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Advocacy

The Federal Prison Industries (FPI)

The Federal Prison Industries (FPI) was created in 1934 to employ Federal prisoners to manufacture products exclusively for all Federal agencies. But as a mandatory source of supply, FPI has a virtual lock on the Federal market – even when price and quality comparisons demonstrate that the private sector is a better supplier. This ultimately translates into a loss of business for those companies that are traditional government suppliers.

How does this mandatory source status work? Current law and regulation obligates a Federal agency to look first to FPI to fulfill its requirements for a product – and to negotiate a contract with FPI on a sole source basis. The final determination of the price to be paid for its products is left to FPI – not to the Federal manager. This is completely contrary to normal procurement practices where the private sector, when selling to the Federal government, is required by statute to sell at a fair and reasonable price established through a competitive bidding process. It is also contrary to the bi-partisan efforts of the last several years to encourage greater commercial practices in how the Federal government conducts its business.

Contrary to FPI’s assertions, GAO reported in April 1998 that the Federal Prison Industries cannot back-up its frequent claims about being a quality supplier to Federal agencies, furnishing products that meet their needs in terms of quality, price, and timeliness of delivery. Once FPI commandeers a product, it erodes, displaces, or eliminates private sector competition and opens the door for it to raise its future prices. So far, these comments have focused on FPI’s mandatory source in the manufacturing arena. However, FPI sees services as ripe for aggressive expansion.

While the authorizing statute is silent with respect to services, FPI is already involved in numerous service-related activities including laundry services, distribution and mailing services, data services, and telephone support services.

News Coverage

Contractors applaud prison industries limits

Need more information about CSA's position on issues?

Contact Colleen Preston, CSA SVP for Public Policy

What does the Hill and the Agencies say about CSA?

“CSA has been a champion for the service contract industry on Capitol Hill and throughout the federal government. Happy 40th Anniversary CSA!”

U.S. Representative Todd Tiahrt

“For the past 40 years, CSA has served as one of the most well-respected organizations in Washington, D.C. CSA has been at the forefront of the debate to ensure that our Government has the greatest resources available.”

U.S. Representative Pete Sessions

“CSA continues to promote American small businesses and work on behalf of taxpayers. They are an effective advocate of policies that promote the ingenuity of Main Street America as a means to a more accountable and responsible federal government. During their 40th Anniversary, I congratulate CSA for their ongoing efforts.”

U.S. Senator Craig Thomas

“I have watched the CSA and its representation of the Federal service contracting community for over 20 years. Congratulations on your 40th CSA.”

David Childs, Director, Office of Competitive Sourcing and Privatization, Department of Homeland Security.

“The Office of Advocacy has had a long history of working with the CSA to advance the interests of small business in Washington. We are proud to work with them to make the voice of their small business members heard in policy debates. The CSA staff is tireless in representing their members and offering solid solutions to real world regulatory issues.”

Tom Sullivan, Chief Counsel, Small Business Administration, Office of Advocacy

“The Contract Services Association has been a valued sounding board for me since I assumed my Competitive Sourcing responsibilities in 1998. They have always represented their membership fiercely but shared my goal of seeking the most efficient provider of services for DoD through fair competition. Best Wishes on your 40th Anniversary.”

Joe Sikes, Director of Competitive Sourcing, Department of Defense

"We value CSA's involvement in both our regulatory process and in representing industry in operational issues. CSA always represents it's members focusing on solutions that are good for Industry, Government and the Taxpayer alike."

Advocacy

The Federal Prison Industries (FPI)

Congressional testimony

CSA letters to Congress

Comments on proposed regulations

Background Papers