House Passes The FPI Reform Bill

November 7, 2003
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The heavy support in the U.S. House to reform Federal Prison Industries Inc. gives backers high hopes for their chances in the Senate.

FPI is the U.S. Department of Justice corporation that critics complain unfairly competes with the private sector through a virtual monopoly over federal procurement contracts.

The overwhelming margin of victory for the bill, which the House passed Nov. 6 by a vote of 350-65 after five hours of intense debate, surprised even the most ardent supporters of the reform movement who now hope to see the same kind of support in the Senate.

“It’s absolutely amazing,” U.S. Rep. Pete Hoekstra, R-Holland, said last week following the bill’s passage in the House.

“The margin says there are a lot of people out there that recognize this is a problem and the solution we proposed is an appropriate and reasonable solution,” Hoekstra said. “I’m hopeful.”

The bill would open all federal contracts to competitive bidding by removing, over a five-year period, a provision known as mandatory source status that requires federal agencies to buy prisoner-made products when available.

The bill’s passage marks the first time in Hoekstra’s eight-year battle to reform FPI that he’s been able to push legislation this far. The push heightened in the last two years as a result of the unprecedented downturn in the office furniture that has cost thousands of jobs in West Michigan alone.

Backers, including executives at office furniture makers based in West Michigan, say they need to maintain the same kind of lobbying effort in the Senate, where U.S. Sen. Carl Levin, D-Michigan, has similar legislation pending.

“We’ve got to keep our eye on the ball,” said Tom Walker, head of government contracts for Haworth Inc.

Walker hopes the large margin of victory provides the momentum needed to get the bill through the Senate.

“It’s a pretty clear and a pretty strong message to everyone,” Walker said. “Hopefully it gets passed in the Senate and we get things where they belong.”

FPI is an arm of the U.S. Justice Department’s Federal Bureau of Prisons that employs more than 21,700 inmates to produce some 300 products — including textiles, electronic and automotive components, and office furniture — sold under the “Unicor” brand name.

FPI’s net sales for the federal government’s 2002 fiscal year totaled $678.7 million, up 16.3 percent from the $583.5 million in the prior fiscal year.

Office furniture is by far FPI’s largest product category. In 2002, as sales by the private sector office furniture industry continued to plunge, FPI’s furniture business grew 24 percent to $217.8 million.

Backers of the bill, pushed by a unique bipartisan coalition that includes labor and business interests, say that reforms are necessary to reel in FPI’s monopoly over federal contracts.

They also have been concerned about FPI’s ncursions into the private sector. The measure provides alternative job training and work programs for federal inmates to offset any resulting losses in the agency’s business.

Levin’s press secretary, Tara Andringa, said the senator expects to move his version of the FPI reform legislation to committee hearings early next year.

Opponents to the bill, while conceding that FPI’s monopoly and competition with the private sector needs addressing, argued that it goes too far in seeking to solve the problems and will cause steep reductions in prisoner employment, leading to higher recidivism rates and safety and security problems in prisons.

Praising the work experience FPI provides prisoners, which helps lower recidivism rates, they urged lawmakers to examine other reforms that wouldn’t cripple the agency.

Supporters countered that the bill provides the kind of alternative vocational education federal prisoners need to gain employment after they’re released. They argue that the bill still allows FPI to compete for federal contracts while leveling the playing field for businesses that want to bid for government work.

“It meets both goals — fair competition and rehabilitation,” said Rep. Denise Majette, D-Georgia.

Brad Miller, manager of communications and government affairs for the office furniture industry trade group BIFMA, believes the large margin of victory in the House bodes well for the bill’s chance in the Senate and, more importantly, eventually getting the attention of the White House.

“Rather than a long road ahead for us, we hope to see a quick result in the Senate as some juncture ahead here,” Miller said.

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