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Conference Report 107-772 - National Defense Authorization Act for Fiscal Year 2003

Conference Report Section

Legislative History

(a) ASSURANCE OF BEST VALUE FOR NATIONAL DEFENSE- (1) Section 2410n of title 10, United States Code, is amended--

(A) in subsection (a)--

(i) by amending the heading to read as follows: `MARKET RESEARCH- '; and

(ii) by striking `comparable in price, quality, and time of delivery to products available from the private sector' and inserting `comparable to products available from the private sector that best meet the Department's needs in terms of price, quality, and time of delivery';

(B) by striking subsection (b) and inserting the following:

(b) COMPETITION REQUIREMENT- If the Secretary determines that a Federal Prison Industries product is not comparable in price, quality, or time of delivery to products available from the private sector that best meet the Department's needs in terms of price, quality, and time of delivery, the Secretary shall use competitive procedures for the procurement of the product or shall make an individual purchase under a multiple award contract. In conducting such a compeititon or making such a purchase, the Secretary shall consider a timely offer from Federal Prison Industries.'; and

(C) by adding at the end the following new subsections:

(c) IMPLEMENTATION BY SECRETARY OF DEFENSE- The Secretary of Defense shall ensure that--

(1) the Department of Defense does not purchase a Federal Prison Industries product or service unless a contracting officer of the Department determines that the product or service is comparable to products or services available from the private sector that best meet the Department's needs in terms of price, quality, and time of delivery; and

(2) Federal Prison Industries performs its contractual obligations to the same extent as any other contractor for the Department of Defense.

(d) MARKET RESEARCH DETERMINATION NOT SUBJECT TO REVIEW- A determination by a contracting officer regarding whether a product or service offered by Federal Prison Industries is comparable to products or services available from the private sector that best meet the Department's needs in terms of price, quality, and time of delivery shall not be subject to review pursuant to section 4124(b) of title 18.

(e) PERFORMANCE AS A SUBCONTRACTOR- (1) A contractor or potential contractor of the Department of Defense may not be required to use Federal Prison Industries as a subcontractor or supplier of products or provider of services for the performance of a Department of Defense contract by any means, including means such as--

(A) a contract solicitation provision requiring a contractor to offer to make use of products or services of Federal Prison Industries in the performance of the contract;

(B) a contract specification 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; or

(C) any contract modification directing the use of products or services of Federal Prison Industries in the performance of the contract.

(2) In this subsection, the term `contractor', with respect to a contract, includes a subcontractor at any tier under the contract.

(f) PROTECTION OF CLASSIFIED AND SENSITIVE INFORMATION- The Secretary of Defense may not enter into any contract with Federal Prison Industries under which an inmate worker would have access to--

(1) any data that is classified;

(2) any geographic data regarding the location of--

(A) surface and subsurface infrastructure providing communications or water or electrical power distribution;

(B) pipelines for the distribution of natural gas, bulk petroleum products, or other commodities; or

(C) other utilities; or

(3) any personal or financial information about any individual private citizen, including information relating to such person's real property however described, without the prior consent of the individual.

(g) DEFINITIONS- In this section:

(1) The term `competitive procedures' has the meaning given such term in section 2302(2) of this title.

(2) The term `market research' means obtaining specific information about the price, quality, and time of delivery of products available in the private sector through a variety of means, which may include--

(A) contacting knowledgeable individuals in government and industry;

(B) interactive communication among industry, acquisition personnel, and customers; and

(C) interchange meetings or pre-solicitation conferences with potential offerors.'.

(2) Paragraph (1) and the amendments made by such paragraph shall take effect as of October 1, 2001.

(b) REGULATORY IMPLEMENTATION- (1) Proposed revisions to the Department of Defense Supplement to the Federal Acquisition Regulation to implement this section shall be published not later than 90 days after the date of the enactment of this Act, and not less than 60 days shall be provided for public comment on the proposed revisions.

(2) 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 the publication.

Conference Report 107-772

The House bill contained a provision (sec. 811) that would: (1) require the Secretary of Defense to use competitive procedures to acquire products or services from Federal Prison Industries (FPI); (2) clarify that a Department of Defense (DOD) contractor may not be required to use FPI as a subcontractor or supplier of products or services; and (3) prohibit the Department from entering any contract with FPI under which an inmate worker would have access to classified or sensitive information. (See H. R. 4546 - House Bill and House Report 107-436 below)

The Senate amendment contained no similar provision. 

The Senate recedes with an amendment that would modify the provision to ensure that it is consistent with the approach taken by section 811 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107 107), while reinforcing the requirement of that provision that DOD contracting officials shall have sole discretion to determine whether FPI products and services meet the Department's needs in terms of price, quality, and time of delivery. If DOD officials determine that an FPI product or service is not comparable to the best products or services available from the private sector, the Department is directed to purchase the product on a competitive basis. The requirement for competition under this section may be met by the award of a new contract on a competitive basis or through a purchase under an existing multiple award contract pursuant to competition requirements included in section 803 of the National Defense Authorization Act for Fiscal Year 2002 and other applicable provisions of law and regulation. In either case, the Department must consider a timely offer from FPI in accordance with the specifications and evaluation factors specified in the solicitation or other request for offers.

H. R. 4546 - House Bill

SEC. 811. CONTRACTING WITH FEDERAL PRISON INDUSTRIES.

(a) ASSURING BEST VALUE FOR NATIONAL DEFENSE AND HOMELAND SECURITY- (1) The Department of Defense or one of the military departments may acquire a product or service from Federal Prison Industries, Inc. only if such acquisition is made through a procurement contract awarded and administered in accordance with chapter 137 of title 10, United States Code, the Federal Acquisition Regulation, and the Department of Defense supplements to such regulation. If a contract is to be awarded to Federal Prison Industries, Inc. by the Department of Defense through other than competitive procedures, authority for such award shall be based upon statutory authority other than chapter 307 of title 18, United States Code.

(2) The Secretary of Defense shall assure that--

(A) no purchase of a product or a service is made by the Department of Defense from Federal Prison Industries, Inc. unless the contracting officer determines that--

(i) the product or service can be timely furnished and will meet the performance needs of the activity that requires the product or service; and

(ii) the price to be paid does not exceed a fair market price determined by competition or a fair and reasonable price determined by price analysis or cost analysis; and

(B) Federal Prison Industries, Inc. performs its contractual obligations to the same extent as any other contractor for the Department of Defense.

(b) PERFORMANCE AS A SUBCONTRACTOR- (1) The use of Federal Prison Industries, Inc. as a subcontractor or supplier shall be a wholly voluntary business decision by a Department of Defense prime contractor or subcontractor, subject to any prior approval of subcontractors or suppliers by the contracting officer which may be imposed by regulation or by the contract.

(2) A defense contractor (or subcontractor at any tier) using Federal Prison Industries, Inc. as a subcontractor or supplier in furnishing a commercial product pursuant to a contract shall implement appropriate management procedures to prevent introducing an inmate-produced product or inmate-furnished services into the commercial market.

(3) Except as authorized under the Federal Acquisition Regulation, the use of Federal Prison Industries, Inc. as a subcontractor or supplier of products or provider of services shall not be imposed upon prospective or actual defense prime contractors or subcontractors at any tier by means of--

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

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

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

(D) any other means.

(c) PROTECTION OF CLASSIFIED AND SENSITIVE INFORMATION- The Secretary of Defense shall assure that Federal Prison Industries, Inc. is not permitted to provide services as a contractor or subcontractor at any tier, if an inmate worker has access to--

(1) data that is classified or will become classified after being merged with other data;

(2) 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

(3) 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.

(d) REGULATORY IMPLEMENTATION-

(1) PROPOSED REGULATIONS- Proposed revisions to the Department of Defense Supplement to the Federal Acquisition Regulation to implement this section shall be published not later than 90 days after the date of 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.

House Report 107-436

SECTION 811--CONTRACTING WITH FEDERAL PRISON INDUSTRIES

This section would require the Secretary of Defense to acquire a product or service from Federal Prison Industries in accordance with chapter 137 of title 10, United States Code. This provision would also require the Secretary of Defense to assure that Federal Prison Industries, Inc. does not provide contractor services if an inmate were to have access to certain information.