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that it offers for sale to government agencies and not-for-
profit organizations. The catalog shall be periodically re-
vised as products and services are added or deleted.’’.
(b) CONFORMING AMENDMENT.—Section 1761(c)(1)
of such title is amended by striking ‘‘non-Federal’’.
(c) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 307 of such title is amended
by striking the items relating to sections 4121, 4122, and
4123 and inserting the following:
‘‘4121. Federal Prison Industries: status, mission, and management.
‘‘4122. Federal Prison Industries: operating objectives, standards, and require-
ments.
‘‘4123. Federal Prison Industries: transactions authorized.’’.
SEC. 4. AUTHORITY FOR FEDERAL AGENCIES TO PUR-
CHASE FROM FEDERAL PRISON INDUSTRIES
AND THE AUTHORITY FOR THE ATTORNEY
GENERAL TO CREATE A PILOT PROGRAM TO
TEST THE ELIMINATION OF THE MANDATORY
SOURCE PREFERENCE.
(a) IN GENERAL.—Section 4124 of title 18, United
States Code, is amended—
(1) in subsection (a), by adding at the end the
following: ‘‘The mandatory source preference in this
section does not apply to services.’’;
(2) by amending subsection (c) to read as fol-
lows:
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‘‘(c) Each Federal department or agency shall report
purchases from Federal Prison Industries to the Federal
Procurement Data System (referred to in section 6(d)(4)
of the Office of Federal Procurement Policy Act (41
U.S.C. 405(d)(4))) in the same manner as it reports to
such System any acquisition in an amount in excess of
the simplified acquisition threshold (as defined in section
4(11) of that Act (41 U.S.C. 403(11))).’’; and
(3) by amending subsection (d) to read as fol-
lows:
‘‘(d)(1) The head of a Federal department or agency
may purchase directly from Federal Prison Industries any
of the following:
‘‘(A) Any products with respect to which the re-
quirement in subsection (a) has, under any author-
ity, been suspended, waived, or not invoked.
‘‘(B) Any services.
‘‘(2) A purchase under this subsection may be made
in quantity and by any method that is determined appro-
priate by the head of the agency making the purchase
without regard to any provision of law or regulation.’’.
(b) Chapter 307 of title 18, United States Code, is
amended by adding at the end the following:
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‘‘§ 4130. Creation of pilot program to test the elimi-
nation of mandatory source preference in
Federal Prison Industries programs
‘‘(a) CREATION OF PILOT PROGRAM.—Not later than
180 days after the enactment of this section, the Attorney
General shall implement a pilot program to test the effect
of changes to the mandatory source preference of Federal
Prison Industries described in section 4124. The pilot pro-
gram shall conform to the requirements of this subsection
(a).
‘‘(1) PILOT PROGRAM TO COVER A DESIGNATED
SPECIFIC
PRODUCT
OR
PRODUCTS.—The Attorney
General shall designate up to five specific product or
products, identified by Standard Industrial Product
Code (as published by the Office of Management
and Budget), each from a separate industry cat-
egory, which Federal Prison Industries, on the date
of enactment of this section, produces and sells to
the several Federal departments and agencies and
other Government institutions of the United States,
pursuant to the mandatory source preference de-
scribed in section 4124. The pilot program created
by this section shall be implemented with respect to
such designated Federal Prison Industries product
or products.
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‘‘(2) ELIMINATION
OF
MANDATORY
SOURCE
PREFERENCE WITH RESPECT TO DESIGNATED PROD-
UCT OR PRODUCTS IN THE PILOT PROGRAM.—In the
pilot program created by this section, the mandatory
source preference of Federal Prison Industries pur-
suant to section 4124, with respect to the designated
product or products described in paragraph (1),
shall be eliminated.
‘‘(b) PERMANENT ELIMINATION
OF MANDATORY
SOURCE PREFERENCE UPON SATISFACTION OF CERTAIN
CONDITIONS IN PILOT PROGRAM.—The Attorney General
shall review the results of the pilot program created by
this section, and shall determine whether the elimination
of the mandatory source preference of Federal Prison In-
dustries pursuant to section 4142, with respect to the des-
ignated product or products in the pilot program, shall
be made permanent or shall be terminated, all in accord-
ance with this subsection (b).
‘‘(1) ATTORNEY
GENERAL’S
DETERMINATION
REGARDING EMPLOYMENT OF ELIGIBLE INMATES.—
As of the date that is five years after the date of
enactment of this section, the Attorney General shall
determine how many eligible inmates are in fact em-
ployed by Federal Prison Industries in the manufac-
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ture or sale of the designated product or products in
the pilot program created by this section.
‘‘(2) EFFECT OF DETERMINATION THAT PILOT
PROGRAM HAS MAINTAINED OR INCREASED INMATE
EMPLOYMENT.—If the Attorney General determines
pursuant to paragraph (1) that an equal or greater
number of the eligible inmates described in para-
graph (1) are employed in the manufacture and sale
of the designated product or products than were so
employed on the date of enactment of this section,
then the elimination of the mandatory source pref-
erence of Federal Prison Industries pursuant to sec-
tion 4124, with respect to the designated product or
products in the pilot program, shall be made perma-
nent with respect to such product or products. In
this event, the Attorney General shall submit a re-
port to the Congress, containing recommendations
for continuation of the pilot program to additional
periods as described in section 4130(a)(1).
‘‘(3) EFFECT OF DETERMINATION THAT PILOT
PROGRAM HAS REDUCED INMATE EMPLOYMENT.—If
the Attorney General determines pursuant to para-
graph (1) that a lesser number of the eligible in-
mates described in paragraph (1) are employed in
the manufacture and sale of the designated product
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or products than were so employed on the date of
enactment of this section, then the pilot program
created by this section may, at the discretion of the
Attorney General, be terminated with respect to
such product or products. In the event of such ter-
mination, the mandatory source preference of Fed-
eral Prison Industries pursuant to section 4124 shall
be re-implemented with respect to the designated
product or products. In this event, the Attorney
General shall submit a report to the Congress, with-
in 180 days after such determination, advising the
Congress of the termination of the pilot program,
and containing recommendations for continuation of
the pilot program to additional products and for ad-
ditional periods as described in section 4130(a)(1).
‘‘(4) UTILIZATION
OF
OTHER
REPORTS.—In
preparing the reports described in paragraphs (2)
and (3), the Attorney General shall pay due regard
to any reports prepared during the existence of the
pilot program by the Comptroller General and by the
board of directors of Federal Prison Industries pur-
suant to section 4127.
‘‘(c) AUTHORITY FOR EARLY SUSPENSION OR TER-
MINATION.—Notwithstanding subsection (b), the Attorney
General may suspend or terminate the pilot program cre-
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ated by this section at any time, in whole or in part, if
the Attorney General determines that such pilot program
threatens the stability or security of any Federal correc-
tional facility.
‘‘(d) NO EFFECT ON EXISTING CONTRACTS OF FED-
ERAL PRISON INDUSTRIES.— Nothing in this section shall
be construed to amend or impair any contract between
Federal Prison Industries and any private person or com-
pany in effect at the time of commencement of the pilot
program created by this section.’’
SEC. 5. PERIODIC EVALUATION AND REPORTS.
(a) IN GENERAL.—Section 4127 of title 18, United
States Code, is amended to read as follows:
‘‘§ 4127. Periodic evaluation and reports
‘‘(a) EVALUATION BY GAO.—
‘‘(1) MATTERS EVALUATED.—The Comptroller
General shall provide for an independent evaluation
of the operations of Federal Prison Industries to be
carried out each year. The matters evaluated shall
include the following:
‘‘(A) The overall success of the operations.
‘‘(B) The effects that any reduction in the
purchases made under section 4124(a) has on
the viability of Federal Prison Industries.
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‘‘(C) The extent to which Federal Prison
Industries can successfully contract with private
companies without adversely affecting domestic
companies or workers.
‘‘(D) The current status and effects of the
pilot program or programs described in section
4130.
‘‘(2) VIEWS INCLUDED.—The Comptroller Gen-
eral shall ensure that, in the development of appro-
priate methodologies for the evaluation under para-
graph (1), the views of the Foreign Labor Substitute
Panel, private industry, organized labor, the Board
of Directors of Federal Prison Industries, and the
public are solicited.
‘‘(3) REPORT.—Not later than March 31 of
each fiscal year, the Comptroller General shall sub-
mit to Congress a report on the evaluation of the op-
erations of Federal Prison Industries that was car-
ried out under paragraph (1) for the preceding fiscal
year. The report for a fiscal year shall, at a min-
imum, include the following:
‘‘(A) The evaluation.
‘‘(B) Any concerns raised about any ad-
verse effects on domestic companies or workers,
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together with any actions taken in regard to the
concerns.
‘‘(C) The extent to which Federal Prison
Industries maintained at least a 25 percent em-
ployment rate for eligible inmate workers.
‘‘(D) The extent to which Federal Prison
Industries conducted its operations on a finan-
cially self-sustaining basis.
‘‘(E) Any recommended legislation to im-
prove the administration of this chapter or the
effects of the administration of this chapter, in-
cluding any recommended legislation necessary
to authorize remedial actions regarding—
‘‘(i) any conduct of the operations of
Federal Prison Industries in a manner
that adversely affects domestic companies
or workers (excluding the effects of normal
competitive business practices);
‘‘(ii) any failure of Federal Prison In-
dustries to maintain at least a 25 percent
employment rate for eligible inmate work-
ers; or
‘‘(iii) any failure of Federal Prison In-
dustries to conduct its operations on a fi-
nancially self-sustaining basis.
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‘‘(b) ANNUAL REPORT BY BOARD OF DIRECTORS.—
‘‘(1) IN GENERAL.—The Board of Directors of
Federal Prison Industries shall, each year, report
under section 9106 of title 31 on the conduct of the
business of Federal Prison Industries and the condi-
tion of its funds during the preceding fiscal year.
‘‘(2) MATTERS INCLUDED.—In addition to the
matters required by section 9106 of title 31, and
such other matters as the Board considers appro-
priate, each report for a fiscal year under paragraph
(1) shall include the following:
‘‘(A) A statement of the amount of obliga-
tions issued under section 4129(a)(1) of this
title during that fiscal year.
‘‘(B) An estimate of the amount of obliga-
tions that will be issued under that section dur-
ing the following fiscal year.
‘‘(C) An analysis of—
‘‘(i) the total sales by Federal Prison
Industries for each product and service
sold to Federal agencies and to private
United States companies;
‘‘(ii) the total purchases by each Fed-
eral agency of each product and service;
and
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‘‘(iii) the Federal Prison Industries
share of the total Federal Government pur-
chases by product and service.
‘‘(D) An analysis of the inmate workforce,
including—
‘‘(i) the number of inmates employed;
‘‘(ii) the number of inmates used to
produce products or perform services sold
to private United States companies;
‘‘(iii) the number and percentage of
employed inmates, categorized by term of
incarceration; and
‘‘(iv) the various hourly wages paid to
inmates engaged in the production of the
various products and the performance of
services authorized for production and sale
to Federal agencies and to private United
States companies.
‘‘(E) Information concerning any employ-
ment obtained by former inmates upon release
that is useful in determining whether the em-
ployment provided by Federal Prison Industries
during incarceration provided those former in-
mates with knowledge and skill in a trade or oc-