Hoekstra Says FPI Is Fighting Back
The issue, Hoekstra explained, is H.R. 1829 — the Federal Prison Industries Competition in Contracting Act of 2003.
Hoekstra is the author of the measure intended to terminate FPI’s status as a mandatory source of manufactured goods for federal agencies. He said a similar bill by Sen. Carl Levin, D-Mich., would have the same effect with reference to defense procurement.
Mandatory source status enables FPI to force federal agencies to accept goods that it manufactures at prices that FPI dictates. That 75-year-old power also has enabled FPI to keep most private sector firms — including office furniture manufacturers — from landing federal contracts.
Thanks to long-term acceptance of its role, Hoekstra said FPI has been able to skirt recent legislative and administrative reforms and to essentially copy and steal a $6 million federal Steelcase contract.
Hoekstra said his new bill apparently has alarmed FPI to the point that it is trying to generate political pressure to derail the proposal.
“We’re already getting some calls,” Hoekstra told the Business Journal. “Some of these bureaucrats have been on the phone saying, ‘We’re going to get you.’”
Hoekstra said such calls alarmed some of his colleagues, especially after a former congressman-turned-FPI lobbyist placed angry calls to his colleagues on the House Intelligence Committee.
“They’re saying, ‘Pete! What did you unleash?’ Hoekstra said.
“I tell them, ‘Don’t worry. I’ve got bipartisan support on this. I’ve got Bud Cramer (Robert E. Cramer Jr., D-Ala., a member of the committee who happens to have a large Steelcase plant in his district) andBarney Frank (D.-Mass.) and all these folks. The unions are with us. And Carl Levin in the Senate.’
“But they keep saying, ‘Man, you’ve unleashed a firestorm on us! Hey, you better get ready for a fight on the floor (of the House).”
Hoekstra said he’s ready for the fight if it comes. He said that thanks to having 130 co-sponsors from both parties, the measure likely will pass. But he said he doesn’t believe that will accomplish anything meaningful unless the measure passes with 300 votes or so.
“If I’ve done enough legwork to get 300 votes,” Hoekstra said, “then at that point the administration’s going to have to take notice.”
As he sees it, only close administration attention together with intense Congressional oversight can make FPI actually follow laws to allow U.S. manufacturers a meaningful chance at federal contracts.
“We expect these folks (FPI) to fight us every step of the way,” Hoekstra said. “Oh no, I would never assume that if we pass something that we can say, ‘Okay, we’ve won,’ and go on to the next issue.
“These are slimy people,” Hoekstra added. “I’m not talking about the prisoners, now, but the ones running Federal Prison Industries.”
He said the agency’s unwillingness to live within the laws of the government to which it belongs gives him a sinking feeling. “And I have a bigger sinking feeling because it’s my friends who are running the government — meaning the Bush Administration.
“The president said that he wanted this fixed,” Hoekstra added. “And the even bigger sinking feeling is that if the president says he wants this fixed, how come I’ve got this low-life over at FPI subverting the president’s objective?”
The subversion in question recently came to light when, he said, FPI simply began lying to Pentagon procurement officials.
“The folks over at defense called my guy over here and said, ‘Hey, Bill, what happened?’
“He said the calls from defense people reported that FPI basically said, ‘Well, this now takes precedence over what was done in the law. We have new requirements superseding it.’
“And Bill told them, ‘Nothing happened! They’re just trying to hide what the law says. FPI’s just trying to feed you a line.’”
The trouble is that FPI is prepared to go to court — with its parent agency, the Justice Department, providing the legal talent — while the Pentagon doesn’t have the time or legal resources to fight court battles that take years.
Hoekstra reported that when President Bush ordered FPI to allow more federal contract competition, it rewrote its own rules.
“But what those rules called for is competition that doesn’t look a thing like competition in the private sector,” Hoekstra added.
He said he regrets that FPI is below the public’s radar screen.
“It becomes important if you’re one of the Steelcase people that just got laid off,” he said.
He said it’s difficult to say how many West Michigan furniture industry jobs have been lost to FPI.
“We used to estimate at Herman Miller that every employee manufactured a quarter of a million dollars’ worth of furniture a year.
“If that’s still true, then when FPI took that $6 million contract from Steelcase, that means for five or six people who might have had a permanent job this year — for the whole year, producing five or six million dollars’ worth of furniture — they aren’t going to have that opportunity. Their job is gone.”
FPI, he explained, provides work for 30,000 to 40,000 federal prison inmates a year. Because FPI is less automated that the private sector, he estimates it takes two to four inmates to do one private sector job, implying that FPI may be denying work to as many as 10,000 citizens.
Hoekstra said his alarm about FPI has deepened since he read its most recent annual report.
He said in testimony before the Senate last week that the agency claims to have grown its automotive components division by 216 percent and its office furniture division by 24 percent.
He said the same report also indicates FPI plans to construct 11 new production facilities and increase employment by 30 percent over the next five years. It has authorized up to 50 percent in growth for this fiscal year in its office furniture division alone.
“It is an incredible rate of growth as the West Michigan office furniture industry experiences its worst economic downturn ever,” he said.
“FPI is directly and indirectly eliminating jobs throughout the country, particularly in Michigan.”