Letter to Senate Governmental Affairs Committee

March 31,2004

Honorable Susan Collins
Chairwoman, Senate Governmental
Affairs Committee
340 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairwoman Collins:

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, I urge you to support S. 346, the Federal Prison Industries Reform Act. We are pleased the Subcommittee on Financial Management, the Budget and International Security has agreed to hear testimony on this important issue and we urge quick consideration by the full Committee. This bipartisan legislation is supported by the business community, labor organizations, and by the federal managers actively seeking Federal Prison Industries (FPI) reform to ensure a fair and efficient federal procurement process.

S. 346 would impose overdue and much-needed restraints on the unfair competitive practices of FPI. Under current law, FPI has 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, which generated $678 million in sales last year. 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.

Recently, the House overwhelmingly passed a similar comprehensive reform package and the Senate passed interim relief enacted as part of the FY02 and FY03 Department of Defense Authorization bills and the FY04 Transportation, Treasury Appropriations bill. The time is now for the Senate to act on a broad, permanent reform package. Accordingly, we ask for your support of S. 346 and urge the Committee to schedule a markup of this important reform legislation at the earliest possible time.

Sincerely,

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