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Old 05-27-2003, 09:36 AM
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Default Hr 1829

108th CONGRESS

1st Session

H. R. 1829

To amend title 18, United States Code, to require Federal Prison Industries to compete for its contracts minimizing its unfair competition with private sector firms and their non-inmate workers and empowering Federal agencies to get the best value for taxpayers' dollars, to provide a five-year period during which Federal Prison Industries adjusts to obtaining inmate work opportunities through other than its mandatory source status, to enhance inmate access to remedial and vocational opportunities and other rehabilitative opportunities to better prepare inmates for a successful return to society, to authorize alternative inmate work opportunities in support of non-profit organizations, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

April 12, 2003
Mr. HOEKSTRA (for himself, Mr. FRANK of Massachusetts, Mr. COLLINS, Mrs. MALONEY, Mr. SENSENBRENNER, Mr. CONYERS, Mr. COBLE, Mr. WATT, Mr. MANZULLO, Ms. VELAZQUEZ, Mr. BOEHNER, Mr. GEORGE MILLER of California, Mr. TOM DAVIS of Virginia, Mr. RANGEL, Mr. TOOMEY, Mr. NADLER, Mr. EHLERS, Mr. DINGELL, Mr. LOBIONDO, Mr. CANTOR, Ms. BALDWIN, Mr. NORWOOD, Ms. WOOLSEY, Mr. SOUDER, Mr. FERGUSON, Ms. SCHAKOWSKY, Mr. SHADEGG, Mr. KINGSTON, Ms. HART, Ms. LEE, Mr. HOSTETTLER, Mr. FILNER, Mr. BARTLETT of Maryland, Mr. OXLEY, Mr. ENGLISH, Mr. MCINTYRE, Mr. DEMINT, Mr. FLAKE, Mr. SMITH of New Jersey, Mr. RYAN of Wisconsin, Mr. CULBERSON, Mr. EMANUEL, Mr. FORBES, Mr. GOODE, Mrs. NORTHUP, Mr. OLVER, Mr. BLUNT, Ms. PRYCE of Ohio, Mrs. MILLER of Michigan, Mr. CRAMER, Mr. CAMP, Mr. ROGERS of Michigan, Mr. LEACH, Mr. PENCE, Mr. HILL, Mr. UPTON, Mr. MCCOTTER, Mr. LANGEVIN, Mr. NETHERCUTT, Mr. OSBORNE, Mr. HAYES, Mr. WAMP, Mr. TERRY, Mr. KLECZKA, Mrs. MYRICK, Mr. NEY, Mr. BRADY of Pennsylvania, Mr. BRADY of Texas, Mrs. JONES of Ohio, Mr. JONES of North Carolina, Mr. SESSIONS, Mrs. CUBIN, Mrs. CAPITO, Mr. BURR, Mr. CLAY, Mr. KNOLLENBERG, Mr. MORAN of Kansas, Mr. TIBERI, Mr. PORTER, Mr. MCGOVERN, Mr. BALLENGER, Mr. DEAL of Georgia, Mr. EVERETT, Mr. KENNEDY of Rhode Island, Mr. MCKEON, Mr. ISAKSON, Mr. LATOURETTE, Mr. THORNBERRY, Mrs. WILSON of New Mexico, Mr. ROYCE, Mr. KLINE, Mr. KUCINICH, Mr. DUNCAN, Mr. TIAHRT, Mr. QUINN, Mr. WILSON of South Carolina, Mr. DOOLITTLE, Mr. MCDERMOTT, Mrs. BIGGERT, Mrs. MUSGRAVE, Mr. CHOCOLA, Mr. GINGREY, Mr. NUNES, and Mr. BURNS) introduced the following bill; which was referred to the Committee on the Judiciary


--------------------------------------------------------------------------------

A BILL

To amend title 18, United States Code, to require Federal Prison Industries to compete for its contracts minimizing its unfair competition with private sector firms and their non-inmate workers and empowering Federal agencies to get the best value for taxpayers' dollars, to provide a five-year period during which Federal Prison Industries adjusts to obtaining inmate work opportunities through other than its mandatory source status, to enhance inmate access to remedial and vocational opportunities and other rehabilitative opportunities to better prepare inmates for a successful return to society, to authorize alternative inmate work opportunities in support of non-profit organizations, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Federal Prison Industries Competition in Contracting Act of 2003'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Governmentwide procurement policy relating to purchases from Federal Prison Industries.

Sec. 3. Public participation regarding expansion proposals by Federal Prison Industries.

Sec. 4. Transitional mandatory source authority.

Sec. 5. Authority to perform as a Federal subcontractor.

Sec. 6. Inmate wages and deductions.

Sec. 7. Clarifying amendment relating to services.

Sec. 8. Conforming amendment.

Sec. 9. Rules of construction relating to chapter 307.

Sec. 10. Providing additional rehabilitative opportunities for inmates.

Sec. 11. Restructuring the Board of Directors.

Sec. 12. Providing additional management flexibility to Federal Prison Industry operations.

Sec. 13. Transitional personnel management authority.

Sec. 14. Federal Prison Industries report to Congress.

Sec. 15. Independent study to determine the effects of eliminating the Federal Prison Industries mandatory source authority.

Sec. 16. Definitions.

Sec. 17. Implementing regulations and procedures.

Sec. 18. Rule of construction.

Sec. 19. Effective date and applicability.

Sec. 20. Clerical amendments.

SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELATING TO PURCHASES FROM FEDERAL PRISON INDUSTRIES.
Section 4124 of title 18, United States Code, is amended to read as follows:

`Sec. 4124. Governmentwide procurement policy relating to purchases from Federal Prison Industries
`(a) IN GENERAL- Purchases from Federal Prison Industries, Incorporated, a wholly owned Government corporation, as referred to in section 9101(3)(E) of title 31, may be made by a Federal department or agency only in accordance with this section.

`(b) SOLICITATION AND EVALUATION OF OFFERS AND CONTRACT AWARDS- (1) If a procurement activity of a Federal department or agency has a requirement for a specific product or service that is authorized to be offered for sale by Federal Prison Industries, in accordance with section 4122 of this title, and is listed in the catalog referred to in subsection (g), the procurement activity shall solicit an offer from Federal Prison Industries, if the purchase is expected to be in excess of the micro-purchase threshold (as defined by section 32(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 428(f))).

`(2) A contract award for such product or service shall be made using competitive procedures in accordance

with the applicable evaluation factors, unless a determination is made by the Attorney General pursuant to paragraph (3) or an award using other than competitive procedures is authorized pursuant to paragraph (7).

`(3) The procurement activity shall negotiate with Federal Prison Industries on a noncompetitive basis for the award of a contract if the Attorney General determines that--

`(A) Federal Prison Industries cannot reasonably expect fair consideration to receive the contract award on a competitive basis; and

`(B) the contract award is necessary to maintain work opportunities otherwise unavailable at the penal or correctional facility at which the contract is to be performed to prevent circumstances that could reasonably be expected to significantly endanger the safe and effective administration of such facility.

`(4) Except in the case of an award to be made pursuant to paragraph (3), a contract award shall be made with Federal Prison Industries only if the contracting officer for the procurement activity determines that--

`(A) the specific product or service to be furnished will meet the requirements of the procurement activity (including any applicable prequalification requirements and all specified commercial or governmental standards pertaining to quality, testing, safety, serviceability, and warranties);

`(B) timely performance of the contract can be reasonably expected; and

`(C) the contract price does not exceed a current market price.

`(5) A determination by the Attorney General pursuant to paragraph (3) shall be--

`(A) supported by specific findings by the warden of the penal or correctional institution at which a Federal Prison Industries workshop is scheduled to perform the contract;

`(B) supported by specific findings by Federal Prison Industries regarding why it does not expect to win the contract on a competitive basis; and

`(C) made and reported in the same manner as a determination made pursuant to section 303(c)(7) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)(7)).

`(6) If the Attorney General has not made the determination described in paragraph (3) within 30 days after Federal Prison Industries has been informed of a contracting opportunity by a procurement activity, the procurement activity may proceed to conduct a procurement for the product or service in accordance with the procedures generally applicable to such procurements by the procurement activity.

`(7) A contract award may be made to Federal Prison Industries using other than competitive procedures if such product or service is only available from Federal Prison Industries and the contract may be awarded under the authority of section 2304(c)(1) of title 10 or section 303(c) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252(c)(1)), as may be applicable, and pursuant to the justification and approval requirements relating to such noncompetitive procurements specified by law and the Governmentwide Federal Acquisition Regulation.

`(c) OFFERS FROM FEDERAL PRISON INDUSTRIES- A timely offer received from Federal Prison Industries to furnish a product or service to a Federal department or agency shall be considered for award without limitation as to the dollar value of the proposed purchase.

`(d) PERFORMANCE BY FEDERAL PRISON INDUSTRIES- Federal Prison Industries shall perform its contractual obligations under a contract awarded by a Federal department or agency to the same extent as any other contractor.

`(e) FINALITY OF CONTRACTING OFFICER'S DECISION- (1) A decision by a contracting officer regarding the award of a contract to Federal Prison Industries or relating to the performance of such contract shall be final, unless reversed on appeal pursuant to paragraph (2) or (3).

`(2) The Chief Executive Officer of Federal Prison Industries may appeal to the head of a Federal department or agency a decision by a contracting officer not to award a contract to Federal Prison Industries pursuant to subsection (b)(4). The decision of the head of a Federal department or agency on appeal shall be final.

`(3) A dispute between Federal Prison Industries and a procurement activity regarding performance of a contract shall be subject to--

`(A) alternative means of dispute resolution pursuant to subchapter IV of chapter 5 of title 5; or

`(B) final resolution by the board of contract appeals having jurisdiction over the procurement activity's contract performance disputes pursuant to the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.).

`(f) REPORTING OF PURCHASES- Each Federal department or agency shall report purchases from Federal Prison Industries to the Federal Procurement Data System (as referred to in section 6(d)(4) of the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4))) in the same manner as it reports to such System any acquisition in an amount in excess of the simplified acquisition threshold (as defined by section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11))).

`(g) CATALOG OF PRODUCTS- Federal Prison Industries shall publish and maintain a catalog of all specific products and services that it is authorized to offer for sale. Such catalog shall be periodically revised as products and services are added or deleted by its board of directors (in accordance with section 4122(b) of this title).

`(h) COMPLIANCE WITH STANDARDS- Federal Prison Industries shall comply with Federal occupational, health, and safety standards with respect to the operation of its industrial operations.'.

SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION PROPOSALS BY FEDERAL PRISON INDUSTRIES.
Section 4122(b) of title 18, United States Code, is amended--

(1) by redesignating paragraph (6) as paragraph (12); and

(2) by striking paragraphs (4) and (5) and inserting the following new paragraphs:

`(4) A decision to authorize Federal Prison Industries to offer a new specific product or specific service or to expand the production of an existing product or service shall be made by its board of directors in conformance with the requirements of subsections (b), (c), (d), and (e) of section 553 of title 5, and this chapter.
__________________
*SHERRI*
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  #2  
Old 05-27-2003, 09:37 AM
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part two


`(5)(A) Whenever Federal Prison Industries proposes to offer for sale a new specific product or specific service or to expand production of a currently authorized product or service, the Chief Operating Officer of Federal Prison Industries shall submit an appropriate proposal to the board of directors and obtain the board's approval before initiating any such expansion. The proposal submitted to the board shall include a detailed analysis of the probable impact of the proposed expansion of sales within the Federal market by Federal Prison Industries on private sector firms and their non-inmate workers.

`(B)(i) The analysis required by subparagraph (A) shall be performed by an interagency team on a reimbursable basis or by a private contractor paid by Federal Prison Industries.

`(ii) If the analysis is to be performed by an interagency team, such team shall be led by the Administrator of the Small Business Administration or the designee of such officer with representatives of the Department of Labor, the Department of Commerce, and the Federal Procurement Data Center.

`(iii) If the analysis is to be performed by a private contractor, the selection of the contractor and the administration of the contract shall be conducted by one of the entities referenced in clause (ii) as an independent executive agent for the board of directors. Maximum consideration shall be given to any proposed statement of work furnished by the Chief Operating Officer of Federal Prison Industries.

`(C) The analysis required by subparagraph (A) shall identify and consider--

`(i) the number of vendors that currently meet the requirements of the Federal Government for the specific product or specific service;

`(ii) the proportion of the Federal Government market for the specific product or specific service currently furnished by small businesses during the previous 3 fiscal years;

`(iii) the share of the Federal market for the specific product or specific service projected for Federal Prison Industries for the fiscal year in which production or performance will commence or expand and the subsequent 4 fiscal years;

`(iv) whether the industry producing the specific product or specific service in the private sector--

`(I) has an unemployment rate higher than the national average; or

`(II) has a rate of unemployment for workers that has consistently shown an increase during the previous 5 years;

`(v) whether the specific product is an import-sensitive product;

`(vi) the requirements of the Federal Government and the demands of entities other than the Federal Government for the specific product or service during the previous 3 fiscal years;

`(vii) the projected growth or decline in the demand of the Federal Government for the specific product or specific service;

`(viii) the capability of the projected demand of the Federal Government for the specific product or service to sustain both Federal Prison Industries and private vendors; and

`(ix) whether authorizing the production of the new product or performance of a new service will provide inmates with the maximum opportunity to acquire knowledge and skill in trades and occupations that will provide them with a means of earning a livelihood upon release.

`(D)(i) The board of directors may not approve a proposal to authorize the production and sale of a new specific product or continued sales of a previously authorized product unless--

`(I) the product to be furnished is a prison-made product; or

`(II) the service to be furnished is to be performed by inmate workers.

`(ii) The board of directors may not approve a proposal to authorize the production and sale of a new prison-made product or to expand production of a currently authorized product if the product is--

`(I) produced in the private sector by an industry which has reflected during the previous year an unemployment rate above the national average; or

`(II) an import-sensitive product.

`(iii) The board of directors may not approve a proposal for inmates to provide a service in which an inmate worker has access to--

`(I) personal or financial information about individual private citizens, including information relating to such person's real property, however described, without giving prior notice to such persons or class of persons to the greatest extent practicable;

`(II) geographic data regarding the location of surface and subsurface infrastructure providing communications, water and electrical power distribution, pipelines for the distribution of natural gas, bulk petroleum products and other commodities, and other utilities; or

`(III) data that is classified.

`(iv)(I) Federal Prison Industries is prohibited from furnishing through inmate labor construction services, unless to be performed within a Federal correctional institution pursuant to the participation of an inmate in an apprenticeship or other vocational education program teaching the skills of the various building trades.

`(II) For purposes of this clause, the term `construction' has the meaning given such term by section 2.101 of the Federal Acquisition Regulation (48 CFR part 2.101), as in effect on June 1, 2002, including the repair, alteration, or maintenance of real property in being.

`(6) To provide further opportunities for participation by interested parties, the board of directors shall--

`(A) give additional notice of a proposal to authorize the production and sale of a new product or

service, or expand the production of a currently authorized product or service, in a publication designed to most effectively provide notice to private vendors and labor unions representing private sector workers who could reasonably be expected to be affected by approval of the proposal, which notice shall offer to furnish copies of the analysis required by paragraph (5) and shall solicit comment on the analysis;

`(B) solicit comments on the analysis required by paragraph (5) from trade associations representing vendors and labor unions representing private sector workers who could reasonably be expected to be affected by approval of the proposal to authorize the production and sale of a new product or service (or expand the production of a currently authorized product or service); and

`(C) afford an opportunity, on request, for a representative of an established trade association, labor union, or other private sector representatives to present comments on the proposal directly to the board of directors.

`(7) The board of directors shall be provided copies of all comments received on the expansion proposal.

`(8) Based on the comments received on the initial expansion proposal, the Chief Operating Officer of Federal Prison Industries may provide the board of directors a revised expansion proposal. If such revised proposal provides for expansion of inmate work opportunities in an industry different from that initially proposed, such revised proposal shall reflect the analysis required by paragraph (5)(C) and be subject to the public comment requirements of paragraph (6).

`(9) The board of directors shall consider a proposal to authorize the sale of a new specific product or specific service (or to expand the volume of sales for a currently authorized product or service) and take any action with respect to such proposal, during a meeting that is open to the public, unless closed pursuant to section 552(b) of title 5.

`(10) In conformity with the requirements of paragraphs (5) through (9) of this subsection, the board of directors may--

`(A) authorize the donation of products produced or services furnished by Federal industries and available for sale; or

`(B) authorize the production of a new specific product or the furnishing of a new specific service for donation.'.

SEC. 4. TRANSITIONAL MANDATORY SOURCE AUTHORITY.
(a) IN GENERAL- Notwithstanding the requirements of section 4124 of title 18, United States Code (as amended by section 2 of this Act), a Federal department or agency having a requirement for a product that is authorized for sale by Federal Prison Industries and is listed in its catalog (referred to in section 4124(g) of title 18, United States Code) shall first solicit an offer from Federal Prison Industries and make purchases on a noncompetitive basis in accordance with this section.

(b) PREFERENTIAL SOURCE STATUS- Subject to the limitations of subsection (d), a contract award shall be made on a noncompetitive basis to Federal Prison Industries if the contracting officer for the procurement activity determines that--

(1) the product offered by Federal Prison Industries will meet the requirements of the procurement activity (including commercial or governmental standards or specifications pertaining to design, performance, testing, safety, serviceability, and warranties as may be imposed upon a private sector supplier of the type being offered by Federal Prison Industries);

(2) timely performance of the contract by Federal Prison Industries can be reasonably expected; and

(3) the negotiated price does not exceed a fair and reasonable price.

(c) CONTRACTUAL TERMS- The terms and conditions of the contract and the price to be paid to Federal Prison Industries shall be determined by negotiation between Federal Prison Industries and the Federal agency making the purchase. The negotiated price shall not exceed a fair and reasonable price determined in accordance with the procedures of the Federal Acquisition Regulation.

(d) PERFORMANCE OF CONTRACTUAL OBLIGATIONS-

(1) IN GENERAL- Federal Prison Industries shall perform the obligations of the contract negotiated pursuant to subsection (c).

(2) PERFORMANCE DISPUTES- If the head of the contracting activity and the Chief Operating Officer of Federal Prison Industries are unable to resolve a contract performance dispute to their mutual satisfaction, such dispute shall be resolved pursuant to section 4124(e)(3) of title 18, United States Code (as added by section 2 of this Act).

(e) LIMITATIONS ON USE OF AUTHORITY-

(1) IN GENERAL- As a percentage of the sales made by Federal Prison Industries during the base period, the total dollar value of sales to the Government made pursuant to subsection (b) and subsection (c) of this section shall not exceed--

(A) 90 percent in fiscal year 2005;

(B) 85 percent in fiscal year 2006;

(C) 70 percent in fiscal year 2007;

(D) 55 percent in fiscal year 2008; and

(E) 40 percent in fiscal year 2009.

(2) SALES WITHIN VARIOUS BUSINESS SECTORS- Use of the authority provided by subsections (b) and (c) shall not result in sales by Federal Prison Industries to the Government that are in excess of its total sales during the base year for each business sector.

(3) LIMITATIONS RELATING TO SPECIFIC PRODUCTS- Use of the authorities provided by subsections (b) and (c) shall not result in contract awards to Federal Prison Industries that are in excess of its total sales during the base period for such product.

(4) CHANGES IN DESIGN SPECIFICATIONS- The limitations on sales specified in paragraphs (2) and (3) shall not be affected by any increases in the unit cost of production of a specific product arising from changes in the design specification of such product directed by the buying agency.

(f) DURATION OF AUTHORITY- The preferential contracting authorities authorized by subsection (b) may not be used on or after October 1, 2009, and become effective on the effective date of the final regulations issued pursuant to section 17.

(g) DEFINITIONS- For the purposes of this section--

(1) the term `base period' means the total sales of Federal Prison Industries during the period October 1, 2001, and September 30, 2002 (Fiscal Year 2002);

(2) the term `business sectors' means the eight product/service business groups identified in the 2002 Federal Prison Industries annual report as the Clothing and Textile Business Group, the Electronics Business Group, the Fleet Management and Vehicular Components Business Group, the Graphics Business Group, the Industrial Products Business Group, the Office Furniture Business Group, the Recycling Activities Business Group, and the Services Business Group; and

(3) the term `fair and reasonable price' shall be given the same meaning as, and be determined pursuant to, part 15.8 of the Federal Acquisition Regulation (48 C.F.R. 15.8).

(h) FINDING BY ATTORNEY GENERAL WITH RESPECT TO PUBLIC SAFETY- (1) Not later than 60 days prior to the end of each fiscal year specified in subsection (e)(1), the Attorney General shall make a finding regarding the effects of the percentage limitation imposed by such subsection for such fiscal year and the likely effects of the limitation imposed by such subsection for the following fiscal year.

(2) The Attorney General's finding shall include a determination whether such limitation has resulted or is likely to result in a substantial reduction in inmate industrial employment and whether such reductions, if any, present a significant risk of adverse effects on safe prison operation or public safety.

(3) If the Attorney General finds a significant risk of adverse effects on either safe prison management or public safety, he shall so advise the Congress.

(4) In advising the Congress pursuant to paragraph (3), the Attorney General shall make recommendations for additional authorizations of appropriations to provide additional alternative inmate rehabilitative opportunities and additional correctional staffing, as may be appropriate.

SEC. 5. AUTHORITY TO PERFORM AS A FEDERAL SUBCONTRACTOR.
(a) IN GENERAL- Federal Prison Industries is authorized to enter into a contract with a Federal contractor (or a subcontractor of such contractor at any tier) to produce products as a subcontractor or supplier in the performance of a Federal procurement contract. The use of Federal Prison Industries as a subcontractor or supplier shall be a wholly voluntary business decision by the Federal prime contractor or subcontractor, subject to any prior approval of subcontractors or suppliers by the contracting officer which may be imposed by the Federal Acquisition Regulation or by the contract.

(b) COMMERCIAL SALES PROHIBITED- The authority provided by subsection (a) shall not result, either directly or indirectly, in the sale in the commercial market of a product or service resulting from the labor of Federal inmate workers in violation of section 1762(a) of title 18, United States Code. A Federal contractor (or subcontractor at any tier) using Federal Prison Industries as a subcontractor or supplier in furnishing a commercial product pursuant to a Federal contract shall implement appropriate management procedures to prevent introducing an inmate-produced product into the commercial market.

(c) PROHIBITIONS ON MANDATING SUBCONTRACTING WITH FEDERAL PRISON INDUSTRIES- Except as authorized under the Federal Acquisition Regulation, the use of Federal Prison Industries as a subcontractor or supplier of products or provider of services shall not be imposed upon prospective or actual Federal prime contractors or a subcontractors at any tier by means of--

(1) a contract solicitation provision requiring a contractor to offer to make use of Federal Prison Industries, its products or services;

(2) specifications requiring the contractor to use specific products or services (or classes of products or services) offered by Federal Prison Industries in the performance of the contract;

(3) any contract modification directing the use of Federal Prison Industries, its products or services; or

(4) any other means.

SEC. 6. INMATE WAGES AND DEDUCTIONS.
Section 4122(b) of title 18, United States Code (as amended by section 3 of this Act), is further amended by adding a new paragraph (11) as follows:

`(11)(A) The Board of Directors of Federal Prison Industries shall prescribe the rates of hourly wages to be paid inmates performing work for or through Federal Prison Industries. The Director of the Federal Bureau of Prisons shall prescribe the rates of hourly wages for other work assignments within the various Federal correctional institutions.

`(B) The various inmate wage rates shall be reviewed and considered for increase on not less than a biannual basis.

`(C) Wages earned by an inmate worker shall be paid in the name of the inmate. Deductions, aggregating to not more than 80 percent of gross wages, shall be taken from the wages due for--

`(i) applicable taxes (Federal, State, and local);

`(ii) payment of fines and restitution pursuant to court order;

`(iii) payment of additional restitution for victims of the inmate's crimes (at a rate not less than 10 percent of gross wages);

`(iv) allocations for support of the inmate's family pursuant to statute, court order, or agreement with the inmate;

`(v) allocations to a fund in the inmate's name to facilitate such inmate's assimilation back into society, payable at the conclusion of incarceration; and

`(vi) such other deductions as may be specified by the Director of the Bureau of Prisons.

`(D) Each inmate worker working for Federal Prison Industries shall indicate in writing that such person--

`(i) is participating voluntarily; and

`(ii) understands and agrees to the wages to be paid and deductions to be taken from such wages.'.

SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES.
(a) IN GENERAL- Section 1761 of title 18, United States Code, is amended in subsection (a), by striking `any goods, wares, or merchandise manufactured, produced, or mined' and inserting `products manufactured, services furnished, or minerals mined'.

(b) COMPLETION OF EXISTING AGREEMENTS- Any prisoner work program operated by a prison or jail of a State or local jurisdiction of a State which is providing services for the commercial market through inmate labor on October 1, 2002, may continue to provide such commercial services until--

(1) the expiration date specified in the contract or other agreement with a commercial partner on October 1, 2002, or

(2) until September 30, 2005, if the prison work program is directly furnishing the services to the commercial market.

(c) APPROVAL REQUIRED FOR LONG-TERM OPERATION- A prison work program operated by a correctional institution operated by a State or local jurisdiction of a State may continue to provide inmate labor to furnish services for sale in the commercial market after the dates specified in subsection (b) if such program has been certified pursuant to section 1761(c)(1) of title 18, United States Code, and is in compliance with the requirements of such subsection and its implementing regulations.

SEC. 8. CONFORMING AMENDMENT.
Section 4122(a) of title 18, United States Code, is amended by striking `production of commodities' and inserting `production of products or furnishing of services'.

SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 307.
Chapter 307 of title 18, United States Code, is further amended by adding the following:

`Sec. 4130. Construction of provisions
`Nothing in this chapter shall be construed--

`(1) to establish an entitlement of any inmate to--

`(A) employment in a Federal Prison Industries facility; or

`(B) any particular wage, compensation, or benefit on demand, except as otherwise specifically provided by law or regulation;

`(2) to establish that inmates are employees for the purposes of any law or program; or

`(3) to establish any cause of action by or on behalf of any inmate against the United States or any officer, employee, or contractor thereof.'.

SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPORTUNITIES FOR INMATES.
(a) ADDITIONAL EDUCATIONAL, TRAINING, AND RELEASE-PREPARATION OPPORTUNITIES-

(1) PROGRAM ESTABLISHED- There is hereby established the Enhanced In-Prison Educational and Vocational Assessment and Training Program within the Bureau of Prisons.

(2) COMPREHENSIVE PROGRAM- In addition to such other components as the Director of the Bureau of Prisons deems appropriate to reduce inmate idleness and better prepare inmates for a successful reentry into the community upon release, the program shall provide--

(A) in-prison assessments of inmates' needs and aptitudes;

(B) a full range of educational opportunities;

(C) vocational training and apprenticeships; and

(D) comprehensive release-readiness preparation.

(3) AUTHORIZATION OF APPROPRIATIONS- For the purposes of carrying out the program established by paragraph (1), $75,000,000 is authorized for each fiscal year after fiscal year 2003, to remain available until expended. Funds shall be allocated from the gross profits within the Federal Prison Industries Fund, and, to the extent such amounts are inadequate, from the General Treasury.

(b) INMATE WORK OPPORTUNITIES IN SUPPORT OF NOT-FOR-PROFIT ENTITIES-

(1) PROPOSALS FOR DONATION PROGRAMS- The Chief Operating Officer of Federal Prison Industries shall develop and present to the Board of Directors of Federal Prison Industries proposals to have Federal Prison Industries donate products and services to eligible entities that provide goods or services to low-income individuals who would likely otherwise have difficulty purchasing such products or services in the commercial market.

(2) SCHEDULE FOR SUBMISSION AND CONSIDERATION OF DONATION PROGRAMS-

(A) INITIAL PROPOSALS- The Chief Operating Officer shall submit the initial group of proposals for programs of the type described in paragraph (1) within 180 days after the date of the enactment of this Act. The Board of Directors of Federal Prison Industries shall consider such proposals from the Chief Operating Officer not later than the date that is 270 days after the date of the enactment of this Act.

(B) ANNUAL OPERATING PLAN- The Board of Directors of Federal Prison Industries shall consider proposals by the Chief Operating Officer for programs of the type described in paragraph (1) as part of the annual operating plan for Federal Prison Industries.

(C) OTHER PROPOSALS- In addition to proposals submitted by the Chief Operating Officer, the Board of Directors may, from time to time, consider proposals presented by prospective eligible entities.

(3) DEFINITION OF ELIGIBLE ENTITIES- For the purposes of this subsection, the term `eligible entity' means an entity--

(A) that is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code and that has been such an organization for a period of not less

than 36 months prior to inclusion in a proposal of the type described in paragraph (1), or

(B) that is a religious organization described in section 501(d) of such Code and exempt from taxation under section 501(a) of such Code.

(4) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $7,000,000 for each of the fiscal years 2004 through 2008 for the purposes of paying the wages of inmates and otherwise carrying out programs of the type described in paragraph (1).

(c) MAXIMIZING INMATE REHABILITATIVE OPPORTUNITIES THROUGH COGNITIVE ABILITIES ASSESSMENTS-

(1) DEMONSTRATION PROGRAM AUTHORIZED-

(A) IN GENERAL- There is hereby established within the Federal Bureau of Prisons a program to be known as the `Cognitive Abilities Assessment Demonstration Program'. The purpose of the demonstration program is to determine the effectiveness of a program that assesses the cognitive abilities and perceptual skills of Federal inmates to maximize the benefits of various rehabilitative opportunities designed to prepare each inmate for a successful return to society and reduce recidivism. The demonstration program shall be undertaken by a contractor with a demonstrated record of enabling the behavioral and academic improvement of adults through the use of research-based systems that maximize the development of both the cognitive and perceptual capabilities of a participating individual, including adults in a correctional setting.

(B) SCOPE OF DEMONSTRATION PROGRAM- The demonstration program shall to the maximum extent practicable, be--

(i) conducted during a period of three consecutive fiscal years, commencing during fiscal year 2004;

(ii) conducted at 12 Federal correctional institutions; and

(iii) offered to 6,000 inmates, who are categorized as minimum security or less, and are within five years of release.

(2) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated $3,000,000 in each of the three fiscal years after fiscal year 2003, to remain available until expended, for the purposes of conducting the demonstration program authorized by subsection (a).

(d) PRERELEASE EMPLOYMENT ASSISTANCE-

(1) IN GENERAL- The Director of the Bureau of Prisons shall, to the maximum extent practicable, afford to inmates opportunities to participate in programs and activities designed to help prepare such inmates to obtain employment upon release.

(2) PRERELEASE EMPLOYMENT PLACEMENT ASSISTANCE- Such prerelease employment placement assistance required by subsection (a) shall include--

(A) training in the preparation of resumes and job applications;

(B) training in interviewing skills;

(C) training and assistance in job search techniques;

(D) conduct of job fairs; and

(E) such other methods deemed appropriate by the Director of the Bureau of Prisons.

(3) PRIORITY PARTICIPATION- Priority in program participation shall be accorded to inmates who are participating in work opportunities afforded by Federal Prison Industries and are within 24 months of release from incarceration.

(e) PROVIDING ADDITIONAL OPPORTUNITIES FOR POST INCARCERATION VOCATIONAL AND REMEDIAL EDUCATIONAL OPPORTUNITIES FOR INMATES-

(1) FEDERAL REENTRY CENTER DEMONSTRATION-

(A) AUTHORITY AND ESTABLISHMENT OF DEMONSTRATION PROJECT- From funds made available to carry out this subsection, the Attorney General, in consultation with the Director of the Administrative Office of the United States Courts, shall establish the Federal Reentry Center Demonstration project. The project shall involve appropriate prisoners from the Federal prison population and shall utilize community corrections facilities, home confinement, and a coordinated response by Federal agencies to assist participating prisoners in preparing for and adjusting to reentry into the community.

(B) PROJECT ELEMENTS- The project authorized by subparagraph (A) shall include the following core elements:

(i) A Reentry Review Team for each prisoner, consisting of representative from the Bureau of Prisons, the United States Probation System, the United States Parole Commission, and the relevant community corrections facility, who shall initially meet with the prisoner to develop a reentry plan tailored to the needs of the prisoner.

(ii) A system of graduated levels of supervision within the community corrections facility to promote community safety, provide incentives for prisoners to complete the reentry plan, including victim restitution, and provide a reasonable method for imposing sanctions for a prisoner's violation of the conditions of participation in the project.

(iii) Substance abuse treatment and aftercare, mental and medical health treatment and aftercare, vocational and educational training, life skills instruction, conflict resolution skills training, batterer intervention programs, assistance obtaining suitable affordable housing, and other programming to promote effective reintegration into the community as needed.

(C) PROBATION OFFICERS- From funds made available to carry out this subsection, the

Director of the Administrative Office of the United States Courts shall assign one or more probation officers from each participating judicial district to the Reentry Demonstration project. Such officers shall be assigned to and stationed at the community corrections facility and shall serve on the Reentry Review Teams.

(D) PROJECT DURATION- The Reentry Center Demonstration project shall begin not later than 6 months following the availability of funds to carry out this subsection, and shall last 3 years.

(2) DEFINITIONS- For the purposes of this subsection, the term `appropriate prisoner' shall mean a person who is considered by prison authorities--

(A) to pose a medium to high risk of committing a criminal act upon reentering the community; and

(B) to lack the skills and family support network that facilitate successful reintegration into the community.

(3) AUTHORIZATION OF APPROPRIATIONS- To carry out this subsection, there are authorized to be appropriated, to remain available until expended--

(A) to the Federal Bureau of Prisons--

(i) $1,375,000 for fiscal year 2004;

(ii) $1,110,000 for fiscal year 2005;

(iii) $1,130,000 for fiscal year 2006;

(iv) $1,155,000 for fiscal year 2007; and

(v) $1,230,000 for fiscal year 2008; and

(B) to the Federal Judiciary--

(i) $3,380,000 for fiscal year 2004;

(ii) $3,540,000 for fiscal year 2005;

(iii) $3,720,000 for fiscal year 2006;

(iv) $3,910,000 for fiscal year 2007; and

(v) $4,100,000 for fiscal year 2008.

SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS.
Section 4121 of title 18, United States Code, is amended to read as follows:

`Sec. 4121. Federal Prison Industries; Board of Directors: executive management
`(a) Federal Prison Industries is a government corporation of the District of Columbia organized to carry on such industrial operations in Federal correctional institutions as authorized by its Board of Directors. The manner and extent to which such industrial operations are carried on in the various Federal correctional institutions shall be determined by the Attorney General.

`(b)(1) The corporation shall be governed by a board of 11 directors appointed by the President.

`(2) In making appointments to the Board, the President shall assure that 3 members represent the business community, 3 members represent organized labor, 1 member shall have special expertise in inmate rehabilitation techniques, 1 member represents victims of crime, 1 member represents the interests of Federal inmate workers, and 2 additional members whose background and expertise the President deems appropriate. The members of the Board representing the business community shall include, to the maximum extent practicable, representation of firms furnishing services as well as firms producing products, especially from those industry categories from which Federal Prison Industries derives substantial sales. The members of the Board representing organized labor shall, to the maximum practicable, include representation from labor unions whose members are likely to be most affected by the sales of Federal Prison Industries.

`(3) Each member shall be appointed for a term of 5 years, except that of members first appointed--

`(A) 2 members representing the business community shall be appointed for a term of 3 years;

`(B) 2 members representing labor shall be appointed for a term of 3 years;

`(C) 2 members whose background and expertise the President deems appropriate for a term of 3 years;

`(D) 1 member representing victims of crime shall be appointed for a term of 3 years;

`(E) 1 member representing the interests of Federal inmate workers shall be appointed for a term of 3 years;

`(F) 1 member representing the business community shall be appointed for a term of 4 years;

`(G) 1 member representing the business community shall be appointed for a term of 4 years; and

`(H) the members having special expertise in inmate rehabilitation techniques shall be appointed for a term of 5 years.

`(4) The President shall designate 1 member of the Board as Chairperson. The Chairperson may designate a Vice Chairperson.

`(5) Members of the Board may be reappointed.

`(6) Any vacancy on the Board shall be filled in the same manner as the original appointment. Any member appointed to fill a vacancy occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed for the remainder of that term.

`(7) The members of the Board shall serve without compensation. The members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, to attend meetings of the Board and, with the advance approval of the Chairperson of the Board, while otherwise away from their homes or regular places of business for purposes of duties as a member of the Board.

`(8)(A) The Chairperson of the Board may appoint and terminate any personnel that may be necessary to enable the Board to perform its duties.

`(B) Upon request of the Chairperson of the Board, a Federal agency may detail a Federal Government employee to the Board without reimbursement. Such detail shall be without interruption or loss of civil service status or privilege.

`(9) The Chairperson of the Board may procure temporary and intermittent services under section 3109(b) of title 5, United States Code.

`(c) The Director of the Bureau of Prisons shall serve as Chief Executive Officer of the Corporation. The

Director shall designate a person to serve as Chief Operating Officer of the Corporation.'.

SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXIBILITY TO FEDERAL PRISON INDUSTRY OPERATIONS.
Section 4122(b)(3) of title 18, United States Code, is amended--

(1) by striking `(3)' and inserting `(3)(A)'; and

(2) by adding at the end the following new paragraphs:

`(B) Federal Prison Industries may locate more than one workshop at a Federal correctional facility.

`(C) Federal Prison Industries may operate a workshop outside of a correctional facility if all of the inmates working in such workshop are classified as minimum security inmates.'.

SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AUTHORITY.
Any correctional officer or other employee of Federal Prison Industries being paid with nonappropriated funds who would be separated from service because of a reduction in the net income of Federal Prison Industries during any fiscal year specified in section 4(e)(1) shall be--

(1) eligible for appointment (or reappointment) in the competitive service pursuant to title 5, United States Code;

(2) registered on a Bureau of Prisons reemployment priority list; and

(3) given priority for any other position within the Bureau of Prisons for which such employee is qualified.

SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CONGRESS.
Section 4127 of title 18, United States Code, is amended to read as follows:

`Sec. 4127. Federal Prison Industries report to Congress
`(a) IN GENERAL- Pursuant to chapter 91 of title 31, the board of directors of Federal Prison Industries shall submit an annual report to Congress on the conduct of the business of the corporation during each fiscal year and the condition of its funds during the fiscal year.

`(b) CONTENTS OF REPORT- In addition to the matters required by section 9106 of title 31, and such other matters as the board considers appropriate, a report under subsection (a) shall include--

`(1) a statement of the amount of obligations issued under section 4129(a)(1) of this title during the fiscal year;

`(2) an estimate of the amount of obligations that will be issued in the following fiscal year;

`(3) an analysis of--

`(A) the corporation's total sales for each specific product and type of service sold to the Federal agencies and the commercial market;

`(B) the total purchases by each Federal agency of each specific product and type of service;

`(C) the corporation's share of such total Federal Government purchases by specific product and type of service; and

`(D) the number and disposition of disputes submitted to the heads of the Federal departments and agencies pursuant to section 4124(e) of this title;

`(4) an analysis of the inmate workforce that includes--

`(A) the number of inmates employed;

`(B) the number of inmates utilized to produce products or furnish services sold in the commercial market;

`(C) the number and percentage of employed inmates by the term of their incarceration; and

`(D) the various hourly wages paid to inmates employed with respect to the production of the various specific products and types of services authorized for production and sale to Federal agencies and in the commercial market; and

`(5) data concerning employment obtained by former inmates upon release to determine whether the employment provided by Federal Prison Industries during incarceration provided such inmates with knowledge and skill in a trade or occupation that enabled such former inmate to earn a livelihood upon release.

`(c) PUBLIC AVAILABILITY- Copies of an annual report under subsection (a) shall be made available to the public at a price not exceeding the cost of printing the report.'.

SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EFFECTS OF ELIMINATING THE FEDERAL PRISON INDUSTRIES MANDATORY SOURCE AUTHORITY.
(a) STUDY REQUIRED- The Comptroller General shall undertake to have an independent study conducted on the effects of eliminating the Federal Prison Industries mandatory source authority.

(b) SOLICITATION OF VIEWS- The Comptroller General shall ensure that in developing the statement of work and the methodology for the study, the views and input of private industry, organized labor groups, Members and staff of the relevant Congressional committees, officials of the executive branch, and the public are solicited.

(c) SUBMISSION- Not later than January 31, 2005, the Comptroller General shall submit the results of the study to Congress, including any recommendations for legislation.

SEC. 16. DEFINITIONS.
Chapter 307 of title 18, United States Code, is amended by adding at the end the following new section:

`Sec. 4131. Definitions
`As used in this chapter--

`(1) the term `assembly' means the process of uniting or combining articles or components (including ancillary finished components or assemblies) so as to produce a significant change in form or utility, without necessarily changing or altering the component parts;

`(2) the term `current market price' means, with respect to a specific product, the fair market price of the product within the meaning of section 15(a) of the Small Business Act (15 U.S.C. 644(a)),

at the time that the contract is to be awarded, verified through appropriate price analysis or cost analysis, including any costs relating to transportation or the furnishing of any ancillary services;

`(3) the term `import-sensitive product' means a product which, according to Department of Commerce data, has experienced competition from imports at an import to domestic production ratio of 25 percent or greater;

`(4) the term `labor-intensive manufacture' means a manufacturing activity in which the value of inmate labor constitutes at least 10 percent of the estimate unit cost to produce the item by Federal Prison Industries;

`(5) the term `manufacture' means the process of fabricating from raw or prepared materials, so as to impart to those materials new forms, qualities, properties, and combinations;

`(6) the term `reasonable share of the market' means a share of the total purchases by the Federal departments and agencies, as reported to the Federal Procurement Data System for--

`(A) any specific product during the 3 preceding fiscal years, that does not exceed 20 percent of the Federal market for the specific product; and

`(B) any specific service during the 3 preceding fiscal years, that does not exceed 5 percent of the Federal market for the specific service; and

`(7) the term `services' has the meaning given the term `service contract' by section 37.101 of the Federal Acquisition Regulation (48 C.F.R. 36.102), as in effect on July 1, 2002.'.

SEC. 17. IMPLEMENTING REGULATIONS AND PROCEDURES.
(a) FEDERAL ACQUISITION REGULATION-

(1) PROPOSED REVISIONS- Proposed revisions to the Governmentwide Federal Acquisition Regulation to implement the amendments made by this Act shall be published not later than 60 days after the date of the enactment of this Act and provide not less than 60 days for public comment.

(2) FINAL REGULATIONS- Final regulations shall be published not later than 180 days after the date of the enactment of this Act and shall be effective on the date that is 30 days after the date of publication.

(3) PUBLIC PARTICIPATION- The proposed regulations required by subsection (a) and the final regulations required by subsection (b) shall afford an opportunity for public participation in accordance with section 22 of the Office of Federal Procurement Policy Act (41 U.S.C. 418b).

(b) BOARD OF DIRECTORS-

(1) IN GENERAL- The Board of Directors of Federal Prison Industries shall issue regulations defining the terms specified in paragraph (2).

(2) TERMS TO BE DEFINED- The Board of Directors shall issue regulations for the following terms:

(A) Prison-made product.

(B) Prison-furnished service.

(C) Specific product.

(D) Specific service.

(3) SCHEDULE FOR REGULATORY DEFINITIONS-

(A) Proposed regulations relating to the matter described in subsection (b)(2) shall be published not later than 60 days after the date of enactment of this Act and provide not less than 60 days for public comment.

(B) Final regulations relating to the matters described in subsection (b)(2) shall be published not less than 180 days after the date of enactment of this Act and shall be effective on the date that is 30 days after the date of publication.

(4) ENHANCED OPPORTUNITIES FOR PUBLIC PARTICIPATION AND SCRUTINY-

(A) ADMINISTRATIVE PROCEDURE ACT- Regulations issued by the Board of Directors shall be subject to notice and comment rulemaking pursuant to section 553 of title 5, United States Code. Unless determined wholly impracticable or unnecessary by the Board of Directors, the public shall be afforded 60 days for comment on proposed regulations.

(B) ENHANCED OUTREACH- The Board of Directors shall use means designed to most effectively solicit public comment on proposed regulations, procedures, and policies and to inform the affected public of final regulations, procedures, and policies.

(C) OPEN MEETING PROCESSES- The Board of Directors shall take all actions relating to the adoption of regulations, operating procedures, guidelines, and any other matter relating to the governance and operation of Federal Prison Industries based on deliberations and a recorded vote conducted during a meeting open to the public, unless closed pursuant to section 552(b) of title 5, United States Code.

SEC. 18. RULE OF CONSTRUCTION.
Subsection (e) of section 4124 of title 18, United States Code, as amended by section 2, is not intended to alter any rights of any offeror other than Federal Prison Industries to file a bid protest in accordance with other law or regulation in effect on the date of the enactment of this Act.

SEC. 19. EFFECTIVE DATE AND APPLICABILITY.
(a) EFFECTIVE DATE- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of enactment of this Act.

(b) APPLICABILITY- Section 4124 of title 18, United States Code, as amended by section 2, shall apply to any requirement for a product or service offered by Federal Prison Industries needed by a Federal department or agency after the effective date of the final regulations issued pursuant to section 17(a)(2), or after September 30, 2004, whichever is earlier.

SEC. 20. CLERICAL AMENDMENTS.
The table of sections for chapter 307 of title 18, United States Code, is amended--

(1) by amending the item relating to section 4121 to read as follows:

`4121. Federal Prison Industries; Board of Directors: executive management.';

(2) by amending the item relating to section 4124 to read as follows:

`4124. Governmentwide procurement policy relating to purchases from Federal Prison Industries.';

(3) by amending the item relating to section 4127 to read as follows:

`4127. Federal Prison Industries report to Congress.';

and

(4) by adding at the end the following new items:

`4130. Construction of provisions.

`4131. Definitions.'.

END
__________________
*SHERRI*
never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has

margaret mead

ANYTHING IS POSSIBLE
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