Federal Prison Industries:

Limited Data Available on Customer Satisfaction

GGD-98-50: Published: Mar 16, 1998. Publicly Released: Apr 15, 1998.

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Pursuant to a congressional request, GAO provided information on whether Federal Prison Industries (FPI) collects and maintains data that would enable it to make reliable, generalizable statements about the satisfaction of its federal agency customers with respect to the quality, cost, and timely delivery of FPI's products, focusing on: (1) if FPI has data, either from its management information system or other sources, to support overall conclusions about how federal customers who buy and use its products and services view their timeliness, price, and quality; and (2) whether agencies who are among the largest buyers of FPI products and services monitor FPI's performance the same way they do commercial vendors in terms of timeliness, price, and quality.

GAO noted that: (1) FPI has been the subject of substantial debate over the years, much of which has centered on the timeliness, price, and quality of its products; (2) missing from this debate have been convincing data that show whether federal customers who buy and use FPI products and services are satisfied with FPI's performance; (3) FPI has a variety of management information systems that allow it to track customer orders and react to complaints; (4) however, FPI does not have a systematic or structured process for collecting and analyzing customer satisfaction data so that conclusions can be drawn about customer satisfaction; (5) FPI's efforts to gauge customer satisfaction have been limited to relying on narrowly scoped surveys as well as other efforts; (6) without convincing data on customer satisfaction, FPI: (a) remains vulnerable to assertions by its critics that federal customers are dissatisfied and, in turn, should no longer be required to buy FPI products; and (b) may miss opportunities to improve its operations by having better data on how federal customers view its performance in the areas of timeliness, price, and quality; (7) furthermore, FPI's lack of a systematic approach for collecting these data appears inconsistent with contemporary management principles used by both public- and private-sector organizations; (8) regarding agencies' efforts to monitor FPI performance, major customer agencies that GAO contacted stated that they consider price when awarding contracts and monitor factors like quality and timeliness while administering contracts for all vendors, including FPI; (9) it should be recognized, however, that the contracting officer's leverage in resolving procurement problems is different for FPI than for private-sector vendors since the rules that typically govern contracts with private-sector vendors do not apply to FPI; (10) in this regard, on September 13, 1993, the Acting Attorney General issued a legal opinion that FPI, as a seller of goods to the federal government, is not covered by the Federal Acquisition Regulations (FAR), and must be treated under its authorizing legislation FAR Subpart 8.6; (11) furthermore, agencies cannot use past performance information to deny awarding a contract to FPI because, under the law, FPI is a mandatory source of supply; and (12) however, at FPI's discretion, agencies can use it to negotiate with FPI factors such as product quality or delivery time frames, or to seek a waiver from FPI so that they can buy from a commercial vendor that can better meet their quality or delivery requirements.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: FPI has ceased taking action on this recommendation; its actions are not fully responsive to the recommendation.

    Recommendation: In order to institutionalize within FPI an assessment of overall customer satisfaction and the use of this assessment to measure and improve performance, the Director, Bureau of Prisons, should direct FPI's Chief Operating Officer to: (1) examine available approaches to collect and use customer satisfaction data to determine the most cost-effective approaches for FPI; (2) develop a plan for collecting customer satisfaction data that would allow for supportable conclusions about federal customers' views on timeliness, price, and quality; (3) develop a timetable for implementing the plan; and (4) set performance goals for the levels of customer satisfaction that FPI wants to attain and measure results against these goals.

    Agency Affected: Department of Justice: Bureau of Prisons


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