U.S. Department of Justice
Federal Bureau of Prisons
Washington, DC 20534

March 30, 1999

The Honorable Dale E. Kildee
U.S. House of Representatives
432 North Saginaw Street, Suite 410
Flint, Michigan 48502

Dear Congressman Kildee:

This is in response to your recent letters to the Assistant Attorney General for Legislative Affairs and to Mr. Robert C. Grieser of my staff concerning your constituent, Mr. Thomas Tyson, of Southern Automotive Wholesalers, Inc.

Federal Prison Industries, Inc. (FPI), a government owned corporation (and a division of the Federal Bureau of Prisons) employs approximately 20,000 inmates out of 113,000 inmates currently incarcerated in Bureau facilities.

FPI was established by Congress in 1934, during the Depression. Congress was acutely aware of opposition to providing inmates jobs when so many law-abiding citizens were without work. But, in establishing FPI, Congress recognized the value to society, as a whole, that would be derived by providing opportunities for education and work-related experiences to offenders. Furthermore, the concept of inmates being idle has never been acceptable to the American public, nor is it appropriate from the standpoint of sound prison management.

As part of FPI's enabling legislation (18 U.S.C., Sections 4121-4129), Congress provided for oversight through a Board of Directors (appointed by the President of the United States), representing retail trade, industry, agriculture, labor, the U.S. Department of Defense, and the U.S. Department of Justice. This legislation also mandates that FPI:

• Provide products on a economic basis, but avoid capturing more than a reasonable share of the market for any specific product.

• Provide products which permit employment of the greatest number of inmates as is reasonably possible.

• Diversify products so that sales are distributed among FPI's industries as broadly as possible.
• Undergo a detailed public involvement process to add a new product, or significantly expand an existing product, prior to a final decision by the Board of Directors.
  

These mandates significantly reduce the potential of FPI's impact on individual industries and companies. For example, the 20,000 inmate jobs are located in approximately 100 factories, providing approximately 100 separate items and services to our Federal customers. I assure you that FPI has always made a good faith effort to adhere to its responsibilities regarding its impact on the private sector and free labor.

FPI's initiative to manufacture engine electrical components is being pursued with the explicit purpose of repatriating Department of Defense contract work which is currently being performed overseas. Two specific contracts have been identified which will contribute, in a modest way, to the effective management of the ever growing inmate population of the Bureau of Prisons. These two contracts represent work that has not been performed in the past by Southern Automotive Wholesalers, Inc. and, thus would not cause any adverse impact to Southern should the work be repatriated by FPI.

These contracts may be followed in the future by awards to non-domestic firms for other engine electrical components. FPI's final proposal to the Board of Directors will seek approval to repatriate such future contracts and, at the same time, impose limits on FPI's use of its mandatory procurement preference to acquire contracts which might displace work currently performed by domestic firms.

Enclosed is a copy of our response to Mr. Tyson's letter to FPI of February 23, 1999. If you should have further questions on this matter, please do not hesitate to contact me.

Sincerely,


Steve Schwalb
Assistant Director
Industries, Education and
Vocational Training