Office of Management and Budget Letter on Federal Prison Industries Reform

March 22, 2002

The Honorable Mitchell E. Daniels, Jr.
Director
Office of Management and Budget
Executive Office of the President
Washington, D.C. 20503

Dear Director Daniels:

On behalf of the U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector and region, I am writing to urge your quick and fair consideration of the draft rule before your agency that provides implementation guidelines for recently enacted Federal Prison Industries (FPI) reform. This much-needed reform effectively ends FPI's preferential status by allowing the Department of Defense (DoD) to decide how to best meet its procurement needs by examining existing marketplace opportunities and purchasing products on a competitive basis.

The FPI reform provision, endorsed by the Administration, was enacted in the National Defense Authorization Act for Fiscal Year 2002 with strong bipartisan support in Congress. In fact, an effort to remove this language during the Senate floor debate was soundly defeated by a vote of 74 to 24. This provision, and FPI reform in general, is supported by a unique coalition of the business, organized labor and federal managers communities.

The U.S. Chamber has long advocated a fair and efficient federal procurement process, which benefits both the private and public sectors. We share your views that Federal agencies should be afforded the opportunity through competition to purchase quality goods and services at the lowest price and best availability. Eliminating FPI's mandatory source status is fundamental to meeting this standard for our government and the American taxpayer. The recently enacted FPI reform provision, which became effective October 1, 2001, is a significant step in the right direction. However, more definitive guidance is necessary to ensure proper implementation.

Accordingly, we urge your immediate consideration of the rule that reflects the intent of Congress by allowing DoD contracting officers to procure goods based on price, quality and timeliness of delivery from whatever source best meets the needs of the agency, thereby saving taxpayers dollars and protecting American businesses and the workers they employ.

Thank you in advance for your attention to this important matter. And on behalf of the business community, I would like to express our appreciation for the Administration's support of fair, comprehensive FPI reform.

Sincerely,

R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce