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 two-thirds of 
the appointed 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, 
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 (j)). 
(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— 
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(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. 
(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). 
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(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— 
(A) 90 percent in fiscal year 2012; 
(B) 85 percent in fiscal year 2013; 
(C) 70 percent in fiscal year 2014; 
(D) 55 percent in fiscal year 2015; and 
(E) 40 percent in fiscal year 2016. 
(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. 
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(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.—If a 
buying agency directs a change to the design speci-
fication for a specific product, the costs associated 
with the implementation of such specification change 
by Federal Prison Industries shall not be considered 
for the purposes of computing sales by Federal Pris-
on Industries for the purposes of paragraphs (2) and 
(3). 
(f) ADDITIONAL AUTHORITY TO SUSTAIN INMATE 
EMPLOYMENT.—During the period specified in subsection 
(g), the authority of section 4122(b)(11)(C)(ii) of title 18, 
United States Code (as added by section 3), may be used 
by the Board to sustain inmate employment. 
(g) DURATION
OF AUTHORITY.—The preferential 
contracting authorities authorized by subsection (b) may 
not be used on or after October 1, 2015, and become effec-
tive on the effective date of the final regulations issued 
pursuant to section 17. 
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(h) DEFINITIONS.—For the purposes of this sec-
tion— 
(1) the term ‘‘base period’’ means the total 
sales of Federal Prison Industries during the period 
October 1, 2009, and September 30, 2010 (Fiscal 
Year 2010); 
(2) the term ‘‘business sectors’’ means the 
seven product/service business groups identified in 
the 2004 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 Indus-
trial Products Business Group, the Office Furniture 
Business Group, the Recycling Activities 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 
pursuant to, part 15.8 of the Federal Acquisition 
Regulation (48 CFR 15.8). 
(i) FINDING
BY ATTORNEY GENERAL WITH RE-
SPECT 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 regard-
ing the effects of the percentage limitation imposed by 
such subsection for such fiscal year and the likely effects 
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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. 
(j) 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: 
‘‘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 
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Industries catalog under section 4124(g) 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— 
‘‘(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 
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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— 
‘‘(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; 
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‘‘(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; 
‘‘(B) pipelines for the distribution of nat-
ural gas, bulk petroleum products, or other 
commodities; or 
‘‘(C) other utilities; or 
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‘‘(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 in-
clude— 
‘‘(A) contacting knowledgeable individuals 
in government and industry; 
‘‘(B) interactive communication among in-
dustry, acquisition personnel, and customers; 
and 
‘‘(C) interchange meetings or pre-solicita-
tion conferences with potential offerors.’’. 
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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) LIMITATIONS ON USE.—Federal Prison Indus-
tries is prohibited from being a subcontractor or supplier 
at any tier if— 
(1) the product or service is to be acquired by 
a Federal department or agency pursuant to section 
3 of the Javits-Wagner-O’Day Act (41 U.S.C. 48); 
or 
(2) the product to be acquired by the Federal 
department or agency is subject to section 2533a of 
title 10, United States Code. 
(c) 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 
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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-
priate management procedures to prevent introducing an 
inmate-produced product into the commercial market. 
(d) 
PROHIBITIONS
ON
MANDATING
SUBCON-
TRACTING WITH FEDERAL PRISON INDUSTRIES.—Except 
as authorized 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 con-
tractors 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 
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(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 (11) a new paragraph (12) as fol-
lows: 
‘‘(12)(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— 
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‘‘(i) not later than September 30, 2012, 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)); and 
‘‘(ii) not later than September 30, 2017, in-
crease such maximum wage rate to an amount equal 
to such minimum wage. 
‘‘(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; 
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‘‘(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. 
‘‘(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) and (c) by strik-
ing ‘‘goods, wares, or merchandise manufactured, pro-
duced, or mined’’ each place it appears 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, 2010, may continue to provide such com-
mercial services until— 
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(1) the expiration date specified in the contract 
or other agreement with a commercial partner on 
October 1, 2010, or 
(2) until September 30, 2015, 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-
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. 
(d) EXISTING WORK OPPORTUNITIES FOR FEDERAL 
INMATES.—Any private for-profit business entity having 
an agreement with Federal Prison Industries in effect on 
the date of enactment of this Act, under which Federal 
inmates are furnishing services that are being introduced 
into the commercial market, may continue to furnish such 
services for the duration of the term of such agreement. 
(e) ADDITIONAL AMENDMENT.—Section 1761 of title 
18, United States Code, is further amended— 
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(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing new subsection: 
‘‘(d) This section shall not apply to services per-
formed as part of an inmate work program conducted by 
a State or local government to disassemble, scrap, and re-
cycle products, other than electronic products, that would 
otherwise be disposed of in a landfill. Recovered scrap 
from such program may be sold.’’. 
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 at the end 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 
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‘‘(B) any particular wage, compensation, 
or benefit on demand, except as otherwise spe-
cifically 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 
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; 
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(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 2011, to remain 
available until expended. It is the sense of Congress 
that Federal Prison Industries should use some of 
its net earnings to accomplish the purposes of the 
program. 
(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 
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(D) in all Federal prisons not later than 8 
years after such date of enactment. 
(b) ADDITIONAL INMATE WORK OPPORTUNITIES 
THROUGH PUBLIC SERVICE ACTIVITIES.— 
(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; 
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‘‘(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.— 
There is hereby established the position of Inmate Work 
Training Administrator, who shall be responsible for fos-
tering the creation of alternative inmate work opportuni-
ties authorized by this section. The Administrator shall 
be designated by the Chief Executive Officer of Federal 
Prison Industries, with the approval of the Board of Di-
rectors, and be under the supervision of the Chief Oper-
ating Officer, but may directly report to the Board. 
‘‘(d) PROPOSED AGREEMENTS.—An eligible entity 
seeking to enter into an agreement pursuant to subsection 
(a) shall submit a detailed proposal to the Inmate Work 
Training Administrator. Each such agreement shall speci-
fy— 
‘‘(1) types of work to be performed; 
‘‘(2) the proposed duration of the agreement, 
specified in terms of a base year and number of op-
tion years; 
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‘‘(3) the number of inmate workers expected to 
be employed in the specified types of work during 
the various phases of the agreement; 
‘‘(4) the wage rates proposed to be paid to var-
ious classes of inmate workers; and 
‘‘(5) the facilities, services and personnel (other 
than correctional personnel dedicated to the security 
of the inmate workers) to be furnished by Federal 
Prison Industries or the Bureau of Prisons and the 
rates of reimbursement, if any, for such facilities, 
services, and personnel. 
‘‘(e) REPRESENTATIONS.— 
‘‘(1) ELEEMOSYNARY WORK ACTIVITIES.—Each 
proposed agreement shall be accompanied by a writ-
ten certification by the chief executive officer of the 
eligible entity that— 
‘‘(A) the work to be performed by the in-
mate workers will be limited to the eleemosy-
nary work of such entity in the case of an enti-
ty described in paragraph (1) or (2) of sub-
section (b); 
‘‘(B) the work would not be performed in 
the United States but for the availability of the 
inmate workers; and 
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‘‘(C) the work performed by the inmate 
workers will not result, either directly or indi-
rectly, in the production of a new product or 
the furnishing of a service that is to be offered 
for other than resale or donation by the eligible 
entity or any affiliate of the such entity. 
‘‘(2) PROTECTIONS
FOR
NON-INMATE
WORK-
ERS.—Each proposed agreement shall also be ac-
companied by a written certification by the chief ex-
ecutive officer of the eligible entity that— 
‘‘(A) no non-inmate employee (including 
any person performing work activities for such 
governmental entity pursuant to section 607 of 
subchapter IV of the Social Security Act (42 
U.S.C. 607)) of the eligible entity (or any affil-
iate of the entity) working in the United States 
will have his or her job abolished or work hours 
reduced as a result of the entity being author-
ized to utilize inmate workers; and 
‘‘(B) the work to be performed by the in-
mate workers will not supplant work currently 
being performed in the United States by a con-
tractor of the eligible entity. 
‘‘(f) APPROVAL BY BOARD OF DIRECTORS.— 
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‘‘(1) IN GENERAL.—Each such proposed agree-
ment shall be presented to the Board of Directors, 
be subject to the same opportunities for public com-
ment, and be publicly considered and acted upon by 
the Board in a manner comparable to that required 
by paragraphs (7) and (8) of section 4122(b). 
‘‘(2) MATTERS TO BE CONSIDERED.—In deter-
mining whether to approve a proposed agreement, 
the Board shall— 
‘‘(A) give priority to an agreement that 
provides inmate work opportunities that will 
provide participating inmates with the best 
prospects of obtaining employment paying a liv-
able wage upon release; 
‘‘(B) give priority to an agreement that 
provides for maximum reimbursement for in-
mate wages and for the costs of supplies and 
equipment needed to perform the types of work 
to be performed; 
‘‘(C) not approve an agreement that will 
result in the displacement of non-inmate work-
ers contrary to the representations required by 
subsection (e)(2) as determined by the Board or 
by the Secretary of Labor (pursuant to sub-
section (i)); and 
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‘‘(D) not approve an agreement that will 
result, either directly or indirectly, in the pro-
duction of a new product or the furnishing of 
a service for other than resale by an eligible en-
tity described in paragraph (1) or (2) of sub-
section (b) or donation. 
‘‘(g) WAGE RATES AND DEDUCTIONS FROM INMATE 
WAGES.— 
‘‘(1) IN
GENERAL.—Inmate workers shall be 
paid wages for work under the agreement at a basic 
hourly rate to be negotiated between the eligible en-
tity and Federal Prison Industries and specified in 
the agreement. The wage rates set by the Director 
of the Federal Bureau of Prisons to be paid inmates 
for various institutional work assignments are spe-
cifically authorized. 
‘‘(2) PAYMENT TO INMATE WORKER AND AU-
THORIZED DEDUCTIONS.—Wages shall be paid and 
deductions 
taken 
pursuant 
to 
section 
4122(b)(12)(D). 
‘‘(3) VOLUNTARY PARTICIPATION BY INMATE.— 
Each inmate worker to be utilized by an eligible en-
tity shall indicate in writing that such person— 
‘‘(A) is participating voluntarily; and 
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‘‘(B) understands and agrees to the wages 
to be paid and deductions to be taken from 
such wages. 
‘‘(h) ASSIGNMENT TO WORK OPPORTUNITIES.—As-
signment of inmates to work under an approved agree-
ment with an eligible entity shall be subject to the Bureau 
of Prisons Program Statement Number 1040.10 (Non- 
Discrimination Toward Inmates), as contained in section 
551.90 of title 28 of the Code of Federal Regulations (or 
any successor document). 
‘‘(i) ENFORCEMENT OF PROTECTIONS FOR NON-IN-
MATE WORKERS.— 
‘‘(1) PRIOR TO BOARD CONSIDERATION.—Upon 
request of any interested person, the Secretary of 
Labor may promptly verify a certification made pur-
suant subsection (e)(2) with respect to the displace-
ment of non-inmate workers so as to make the re-
sults of such inquiry available to the Board of Direc-
tors prior to the Board’s consideration of the pro-
posed agreement. The Secretary and the person re-
questing the inquiry may make recommendations to 
the Board regarding modifications to the proposed 
agreement. 
‘‘(2) DURING PERFORMANCE.— 
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‘‘(A) IN
GENERAL.—Whenever the Sec-
retary deems appropriate, upon request or oth-
erwise, the Secretary may verify whether the 
actual performance of the agreement is result-
ing in the displacement of non-inmate workers 
or the use of inmate workers in a work activity 
not authorized under the approved agreement. 
‘‘(B) SANCTIONS.—Whenever the Sec-
retary determines that performance of the 
agreement has resulted in the displacement of 
non-inmate workers or employment of an in-
mate worker in an unauthorized work activity, 
the Secretary may— 
‘‘(i) direct the Inmate Work Training 
Administrator to terminate the agreement 
for default, subject to the processes and 
appeals available to a Federal contractor 
whose procurement contract has been ter-
minated for default; and 
‘‘(ii) initiate proceedings to impose 
upon the person furnishing the certifi-
cation regarding non-displacement of non- 
inmate workers required by subsection 
(d)(2)(B) any administrative, civil, and 
criminal sanctions as may be available.’’. 
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(2) AUTHORIZATION
OF
APPROPRIATION.— 
There is authorized to be appropriated $5,000,000 
for each of the fiscal years 2012 through 2016 for 
the purposes of paying the wages of inmates and 
otherwise undertaking the maximum number of 
agreements with eligible entities pursuant to section 
4124a of title 18, United States Code, as added by 
paragraph (1). 
(3) SENSE
OF
CONGRESS.—For purposes of 
sections 4124a and 4124b of title 18, United States 
Code, as added by sections 10(b) and 11, respec-
tively, it is the sense of Congress that an inmate 
training wage that is at least 50 percent of the min-
imum wage prescribed pursuant to section 6(a)(1) of 
the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)(1)) will facilitate successful achievement of 
the goals of the work-based training and apprentice-
ship program authorized under such section 4124a. 
(c) INMATE WORK OPPORTUNITIES IN SUPPORT OF 
NOT-FOR-PROFIT ENTITIES.— 
(1) PROPOSALS FOR DONATION PROGRAMS.— 
The Chief Operating Officer of Federal Prison In-
dustries shall develop and present to the Board of 
Directors of Federal Prison Industries proposals to 
have Federal Prison Industries donate products and 
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services to eligible entities that provide goods or 
services to low-income individuals who would likely 
otherwise have difficulty purchasing such products 
or services in the commercial market. 
(2) SCHEDULE FOR SUBMISSION AND CONSID-
ERATION 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 Direc-
tors 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 Federal Prison Industries. 
(C) OTHER
PROPOSALS.—In addition to 
proposals submitted by the Chief Operating Of-
ficer, the Board of Directors may, from time to 
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time, consider proposals presented by prospec-
tive 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 
section 501(c)(3) of the Internal Revenue Code 
of 1986 and exempt from taxation under sec-
tion 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-
empt from taxation under section 501(a) of 
such Code. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated $7,000,000 
for each of the fiscal years 2012 through 2016 for 
the purposes of paying the wages of inmates and 
otherwise carrying out programs of the type de-
scribed in paragraph (1). 
(d) MAXIMIZING INMATE REHABILITATIVE OPPOR-
TUNITIES
THROUGH
COGNITIVE
ABILITIES
ASSESS-
MENTS.— 
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(1) DEMONSTRATION PROGRAM AUTHORIZED.— 
(A) IN GENERAL.—There is hereby estab-
lished within the Federal Bureau of Prisons a 
program to be known as the ‘‘Cognitive Abili-
ties Assessment Demonstration Program’’. The 
purpose of the demonstration program is to de-
termine the effectiveness of a program that as-
sesses the cognitive abilities and perceptual 
skills of Federal inmates to maximize the bene-
fits of various rehabilitative opportunities de-
signed to prepare each inmate for a successful 
return to society and reduce recidivism. The 
demonstration program shall be undertaken by 
a contractor with a demonstrated record of ena-
bling the behavioral and academic improvement 
of adults through the use of research-based sys-
tems that maximize the development of both the 
cognitive and perceptual capabilities of a par-
ticipating individual, including adults in a cor-
rectional setting. 
(B) SCOPE
OF
DEMONSTRATION
PRO-
GRAM.—The demonstration program shall to 
the maximum extent practicable, be— 
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(i) conducted during a period of three 
consecutive fiscal years, commencing dur-
ing fiscal year 2012; 
(ii) conducted at 12 Federal correc-
tional institutions; and 
(iii) offered to 6,000 inmates, who are 
categorized as minimum security or less, 
and are within five years of release. 
(C) REPORT ON RESULTS OF PROGRAM.— 
Not later than 60 days after completion of the 
demonstration program, the Director shall sub-
mit to Congress a report on the results of the 
program. At a minimum, the report shall in-
clude an analysis of employment stability, sta-
bility of residence, and rates of recidivism 
among inmates who participated in the program 
after 18 months of release. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated $3,000,000 
in each of the three fiscal years after fiscal year 
2011, to remain available until expended, for the 
purposes of conducting the demonstration program 
authorized by subsection (a). 
(e) PRERELEASE EMPLOYMENT ASSISTANCE.— 
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(1) IN GENERAL.—The Director of the Federal 
Bureau of Prisons shall, to the maximum extent 
practicable, afford to inmates opportunities to par-
ticipate in programs and activities designed to help 
prepare such inmates to obtain employment upon re-
lease. 
(2) PRERELEASE
EMPLOYMENT
PLACEMENT 
ASSISTANCE.—Such prerelease employment place-
ment assistance required by subsection (a) shall in-
clude— 
(A) training in the preparation of resumes 
and job applications; 
(B) training in interviewing skills; 
(C) training and assistance in job search 
techniques; 
(D) conduct of job fairs; and 
(E) such other methods deemed appro-
priate by the Director. 
(3) PRIORITY PARTICIPATION.—Priority in pro-
gram participation shall be accorded to inmates who 
are participating in work opportunities afforded by 
Federal Prison Industries and are within 24 months 
of release from incarceration. 
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SEC. 11. RE-ENTRY EMPLOYMENT PREPARATION THROUGH 
WORK-BASED TRAINING AND APPRENTICE-
SHIP. 
(a) IN GENERAL.—Chapter 307 of title 18, United 
States Code, is further amended by inserting after section 
4124a, as added by section 10(b), the following new sec-
tion: 
‘‘§ 4124b. Re-entry employment preparation through 
work-based training and apprenticeship 
‘‘(a) PARTICIPATION AUTHORIZED.—A private for- 
profit business entity shall be an eligible entity for partici-
pation in the program authorized by section 4124a of this 
title, if such participation conforms with the requirements 
and limitations of this section. 
‘‘(b) REQUIREMENTS RELATING TO PRODUCTS AND 
SERVICES.—A private for-profit business entity is eligible 
for such participation if such business entity proposes to 
train participating inmates, pursuant to subsection (c), by 
producing a product or performing a service, if such prod-
uct or service is of a type for which there is no production 
or performance within the United States by noninmate 
workers. 
‘‘(c) REQUIREMENTS RELATING TO TRAINING.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the training of participating inmates shall be 
work-based training that provides to a participating 
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inmate apprenticeship training or a functionally 
equivalent structured program that combines hands- 
on work experience with conceptual understanding of 
the work being performed. Other inmates with reg-
ular work assignments within Federal Prison Indus-
tries may be assigned to support the program. 
‘‘(2) DOCUMENTATION OF PROGRAM PARTICIPA-
TION.— 
‘‘(A) Each inmate who successfully com-
pletes participation in training undertaken pur-
suant to this section shall be provided a certifi-
cate or other written document memorializing 
such successful completion, providing a market-
able summary of the skills learned and an over-
all assessment of performance. 
‘‘(B) Copies of such documents shall be 
furnished to perspective employers upon the re-
quest of the participant for a period of not less 
than 24 months from the date of such partici-
pant’s release from incarceration. 
‘‘(3) DOCUMENTS
REQUIRED
FOR
EMPLOY-
MENT.—The Federal Bureau of Prisons, in coopera-
tion with a business entity providing an inmate 
work-based training at the time of his or her sched-
uled release, shall make every reasonable effort to 
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help the inmate timely obtain such documentation 
(including a State government-issued photo identi-
fication card) as a person may be required to pro-
vide to a prospective employer, after such person 
completes an Employment Eligibility Verification 
(ICE Form I–9). 
‘‘(d) WAGE RATES.— 
‘‘(1) IN
GENERAL.—Business entities partici-
pating in the program authorized by subsection (a) 
shall propose wages for inmates participating in the 
program at rates not less than the inmate training 
wage promulgated pursuant to section 17(c) of the 
Federal Prison Industries Competition in Con-
tracting Act of 2011. 
‘‘(2) INMATE TRAINING WAGE.—Not more than 
30 days after the date of enactment of this section, 
the Board of Directors of Federal Prison Industries 
shall request the Secretary of Labor to promulgate 
an inmate training wage pursuant to section 14(a) 
of the Fair Labor Standards Act of 1938 (29 U.S.C. 
214(a)). 
‘‘(e) SUPPORT FOR OTHER RELEASE PREPARATION 
PROGRAMS.—In addition to the matters listed in section 
4124a(d) of this title, a proposal for an agreement re-
ferred to in such section submitted by an eligible business 
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entity shall specify an amount of any supplemental fund-
ing, specified as a per-capita amount for each inmate par-
ticipating pursuant to the agreement, that the business 
entity will provide for the purpose of supporting remedial, 
vocational, and other release preparation programs for 
other nonparticipating inmates. 
‘‘(f) ADDITIONAL STANDARDS APPLICABLE.—In con-
sidering a proposed agreement pursuant to section 
4124a(f)(1) of this title, the Board of Directors shall— 
‘‘(1) give preference to an agreement that pro-
poses— 
‘‘(A) work-based training opportunities 
that provide the participating inmate the best 
prospects for obtaining employment paying a 
livable wage upon release; 
‘‘(B) the highest per-capita amount pursu-
ant to subsection (e) relating to providing fi-
nancial support for release preparation for 
other inmates; and 
‘‘(C) the highest inmate wage rates; 
‘‘(2) not approve any agreement with respect to 
furnishing services of the type described in section 
4122(b)(6)(D)(iii) of this title; 
‘‘(3) not approve any agreement with respect to 
furnishing construction services described in section 
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4122(b)(6)(D)(iv) of this title, unless to be per-
formed within a Federal correctional institution; 
‘‘(4) not approve an agreement that does not 
meet the standards of subsection (b); and 
‘‘(5) request a determination from the Depart-
ment of Commerce (and such other executive branch 
entities as may be appropriate), regarding whether a 
product or service is of the type being produced or 
performed in the United States by noninmate work-
ers, whenever the Board determines that such an ad-
ditional assessment is warranted, including upon a 
request from an interested party presenting informa-
tion that the Board deems to warrant such addi-
tional assessment prior to the Board’s consideration 
of the proposed agreement. 
‘‘(g) LIMITATIONS ON THE USE OF THE AUTHOR-
ITY.— 
‘‘(1) NO SALES BY FEDERAL PRISON INDUS-
TRIES.—Federal Prison Industries is prohibited 
from directly offering for commercial sale products 
produced or services furnished by Federal inmates, 
including through any form of electronic commerce. 
‘‘(2) DURATION.— 
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‘‘(A) No proposed agreement pursuant to 
this subsection may be approved by the Board 
of Directors after September 30, 2020. 
‘‘(B) Performance of all such agreements 
shall be concluded prior to October 1, 2025.’’. 
(b) REVIEW AND REPORTING BY THE ATTORNEY 
GENERAL.—Not less than biannually, beginning in fiscal 
year 2012, the Attorney General shall meet in person 
jointly with the Chairman of the Board of Directors and 
the Chief Executive Officer of Federal Prison Industries 
to review the progress that Federal Prison Industries is 
making in maximizing the use of the authority provided 
by sections 4124a and 4124b of title 18, United States 
Code. The Attorney General shall provide annually a writ-
ten report to the Committees on the Judiciary and Appro-
priations of the House of Representatives and the Senate 
addressing such progress by Federal Prison Industries. 
(c) GAO ASSESSMENT OF WORK-BASED TRAINING 
PROGRAM.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall undertake an on-going as-
sessment of the authority granted by section 4124b 
of title 18, United States Code, as added by sub-
section (a). 
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(2) MATTERS TO BE ASSESSED.—In addition to 
such other matters as the Comptroller General 
deems appropriate, the assessment shall include— 
(A) efforts to recruit private for-profit 
business entities to participate; 
(B) the quality of training provided to in-
mates; 
(C) the amounts and types of products and 
services that have been produced incident to the 
work-based training programs; 
(D) the types of worksite arrangement that 
encourage business concerns to voluntarily enter 
into such partnerships; 
(E) the extent and manner of the partici-
pation of supervisory, quality assurance, and 
other management employees of the partici-
pating business entity in worksites within cor-
rectional facilities of various levels of security; 
(F) the extent of the facilities, utilities, 
equipment, and personnel (other than security 
personnel) provided by the host correctional 
agency, and extent to which such resources are 
provided on a nonreimbursable basis; 
(G) the rates of wages paid to inmate 
workers and the effect that such wage rates 
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have on willingness of business entities to par-
ticipate; 
(H) any complaints filed regarding the dis-
placement of noninmate workers or of inmate 
workers being paid less than required wages 
and the disposition of those complaints; 
(I) any sanctions recommended relating to 
displacement of noninmate workers or payment 
of less than the required wages, and the dis-
position of such proposed sanctions; 
(J) the extent to which the new authority 
provided additional inmate work opportunities 
assisting the Bureau of Prisons in attaining its 
objective of providing 25 percent of the work- 
eligible inmates with work opportunities within 
Federal Prison Industries; 
(K) measures of any adverse impacts of 
implementation of the new authority on busi-
ness concerns using noninmate workers that are 
engaged in providing similar types of products 
and services in direct competition; and 
(L) a compilation of data relating work op-
portunities for Federal inmates with work as-
signments with Federal Prison Industries pro-
vided by— 
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(i) sales to Federal agencies pursuant 
to the status of Federal Prison Industries 
as a mandatory source of supply during 
the period fiscal year 1990 through fiscal 
year 2011; 
(ii) sales to Federal agencies of serv-
ices, both through non-competitive inter-
agency transfers and as a result of direct 
competition from private-sector offerors 
during the period fiscal year 1990 though 
fiscal year 2011; 
(iii) performance as a subcontrator to 
a Federal prime contractor or Federal sub-
contractor at a higher tier beginning in fis-
cal year 1990; 
(iv) introduction of inmate-furnished 
services into the commercial market, begin-
ning in the second quarter of fiscal year 
1998; 
(v) alternative inmate work opportuni-
ties, beginning in fiscal year 2012, pro-
vided by agreements with— 
(I) non-profit organizations, pur-
suant to section 4124a(b)(1) of title 
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18, United States Code, as added by 
section 10(b), and section 10(c); 
(II) religious organizations, pur-
suant to section 4124a(b)(2) of title 
18, United States Code; 
(III) units of local governments, 
school districts, or other special pur-
pose districts, pursuant to section 
4124a(b)(3) of title 18, United States 
Code; 
(IV) 
work-based 
Employment 
Preparation Programs for Federal in-
mates, pursuant to section 4124b of 
title 18, United States Code, as added 
by section 11; or 
(V) other means. 
(3) OPPORTUNITY
FOR
PUBLIC
COMMENT.— 
The Comptroller General shall provide an oppor-
tunity for public comment on the proposed scope 
and methodology for the assessment required by 
paragraph (1), making such modifications in re-
sponse to such comments as he deems appropriate. 
(4) REPORTS AND RECOMMENDATIONS.— 
(A) IN GENERAL.—The Comptroller Gen-
eral shall submit to the Congress in accordance 
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with this subsection two interim reports and a 
final report of the assessment of implementa-
tion of the new authority, including such rec-
ommendations as the Comptroller General may 
deem appropriate. 
(B) INTERIM REPORTS.—The two interim 
reports shall encompass the assessment of the 
implementation of the new authority— 
(i) from the effective date of the au-
thority through the end of fiscal year 
2014; and 
(ii) from the effective date of the au-
thority through the end of fiscal year 
2017. 
(C) FINAL
REPORT.—The final report 
shall assess the implementation of the new au-
thority from the effective date of the authority 
through the end of fiscal year 2018. 
(D) 
SUBMISSION
TO
CONGRESS.—The 
Comptroller General shall submit the reports 
required by this paragraph within 6 months 
after the end of the fiscal years referred to in 
subparagraphs (B) and (C). 
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(d) CONFORMING AMENDMENT.—Section 1761 of 
title 18, United States Code, as amended by section 7, 
is further amended— 
(1) by redesignating subsection (e) as sub-
section (f); and 
(2) inserting after subsection (d) the following 
new subsection: 
‘‘(e) This section shall not apply to products produced 
or services furnished with inmate labor incidental to the 
work-based training program authorized pursuant to sec-
tion 4124b of this title.’’. 
SEC. 12. RESTRUCTURING THE BOARD OF DIRECTORS. 
(a) IN GENERAL.—Section 4121 of title 18, United 
States Code, is amended to read as follows: 
‘‘§ 4121. Federal Prison Industries; Board of Direc-
tors: executive management 
‘‘(a) Federal Prison Industries is a government cor-
poration of the District of Columbia organized to carry 
on such industrial operations in Federal correctional insti-
tutions as authorized by its Board of Directors. The man-
ner and extent to which such industrial operations are car-
ried on in the various Federal correctional institutions 
shall be determined by the Attorney General. 
‘‘(b)(1) The corporation shall be governed by a board 
of 11 directors appointed by the President. 
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‘‘(2) In making appointments to the Board, the 
President shall assure that 3 members represent the busi-
ness community, 3 members represent organized labor, 1 
member shall have special expertise in inmate rehabilita-
tion techniques, 1 member represents victims of crime, 1 
member represents the interests of Federal inmate work-
ers, and 2 additional members whose background and ex-
pertise the President deems appropriate. The members of 
the Board representing the business community shall in-
clude, to the maximum extent practicable, representation 
of firms furnishing services as well as firms producing 
products, especially from those industry categories from 
which Federal Prison Industries derives substantial sales. 
The members of the Board representing organized labor 
shall, to the maximum practicable, include representation 
from labor unions whose members are likely to be most 
affected by the sales of Federal Prison Industries. 
‘‘(3) Each member shall be appointed for a term of 
5 years, except that of members first appointed— 
‘‘(A) 2 members representing the business com-
munity shall be appointed for a term of 3 years; 
‘‘(B) 2 members representing labor shall be ap-
pointed for a term of 3 years; 
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‘‘(C) 2 members whose background and exper-
tise the President deems appropriate for a term of 
3 years; 
‘‘(D) 1 member representing victims of crime 
shall be appointed for a term of 3 years; 
‘‘(E) 1 member representing the interests of 
Federal inmate workers shall be appointed for a 
term of 3 years; 
‘‘(F) 1 member representing the business com-
munity shall be appointed for a term of 4 years; 
‘‘(G) 1 member representing the business com-
munity shall be appointed for a term of 4 years; and 
‘‘(H) the members having special expertise in 
inmate rehabilitation techniques shall be appointed 
for a term of 5 years. 
‘‘(4) The President shall designate 1 member of the 
Board as Chairperson. The Chairperson may designate a 
Vice Chairperson. 
‘‘(5) Members of the Board may be reappointed. 
‘‘(6) Any vacancy on the Board shall be filled in the 
same manner as the original appointment. Any member 
appointed to fill a vacancy occurring before the expiration 
of the term for which the member’s predecessor was ap-
pointed shall be appointed for the remainder of that term. 
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‘‘(7) The members of the Board shall serve without 
compensation. The members of the Board shall be allowed 
travel expenses, including per diem in lieu of subsistence, 
at rates authorized for employees of agencies under sub-
chapter I of chapter 57 of title 5, United States Code, 
to attend meetings of the Board and, with the advance 
approval of the Chairperson of the Board, while otherwise 
away from their homes or regular places of business for 
purposes of duties as a member of the Board. 
‘‘(8)(A) The Chairperson of the Board may appoint 
and terminate any personnel that may be necessary to en-
able the Board to perform its duties. 
‘‘(B) Upon request of the Chairperson of the Board, 
a Federal agency may detail a Federal Government em-
ployee to the Board without reimbursement. Such detail 
shall be without interruption or loss of civil service status 
or privilege. 
‘‘(9) The Chairperson of the Board may procure tem-
porary and intermittent services under section 3109(b) of 
title 5, United States Code. 
‘‘(c) The Director of the Bureau of Prisons shall 
serve as Chief Executive Officer of the Corporation. The 
Director shall designate a person to serve as Chief Oper-
ating Officer of the Corporation.’’. 
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(b) CONTINUED GOVERNANCE.—The members of the 
Board of Directors serving on the date of enactment of 
this Act, and the person selected by them as Chairman, 
shall continue to exercise the duties and responsibilities 
of the Board until the earlier of— 
(1) the date on which the President has ap-
pointed at least 6 members of the Board and des-
ignated a new Chairman, pursuant to section 4121 
of title 18, United States Code (as added by section 
12(a) of this Act); or 
(2) the date that is 365 days after the date of 
enactment of this Act. 
SEC. 13. MANAGEMENT MATTERS. 
(a) 
ADDITIONAL
FLEXIBILITIES.—Section 
4122(b)(3) of title 18, United States Code, is amended— 
(1) by striking ‘‘(3)’’ and inserting ‘‘(3)(A)’’; 
and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(B) Federal Prison Industries may locate more than 
one workshop at a Federal correctional facility. 
‘‘(C) Federal Prison Industries may operate a work-
shop outside of a correctional facility if all of the inmates 
working in such workshop are classified as minimum secu-
rity inmates.’’. 
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(b) COST ACCOUNTING SYSTEM.— 
(1) ESTABLISHMENT.—Federal Prison Indus-
tries shall establish a cost accounting system that 
meets the requirements of part 30 (Cost Accounting 
Standards Administration) of the Federal Acquisi-
tion Regulation (48 CFR part 30). The compliance 
of the cost accounting system with such standards 
shall be annually verified as part of the independent 
audit of Federal Prison Industries, Inc., pursuant to 
section 9106(b) of title 31, United States Code. 
(2) APPLICATION
OF
RELATED
PROVISION.— 
Section 4124(c)(2) of title 18, United States Code, 
shall apply when Federal Prison Industries has been 
found to have a complaint cost accounting system 
pursuant to paragraph (1). 
SEC. 14. TRANSITIONAL PERSONNEL MANAGEMENT AU-
THORITY. 
Any correctional officer or other employee of Federal 
Prison Industries being paid with nonappropriated funds 
who would be separated from service because of a reduc-
tion in the net income of Federal Prison Industries during 
any fiscal year specified in section 4(e)(1) shall be— 
(1) eligible for appointment (or reappointment) 
in the competitive service pursuant to title 5, United 
States Code; 
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(2) registered on a Bureau of Prisons reemploy-
ment priority list; and 
(3) given priority for any other position within 
the Bureau of Prisons for which such employee is 
qualified. 
SEC. 15. FEDERAL PRISON INDUSTRIES REPORT TO CON-
GRESS. 
Section 4127 of title 18, United States Code, is 
amended to read as follows: 
‘‘§ 4127. Federal Prison Industries report to Congress 
‘‘(a) IN GENERAL.—Pursuant to chapter 91 of title 
31, the board of directors of Federal Prison Industries 
shall submit an annual report to Congress on the conduct 
of the business of the corporation during each fiscal year 
and the condition of its funds during the fiscal year. 
‘‘(b) CONTENTS OF REPORT.—In addition to the 
matters required by section 9106 of title 31, and such 
other matters as the board considers appropriate, a report 
under subsection (a) shall include— 
‘‘(1) a statement of the amount of obligations 
issued under section 4129(a)(1) of this title during 
the fiscal year; 
‘‘(2) an estimate of the amount of obligations 
that will be issued in the following fiscal year; 
‘‘(3) an analysis of— 
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‘‘(A) the corporation’s total sales for each 
specific product and type of service sold to the 
Federal agencies and the commercial market; 
‘‘(B) the total purchases by each Federal 
agency of each specific product and type of 
service; 
‘‘(C) the corporation’s share of such total 
Federal Government purchases by specific prod-
uct and type of service; and 
‘‘(D) the number and disposition of dis-
putes submitted to the heads of the Federal de-
partments and agencies pursuant to section 
4124(e) of this title; 
‘‘(4) an allocation of the profits of the corpora-
tion, both gross and net, to— 
‘‘(A) educational, training, release-prepara-
tion opportunities for inmates; 
‘‘(B) opening new factories; and 
‘‘(C) improving the productivity and com-
petitiveness of existing factories; 
‘‘(5) an analysis of the inmate workforce that 
includes— 
‘‘(A) the number of inmates employed; 
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‘‘(B) the number of inmates utilized to 
produce products or furnish services sold in the 
commercial market; 
‘‘(C) the number and percentage of em-
ployed inmates by the term of their incarcer-
ation; and 
‘‘(D) the various hourly wages paid to in-
mates employed with respect to the production 
of the various specific products and types of 
services authorized for production and sale to 
Federal agencies and in the commercial market; 
and 
‘‘(6) data concerning employment obtained by 
former inmates upon release to determine whether 
the employment provided by Federal Prison Indus-
tries during incarceration provided such inmates 
with knowledge and skill in a trade or occupation 
that enabled such former inmate to earn a livelihood 
upon release. 
‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re-
port under subsection (a) shall be made available to the 
public at a price not exceeding the cost of printing the 
report.’’. 
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SEC. 16. DEFINITIONS. 
Chapter 307 of title 18, United States Code, is 
amended by adding at the end the following new section: 
‘‘§ 4131. Definitions 
‘‘As used in this chapter— 
‘‘(1) the term ‘assembly’ means the process of 
uniting or combining articles or components (includ-
ing ancillary finished components or assemblies) so 
as to produce a significant change in form or utility, 
without necessarily changing or altering the compo-
nent parts; 
‘‘(2) the term ‘current market price’ means, 
with respect to a specific product, the fair market 
price of the product within the meaning of section 
15(a) of the Small Business Act (15 U.S.C. 644(a)), 
at the time that the contract is to be awarded, 
verified through appropriate price analysis or cost 
analysis, including any costs relating to transpor-
tation or the furnishing of any ancillary services; 
‘‘(3) the term ‘import-sensitive product’ means 
a product which, according to Department of Com-
merce data, has experienced competition from im-
ports at an import to domestic production ratio of 
25 percent or greater; 
‘‘(4) the term ‘labor-intensive manufacture’ 
means a manufacturing activity in which the value 
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of inmate labor constitutes at least 10 percent of the 
estimate unit cost to produce the item by Federal 
Prison Industries; 
‘‘(5) the term ‘manufacture’ means the process 
of fabricating from raw or prepared materials, so as 
to impart to those materials new forms, qualities, 
properties, and combinations; 
‘‘(6) the term ‘reasonable share of the market’ 
means a share of the total purchases by the Federal 
departments and agencies, as reported to the Fed-
eral Procurement Data System for— 
‘‘(A) any specific product during the 3 pre-
ceding fiscal years, that does not exceed 20 per-
cent of the Federal market for the specific 
product; and 
‘‘(B) any specific service during the 3 pre-
ceding fiscal years, that does not exceed 5 per-
cent of the Federal market for the specific serv-
ice; and 
‘‘(7) the term ‘services’ has the meaning given 
the term ‘service contract’ by section 37.101 of the 
Federal Acquisition Regulation (48 CFR 36.102), as 
in effect on July 1, 2010.’’. 
SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES. 
(a) FEDERAL ACQUISITION REGULATION.— 
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(1) PROPOSED REVISIONS.—Proposed revisions 
to the Governmentwide Federal Acquisition Regula-
tion to implement the amendments made by this Act 
shall be published not later than 60 days after the 
date of the enactment of this Act and provide not 
less than 60 days for public comment. 
(2) FINAL
REGULATIONS.—Final regulations 
shall be published not later than 180 days after the 
date of the enactment of this Act and shall be effec-
tive on the date that is 30 days after the date of 
publication. 
(3) PUBLIC
PARTICIPATION.—The proposed 
regulations required by subsection (a) and the final 
regulations required by subsection (b) shall afford 
an opportunity for public participation in accordance 
with section 22 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 418b). 
(b) BOARD OF DIRECTORS.— 
(1) IN GENERAL.—The Board of Directors of 
Federal Prison Industries shall issue regulations de-
fining the terms specified in paragraph (2). 
(2) TERMS TO BE DEFINED.—The Board of Di-
rectors shall issue regulations for the following 
terms: 
(A) Prison-made product. 
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(B) Prison-furnished service. 
(C) Specific product. 
(D) Specific service. 
(3) SCHEDULE
FOR
REGULATORY
DEFINI-
TIONS.— 
(A) Proposed regulations relating to the 
matter described in subsection (b)(2) shall be 
published not later than 60 days after the date 
of enactment of this Act and provide not less 
than 60 days for public comment. 
(B) Final regulations relating to the mat-
ters described in subsection (b)(2) shall be pub-
lished not less than 180 days after the date of 
enactment of this Act and shall be effective on 
the date that is 30 days after the date of publi-
cation. 
(4) ENHANCED
OPPORTUNITIES
FOR
PUBLIC 
PARTICIPATION AND SCRUTINY.— 
(A) ADMINISTRATIVE PROCEDURE ACT.— 
Regulations issued by the Board of Directors 
shall be subject to notice and comment rule-
making pursuant to section 553 of title 5, 
United States Code. Unless determined wholly 
impracticable or unnecessary by the Board of 
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Directors, the public shall be afforded 60 days 
for comment on proposed regulations. 
(B) ENHANCED
OUTREACH.—The Board 
of Directors shall use means designed to most 
effectively solicit public comment on proposed 
regulations, procedures, and policies and to in-
form the affected public of final regulations, 
procedures, and policies. 
(C) OPEN
MEETING
PROCESSES.—The 
Board of Directors shall take all actions relat-
ing to the adoption of regulations, operating 
procedures, guidelines, and any other matter re-
lating to the governance and operation of Fed-
eral Prison Industries based on deliberations 
and a recorded vote conducted during a meeting 
open to the public, unless closed pursuant to 
section 552(b) of title 5, United States Code. 
(c) SECRETARY OF LABOR.— 
(1) SCHEDULE
FOR
REGULATORY
ACTION.— 
Upon receipt of a request from the Federal Prison 
Industries Board of Directors, pursuant to section 
11(d)(2), to establish an inmate training wage pur-
suant to section 14(a) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 214(a)), the Secretary of 
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Labor, in consultation with the Attorney General, 
shall issue— 
(A) an advanced notice of proposed rule-
making within 60 days; 
(B) an interim regulation with concurrent 
request for public comments within 180 days; 
and 
(C) a final regulation within 365 days. 
(2) ALTERNATIVE
TO
TIMELY
ISSUANCE.—In 
the event that the Secretary of Labor fails to issue 
an interim inmate training wage by the date re-
quired by paragraph (1)(B), the Federal Prison In-
dustries Board of Directors may prescribe an in-
terim inmate training wage, which shall be in an 
amount not less than 50 percent of the amount of 
the minimum wage prescribed pursuant to section 
6(a)(1) of such Act (29 U.S.C. 206(a)(1)). 
(3) CONTINUED
USE
OF
INTERIM
INMATE 
TRAINING WAGE.— 
(A) The interim inmate training wage 
issued pursuant to paragraph (1)(B) or pre-
scribed under paragraph (2) shall remain in ef-
fect until the effective date of a final regulation, 
issued pursuant to paragraph (1)(C). 
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(B) An eligible entity having an approved 
agreement with Federal Prison Industries pur-
suant to section 4124b of title 18, United 
States Code, may continue to pay participating 
inmates at the wages prescribed in the agree-
ment for the duration of the agreement, if those 
wages comply with the standards of the interim 
inmate training wage issued pursuant to para-
graph (1)(B) or prescribed under paragraph 
(2). 
(4) EXISTING
AGREEMENTS
WITH
NONCON-
FORMING WAGES.—Any for-profit business concern 
having an agreement with Federal Prison Industries 
in effect on the date of enactment of this Act, under 
which Federal inmates are furnishing services that 
are being introduced into the commercial market, 
may continue to pay wages at rates specified in the 
agreement for the duration of the term of such 
agreement. 
SEC. 18. RULES OF CONSTRUCTION. 
(a) AGENCY BID PROTESTS.—Subsection (e) of sec-
tion 4124 of title 18, United States Code, as amended by 
section 2, is not intended to alter any rights of any offeror 
other than Federal Prison Industries to file a bid protest 
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in accordance with other law or regulation in effect on the 
date of the enactment of this Act. 
(b) JAVITS-WAGNER-O’DAY ACT.—Nothing in this 
Act is intended to modify the Javits-Wagner-O’Day Act 
(41 U.S.C. 46 et seq.). 
SEC. 19. EFFECTIVE DATE AND APPLICABILITY. 
(a) EFFECTIVE DATE.—Except as provided in sub-
section (b), this Act and the amendments made by this 
Act shall take effect on the date of enactment of this Act. 
(b) APPLICABILITY.—Section 4124 of title 18, United 
States Code, as amended by section 2, shall apply to any 
requirement for a product or service offered by Federal 
Prison Industries needed by a Federal department or 
agency after the effective date of the final regulations 
issued pursuant to section 17(a)(2), or after September 
30, 2012, whichever is earlier. 
SEC. 20. CLERICAL AMENDMENTS. 
The table of sections for chapter 307 of title 18, 
United States Code, is amended— 
(1) by amending the item relating to section 
4121 to read as follows: 
‘‘4121. Federal Prison Industries; Board of Directors: executive management.’’; 
(2) by amending the item relating to section 
4124 to read as follows: 
‘‘4124. Governmentwide procurement policy relating to purchases from Federal 
Prison Industries.’’; 
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(3) by inserting after the item relating to sec-
tion 4124 the following new items: 
‘‘4124a. Additional inmate work opportunities through public service activities. 
‘‘4124b. Re-entry employment preparation through work-based training and ap-
prenticeship.’’; 
(4) by amending the item relating to section 
4127 to read as follows: 
‘‘4127. Federal Prison Industries report to Congress.’’; 
and 
(5) by adding at the end the following new 
items: 
‘‘4130. Construction of provisions. 
‘‘4131. Definitions.’’. 
Æ 
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