Hoekstra Assails FPI Knockoff Chair

October 25, 2002
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WASHINGTON, D.C. — To say Congressman Peter Hoekstra, R-Holland, is boiling mad about Federal Prison Industries (FPI) is like saying the Pacific Ocean is somewhat damp.

Last week Hoekstra took the opportunity to vent some of his frustrations in addressing a public forum held by FPI’s recently appointed board of directors.

He also told the Business Journal about the issue that has angered him.

FPI, he said, has created a partnership with Teknion — a Canadian furniture manufacturer that is a major player in the American market — whereby the Canadian firm is producing a knockoff of a Herman Miller chair, which FPI then sells to federal agencies.

“I told the board that FPI really has its priorities screwed up,” Hoekstra said. “And I think they agreed.

“Our first priority should be jobs for law-abiding Americans,” he said. “Then we can worry about jobs for prison inmates. As for the Canadians — well, they have people in their own government to worry about jobs for them.

“I mean, come on!” he said. “You talk to Steelcase or Herman Miller or Haworth — they’ll tell you Teknion is a very, very competitive firm. So why is Federal Prison Industries helping Teknion get access to the federal market?”

He said the FPI-Teknion partnership seemed to be news to the FPI board.

Hoestra told the Business Journal he spoke at length to the board both formally and informally because its membership is brand new.

“The new chairman is a former Philadelphia police officer,” he said. “And he was talking about the ‘broken-window syndrome’ and how crime went up as plants closed down due to outside competition.” Another member of the board, he said, is a woman from the clothing industry who has had to deal with FPI’s mandatory provider status as a federal supplier.

“And, of course,” Hoekstra added, “she knew the role FPI played in forcing the last major American shirt-maker — Hathaway — out of business just last week.”

He told the FPI board he cannot accept the agency giving non-American firms preferential access to federal contracting opportunities while denying that same market to U.S. office furniture manufacturers suffering through the nation’s recession.

He noted several thousand West Michigan furniture manufacturer employees are on extended layoff as the industry tries to claw itself out of an unprecedented economic downturn.

“There are many laid-off office furniture workers in West Michigan and elsewhere,” Hoekstra said, “who would only like the chance to bid on federal government contracts.”

Part of the problem is that unlike most states and local governments, the federal government buys almost nothing by competitive bidding.

“I’ve fought this thing for five and a half years,” Hoekstra said, “and it’s like trying to wade through mud.”

Last year a bill that he sponsored in the House and that Sen. Carl Levin, D-Mich., sponsored in the Senate explicitly gave Department of Defense procurement officers the power to buy products anywhere they can get “the best value for the tax dollars.”

But he said the FPI staff has utterly stymied the legislation.

“Unwilling to compete for contracting opportunities,” Hoekstra charged, “FPI staff have spun every possible argument to frustrate in practice the clear intent of the legislation.” He explained that FPI staffers have dissuaded defense contractors from using their new powers by threatening arbitration as provided in FPI’s Depression-era authorizing statute.

“And these defense people don’t want to face those kinds of delays,” he said, “so they’re giving in and buying from FPI.”

He said he finds it troubling that with military action approaching, the Defense Department won’t be able to get the best value for the equipment it buys.

A number of federal agencies ranging from the U.S. Navy to the General Accounting Office have issued reports saying many FPI products often cost more and often are inferior to products available from the private sector.

Because FPI faces no competition, it is by law able to decide whether its products satisfy the need of an agency. It also decides its own delivery schedule. If a federal agency wants something, and FPI makes it, FPI sets all the terms of the purchase.

Currently, federal regulations prevent most federal entities from conducting market research to find out if private industry can supply them with a better and cheaper product.

Though FPI board members seemed sympathetic to what Hoekstra was saying, he warned them they have two strikes against them in trying to change FPI practices.

First, he said the board has little more than advisory powers and possesses neither the power to hire or fire any of FPI’s entrenched career civil service staff.

Second, being an arm of the Department of Justice, FPI’s staff has access to some of Washington’s best lawyers to defend its mandatory provider status.

Hoekstra congratulated the board on its willingness to hear from business and workers who he said are “hurt by the corrosive manner in which FPI is currently authorized to participate in the federal market.”

But he also warned the board, “You will be hard-pressed to exercise your statutory responsibility to ‘reduce to a minimum competition with private enterprise and free labor.’ Your efforts to minimize adverse impacts on business and labor will be greeted with little more than lip service unless you press very hard.

“As you have already learned,” he added, “it is the staff’s view that every concern, raised by anyone but them, is wholly without merit.”

Hoekstra told the new FPI chairman, “Your predecessor played the role of the concerned listener with consummate skill, but then did as he was told by FPI’s career management staff.” 

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