Federal Prison Industries

History

A statute in May 1930 provided for the employment of prisoners, the creation of a corporation for the purpose was authorized by a statute in June 1934, and the Federal Prison Industries was created by executive order in December 1934.

Purpose

While in the program, inmates are given vocational training. By equipping inmates with a skill set in a vocation, UNICOR aims to reduce recidivism and give former inmates the means to support themselves in post-institutional life.

Activities

UNICOR operates at no cost to taxpayers, in that it receives no appropriated funds from Congress to run its operations. In fiscal year 2015, UNICOR had net losses of $18 million. In fiscal year 2015, close to 12,278 inmates participated in the UNICOR program, which equates to approximately 7% of the inmate population eligible to participate in this program in BOP-managed facilities. All federally incarcerated individuals are expected to work in BOP-managed facilities. In general, those who choose to participate in UNICOR's voluntary industrial work program earn between $0.23 and $1.15 per hour. There are exceptions, in particular the Prison Industry Enhancement Certification program, whereby inmates earn up to the prevailing wages paid for comparable work performed in the locality. Deductions are then taken for taxes, victim restitution, program costs and court-imposed legal obligations. In 2015, UNICOR generated $472 million in sales, of which 72% was used to purchase raw materials, equipment and other supplies to produce the products and services it offers for sale; 23% paid staff salaries; and 5% paid inmate workforce wages.

As of August 2016, UNICOR operates 81 factory operations within federal prisons, nationwide, offering more than 100 products and services in 80 Federal Supply Classifications (FSCs), in areas including clothing and textiles, electronics, fleet management and vehicular components, industrial products, office furniture, recycling activities; and services including data entry, computer aided design (CAD), distribution, and more. While UNICOR's customer base consists primarily of federal government agencies, it also collaborates with private sector companies to support their subcontracting needs. It offers qualifying U.S. manufacturers domestic facilities and inmate workforce resources to repatriate their operations, with costs comparable to those of offshore production and other benefits.

Criticism

Federal Acquisition Regulation (FAR) Subpart 8.6 outlines mandatory source procurement provisions under which federal agencies are to purchase products which are listed on UNICOR's Schedule of Products and deemed comparable in price, quality and delivery to those available from the private sector. While the guidelines differ slightly between Department of Defense and civilian agencies, in all cases decision-making purchasing authority rests with the agency's contracting officials. In 2003, UNICOR's Board of Directors exempted micro-purchase level orders of $2,500 and under from the FAR provision which required agencies to obtain waiver approval from UNICOR as a condition for purchasing like items from the private sector. In 2016, the Board increased the "administrative waiver" amount to $3,500, in line with updated micro-purchase levels. Federal agencies are authorized to purchase services from FPI, but not required to do so.

Under current law, all physically able inmates who are not a security risk or have a health exception are required to work, either for UNICOR or at some other prison job. Inmates earn from US$0.23 per hour up to a maximum of US$1.15 per hour, and all inmates with court-ordered financial obligations must use at least 50% of this UNICOR income to satisfy those debts.

FPI has manufactured a diverse set of products, and provided a range of services offerings, in accordance with its statutory mandate, for the Federal government for over 80 years. One report detailed a FPI operation at a California prison in which inmates de-manufactured computer cathode-type monitors. Industry standard practice for this mandates a mechanical crushing machine to minimize danger from flying glass, with an isolated air system to avoid releasing lead, barium, phosphor compounds to the workplace atmosphere. At the FPI facility prisoners demanufactured CRTs with hammers. FPI initiated corrective action to address this finding, and currently meets and exceeds industry standards in its recycling operations.

Helmets produced by FPI at one factory were at the center of a US Department of Justice lawsuit and $3 million settlement paid by ArmorSource, the prime contractor. The U.S. Attorney's Offices declined to criminally prosecute or file any civil action against FPI staff. The helmets were produced for ArmorSource between 2008 and 2009 and failed to meet standards. The DOJ investigation did not develop any information to indicate military personnel sustained injury or death as a result of the defective ACH helmets. Immediately after FPI leadership became aware of the manufacturing concerns surrounding the ACH helmets, FPI began taking corrective action. FPI recalled its only shipment of Lightweight Helmets for re-inspection, and ensured no Lightweight Helmets manufactured at the factory were sent to the military. The recall of both helmets cost the US Government $19 million. With Defense Contract Management Agency audit staff, FPI identified opportunities to improve its Quality Management System in areas including improved management staff oversight, proper control of quality procedures, training, and implementation of corrective action. FPI implemented new procedures to address these areas, and works continuously to ensure it delivers high quality products and services.