iv) whether the industry producing the spe-
cific 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 
workers that has consistently shown an increase 
during the previous 5 years; 
‘‘(v) whether the specific product is an import-
sensitive product; 
‘‘(vi) the requirements of the Federal Govern-
ment and the demands of entities other than the 
Federal Government for the specific product or serv-
ice during the previous 3 fiscal years; 
‘‘(vii) the projected growth or decline in the de-
mand of the Federal Government for the specific 
product or specific service;
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‘‘(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 
provide inmates with the maximum opportunity to 
acquire knowledge and skill in trades and occupa-
tions that will provide them with a means of earning 
a livelihood upon release. 
‘‘(D)(i) The board of directors may not approve a 
proposal to authorize the production and sale of a new 
specific product or continued sale of a previously author-
ized product 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
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‘‘(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 de-
scribed, 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 CFR part
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2.101), as in effect on June 1, 2002, including the repair, 
alteration, or maintenance of real property in being. 
‘‘(6) To provide further opportunities for participa-
tion 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 
approval of the proposal, which notice shall offer to 
furnish 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 rep-
resenting vendors and labor unions representing pri-
vate sector workers who could reasonably be ex-
pected to be affected 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 product or service); and 
‘‘(C) afford an opportunity, on request, for a 
representative of an established trade association, 
labor union, or other private sector representatives
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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 
expansion 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 pro-
posal 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 
respect 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 
directors may—
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‘‘(A) authorize the donation of products pro-
duced or services furnished by Federal industries 
and available 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 require-
ments 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 au-
thorized for sale by Federal Prison Industries and is listed 
in its catalog (referred to in section 4124(g) of title 18,
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United States Code) shall first solicit an offer from Fed-
eral Prison Industries and make purchases on a non-
competitive basis in accordance with this section or in ac-
cordance with section 2410n of title 10, United States 
Code, or section 318 of title III of the Federal Property 
and Administrative Services Act of 1949 (as added by sub-
section (i)). 
(b) PREFERENTIAL SOURCE STATUS.—Subject to 
the limitations of subsection (d), a contract award shall 
be made on a noncompetitive basis to Federal Prison In-
dustries if the contracting officer for the procurement ac-
tivity determines that—
(1) the product offered by Federal Prison In-
dustries will meet the requirements of the procure-
ment 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 sup-
plier of the type being offered by Federal Prison In-
dustries); 
(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.
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(c) CONTRACTUAL TERMS.—The terms and condi-
tions of the contract and the price to be paid to Federal 
Prison Industries shall be determined by negotiation be-
tween Federal Prison Industries and the Federal agency 
making the purchase. The negotiated price shall not ex-
ceed a fair and reasonable price determined in accordance 
with the procedures of the Federal Acquisition Regulation. 
(d) PERFORMANCE
OF
CONTRACTUAL
OBLIGA-
TIONS.—
(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 Of-
ficer of Federal Prison Industries are unable to re-
solve a contract performance dispute to their mutual 
satisfaction, such dispute shall be resolved pursuant 
to section 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 sub-
section (c) of this section shall not exceed—
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(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 Pris-
on Industries to the Government that are in excess 
of its total sales during the base year for each busi-
ness sector. 
(3) LIMITATIONS RELATING TO SPECIFIC PROD-
UCTS.—Use of the authorities provided by sub-
sections (b) and (c) shall not result in contract 
awards to Federal Prison Industries that are in ex-
cess 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 directed by the buying agency. 
(f) DURATION
OF AUTHORITY.—The preferential 
contracting authorities authorized by subsection (b) may
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not be used on or after October 1, 2009, and become effec-
tive 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 
October 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 
Clothing and Textiles Business Group, the Elec-
tronics 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 Activities Business Group, and the Serv-
ices Business Group; and 
(3) the term ‘‘fair and reasonable price’’ shall 
be given the same meaning as, and be determined 
pursuant to, part 15.8 of the Federal Acquisition 
Regulation (48 CFR 15.8). 
(h) FINDING BY ATTORNEY GENERAL WITH RE-
SPECT TO PUBLIC SAFETY.—(1) Not later than 60 days
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prior to the end of each fiscal year specified in subsection 
(e)(1), the Attorney General shall make a finding regard-
ing the effects of the percentage limitation imposed by 
such subsection for such fiscal year and the likely effects 
of the limitation imposed by such subsection for the fol-
lowing 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 oper-
ation 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. 
(i) PROCEDURAL
REQUIREMENTS
FOR
CIVILIAN 
AGENCIES RELATING TO PRODUCTS OF FEDERAL PRISON 
INDUSTRIES.—Title III of the Federal Property and Ad-
ministrative Services Act of 1949 (41 U.S.C. 251 et seq.) 
is amended by adding at the end the following new section:
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‘‘SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: 
PROCEDURAL REQUIREMENTS. 
‘‘(a) MARKET
RESEARCH.—Before purchasing a 
product listed in the latest edition of the Federal Prison 
Industries catalog under section 4124(d) of title 18, 
United States Code, the head of an executive agency shall 
conduct market research to determine whether the Federal 
Prison Industries product is comparable to products avail-
able from the private sector that best meet the executive 
agency’s needs in terms of price, quality, and time of deliv-
ery. 
‘‘(b) COMPETITION REQUIREMENT.—If the head of 
the executive agency determines that a Federal Prison In-
dustries product is not comparable in price, quality, or 
time of delivery to products available from the private sec-
tor that best meet the executive agency’s needs in terms 
of price, quality, and time of delivery, the agency head 
shall use competitive procedures for the procurement of 
the product or shall make an individual purchase under 
a multiple award contract. In conducting such a competi-
tion or making such a purchase, the agency head shall 
consider a timely offer from Federal Prison Industries. 
‘‘(c) IMPLEMENTATION
BY HEAD
OF EXECUTIVE 
AGENCY.—The head of an executive agency shall ensure 
that—
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‘‘(1) the executive agency does not purchase a 
Federal Prison Industries product or service unless 
a contracting officer of the agency determines that 
the product or service is comparable to products or 
services available from the private sector that best 
meet the agency’s needs in terms of price, quality, 
and time of delivery; and 
‘‘(2) Federal Prison Industries performs its 
contractual obligations to the same extent as any 
other contractor for the executive agency. 
‘‘(d) MARKET
RESEARCH
DETERMINATION
NOT 
SUBJECT TO REVIEW.—A determination by a contracting 
officer regarding whether a product or service offered by 
Federal Prison Industries is comparable to products or 
services available from the private sector that best meet 
an executive agency’s needs in terms of price, quality, and 
time of delivery shall not be subject to review pursuant 
to section 4124(b) of title 18. 
‘‘(e) PERFORMANCE AS A SUBCONTRACTOR.—(1) A 
contractor or potential contractor of an executive agency 
may not be required to use Federal Prison Industries as 
a subcontractor or supplier of products or provider of serv-
ices for the performance of a contract of the executive 
agency by any means, including means such as—
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‘‘(A) a contract solicitation provision requiring 
a contractor to offer to make use of products or 
services of Federal Prison Industries in the perform-
ance of the contract; 
‘‘(B) a contract specification requiring the con-
tractor to use specific products or services (or class-
es of products or services) offered by Federal Prison 
Industries in the performance of the contract; or 
‘‘(C) any contract modification directing the use 
of products or services of Federal Prison Industries 
in the performance of the contract. 
‘‘(2) In this subsection, the term ‘‘contractor’’, with 
respect to a contract, includes a subcontractor at any tier 
under the contract. 
‘‘(f) PROTECTION OF CLASSIFIED AND SENSITIVE 
INFORMATION.—The head of an executive agency may not 
enter into any contract with Federal Prison Industries 
under which an inmate worker would have access to—
‘‘(1) any data that is classified; 
‘‘(2) any geographic data regarding the location 
of—
‘‘(A) surface and subsurface infrastructure 
providing communications or water or electrical 
power distribution;
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‘‘(B) pipelines for the distribution of nat-
ural gas, bulk petroleum products, or other 
commodities; or 
‘‘(C) other utilities; or 
‘‘(3) any personal or financial information 
about any individual private citizen, including infor-
mation relating to such person’s real property how-
ever described, without the prior consent of the indi-
vidual. 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) The term ‘competitive procedures’ has the 
meaning given such term in section 4(5) of the Of-
fice of Federal Procurement Policy Act (41 U.S.C. 
403(5)). 
‘‘(2) The term ‘market research’ means obtain-
ing specific information about the price, quality, and 
time of delivery of products available in the private 
sector through a variety of means, which may 
include—
‘‘(A) contacting knowledgeable individuals 
in government and industry; 
‘‘(B) interactive communication among in-
dustry, acquisition personnel, and customers; 
and
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‘‘(C) interchange meetings or pre-solicita-
tion conferences with potential offerors.’’. 
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 Fed-
eral prime contractor or subcontractor, subject to any 
prior approval of subcontractors or suppliers by the con-
tracting officer which may be imposed by the Federal Ac-
quisition Regulation or by the contract. 
(b) COMMERCIAL SALES PROHIBITED.—The author-
ity provided by subsection (a) shall not result, either di-
rectly or indirectly, in the sale in the commercial market 
of a product or service resulting from the labor of Federal 
inmate workers in violation of section 1761(a) of title 18, 
United States Code. A Federal contractor (or subcon-
tractor at any tier) using Federal Prison Industries as a 
subcontractor or supplier in furnishing a commercial prod-
uct pursuant to a Federal contract shall implement appro-
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priate 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 subcontractors at any tier by means of—
(1) a contract solicitation provision requiring a 
contractor to offer to make use of Federal Prison 
Industries, its products or services; 
(2) specifications requiring the contractor to 
use specific products or services (or classes of prod-
ucts or services) offered by Federal Prison Indus-
tries in the performance of the contract; 
(3) any contract modification directing the use 
of Federal Prison Industries, its products or serv-
ices; 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:
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‘‘(11)(A) The Board of Directors of Federal Prison 
Industries shall prescribe the rates of hourly wages to be 
paid inmates performing work for or through Federal 
Prison Industries. The Director of the Federal Bureau of 
Prisons shall prescribe the rates of hourly wages for other 
work assignments within the various Federal correctional 
institutions. In the case of an inmate whose term of im-
prisonment is to expire in not more than 2 years, wages 
shall be earned at an hourly rate of not less than $2.50, 
but paid at the same rate and in the same manner as to 
any other inmate, and any amount earned but not paid 
shall be held in trust and paid only upon the actual expira-
tion of the term of imprisonment. 
‘‘(B) The various inmate wage rates shall be reviewed 
and considered for increase on not less than a biannual 
basis. 
‘‘(C) The Board of Directors of Federal Prison In-
dustries shall—
‘‘(i) not later than September 30, 2004, in-
crease the maximum wage rate for inmates per-
forming work for or through Federal Prison Indus-
tries to an amount equal to 50 percent of the min-
imum wage prescribed by section 6(a)(1) of the Fair 
Labor 
Standards 
Act 
of 
1938 
(29 
U.S.C. 
206(a)(1));
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‘‘(ii) not later than September 30, 2009, in-
crease such maximum wage rate to an amount equal 
to such minimum wage; and 
‘‘(iii) request the Secretary of Labor to estab-
lish, not later than October 1, 2004, an ‘inmate 
training wage’ pursuant to that Act. 
‘‘(D) 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 
family pursuant to statute, court order, or agree-
ment with the inmate; 
‘‘(v) allocations to a fund in the inmate’s name 
to facilitate such inmate’s assimilation back into so-
ciety, payable at the conclusion of incarceration; and 
‘‘(vi) such other deductions as may be specified 
by the Director of the Bureau of Prisons.
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‘‘(E) 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, pro-
duced, or mined’’ and inserting ‘‘products manufactured, 
services furnished, 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 com-
mercial services until—
(1) the expiration date specified in the contract 
or other agreement with a commercial partner on 
October 1, 2002, or 
(2) until September 30, 2005, if the prison 
work program is directly furnishing the services to 
the commercial market. 
(c) APPROVAL REQUIRED FOR LONG-TERM OPER-
ATION.—A prison work program operated by a correc-
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tional institution operated by a State or local jurisdiction 
of a State may continue to provide inmate labor to furnish 
services for sale in the commercial market after the dates 
specified in subsection (b) if such program has been cer-
tified 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 fur-
ther 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 spe-
cifically provided by law or regulation;
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‘‘(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 
behalf 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 Bu-
reau of Prisons deems appropriate to reduce inmate 
idleness and better prepare inmates for a successful 
reentry into the community upon release, the pro-
gram 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
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(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 In-
dustries Fund, and, to the extent such amounts are 
inadequate, from the General Treasury. 
(4) SCHEDULE
FOR
IMPLEMENTATION.—All 
components 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) ADDITIONAL INMATE WORK OPPORTUNITIES 
THROUGH PUBLIC SERVICE ACTIVITIES.—
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(1) IN
GENERAL.—Chapter 307 of title 18, 
United States Code, is further amended by inserting 
after section 4124 the following new section: 
‘‘§ 4124a. 
Additional 
inmate 
work 
opportunities 
through public service activities 
‘‘(a) IN GENERAL.—Inmates with work assignments 
within Federal Prison Industries may perform work for 
an eligible entity pursuant to an agreement between such 
entity and the Inmate Work Training Administrator in ac-
cordance with the requirements of this section. 
‘‘(b) DEFINITION OF ELIGIBLE ENTITIES.—For the 
purposes of this section, the term ‘eligible entity’ means 
an entity—
‘‘(1) that is an organization described in section 
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 an agreement under this section; 
‘‘(2) that is a religious organization described 
in section 501(d) of such Code and exempt from tax-
ation under section 501(a) of such Code; or 
‘‘(3) that is a unit of local government, a school 
district, or another special purpose district. 
‘‘(c) INMATE WORK TRAINING ADMINISTRATOR.—