U.S. Chamber Hails Action to End Prisons' Monopoly

WASHINGTON, D.C.-The United States Chamber of Commerce today welcomed congressional enactment of defense authorization language that ends the preference system for federal prison industries and allows the Pentagon to purchase better-quality goods at lower prices.
"Thanks to Congress, the Defense Department will finally be liberated from the Federal Prison Industries monopoly and be able to purchase top-quality goods at the best price from the private sector," said Bruce Josten, Chamber executive vice president. "We hope that DoD is just the beginning."

Under current law, federal agencies must purchase goods from FPI rather than use a competitive procurement process. As a result, agencies waste taxpayers' dollars purchasing inferior, prison-made products at non-competitive prices, according to the Chamber.

"The private sector, not FPI, is best positioned to serve the needs of America's military, government and taxpayers," said Josten. "As agencies struggle to meet the nation's heightened security needs and businesses struggle to keep America working, the fight to end this anti-competitive purchasing scheme is taking on new life."

More than 300 products and services are produced by federal prisoners, totaling nearly $600 million in sales to the federal government in 2000 alone. Today, federal prisons have 100 percent of the market in more than 100 war products. Approximately 60 percent of FPI sales are to the Defense Department, ranging from clothing, to furniture, to electronics.

"Without action, businesses that provide better-quality products more efficiently and cheaply than FPI will continue to be shut out of millions of dollars in government business each year," said Josten.

The Chamber has long advocated a level playing field in the federal procurement process and is leading the Competition in Contracting Act Coalition, a group of more than 300 business and labor organizations actively seeking legislative and regulatory relief from FPI's monopolistic practices.

The U.S. Chamber of Commerce is the world's largest business federation, representing more that three million businesses and organizations of every size, sector, and region.

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