Transportation and Treasury Appropriations Bill

September 4, 2003

The Honorable Richard Shelby
Chairman Appropriations Subcommittee
Transportation and Treasury
SD-142 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Senator Shelby:

The U.S. Chamber of Commerce representing more than 3 million businesses and organizations of every size, sector and region, would like to thank you for including language in the FY 2004 Transportation and Treasury Appropriations Bill that would eliminate the mandatory contracting requirement that Federal agencies are subject to when it comes to products made by the Federal Prison Industries (FPI).

As you well know, 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 purchasing 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 that generated $678 million in sales last year. Without reform, FPI will continue its unrestricted expansion into the Federal and commercial marketplace even though in most cases, the private sector has proven it can better address the needs of government agencies and taxpayers by providing higher quality products, in a timelier manner, and for a lower price.

Simply put, the language included in your Committee mark requires FPI to be a more responsible supplier to federal agencies 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. Similar reform measures were enacted as part of the FY 2002 and FY 2003 Department of Defense Authorization Bills, which allow the Defense Department, rather than FPI, to choose the best possible supplier to meet its needs.

Unfortunately, loose interpretation of the enacted language has allowed FPI to virtually ignore reform measures further justifying the need for comprehensive, government-wide reform. Your provision is a significant step in the right direction to provide all federal agencies relief from FPI's monopoly.

We appreciate the intended mission of FPI to rehabilitate prisoners and reduce recidivism, but we do not agree it should be met at the expense of the American taxpayer, hardworking, law-abiding businesses in the private sector and the workers they employ. Thank you for including this important language in the Committee mark of the FY 2004 Transportation and Treasury Appropriations bill

Sincerely,

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