Pete Hoekstra

Federal Prison Industries

In November 2003, the House passed H.R. 1829, a bill I introduced that requires FPI to compete for its government contracts rather than simply receiving them on a non-competitive basis as it now does.

FPI exploits cheap prison labor to assemble products purchased by federal agencies, including furniture, clothing and vehicular components. Under its 1934 authorizing statute, if a federal agency requires a product offered by FPI, it must make the award to FPI or obtain FPI’s permission to solicit offers from the private sector.

Federal agencies currently must buy FPI’s offered product even though price is often higher, the quality lower and delivery of service longer than that of commercial products. In 2002, FPI ranked 32nd among the top 100 federal contractors, just behind Exxon-Mobil. FPI enjoys competitive advantages such as compensating its workers at wages of between 23 cents and $1.15 an hour, paying no local, state or federal taxes and not being subject to OSHA regulations.

By eliminating FPI’s mandatory source status in competing for federal contracts, private sector firms will be able to bid on more than a half-billion dollars in business opportunities funded by their own tax dollars. I have reintroduced this legislation in the 109th Congress as H.R. 2965. I am hopeful that we will build off the successes of last Congress and pass this legislation out of both chambers of Congress.