- The Washington Times - Friday, November 22, 2002

Lawmakers yesterday called for dismantling Federal Prison Industries Inc., a government-owned corporation and provider of goods and services to federal prisons and other government agencies, to allow small businesses a chance to bid for contracts.

"Small businesses are continually being shut out of the process to bid for any jobs relating to the federal prisons systems," said Rep. Donald Manzullo, Illinois Republican and chairman of the House Small Business Committee.

At the hearing, Mr. Manzullo said certain laws, such as "mandatory sourcing," have allowed Federal Prison Industries (FPI), also known as UNICOR, to force government agencies to use its services and products without a bid process. Loopholes have made it easier for agencies to get products and workers through FPI rather than requesting competitive bids.

The corporation was created in 1934 under the Justice Department to teach federal prison inmates a skill for jobs once they re-entered society. Inmates worked government jobs, and the program expanded to a corporation that provided agencies with workers and products, such as office supplies and clothing.

Mr. Manzullo said he would push to introduce legislation when Congress convenes in January to halt some or all of the corporation's operations and "weaken their influence over bids in the Federal Bureau of Prisons."

Rep. Roscoe G. Bartlett, Maryland Republican, charged that FPI threatens the jobs of American workers by forcing government agencies to use prison inmates as workers without allowing worker-placement companies to compete.

"I applaud the correctional program in trying to get convicted felons on the right path with a job, but I can't condone it when those jobs come at the expense of the American workers who are being downsized already," he said.

Angela Styles, who supervises procurement for the Office of Management and Budget, the agency in charge of the federal budget, said the Bush administration is working to limit FPI's contracts to bring more small businesses into the bidding process.

In 2001, the federal corporation accrued $582.5 million in sales, making it the 39th-largest government contractor.

Federal Prison Industries Chairman Kenneth Rocks acknowledged that the program has curtailed competition for the past 30 years.

"The FPI program contributes significantly to the safety and security of the federal prisons by keeping inmates productively occupied and reducing inmate idleness," Mr. Rocks said. "We need to meet these responsibilities, however, in a way that takes into account the concerns of the small-business community."

Michael Mansh, president of Pennsylvania Apparel Corp., a Fort Washington, Pa., company that specializes in military apparel, said the mandatory-sourcing rule captured 45 percent of his business through contracts with the Defense Department in the past decade.

"For example, we used to provide jackets for the Navy from 1987 to 1997, and then FPI came in and imposed its mandatory-sourcing rule, saying the Navy had to use their jackets instead," Mr. Mansh said. "The Navy agreed, and we lost a large chunk of our business from the abuse of that privilege."

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