SOUTHERN AUTOMOTIVE WHOLESALERS INC.
597 NORTH SAGINAW STREET
PONTIAC MI 48342-1468
TEL 248-335-5555 FAX 248-335-1564

February 23, 1999

Manager, Planning, Research and Activation
Attn: Robert C Grieser
Federal Prison Industries, Inc.
320 First Street N.W.
Washington, D.C. 20534

RE: Competitive Impact Study of FPI's
Proposed Production of Engine Electrical Components

Dear Mr. Grieser:

I received a copy of the above report and your letter dated February 10, 1999, on Thursday February 18, 1999. Upon reading it I was astounded by both the intention of the proposal, and the inaccuracy of the information it contained regarding Southern Automotive Wholesalers Inc. I will kindly supply you with the correct information as follows:

* Currently Southern Automotive employs 16 full time employees and 5 - 8 temporary workers.

* 2/1/95 - 2/24/99 Southern Automotive has been awarded 973 Government Contracts. 356 fell within the FSC 2920, or 36.58%. However, this accounted for an average of 74.69% of revenues from government sales. FSC 2920 accounted for 52.35% of total revenues for Southern Automotive Wholesalers Inc during that time period.

TOTAL FSC FSC 2920

Does the inaccuracy of the Southern Automotive numbers in your report reflect the accuracy throughout? As you can see approval of FPI'S proposal would surely put Southern Automotive Wholesalers Inc. out of business, which directly violates numbers 5, 7, and 8 of FPI's Mission Statement. It proves false FPI's last statement of the Executive Summary on page ii, that "It is anticipated that no civilian jobs within the domestic industry will be lost as a result of this initiative."

The report mentions a "request for data" (Appendix I), I would like to know why Southern Automotive Wholesalers Inc. was not included in this quest? Southern Automotive would be most affected by this proposal as stated on page 19. Why were we not be included?

Mentioned several times in the report are "preliminary discussions with Prestolite Electric" ( pages ii, 2,) which is major competitor of ours, a much larger company that we, a small business, compete with. We are currently bidding against them on several large government contracts. Is this the company that FPI "is exploring opportunities to partner with" as stated on page 2? I am sure that Prestolite would like to see their competition eliminated, and no longer even need to bid on jobs against other businesses, since they are partnered with FPI, which would be the mandatory source of supply for the U S Government, should this proposal be approved. What would this do to the price of parts the government buys? How would eliminating free enterprise benefit the government? Would FPI use Prestolite as a subcontractor?

The additional jobs this proposal may or may not create for prisoners does not warrant the effects it would surely have on Southern Automotive Wholesalers and it's community, which is designated as a Federal Labor Surplus Area. We have been a U S Government contractor in good standing for 19 years, hiring Veterans through the VET100 Program, disadvantaged workers through the Michigan Unemployment Agency and local residents of our community and the surrounding areas. We are confident that the Board of Directors will see through the obvious conflict of interest and reported inaccuracies.

Respectfully,

Thomas Tyson
President
Southern Automotive Wholesalers Inc.

CC: see attached

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