Comments on Federal Acquisition Regulation; Past Performance Evaluation of Federal Prison Industries Contracts

October 17, 2002

Ms. Laurie Duarte
General Services Administration
FAR Secretariat (MVA)
1800 F Street, NW
Room 4035
Washington, DC  20405

RE: FAR Case 2001-035
Federal Acquisition Regulation; Past Performance Evaluation of Federal Prison Industries Contracts

Dear Ms. Duarte:

 The U.S. Chamber of Commerce appreciates the opportunity to comment on the proposed amendment to the Federal Acquisition Regulation (FAR) to remove the prohibition on evaluating Federal Prison Industries (FPI) contract performance, as published in the Federal Register on August 29, 2002 (67 Fed. Reg. 55679).  The U.S. Chamber of Commerce is the world’s largest business federation, representing more than three million businesses and professional organizations of every size, sector and region of the country. 

 The proposed rule would empower federal contracting officers to evaluate FPI’s performance of its contracts by amending FAR Subparts 8.6 and 42.15.  Currently, the FAR prohibits the evaluation of FPI’s past performance on the basis that federal agencies are required to purchase products offered by FPI regardless of their past performance.  All other vendors to the government have their performance evaluated with respect to contracts above a specified amount and the quality of the private sector’s past performance is a factor, sometimes a very significant factor, in the decisions for future contract awards.  Considering FPI was the 39th largest government contractor in Fiscal Year 2001 with total sales of $582.5 million, it only makes sense to hold FPI to the same standards as the private sector by evaluating their past performance.

The U.S. Chamber has long advocated an open and fair federal procurement process, which benefits both the private and public sectors. Federal agencies should be afforded the opportunity through competition to purchase quality goods and services at the lowest price and best availability. Until fundamental FPI reform can be enacted, limiting the significant adverse impact of FPI’s mandatory source status is essential to meeting this standard for our government and the American taxpayer.
Section 811 of Public Law 107-107, the National Defense Authorization Act for Fiscal Year 2002, improving Department of Defense (DoD) purchasing procedures with respect to products offered by FPI was a significant step in the right direction.  Section 811 requires DoD to conduct market research before purchasing a product listed in the Federal Prison Industries (FPI) catalog, to determine whether the FPI product is comparable in price, quality, and time of delivery to products available from the private sector. If the FPI product is not comparable, DoD must use competitive procedures to acquire the product.  Past performance evaluation can be used to enhance market research in this sense as well as to help ensure that all federal contracting officers have tools at their disposal to make the best purchasing decisions.

FPI has an unwritten record of poor performance reflected in high prices, low quality product and late deliveries.  The stories appear to be endless from nonfunctional lights in modular furniture, to the backs of chairs simply falling off, to late deliveries and installations that hold billion-dollar government programs hostage.  But furniture is not the only line of business FPI monopolizes in the federal market.  Today, they offer over 300 products and services that the government is forced to buy without competition, including work gloves, circuit board assemblies, safety eyewear, chemical protective suits, and remanufactured vehicle components.  Should the government be outfitting our nation’s military and emergency management teams with unworkable and unreliable clothing and protective gear? 

The debate on FPI’s mandatory source will surely continue as it has for many, many years but the interim relief of allowing contracting officers to take into account FPI’s past performance might ensure federal agencies contracting with FPI receive a quality product or service in a timely manner at a reasonable price.  However, the more likely scenario is the past performance records will provide the hard data needed to compel FPI into granting a so-called “waiver” allowing federal managers to tap into the competitive commercial market.  Consideration of past performance in the source selection process enhances the ability of federal contracting officers to reach best value decisions as well as motivates private sector vendors to improve their performance and produce better products and services.  The proposed rule, if properly implemented, should benefit both the public and private sector.     

Thank you for the opportunity to submit these comments on behalf of our members, small and large, that rely on an efficient, fair, competitive process in providing the federal government with goods and services to maintain and grow their businesses.

Sincerely,

R. Bruce Josten