Prison firm criticized for taking jobs away from contractors

Federal Prison Industries is once again under fire from congressional and industry critics for doing work that could be performed by contractors. Federal Prison Industries (FPI), whose trade name is Unicor, is a division of the Bureau of Prisons that employs about 20,000 federal inmates to produce $500 million in furniture, clothing, electronics and other products for federal agencies. Federal rules require agencies to purchase certain Unicor items. Rep. Peter Hoekstra, R-Mich., recently introduced legislation, H.R. 1577, that would scrap the requirement that agencies buy Unicor products whenever they are available. Instead, the legislation would allow FPI to compete against private-sector companies for the work and would phase out its status as a mandatory source for products over the next five years. "The current [Unicor] system is unfair to private-sector firms large and small," Hoeskstra said in outlining the legislation at a hearing before the House Judiciary Subcommittee on Crime. "Under FPI's mandatory source status, they are foreclosed from being able to bid on more than half a billion dollars worth of federal contract opportunities." Hoekstra said federal agencies are "captive" to FPI because they cannot buy commercial items already made by prisoners without obtaining a waiver. Hoekstra introduced similar legislation in the previous Congress, but was criticized because it did not offer any alternatives to FPI for prisoners seeking job training. In the new legislation, Hoekstra included provisions that would provide expanded vocational job training programs for federal inmates. Gary Engebretson, president of the Contract Services Association of America, said he strongly backs the legislation. Engebretson said in written testimony that Unicor's mandatory source status "translates into lost business for those companies that are traditional government suppliers." Steve Schwalb, FPI's chief operating officer, said the group would see a "major drop" in sales if the legislation passes. Schwalb said FPI would be willing to give up the mandatory source requirement if it were allowed to sell its products and services commercially. Currently, the agency is restricted to selling its products to federal agencies.