I appreciate this opportunity to appear before you today.

I am here to testify on behalf of H.R. 2758, the Federal Prison Industries Competition in Contracting Act of 1997, of which I am a principal cosponsor.

I became involved in this issue when some of my constituents approached me about how the Federal Prison Industries was affecting their business.

I am proud to represent the Glamour Glove Company in New York City and many of its loyal employees who live in Manhattan, Brooklyn, and Queens. My constituents told me that their company was in jeopardy of being closed down -- and that many would lose their jobs -- because of the unfair practices of Federal Prison Industries.

When FPI illegally increased its glove production in 1992, the Glamour Glove Company, then in its 44th year, lost 80 percent of its 400-dozen-pair-a-week glove business.

What is most unfair to FPI’s private sector competitors is that FPI does not actually compete for sales. Under FPI’s authorizing statute, all Federal agencies are to purchase products if FPI believes its products meet the agency’s needs and FPI’s prices do not exceed the highest price offered to the government.

This preferential status is expanded further by the provisions of the Government-wide Federal Acquisition Regulation, which designates FPI’s status as a "mandatory source of supply" and by requiring an agency contracting officer to obtain FPI’s clearance before purchasing any product on FPI’s list of approved products from a commercial source.

As you know, whenever a significant increase in FPI production is planned, FPI is required to prepare a market impact study, request comments from affected and interested parties, and seek formal Board approval. In addition, by statute, no single industry should be forced to bear an undue burden of competition from FPI.

Unfortunately, FPI does not follow its own rules. FPI has repeatedly increased production WITHOUT approval, and then simply sought authorization for that increase later on.

America’s glove industry has already suffered at the hands of foreign competition. This was all made worse by FPI's expansions within the Government markets, especially the unauthorized five-year expansion for which after-the-fact approval was sought.

I testified last year to FPI’s Board of Directors protesting its intention to simply ratify past unauthorized increase in glove production and its intent to approve a further increase. Although the industry reached a negotiated settlement with FPI in this particular case, the basic statute needs to protect Glamour Glove and other companies from similar abuses in the future.

To have even considered approving these unauthorized increases is a smack in the face of my constituents who have played by the rules.

The idea of offering rehabilitative work opportunities to federal prisoners is worthwhile. However, I do not believe that our government should be giving work opportunities to felons by taking the jobs away from hardworking and law-abiding American citizens.

There is broad bi-partisan support for this legislation regarding FPI’s unfair status in addition to support from the business sector and most unions.

The AFL-CIO has commented that

H.R. 2758 levels the playing field and requires FPI to compete for its contract opportunities. I appreciate the opportunity to testify before this subcommittee today.