Businesses battle to end prison purchasing mandates

Business interests have hired an influential lobbying firm in an effort to "supercharge" opposition to Federal Prison Industries' efforts to break into the commercial marketplace, a business lobbyist said. But FPI, for its part, says it is seeking compromise.

The Competition in Contracting Act Coalition-a group of roughly 1,600 companies spearheaded by furnituremakers Herman Miller, Haworth and Steelcase-recently hired the firm Fierce & Isakowitz to make its case on Capitol Hill. Other sectors represented in the coalition include textile and apparel makers.

The hiring of the firm-whose name partners are Donald Fierce, a former senior official with the Republican National Committee, and Mark Isakowitz, a veteran Republican lobbyist-represents the first time that anti-FPI forces have banded together to hire outside lobbyists, officials said.

"The message the industry wants to get out by working with Don [Fierce] is that we're very serious about this issue," said Andrew Fortin, who helped organize the coalition from his post as manager of antitrust and privatization policy at the U.S. Chamber of Commerce. "This is a federal agency out of control, and there's a great need for reform."

FPI and the markets it sells to have been a battleground for years. FPI, also known as Unicor, is a division of the Justice Department's Bureau of Prisons that employs 20,000 federal inmates to produce $500 million a year worth of furniture, clothing, electronics and other products. FPI currently sells several hundred products and services to federal agencies, some under mandated procurement rules. Some of the most rigid mandates are for furniture and apparel.

FPI officials say they are willing to drop those mandated procurement rules, but only in tandem with the institution of new rules that broaden FPI's potential market reach. FPI officials say they need the new markets in order to cope with a rapidly growing federal prison population that needs job training and incentives to remain orderly.

FPI supports a bill sponsored by Reps. Bill McCollum, R-Fla., and Bobby Scott, D-Va.-the senior members of the House Judiciary Subcommittee on Crime-that would end FPI's federal procurement mandates over seven years but would also loosen restrictions on selling to the private sector.

Under the McCollum-Scott bill, FPI would be able to sell its products under two conditions. The first would be if inmates are paid the federal minimum wage or higher-a provision similar to what state prison industries are allowed, FPI points out. And the second would be if the competing products currently on the market are made exclusively overseas at labor rates that are competitive with the prevailing, sub-minimum-wage compensation scale in federal prison.

"Thousands of items would fall under that category-toys, electronic items, and other products made exclusively outside the U.S.," said Steve Schwalb, FPI's chief operating officer.

But the FPI's efforts have drawn sharp opposition from many private-sector businesses. A regulatory effort that would have enabled FPI to sell inmates' services to private-sector companies was introduced in January 1999, but withdrawn in September, in large part because of business opposition, industry lobbyists say.

The business groups have their own alternative. Rep. Peter Hoekstra, R-Mich., has introduced legislation that would end federal procurement mandates immediately and would place additional oversight on FPI. (Fortin of the Chamber is slated to join Hoekstra's staff later this month.)

Fortin said that the coalition seeks to make "a full-court press" on lobbying the House and Senate. Its member companies are also seeking to apply grass-roots pressure outside the Beltway.

For its part, FPI's Schwalb says he is optimistic because the two sides are now at least talking about a range of years-between zero and seven-during which both sides are willing to see the mandates' end. He predicts that a consensus will eventually be reached.

"What I hear is that we're past the issue of who wins and loses and who's playing offense and who's playing defense," Schwalb said.