Congress May End Federal Prison Industry Monopoly


A U.S. Senate committee is considering legislation that would end the near monopoly of Federal Prison Industries (FPI) on federal procurement contracts, reports Booth Newspapers. “Private businesses ought to be allowed to bid for business with their government — it’s that simple,” said U.S. Sen. Carl Levin (D-Mich.) FPI, a work program for about 22,000 of the 176,000 federal prison inmates, had $721 million in sales in 2003.

Levin would eliminate the “mandatory source” rule, in effect between 1934 and 2003, that requires federal agencies to go to FPI first to purchase products or services before seeking bids from private companies. Earlier this year, Congress temporarily eliminated the rule in the fiscal 2004 budget law.

Prison officials would support making the ban permanent if FPI were allowed to bid on business outside federal agencies, possibly in the private or nonprofit sectors. Without that freedom, FPI would eventually close its doors, they said. They noted that efforts by Congress and FPI to make the agency more competitive have resulted in the closing or downsizing of 13 prison factories. Officials say about 2,000 inmates have been idled and 97 prison guard jobs lost as a result of policy changes, including a two-year-old rule that allows the Pentagon to choose private firms over FPI to supply some products and services.


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