HR 2551 IH

To amend title 18, United States Code, to require Federal Prison Industries to compete for its Federal contracts to minimize unfair competition with private firms (depriving law-abiding workers of job opportunities), to save taxpayer dollars by empowering Federal contracting officers to be able to acquire commercial products that better meet agencies' needs, more quickly and at less cost without having to obtain permission from Federal Prison Industries, to further empower contracting officers to compel Federal Prison Industries to fully perform its contract obligations to the same extent as all other contractors, and for other purposes.

Mr. HOEKSTRA (for himself, Mr. FRANK of Massachusetts, Mr. COLLINS, Mrs. MALONEY of New York, Mr. HILLEARY, Mr. COBLE, Mr. KENNEDY of Rhode Island, Mr. SENSENBRENNER, Mr. CLAY, Mr. CUNNINGHAM, Mr. CONYERS, Mr. CHAMBLISS, Mr. ROEMER, Mr. SMITH of Texas, Mr. FROST, Mr. BALLENGER, Mr. EDWARDS, Mr. GILMAN, Mr. STUMP, Mr. BARCIA, Mr. MCINTOSH, Mr. DOYLE, Mr. SOUDER, Ms. STABENOW, Mr. EHLERS, Mr. WEYGAND, Mr. MANZULLO, Mr. BERRY, Mrs. CUBIN, Mr. FILNER, Mr. UPTON, Ms. WOOLSEY, Mr. CAMP, Mr. KLINK, Mr. EWING, Mr. DEAL of Georgia, Mr. KNOLLENBERG, Mr. NETHERCUTT, Mr. NORWOOD, Mr. MCKEON, Mr. SCHAFFER, Mr. TANCREDO, Mr. NEY, Mr. ROYCE, Mrs. MYRICK, Mr. BARTLETT of Maryland, Mr. COBURN, Mr. LINDER, Mr. SHADEGG, Mr. SAM JOHNSON of Texas, Mr. KINGSTON, Mr. HOSTETTLER, Mr. TERRY, and Mr. DUNCAN) introduced the following bill; which was referred to the Committee on the Judiciary

To amend title 18, United States Code, to require Federal Prison Industries to compete for its Federal contracts to minimize unfair competition with private firms (depriving law-abiding workers of job opportunities), to save taxpayer dollars by empowering Federal contracting officers to be able to acquire commercial products that better meet agencies' needs, more quickly and at less cost without having to obtain permission from Federal Prison Industries, to further empower contracting officers to compel Federal Prison Industries to fully perform its contract obligations to the same extent as all other contractors, and for other purposes.

• Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

• This Act may be cited as the `Federal Prison Industries Competition in Contracting Act of 1999'.

SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELATING TO PURCHASES FROM FEDERAL PRISON INDUSTRIES.

• Section 4124 of title 18, United States Code, is amended to read as follows:

`Sec. 4124. Governmentwide procurement policy relating to purchases from Federal Prison Industries

• `(a) IN GENERAL- Purchases from Federal Prison Industries, Incorporated, a wholly owned Government corporation, as defined in section 9101(3)(E) of title 31, may be made by a Federal department or agency only in accordance with this section.

• `(b) SOLICITATION AND EVALUATION OF OFFERS AND CONTRACT AWARDS- (1) When a procurement activity of a Federal department or agency has a requirement for a specific product or service that is authorized to be offered for sale by Federal Prison Industries, in accordance with section 4122 of this title, and is listed in the catalog referred to in subsection (g), the procurement activity shall solicit an offer from Federal Prison Industries, if the purchase is expected to be in excess of the micro-purchase threshold (as defined by section 32(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 428(f))).

• `(2) A contract award for such product or service shall be made using competitive procedures in accordance with the specifications and evaluation factors specified in the solicitation (or other request for offers), unless a determination is made by the Attorney General pursuant to paragraph (3).

• `(3) The procurement activity shall negotiate with Federal Prison Industries on a noncompetitive basis for the award of a contract if the Attorney General determines that--

• `(A) Federal Prison Industries cannot reasonably expect to receive the contract award on a competitive basis; and

• `(B) the contract award is necessary to maintain work opportunities otherwise unavailable at the penal or correctional facility at which the contract is to be performed to prevent circumstances that could reasonably be expected to significantly endanger the safe and effective administration of such facility.

• `(4) A contract award shall be made with Federal Prison Industries if the contracting officer for the procurement activity determines that--

• `(A) the prison-made product or service to be furnished will meet the requirements of the procurement activity (including any applicable prequalification requirements and all specified commercial or governmental standards pertaining to quality, testing, safety, serviceability, and warranties);

• `(B) timely performance of the contract can be reasonably expected; and

• `(C) the contract price does not exceed a current market price.

• `(5) A determination by the Attorney General pursuant to paragraph (3) shall be--

• `(A) supported by specific findings by the warden of the penal or correctional institution at which a Federal Prison Industries workshop is scheduled to perform the contract;

• `(B) supported by specific findings by Federal Prison Industries regarding why it does not expect to win the contract on a competitive basis; and

• `(C) made and reported in the same manner as a determination made pursuant to section 303(c)(7)

of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)(7)).

• `(6) If the Attorney General has not made the determination described in paragraph (3) within 30 days after Federal Prison Industries has been informed of a contracting opportunity by a procurement activity, the procurement activity shall conduct a procurement for the product in accordance with the procedures generally applicable to such procurements by the procurement activity.

• `(c) COMPETITIVE OFFERS FROM FEDERAL PRISON INDUSTRIES- A timely offer made by Federal Prison Industries shall be considered for award in accordance with the applicable specification and evaluation factors specified in any solicitation (or other request for offers).

• `(d) PERFORMANCE BY FEDERAL PRISON INDUSTRIES- Federal Prison Industries shall perform its contractual obligations under a contract awarded by a Federal department or agency to the same extent as any other contractor.

• `(e) FINALITY OF CONTRACTING OFFICER'S DECISION- (1) A decision by a contracting officer regarding the award of a contract to Federal Prison Industries or relating to the performance of such contract shall be final, unless reversed on appeal pursuant to paragraph (2) or (3).

• `(2) The Chief Executive Officer of Federal Prison Industries may appeal to the head of a Federal department or agency a decision by a contracting officer not to award a contract to Federal Prison Industries pursuant to subsection (b)(4). The decision of the head of a Federal department or agency on appeal shall be final.

• `(3) A dispute between Federal Prison Industries and a procurement activity regarding performance of a contract shall be subject to--

• `(A) alternative means of dispute resolution pursuant to subchapter IV of title 5; or

• `(B) final resolution by the board of contract appeals having jurisdiction over the procurement activity's contract performance disputes pursuant to the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.).

• `(f) REPORTING OF PURCHASES- Each Federal department or agency shall report purchases from Federal Prison Industries to the Federal Procurement Data System (as 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 by section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11))).

• `(g) CATALOG OF PRODUCTS- Federal Prison Industries shall publish and maintain a catalog of all specific products and services that it is authorized to offer for sale. Such catalog shall be periodically revised as products and services are added or deleted by its board of directors (in accordance with section 4122(b) of this title).'.

SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION PROPOSALS BY FEDERAL PRISON INDUSTRIES.

• Section 4122(b) of title 18, United States Code, is amended--

• (1) by redesignating paragraph (6) as paragraph (10); and

• (2) by striking paragraphs (4) and (5) and inserting the following paragraphs:

• `(4) A decision to authorize Federal Prison Industries to offer a new specific product or service or to expand the production of an existing product or service shall be made by its board of directors in conformance with the requirements of subsections (b), (c), (d), and (e) of section 553 of title 5, and this chapter.

• `(5)(A) Whenever Federal Prison Industries proposes to offer for sale a new specific product or service or to expand production of a currently authorized product or service, the Chief Operating Officer of Federal Prison Industries shall submit an appropriate proposal to the board of directors and obtain the board's approval before initiating any such expansion. The proposal submitted to the board shall include a detailed analysis of the probable impact of the proposed expansion of inmate-work activities by Federal Prison Industries on private sector firms and their noninmate workers.

• `(B)(i) The analysis required by subparagraph (A) shall be performed by an interagency team on a reimbursable basis or by a private contractor paid by Federal Prison Industries.

• `(ii) If the analysis is to be performed by an interagency team, such team shall be led by the Federal Procurement Data Center with representatives of the Department of Labor, the Department of Commerce, and the Small Business Administration.

• `(iii) If the analysis is to be performed by a private contractor, the selection of the contractor and the administration of the contract shall be conducted by one of the entities references in clause (ii) as an independent executive agent for the board of directors.

• `(C) The analysis required by subparagraph (A) shall identify and consider--

• `(i) the number of vendors that currently meet the requirements of the Federal Government for the specific product or service;

• `(ii) the proportion of the Federal Government market for the specific product or service currently furnished by small businesses during the previous 3 fiscal years;

• `(iii) the share of the Federal market for the specific product or service projected for Federal Prison Industries for the fiscal year in which production or performance will commence or expand and the subsequent 3 fiscal years;

• `(iv) whether the industry producing the specific product or service in the private sector--

• `(I) has an unemployment rate higher than the national average;

• `(II) has a rate of employment for workers that has consistently shown an increase during the previous 5 years; or

• `(III) has an import to domestic production ratio of 25 percent or greater;

• `(v) the total volume of domestic production during each of the 5 previous years in the industry producing the specific product or service in the private sector;

• `(vi) whether the specific product is an import-sensitive product;

• `(vii) the requirements of the Federal Government and the demands of entities other than the Federal Government for the specific product or service during the previous 3 fiscal years;

• `(viii) the projected growth or decline in the demand of the Federal Government for the specific product or service;

• `(ix) the capability of the projected demand of the Federal Government for the specific product or service to sustain both Federal Prison Industries and private vendors; and

• `(x) whether authorizing the production of the new product or performance of a new service will provide inmates with the maximum opportunity to acquire knowledge and skill in trades and occupations that will provide them with a means of earning a livelihood upon release.

• `(C)(i) The board of directors may not approve a proposal to authorize the production and sale of a new specific product or continued sales of a previously authorized product unless--

• `(I) the product to be furnished is a prison-made product; or

• `(II) the service to be furnished is to be performed by inmate workers.

• `(ii) The board of directors may not approve a proposal to authorize the production and sale of a new prison-made product or to expand production of a currently authorized product if the product is--

• `(I) produced in the private sector by an industry which has reflected during the previous year an unemployment rate above the national average; or

• `(II) an import-sensitive product.

• `(iii) The board of directors may not approve a proposal for inmates to provide a service in which an inmate worker has access to--

• `(I) personal or financial information about individual private citizens, including information relating to such person's real property, however described, without giving prior notice to such persons; or

• `(II) data that is classified, or that will become classified after being merged with other data.

• `(iv)(I) Federal Prison Industries is prohibited from furnishing construction services relating to buildings, structures, or other real property.

• `(II) For purposes of this clause, the term `construction' has the meaning given such term by section 36.102 of the Federal Acquisition Regulation (48 CFR part 36.102), as in effect on January 1, 1999, including the repair, alteration, or maintenance of real property in being.

• `(6) To provide further opportunities for participation by interested parties, the board of directors shall--

• `(A) give additional notice of a proposal to authorize the production and sale of a new product or expand the production of a currently authorized product in a publication designed to most effectively provide notice to private vendors and labor unions representing private sector workers who could reasonably be expected to be affected by approval of the proposal, which notice shall offer to furnish copies of the analysis required by paragraph (5) and shall solicit comment on the analysis;

• `(B) solicit comments on the analysis required by paragraph (5) from trade associations representing vendors and labor unions representing private sector workers who could reasonably be expected to be affected by approval of the proposal to authorize the production and sale of a new product or expand the production of a currently authorized product; and

• `(C) afford an opportunity, on request, for a representative of an established trade association, labor union, or other representatives of private industry to present comments on the proposal directly to the board of directors.

• `(7) The board of directors shall be provided copies of all comments received on the expansion proposal.

• `(8) Based on the comments received on the initial expansion proposal, the Chief Operating Officer of Federal Prison Industries may provide the board of directors a revised expansion proposal. If such revised proposal provides for expansion of inmate work opportunities in an industry different from that initially proposed, such revised proposal shall be subject to the public comment requirements of paragraph (6).

• `(9) The board of directors shall consider a proposal to authorize the sale of a new product or service (or to modify the volume of sales for a currently authorized product or service) and take any action with respect to such proposal, during a meeting that is open to the public, unless closed pursuant to section 5526 of title 5.

• `(10) In conformity with the requirements of paragraphs (5) through (9) of this subsection, the board of directors may--

• `(A) authorize the donation of products produced by Federal industries and available for sale; or

• `(B) authorize the production of a new specific product for donation.'.

SEC. 4. SALES TO PRIVATE SECTOR FIRMS.

• (a) IN GENERAL- In accordance with subsections (a) and (b) of section 1761 of title 18, United States Code, Federal Prison Industries is prohibited from offering products or services as a subcontractor or supplier to a private for-profit business concern, notwithstanding that the product or service being furnished by such concern will ultimately be supplied to the United States Government, the government of the District of Columbia, an agency of a State government or any political subdivision of a State government, or an eligible not-for-profit organization.

• (b) CLARIFYING AMENDMENT- Section 1761 of title 18, United States Code, is amended--

• (1) in subsection (a), by striking `any goods, wares, or merchandise manufactured, produced, mined' and inserting `products manufactured, services furnished, or minerals mined';

• (2) in subsection (a), by striking `any goods, wares, or merchandise manufactured, produced, mined' and inserting `products manufactured, services furnished, or minerals mined'.

SEC. 5. DEDUCTIONS FOR VICTIM RESTITUTION AND OTHER PURPOSES.

• Section 4126 of title 18, United States Code, is amended--

• (1) by redesignating subsections (d), (e), and (f) as subsections (e), (f), and (g); and

• (2) by inserting after subsection (c) the following new subsection:

• `(d) Wages earned by an inmate worker of Federal Prison Industries shall be paid in the name of the inmate worker. Deductions, aggregating to not more than 80 percent of gross wages, shall be taken from the wages due for--

• `(1) applicable taxes (Federal, State, and local);

• `(2) payment of fines and restitution pursuant to court order;

• `(3) payment of additional restitution for victims of the inmate's crimes (at a rate not less than 10 percent of gross wages);

• `(4) allocations for support of the inmate's family pursuant to statute, court order, or agreement with the inmate;

• `(5) allocations to a fund in the inmate's name to facilitate such inmate's assimilation into society, payable at the conclusion of incarceration; and

• `(6) such other deductions as may be specified by the Director of the Bureau of Prisons.'.

SEC. 6. ALLOCATION OF PROFITS TO VOCATIONAL TRAINING.

• (a) Section 4126 of title 18, United States Code (as amended by section 5) is further amended by adding at the end the following new subsection:

• `(h) Not less than 20 percent of the gross profits of the corporation at the end of each fiscal year shall be allocated to fund vocational training for inmates without regard to the type of work activities to which they are assigned.'.

SEC. 7. FEDERAL PRISON INDUSTRIES REPORT TO CONGRESS.

• 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--

• `(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 product and type of service; and

• `(D) the number and disposition of disputes submitted to the heads of the Federal departments and agencies pursuant to section 4124(e) of this title;

• `(4) an analysis of the inmate workforce that includes--

• `(A) the number of inmates employed;

• `(B) the number of inmates utilized to produce products or furnish services sold in the commercial market;

• `(C) the number and percentage of employed inmates by the term of their incarceration; and

• `(D) the various hourly wages paid to inmates 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

• `(5) data concerning employment obtained by former inmates upon release to determine whether the employment provided by Federal Prison Industries 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 report under subsection (a) shall be made available to the public at a price not exceeding the cost of printing the report.'.

SEC. 8. DEFINITIONS.

• Chapter 307 of title 18, United States Code, is amended by adding at the end the following new section:

` 4130. Definitions

• `As used in this chapter--

• `(1) the term `assembly' means the process of uniting or combining articles or components (including ancillary finished components or assemblies) so as to produce a significant change in form or utility, without necessarily changing or altering the component 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 transportation or the furnishing of any ancillary services;

• `(3) the term `import-sensitive product' means a product which, according to Department of Commerce data, has experienced competition from imports at an import to domestic production ratio of 25 percent or greater;

• `(4) the term `labor-intensive manufacture' means a manufacturing activity in the private sector in which the ratio of the value of direct labor to the value of the product prior to shipment exceeds 20 percent;

• `(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 `prison-made products' means specific products that require labor-intensive manufacture or assembly employing Federal prison inmates for not less than 75 percent of the hours of direct labor required for the production of the product;

• `(7) the term `reasonable share of the market' means a share of the total purchases by the Federal departments and agencies, as reported to the Federal Procurement Data System for--

• `(A) any specific product during the 3 preceding fiscal years, that does not exceed 20 percent of the Federal market for the specific product; and

• `(B) any specific service during the 3 preceding fiscal years, that does not exceed 5 percent of the Federal market for the specific service;

• `(8) the term `services' has the meaning given the term `service contract' by section 37.101 of the Federal Acquisition Regulation (48 CFR part 36.102), as in effect on July 1, 1997;

• `(9) the term `specific product' means a product that is designed and manufactured to meet requirements distinct in function and predominant material of manufacture from another product, as described by--

• `(A) the 6-digit classification for the product in the 1997 North American Industry Classification System (or any revisions to such system) published by the Office of Management and Budget; and

• `(B) for purposes of reporting on sales by Federal Prison Industries, the current National Stock Number assigned to such product under the Federal Stock Classification System (including group, part number and section), as determined by the General Services Administration; and

• `(10) the term `specific service' means a type of service included within one of the categories of services used by Federal agencies in reporting to the Federal Procurement Data System, as described in the current edition of the Product and Service Code Manual issued by the Federal Procurement Data Center of the General Services Administration as Executive Agent for the Administrator for Federal Procurement Policy (as referred to in section 6(d)(4) of the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4))).'.

SEC. 9. IMPLEMENTATION IN THE FEDERAL ACQUISITION REGULATION.

• (a) PROPOSED REVISIONS- Proposed revisions to the Governmentwide Federal Acquisition Regulation 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.

• (b) FINAL REGULATIONS- Final regulations shall be published not later than 180 days after the date of the enactment of this Act and shall be effective on the date that is 30 days after the date of publication.

• (c) 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).

SEC. 10. RULE OF CONSTRUCTION.

• Subsection (e) of section 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 in accordance with other law or regulation in effect on the date of the enactment of this Act.

SEC. 11. EFFECTIVE DATE AND APPLICABILITY.

• (a) EFFECTIVE DATE- Except as provided in subsection (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 6(b), or after September 30, 2000, whichever is earlier.

SEC. 12. 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 4124 to read as follows:

• `4124. Governmentwide procurement policy relating to purchases from Federal Prison Industries.';

• (2) by amending the item relating to section 4127 to read as follows:

• `4127. Federal Prison Industries report to Congress.';

• and

• (3) by adding at the end the following new item:

• `4130. Definitions.'.

END