The Federal Prison Industries, Inc. (FPI), is a wholly owned government corporation that employs offenders incarcerated in correctional facilities operated by the Department of Justice's (DOJ's) Federal Bureau of Prisons (BOP). The FPI manufactures products and provides services that are primarily sold to executive agencies in the federal government. The FPI is economically self-sustaining and does not receive direct funding through congressional appropriations. It was created to serve as a means for managing, training, and rehabilitating inmates through employment in prison industry jobs. In the past, all federal departments and agencies were required to purchase products from the FPI. This requirement is sometimes referred to as the FPI's "mandatory source clause," or "sole source preference." The FPI's mandatory source clause has been the focus of congressional scrutiny, in part because some policymakers believe that it has a deleterious effect on private vendors' ability to secure federal contracts. However, the FPI contends that the mandatory source clause is necessary to overcome inefficiencies written into its authorizing legislation and associated with producing products in a prison environment. The mandatory source clause, according to the FPI, allows it to generate revenue and provide work opportunities for inmates. Since 2001, Congress has passed legislation to modify the FPI's mandatory source clause, thereby subjecting the FPI to more competition from private vendors. In addition, legislation has been introduced over the past several congresses that would eliminate the FPI's mandatory source clause, thereby requiring the FPI to compete with private vendors for all federal contracts. Furthermore, Congress continues to hold hearings on the FPI, its effect on the private sector, and the effect changes to the mandatory source clause have had on the FPI's sales. This report provides an analysis of the FPI's sales from FY1993-FY2013. While this report focuses on how the FPI's sales changed both before and after changes to the FPI's mandatory source clause, it not possible to definitively determine cause and effect with the data used to conduct this analysis. Some of the limitations of this analysis are discussed in the "Concluding Thoughts" section of this report. This report does not discuss the debate over the FPI's mandatory source clause; the debate over what, if anything, the FPI should be producing; nor how a prison work assignment might contribute to reducing recidivism and contribute to successful reentry. The FPI has 78 factories operating in 62 federal prisons representing five different business segments: clothing and textiles; electronics; office furniture; recycling; and services (which includes data entry and encoding). The FPI operates as a revolving fund and does not receive an annual appropriation. A majority of the FPI's revenues is derived from its sale of products and services to federal departments, agencies, and bureaus. Generated revenues are used to cover operating expenses such as staff salaries, inmate wages, and the cost of raw materials and supplies, and capital expenditures. Between FY1993 and FY2013, the FPI sold products and services to 59 different federal departments, agencies, offices, and boards; and, during this time period, the Department of Defense (DOD) was the FPI's biggest customer. DOD's proportion of the FPI's sales to government agencies ranged from 51% in FY2010 to 68% in FY2001. On average, DOD accounted for 61% of the FPI's sales to government agencies each fiscal year between FY1993 and FY2013. Also, between FY1993 and FY2013, the FPI sold products and services in 160 different product and service codes (PSCs). Despite the variety of products and services offered by the FPI, a majority of its sales involved seven products (hereinafter, these seven products will be referred to as the "FPI's core products"): cable, cord, and wire assemblies (PSC 5995); miscellaneous electrical power/distribution equipment (PSC 6150); household furniture (PSC 7105); office furniture (PSC 7110); cabinets, lockers, bins, and shelving (PSC 7125); household furnishings (PSC 7210); and clothing, special purpose (PSC 8415). Between FY1993 and FY2013, sales in the FPI's core products accounted for, on average, 62% of the FPI's sales of products and services. Sales of the FPI's core products ranged from a low of 50% of the FPI's sales of products and services in FY2006 to a high of 73% in FY1993. Under current law and pursuant to subpart 8.6 of the Federal Acquisition Regulation (FAR) federal agencies are generally required to procure products offered by the FPI, unless authorized by the FPI to solicit bids from the private sector. The requirement for federal agencies to purchase products from the FPI is commonly referred to as the "mandatory source clause." The FPI does not have the same level of preference when it comes to services . Instead, the language of the FAR encourages agencies to buy services from the FPI. It is the mandatory source clause, and its effect on private businesses, that has drawn controversy over the years. Throughout the 1990s, Congress placed more scrutiny on the requirement for federal agencies to purchase products from the FPI if they were available in the FPI's Schedule of Products, met the agency's delivery schedule and quality requirements, and were not above market price. Congress's increased interest in the FPI's mandatory source clause was driven, in part, by the concerns of private businesses that the FPI was monopolizing the federal market and taking jobs from law-abiding citizens. Since 2001, Congress has made a series of changes to the FPI's mandatory source clause in response to these concerns. The National Defense Authorization Act for FY2002 ( P.L. 107-107 , hereinafter "FY2002 NDAA") requires DOD to use competitive procedures for the procurement of a product if DOD determines that the FPI's product is not comparable in price, quality, and time of delivery to products available from the private sector. The Bob Stump National Defense Authorization Act for FY2003 ( P.L. 107-314 ) codified this requirement at 10 U.S.C. §2410n. The Consolidated Appropriations Act of 2004 ( P.L. 108-199 , hereinafter "FY2004 Omnibus") requires all federal agencies to use competitive procedures for the procurement of a product if the agency determines that the FPI's product is not comparable in price, quality, and time of delivery to products available from the private sector. The Consolidated Appropriations Act, 2005 ( P.L. 108-447 ) permanently extended this provision. The National Defense Authorization Act for Fiscal Year 2008 ( P.L. 110-181 , hereinafter "FY2008 NDAA") requires DOD compete any product in which DOD determines the FPI's market share is more than 5%. The FPI can submit a bid if the procurement is competed. In cases where the FPI's market share is less than 5%, DOD has to follow the procurement procedures pursuant to 10 U.S.C. §2410n. The analysis presented in this report focuses on the FPI's sales both before and after the changes Congress made to the FPI's mandatory source clause. For sales to civilian agencies, the analysis focuses on the period before (FY1993-FY2003) and after FY2004 (FY2004-FY2013), when Congress required all civilian agencies to competitively procure products and services from the FPI if they did not meet their needs in terms of price, quality, and time of delivery. For the FPI's sales to DOD, the analysis focuses on three distinct periods: FY1993-FY2001, the period before changes to the way DOD procured products from the FPI; FY2002-FY2007, the period when DOD had to competitively procure products from the FPI if those products did not meet their needs in terms of price, quality, and time of delivery; and FY2008-FY2013, when DOD had to compete contracts for products in which the FPI had more than 5% of the market. The FPI is a self-sustaining wholly government owned corporation, meaning that the FPI's ability to provide work opportunities for federal inmates is contingent on its ability to generate revenue through sales to other federal entities. Data show that there has been a significant decrease in both the FPI's nominal and inflation-adjusted sales since FY2009 (see Figure 1 ). Data on the FPI's nominal sales show a period of relatively steady growth between FY1993 and FY2009, followed by declining sales in each of the last four fiscal years. The FPI's nominal sales in FY2013 were $533 million; approximately $128 million higher than the FPI's nominal sales of $405 million in FY1993. However, the FPI's total nominal sales in FY2013 were $352 million below the peak of $885 million in nominal sales in FY2009. When adjusting for inflation, the FPI's sales peaked in FY2004. The FPI's inflation-adjusted sales in FY2013 were the lowest they have been during the period examined in this report. As shown in Figure 1 , the FPI's total nominal sales are somewhat volatile. There were fiscal years in which the FPI's sales decreased before peaking in FY2009 (for example, the FPI's sales decreased in both FY2005 and FY2006). Despite some fluctuations in the FPI's year-by-year sales, two distinct trends emerge from the data presented in Figure 1 : the FPI's sales increased from FY1993 to FY2009, and they have been decreasing since. On average, the FPI's nominal sales increased 5% each fiscal year between FY1993 and FY2009.