Bush Backs FPI Reform

March 25, 2002
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Support from the Bush administration provides a significant boost to backers of a decade-long effort to open all federal contracts to the private sector.

In a letter sent in October but received only recently because of the anthrax scare, the director of the Office of Management and Budget endorsed efforts to end Federal Prison Industries’ mandatory-source status that gives it a virtual monopoly over many federal contracts.

A provision in the 2002 Department of Defense appropriations bill that Congress passed and President Bush signed on Oct. 2 began to erode mandatory-source status by allowing the Pentagon to shop around for the best value for the goods it buys. OMB Director Mitchell Daniels Jr., in an Oct. 24 letter to U.S. Rep. Mac Collins, R-Georgia, indicated support for further reforms at FPI.

The letter represents the first time a presidential administration has openly backed efforts to reform FPI, an arm of the U.S. Bureau of Prisons that teaches prisoners work skills they can use when released from custody.

“These are the marching orders,” said U.S. Rep. Peter Hoekstra, R-Holland, who has pushed for years to repeal FPI’s mandatory-source status. “Every step helps. We’re slowly putting all the pieces in place to get this done.”

Mandatory-source status requires federal agencies to buy first from FPI, which employs more than 21,000 inmates to produce a myriad of products that it markets under the Unicor brand name. Critics complain the provision is unfair to the private sector. Among the largest backers of reform efforts are office furniture manufacturers based in West Michigan.

A bipartisan bill sponsored by Hoekstra that would allow federal agencies to shop around for the best value is pending in Congress. Now that the Bush administration has publicly backed the effort, Hoekstra hopes to earn support from the White House to give it high enough priority to get a vote on the bill yet this year.

In his letter, Daniels indicated support for legislation that would build on the Department of Defense provision and open all federal contracts to competition by phasing out mandatory-source status, as long as adequate work opportunities are maintained at the federal prisons.

“The administration is encouraged by this initial step to reform FPI and believes that all federal agencies should have the flexibility through competition to purchase quality goods and services at fair and reasonable prices with the expectation of timely performance,” Daniels wrote. “The administration is anxious to work with the Congress to develop FPI reform legislation.”           

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