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04-12-2004, 07:55 PM
http://www.axcessnews.com/national_041204.shtml
More competition urged for prison industries
By Melissa Sanchez - Scripps Howard Foundation Wire
Private sector companies want a greater shot at government contracts for products now made by federal prisoners.
Visit our AXcess News Forum and add your comments on this story. Try your hand at writing, the best story will be published on our news network. Take our education poll too!
April 12, 2004 (AXcess News/SHFW) Washington - Private sector companies want a greater shot at government contracts for products now made by federal prisoners.
Federal Prison Industries Inc. - which has a near monopoly on some contracts - fears the end of so-called mandatory source provisions could hurt prisoners' chances of rehabilitation. FPI’s annual revenue totals about $500 million.
On Wednesday, representatives of both sides, as well as union officials and senators, spoke before a Senate subcommittee about legislation that would let businesses compete with FPI to provide government agencies with products and services such as office furniture and data entry.
"I support the goal of keeping prisoners busy while serving their time in prison, and this legislation is not about ending that. It's about competition," said Sen. Craig Thomas, R-Wyo. "Clearly, competitive bidding is a reasonable process that will ensure taxpayers' dollars are being spent responsibly."
Federal agencies must purchase items from FPI unless they cost less than $2,500 - then they can look to the private sector.
Thomas said FPI has the added advantage of paying its workers less than minimum wage - between 25 cents and $1.25 per hour. FPI employs about 22,000 federal prisoners, or 12 percent of prisoners.
Although prisoners' wages are low, prison officials pointed out that prisoners are often illiterate or unskilled before they begin work. Half of their wages go to pay court fines, restitution or child support.
Advocates of mandatory source say if competition eliminates prison jobs there could be more inmate violence.
"As inmates become idle, they become bored and depressed - both of which increases the chance of inmate violence," said Philip Glover, president of the Council of Prison Locals, which represents prison employees, in a written statement.
He suggested legislation to allow FPI to sell products on the open market, perhaps keeping some jobs that might otherwise go overseas.
"The goal ... is to provide inmates with job skills training and work experience," said Harley Lapin, who heads Federal Bureau of Prisons and FPI. He said that inmates who work are 24 percent less likely to commit crimes and 14 percent more likely to be employed after release, compared to inmates who weren’t involved with FPI.
Lapin said he wouldn't oppose reforming FPI, or eliminating mandatory source, as long as other work opportunities for prisoners are explored.
He also said FPI tries to avoid hurting small businesses that sell similar products and has contracts to buy supplies or raw materials from companies owned by women or minorities.
"Thousands of businesses, my own included, have contracts with FPI - contracts worth more than half a billion dollars in gross revenues in 2002," said Andrew Linder, who owns a New York electronics business called Power Connector. He said he opposes the proposed legislation because it would hurt the small businesses that "supply the raw materials, component parts and the services that make possible FPI’s work with inmates."
The bill, which was introduced a year ago, is in the Senate's Committee on Governmental Affair's Subcommittee on Financial Management, the Budget, and International Security. A similar bill passed in the House in November.
The Defense Department won authorization two years ago to get competitive bids if it determines private sector products are less expensive or more suited to its needs.
AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking news. If you're not a member, consider joining now. Members get the latest business news, commentaries and stock picks delivered right to their in-box.
More competition urged for prison industries
By Melissa Sanchez - Scripps Howard Foundation Wire
Private sector companies want a greater shot at government contracts for products now made by federal prisoners.
Visit our AXcess News Forum and add your comments on this story. Try your hand at writing, the best story will be published on our news network. Take our education poll too!
April 12, 2004 (AXcess News/SHFW) Washington - Private sector companies want a greater shot at government contracts for products now made by federal prisoners.
Federal Prison Industries Inc. - which has a near monopoly on some contracts - fears the end of so-called mandatory source provisions could hurt prisoners' chances of rehabilitation. FPI’s annual revenue totals about $500 million.
On Wednesday, representatives of both sides, as well as union officials and senators, spoke before a Senate subcommittee about legislation that would let businesses compete with FPI to provide government agencies with products and services such as office furniture and data entry.
"I support the goal of keeping prisoners busy while serving their time in prison, and this legislation is not about ending that. It's about competition," said Sen. Craig Thomas, R-Wyo. "Clearly, competitive bidding is a reasonable process that will ensure taxpayers' dollars are being spent responsibly."
Federal agencies must purchase items from FPI unless they cost less than $2,500 - then they can look to the private sector.
Thomas said FPI has the added advantage of paying its workers less than minimum wage - between 25 cents and $1.25 per hour. FPI employs about 22,000 federal prisoners, or 12 percent of prisoners.
Although prisoners' wages are low, prison officials pointed out that prisoners are often illiterate or unskilled before they begin work. Half of their wages go to pay court fines, restitution or child support.
Advocates of mandatory source say if competition eliminates prison jobs there could be more inmate violence.
"As inmates become idle, they become bored and depressed - both of which increases the chance of inmate violence," said Philip Glover, president of the Council of Prison Locals, which represents prison employees, in a written statement.
He suggested legislation to allow FPI to sell products on the open market, perhaps keeping some jobs that might otherwise go overseas.
"The goal ... is to provide inmates with job skills training and work experience," said Harley Lapin, who heads Federal Bureau of Prisons and FPI. He said that inmates who work are 24 percent less likely to commit crimes and 14 percent more likely to be employed after release, compared to inmates who weren’t involved with FPI.
Lapin said he wouldn't oppose reforming FPI, or eliminating mandatory source, as long as other work opportunities for prisoners are explored.
He also said FPI tries to avoid hurting small businesses that sell similar products and has contracts to buy supplies or raw materials from companies owned by women or minorities.
"Thousands of businesses, my own included, have contracts with FPI - contracts worth more than half a billion dollars in gross revenues in 2002," said Andrew Linder, who owns a New York electronics business called Power Connector. He said he opposes the proposed legislation because it would hurt the small businesses that "supply the raw materials, component parts and the services that make possible FPI’s work with inmates."
The bill, which was introduced a year ago, is in the Senate's Committee on Governmental Affair's Subcommittee on Financial Management, the Budget, and International Security. A similar bill passed in the House in November.
The Defense Department won authorization two years ago to get competitive bids if it determines private sector products are less expensive or more suited to its needs.
AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking news. If you're not a member, consider joining now. Members get the latest business news, commentaries and stock picks delivered right to their in-box.