Letter to Senate Appropriations Committee to Support FPI Reform

September 9, 2004

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

Dear Chairman Shelby:

The U.S. Chamber of Commerce, the world's largest business federation representing more than three million organizations of every size, sector and region, urges you to support fair, efficient government contracting procedures during subcommittee consideration of the Fiscal Year 2005 Transportation and Treasury Appropriations Bill. In particular, we respectfully urge you to oppose an amendment to be offered by Senator Mikulski that would severely impair the ability of federal agencies to effectively manage their missions and workforce needs. We also strongly support the Federal Prison Industries (FPI) reform language you are proposing to include.

The proposed FPI reform language would effectively end FPI's preferential status by allowing federal agencies to decide how to best meet their procurement needs by examining existing marketplace opportunities and purchasing products on a competitive basis. It would require FPI to be a more responsible supplier while allowing the private sector to compete fairly for federal contracts by eliminating the requirement that government agencies purchase products and services from FPI. Similar language was enacted as part of the FY04 Transportation, Treasury Appropriations bill as well as in Fiscal Years 2002 and 2003 National Defense Authorization Act. The time is now for Congress to make this authority permanent to all Federal agencies.

The Mikulski amendment would prohibit the use of the newly revised OMB Circular A-76 process, and instead require that all public-private competitions be conducted under the old version of the Circular that all stakeholders agree was fatally flawed. Adoption of this amendment would represent a reversal that will disadvantage agencies and the taxpayer by requiring reliance on a process that simply did not work and lacked credibility. The new Circular was designed to produce increased transparency, savings, and improved performance and accountability. Reverting to the old process would increase costs, decrease efficiencies and innovation, and shut the door on the private sector, particularly small businesses, vying for a share of government contracts.

As you mark up the FY05 Transportation, Treasury Appropriations Bill, we respectfully urge you to support a fair, efficient contracting process by supporting FPI reform language and opposing adverse competitive sourcing language.

Sincerely,

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