B-150470, JAN. 30, 1963

B-150470: Jan 30, 1963

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INC.: REFERENCE IS MADE TO LETTER DATED DECEMBER 12. IT IS STATED ON YOUR BEHALF THAT YOU HAVE HAD A YEARLY CONTRACT FOR MORE THAN 10 YEARS WITH THE GENERAL SERVICES ADMINISTRATION FOR FURNISHING YOUR "PLANNING GUIDE" ITEM TO VARIOUS DEPARTMENTS AND AGENCIES OF THE GOVERNMENT. YOU WERE NOTIFIED THAT THE "REFILLS BEGINNING FOR CALENDAR YEAR 1964. WILL BE FURNISHED BY THE FEDERAL PRISON INDUSTRIES. IT IS CONTENDED THAT THE PROCUREMENT SHOULD NOT BE MADE FROM FEDERAL PRISON INDUSTRIES AND THAT PRIVATE INDUSTRY SHOULD BE ALLOWED TO SUPPLY THIS PRODUCT. ALSO IT IS STATED THAT LOSS OF THE CONTRACT WILL "MEAN LAY OFFS OF EMPLOYEES. WHICH ARE IN PERTINENT PART AS FOLLOWS: "/A) FEDERAL PRISON INDUSTRIES SHALL DETERMINE IN WHAT MANNER AND TO WHAT EXTENT INDUSTRIAL OPERATIONS SHALL BE CARRIED ON IN FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS FOR THE PRODUCTION OF COMMODITIES FOR CONSUMPTION IN SUCH INSTITUTIONS OR FOR SALE TO THE DEPARTMENTS OR AGENCIES OF THE UNITED STATES.

B-150470, JAN. 30, 1963

TO MEMINDEX COMPANY, INC.:

REFERENCE IS MADE TO LETTER DATED DECEMBER 12, 1962, FROM YOUR ATTORNEYS, PROTESTING THE DECISION OF THE GENERAL SERVICES ADMINISTRATION TO PURCHASE FUTURE REQUIREMENTS OF STOCK ITEM NO. 7530 099-8741, LOOSE LEAF FILLERS FOR USE WITH SIX-RING BINDERS, FROM THE FEDERAL PRISON INDUSTRIES, INC.

IT IS STATED ON YOUR BEHALF THAT YOU HAVE HAD A YEARLY CONTRACT FOR MORE THAN 10 YEARS WITH THE GENERAL SERVICES ADMINISTRATION FOR FURNISHING YOUR "PLANNING GUIDE" ITEM TO VARIOUS DEPARTMENTS AND AGENCIES OF THE GOVERNMENT. ON NOVEMBER 23, 1962, YOU WERE NOTIFIED THAT THE "REFILLS BEGINNING FOR CALENDAR YEAR 1964, WILL BE FURNISHED BY THE FEDERAL PRISON INDUSTRIES, INC., WASHINGTON, D.C.' IT IS CONTENDED THAT THE PROCUREMENT SHOULD NOT BE MADE FROM FEDERAL PRISON INDUSTRIES AND THAT PRIVATE INDUSTRY SHOULD BE ALLOWED TO SUPPLY THIS PRODUCT. ALSO IT IS STATED THAT LOSS OF THE CONTRACT WILL "MEAN LAY OFFS OF EMPLOYEES, REDUCTION OF PURCHASES, SUBSTANTIAL REDUCTION IN REVENUES AND TAX LOSS TO THE GOVERNMENT.'

THE CHANGE IN THE PROCUREMENT PROCEDURE IN THIS CASE RESULTED FROM A DETERMINATION OF FEDERAL PRISON INDUSTRIES, INC., MADE PURSUANT TO THE PROVISIONS OF 18 U.S.C. 4122, WHICH ARE IN PERTINENT PART AS FOLLOWS:

"/A) FEDERAL PRISON INDUSTRIES SHALL DETERMINE IN WHAT MANNER AND TO WHAT EXTENT INDUSTRIAL OPERATIONS SHALL BE CARRIED ON IN FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS FOR THE PRODUCTION OF COMMODITIES FOR CONSUMPTION IN SUCH INSTITUTIONS OR FOR SALE TO THE DEPARTMENTS OR AGENCIES OF THE UNITED STATES, BUT NOT FOR SALE TO THE PUBLIC IN COMPETITION WITH PRIVATE ENTERPRISE.

"/B) ITS BOARD OF DIRECTORS SHALL PROVIDE EMPLOYMENT FOR ALL PHYSICALLY FIT INMATES IN THE UNITED STATES PENAL AND CORRECTIONAL INSTITUTIONS, DIVERSIFY, SO FAR AS PRACTICABLE, PRISON INDUSTRIAL OPERATIONS AND SO OPERATE THE PRISON SHOPS THAT NO SINGLE PRIVATE INDUSTRY SHALL BE FORCED TO BEAR AN UNDUE BURDEN OF COMPETITION FROM THE PRODUCTS OF THE PRISON WORKSHOPS, AND TO REDUCE TO A MINIMUM COMPETITION WITH PRIVATE INDUSTRY OR FREE LABOR.'

ON NOVEMBER 3, 1962, THE FEDERAL PRISON INDUSTRIES, INC., NOTIFIED THE GENERAL SERVICES ADMINISTRATION THAT IT WAS CAPABLE OF SUPPLYING A "FEDERAL APPOINTMENT BOOK" FOR USE IN LIEU OF YOUR PLANNING GUIDE. THE PROVISIONS OF 18 U.S.C. 4124 SPECIFICALLY DIRECT THAT THE "SEVERAL FEDERAL DEPARTMENTS AND AGENCIES AND ALL OTHER GOVERNMENT INSTITUTIONS OF THE UNITED STATES SHALL PURCHASE SUCH" PRODUCTS OF FEDERAL PRISON INDUSTRIES, INC., AS MEET THEIR REQUIREMENTS.

THE REFERRED-TO LEGISLATION WAS ENACTED TO PROVIDE USEFUL EMPLOYMENT FOR PRISONERS IN FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS. THE LEGISLATION AUTHORIZING SUCH EMPLOYMENT PROVIDES FOR THE SALE OF PRISON-MADE PRODUCTS SOLELY TO FEDERAL AGENCIES AND IT REQUIRES, SO FAR AS PRACTICABLE, SUCH DIVERSIFICATION OF INDUSTRIAL OPERATIONS AS TO PREVENT ANY SINGLE PRIVATE INDUSTRY FROM BEARING AN UNDUE BURDEN OF COMPETITION FROM PRODUCTS OF THE PRISON WORKSHIPS AND AS TO REDUCE TO A MINIMUM COMPETITION WITH PRIVATE INDUSTRY AND FREE LABOR.

WHILE IT IS STATED THAT THE DECISION TO PROCURE THE INVOLVED SUPPLIES FROM FEDERAL PRISON INDUSTRIES, INC., WAS A "SEEMINGLY ARBITRARY ACTION BY GSA," THE FACTS DO NOT SUPPORT THIS ALLEGATION. RATHER, THE ACTION TAKEN BY GSA WAS REQUIRED UNDER THE PROVISIONS OF SECTIONS 4122 AND 4124, 18 U.S.C. AND, AS INDICATED IN APPLICABLE LAW, THE EXTENT OF THE INDUSTRIAL OPERATIONS IN FEDERAL PENAL AND CORRECTIONAL INSTITUTIONS IS FOR DETERMINATION BY FEDERAL PRISON INDUSTRIES.

WITH REGARD TO THE IMPLICATION THAT THERE MAY BE INVOLVED HERE THE MATTER OF AN INFRINGEMENT OF THE COPYRIGHT ON YOUR PRODUCT, THE GENERAL SERVICES ADMINISTRATION REPORTS THAT THIS DOES NOT APPEAR TOBE THE CASE.

IN VIEW OF THE FOREGOING WE DO NOT FIND ANY BASIS FOR OBJECTING TO THE DECISION OF THE GENERAL SERVICES ADMINISTRATION TO PURCHASE ITS FUTURE REQUIREMENTS FOR LOOSE LEAF FILLERS FROM FEDERAL PRISON INDUSTRIES.