Chamber urges House to support H.R. 1829

November 5, 2003

TO MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:

On behalf of the U.S. Chamber of Commerce, the world's largest business federation, representing more than three million organizations of every size, sector and region, we urge your support of H.R. 1829, the Hoekstra-Frank-Collins-Maloney-Sensenbrenner-Conyers Federal Prison Industries (FPI) Competition in Contracting Act of 2003, during House floor consideration this week.

This bipartisan legislation would impose overdue and much-needed restraints on the unfair competitive practices of FPI. Under current law, FPI has a preferential status in the government procurement process that forces federal agencies to buy only from FPI rather than using a competitive process. Once a small program focused solely on rehabilitation, FPI is now a large enterprise that has a monopoly in the federal marketplace on over 300 products and services. Without reform, FPI will continue its unfettered expansion in the federal and commercial markets even though the private sector has proven it can better address the needs of government agencies and taxpayers by providing higher quality products, more rapidly, and at a lower price.

The Competition in Contracting Act would require FPI to be a more responsible supplier to the government and the taxpayer, and would allow the private sector to compete fairly with FPI for federal contracts by eliminating the requirement that government agencies purchase products from FPI. Agency contract officers, not FPI, would determine if FPI's offered product or service best meets its needs in terms of price, quality and time of delivery. This legislation provides a transition period for FPI as it adapts to the loss of its preferential status as well as provides for additional vocational and educational opportunities to better prepare inmates for a successful return to society.

During floor debate, amendments are likely to be offered that would attempt to weaken real reform efforts by expanding FPIs competitive advantages. The Chamber is opposed to any amendment that would authorize the sale of inmate-furnished products or services in the commercial market. Such an attempt would circumvent real reform and expose private sector firms to further unfair competition in the commercial market from a government entity that does not have to comply with minimum wage or OSHA regulations, doesn't pay federal, state, gross receipts and excise taxes, or provide benefits to its workers. Businesses, especially small enterprises, simply could not compete.

Unfortunately, despite a clear statutory prohibition, FPI is already engaged in selling the results of inmate labor in the commercial market in the service industry. Section 7 of H.R. 1829 aims to correct this problem by clarifying that FPI's enabling statute, which prohibits commercial sales, applies to products and services. The Chamber is opposed to an amendment that would strike Section 7 to allow the commercial sale of services furnished by inmates to continue at the Federal, State, and local level.

H.R. 1829 strikes a proper balance between reforming FPI's unfair competitive advantage and providing adequate programs designed to rehabilitate inmates and reduce recidivism. We urge you to support H.R. 1829 and oppose any amendments that would expand FPI's unfair, monopolistic practices. Because of the importance of this issue to American business, the Chamber will consider using votes on or in relation to this matter in our annual "How They Voted" scorecard for 2003.

Sincerely,

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