The federal program that sells office furniture and other
products made from prison labor expects to lose millions of dollars
in sales because of a new law, officials told a House committee
Federal Prison Industries (FPI), known by the brand name Unicor,
has long been a mandatory source for federal purchases, but the
2008 Defense Authorization Act requires the Defense Department
to put out for bid orders it previously would have placed with
In areas where Defense buys more than 5 percent of goods or
services from FPI, it now must compare what FPI sells to what
the private sector sells. If FPI doesn't offer the best quality,
price and delivery time, Defense is required to open the purchase
to a competition between FPI and the private sector.
As a result of these competition rules, FPI could lose at least
$144 million in sales and 3,250 inmate jobs, Harley Lappin, director
of the Bureau of Prisons, told the House Judiciary Committee
on May 6. FPI took in about $850 million in 2007 and employed
FPI is self-funding and without enough revenue, inmates will
not have jobs to keep them busy, Lappin said.
The American Federation of Government Employees, which represents
Bureau of Prisons corrections officers, estimates the situation
will be much worse. FPI will lose $240 million in revenue and
6,500 prisoner jobs as a result of the competition requirement,
said AFGE President John Gage.
Any loss of inmate jobs increases the idleness of the prison
population, Gage said. "The increase in FPI prison inmate
idleness and the associated increased risk of inmate assaults
on federal correctional officers and staff would necessarily
require a substantial increase in BoP [budget and staff],"
About 1,300 more corrections officers at the cost of $100 million
would be needed if 6,500 FPI inmate jobs were lost due to slumping
sales, he said.
Industry has long criticized mandatory purchasing from FPI, saying
the monopoly takes scarce manufacturing jobs away from law-abiding
citizens. Industry backed a 2002 law that requires agencies to
conduct market research to determine if Unicor products are the
best value in areas where Unicor held more than 20 percent of
the federal market.
As a result of these rules, FPI has seen a dramatic decline in
sales, Lappin said. FPI furniture sales have felt the competition
the hardest, declining 40 percent since 2002, Lappin said. Unicor
makes furniture, textiles, fencing and other industrial products.
It also offers food services, data entry services, electronics
recycling services and printing services.
Members of the committee expressed support for the program and
dismay that mandatory sourcing was limited in the Defense bill
without consulting the committee.
"If we didn't have this program, we'd be falling all over
ourselves to create it," said Rep. Dan Lungren, R-Calif.
While the number of inmate workers has dropped slightly since
2000, FPI has been able to avoid a dramatic decline by creating
shifts to allow for part-time work, said Paul Laird, FPI's chief
operating officer. While not ideal, the part-time work keeps
inmates busy, trains them for the outside world and holds them
to the behavior and education standards required to take part
in the program, Laird said.
FPI could survive competition if it is given new authorities
to manufacture products that are now imported, said Laird. This
would minimize FPI's effect on U.S. jobs while creating jobs
in the community to supply FPI with raw materials, Laird said.
But Congress would also have to protect what is left of FPI's
preferred-source status until those new areas are established,
Lappin said. It won't be easy because FPI doesn't extensively
advertise or market its lines of business, he said.
"We can't afford to lose mandatory sourcing," he