Federal Prison System
Federal Prison Industries, Incorporated
Table of Contents
Page No.
I. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

ll. Summary of Program Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

Ill. Appropriations Language and Analysis of Appropriations Language

6

.......

IV. Decision Unit Justification
A. Federal Prison Industries
1. Program Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Performance Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Performance, Resources, and Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
a. Performance Plan and Report for Outcomes
b. Strategies to Accomplish Outcomes
c. Resutls of Program Assesment Rating Tool (PART) Reviews
V. Exhibits
A. Organizational Chart . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Summary of Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Program Increases by Decision Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Resources by DOJ Strategic Goal/Objective (Not Applicable) . . . . . . . . . . . . . . .
E. Justification for Base Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Crosswalk of 2006 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Crosswalk of 2007 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Summary of Reimbursable Resources (Not Applicable) . . . . . . . . . . . . . . . . . . .
I. Detail of Permanent Positions by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Financial Analysis of Program Increases/Offsets . . . . . . . . . . . . . . . . . . . . . . . . . .
K. Summary of Requirements by Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L. Summary of Requirements by Object Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Status of Congressionally Requested Studies, Reports, and Evaluations (Not Ap
N. Summary of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7
10
12

14
15
16
N/A
17
18
19
N/A
20
21
22
23
N/A
24

I. Overview for Federal Prison Industries, Incorporated
A. General Overview
1. Introduction
Federal Prison Industries’(FPI) mission is to employ and provide work skills training to
the greatest practical number of inmates in Federal correctional facilities necessary to
ensure the safe and secure operation of such institutions, and in doing so, to produce
market priced, quality goods and services in a self-sustaining manner that minimizes the
potential impact on private business and labor. Beginning in FY 2007, electronic copies
of the Department of Justice’s congressional budget justifications and Capital Asset
Plan and Business Case exhibits can be viewed or downloaded from the Internet using
the Internet address: http://www.usdoj.gov/jmd/2008justification/.
FPI was created by Congress in 1934, and is a wholly owned Government corporation
that operates at no cost to the U.S. taxpayer. The Corporation is authorized to operate
industries in Federal penal and correctional institutions and disciplinary barracks (18
U.S.C. 4121-4129). UNICOR is the trade name for FPI. The Director of the Federal
Prison System (FPS), who has jurisdiction over all Federal penal and correctional
institutions, is the Chief Executive Officer. FPI reduces inmate idleness by providing a
full-time work program and continually strives to attain the goal of employing
approximately 25 percent of the eligible inmate population. Many of the inmates do not
have marketable skills. FPI provides a program of constructive industrial work and
services wherein job skills can be developed and work habits acquired. Earnings from
the Corporation’s industrial activities are used for all operating costs of the Corporation,
including purchase of raw materials and equipment, staff salaries and benefits,
compensation to inmates performing in industrial work details, and compensation to
former inmates for injuries they received while in Federal prisons.
A board of six Directors, appointed by the President, reviews and approves the policies
of the Corporation, long-range Corporate plans, establishment of new industries, and
bylaws and capital investments in excess of $500,000. The Board also makes annual
reports to Congress on the conduct of the business of the Corporation and the condition
of its funds. General management of the Corporation is vested in an Assistant Director
of the FPS, who serves as Chief Operating Officer, and carried out by a staff of 32
Corporate Management employees located in Washington, DC. Expenses of this
function are subject to Congressional limitation.
As of September 30, 2006, there were 21,205 inmates employed in 108 factories.
Inmates manufacture items such as furniture, clothing, electronics, and metal products,
and provide such services as printing, data processing and laundry. Products and
services of the Corporation are sold primarily to Federal Agencies. The Departments of
Defense and Justice, the Postal Service, the Department of Homeland Security, and the

General Services Administration are FPI’s largest customers. The growth of the BOP
and the corresponding need to increase inmate employment while minimizing FPI’s
effect on private labor and business continue to be FPI’s major challenge.
For FY 2008, a total of 2,075 positions and 1,930 workyears are requested for FPI.
Further, $2,477,000 is included as the Administrative Expenses limitation. This includes
a program increase for the operation of one factory at Pollock, Louisiana which will
employ a total of 288 inmates in Fiscal Year 2008.

2. Issues, Outcomes, and Strategies
Strategic Goal 4: Ensure the fair and efficient operation of the Federal Justice System.
Strategic Objective 4.5: Provide services and programs to facilitate inmates’ successful
reintegration into society consistent with community expectations and standards.
FPI’s performance goals are part of the Department of Justice (DOJ). The primary FPI
goal, inmate population management, is to proactively manage the offender population
through meaningful work programs.
FPI meets this objective by reducing undesirable inmate idleness through a full time
work program that provides constructive industrial work wherein job skills can be
developed and work habits acquired. Inmate idleness is the number one cause of
inmate unrest and violence in prison, and FPI employs over 20,000 inmates and
provides skills training to help ensure the safe and secure operation of the institutions.
FPI plays a vital role in the management of inmates, and also improves the likelihood
that inmates will remain crime-free upon their release from BOP custody. A 2005 study,
to establish a baseline was conducted of 15,406 FPI participants and an equal number
of comparison subjects released between 1994 through 1998. Results indicate that
inmates who participate in FPI are significantly less likely to recidivate.

For FY 2008, a total of 2,075 positions and 1,930 workyears are requested for FPI. This
request represents a program increase of 17 positions and 16 workyears over the FY
2008 current services. These positions are being requested for the operation of one
factory at Pollock, Louisiana which will employ 288 inmates. Further, $2,477,000 is
included as the Administrative Expenses. Impact on performance: This increase will
provide employment to over 288 inmates, and keep them constructively occupied while
providing them valuable work related experience and skills.
Activation
Funding
Date
New Facility:
FCI Pollock, LA (1,152 beds)
Total, Increase (1,152 beds)

10/2007

Pos.
17
__
17

FTE
16
__
16

The dates reported above reflect the funding stream for operations, not when inmates
will arrive at the new institutions. Operational expenses are cumulative and reflect post
and future months of ramped activity (staffing, equipment purchase and install, etc.)
until the facility is ready to house inmates. In fact, the activation process normally
continues for up to two years.

3. Full Program Costs
FPI operates as a revolving fund and does not receive an annual appropriation. This
budget reflects the full value of anticipated orders received (Revenue) less the
associated costs to produce the products ordered and maintain the facilities for
manufacturing. FPI maintains a proprietary, full accrual accounting system. The
revenue and costs presented in the budget are based upon historical data, market
trends of FPI’s sales of products and services, and projected expansion (growth) of the
BOP. FPI monitors the following program’s activities, Sales Volume, Number of
Factories and Inmate Employment. These activities directly relate to FPI’s goal of
population management.
FPI sales have been significantly impacted by the passage of Sections 811 and 819 of
the National Defense Authorization Acts of 2002 and 2003, and Section 637 of the FY
2004 and 2005 Omnibus Appropriations Bill which changed the nature of FPI’s
mandatory source status, as well as several administrative initiatives by the FPI
program’s Board of Directors.
The impact has primarily been seen in the FPI Office Furniture Business Group, which
has historically comprised a major portion of FPI’s total sales. FPI’s Office Furniture
sales in FY 2006 were $118 million, down from $140 million in FY 2005, $141 million in
FY 2004, $152 million in FY 2003, and $218 million in FY 2002. The $100 million less

in sales during FY 2006 as compared to the peak sales year of FY 2002 represents a
46 percent decrease.
In response, the FPI program has closed some factories and realigned several others
as part of an effort to reduce its operating costs. The FPI program continues to improve
customer service relationships and develop other innovative strategies. These
initiatives have resulted in FPI’s inmate employment decreasing by 1,355 inmates from
the FY 2001 total of 22,560 to 21,205 in FY 2006. This represents a decrease of 6
percent.
Overall sales in FY 2006 of $717,544,000 decreased 6 percent from FY 2005 sales of
$765,396,000. However, FPI earnings decreased to $71,257,000 in FY 2006 compared
to $114,345,000 in FY 2005, a decrease of 38 percent. This was due to the Electronics
Business Group’s earnings decreasing to $62,743,000 in FY 2006 from $94,515,000 in
FY 2005 in continued support of the Department of Defense’s war effort. Sales by the
Electronics Business Group represent 33 percent of FPI’s total sales and 88 percent of
FPI total earnings. Electronics sales decreased to $233,182,000 in FY 2006 from
$287,009,000 in FY 2005, a 19 percent decline.

4. Performance Challenges
External Challenges
FPI does not receive appropriated funding for operations and must maintain itself
through the results of operations. Historically, FPI operates on a very low margin. The
margins are much below that which would be seen by a non-government corporation of
similar size and longevity. FPI has been able to sustain itself despite unprecedented
growth in the number of inmates. The growth demands of the BOP are expected to
continue for the foreseeable future.
The delicate balancing act between self sufficiency and growth create a sizable
challenge for FPI. Additionally, FPI is faced with challenges that may impact this
balance. These challenges include changes to FPI’s position as a supplier to the
Federal Government (preference provided to FPI) and increase in costs not controlled
by FPI (staff pay schedule and benefits cost).
Internal Challenges
FPI faces challenges similar to that of a non-government corporation. These challenges
include: control of costs, collection of account receivables, control of raw material
inventory levels, and stability of sales.

II.

Summary of Program Changes

Description
Item Name
FCI Pollock, Louisiana (1,152 beds)

Operation of FPI Factory

Pos. FTE
17
16

Dollars
($000)
$11,720

Page
13

III. Appropriation Language and Analysis of Appropriation Language

Appropriation Language
Federal Prison Industries, Incorporated
The Federal Prison Industries, Incorporated, is hereby authorized to make such expenditures, within the limits of funds and borrowing
authority available, and in accord with the law, and to make such contracts and commitments, without regard to fiscal year limitations as
provided by section 9104 of title 31, United States Code, as may be necessary in carrying out the program set forth in the budget for the
current fiscal year for such corporation, including purchase (not to exceed five for replacement only) and hire of passenger motor vehicles.
(Department of Justice Appropriation Act, 2007)

Limitation on Administrative Expenses
Federal Prison Industries, Incorporated
Not to exceed $2,477,000 of the funds of the corporation shall be available for its administrative expenses, and for services as authorized by
5 U.S.C. 3109, to be computed on an accrual basis to be determined in accordance with the corporation’s current prescribed accounting
system, and such amounts shall be exclusive of depreciation, payment of claims, and expenditures which such accounting system requires to
be capitalized or charged to cost of commodities acquired or produced, including selling and shipping expenses, and expenses in connection
with acquisition, construction, operation, maintenance, improvement, protection, or disposition of facilities and other property belonging to
the corporation or in which it has an interest. (Department of Justice Appropriation Act, 2007)

Analysis of Appropriation Language
No substantive changes proposed.

IV. Decision Unit Justification
A. Federal Prison Industries

TOTAL
2006 Enacted w/Rescissions and Supp.
2007 Estimate
Adjustments to Base & Technical Adj’s.
2008 Current Services
2008 Program Increases
2008 Offsets
2008 Request
Total Change 2007-2008

Perm. Pos. FTE Amount
2,458 2,295 $766,662
2,058 1,914 900,445
0
0
617
2,058 1,914 901,062
17
16
11,720
0
0
0
2,075 1,930 912,782
17
16 $12,337

1. Program Description: Federal Prison Industries, Inc. (FPI) reduces inmate idleness
by providing a full-time work program and continually strives to attain the goal of
employing approximately 25 percent of the eligible inmate population. Health, security
level and other factors determine eligibility for work in FPI. Many of the inmates do not
have marketable skills. FPI provides a program of constructive industrial work wherein
job skills can be developed and work habits acquired.
FPI’s operations are self-supporting. Revenues are derived from the sale of products
and services to other Federal departments, agencies, and government institutions which
purchase products listed on FPI’s Schedule of Products. FPI provides services on a
non-mandatory, preferred source basis. Operating expenses such as the costs of raw
materials and supplies, inmate wages, staff salaries, and capital expenditures are
applied against these revenues, resulting in operating income or loss, which is reapplied
toward operating costs for future production.
Institution factories and shops are operated by civilian supervisors and managers,
training and overseeing the work of inmates. The factories utilize raw materials and
component parts purchased from the private sector to produce finished goods. FPI’s
major Government customers include the Department of Defense and Justice, the
Postal Service, the Department of Homeland Security and the General Services
Administration. Institution factories manufacture such items as furniture, clothing,
electronics, and metal products, and provide such services as printing, data processing,
laundry and recycling activities. Orders for goods and services are obtained through
marketing and sales efforts by civilian staff. A portion of the earnings realized by these
operations is reinvested to improve and build new facilities and purchase equipment,
maintain the existing equipment base, and provide working capital.
Extensive testing and product development procedures are required to operate modern
factories that produce products which meet Government specifications. Inmate training
is also extensive because most of the inmates have no previous training, experience or
skills. Much of the needed training occurs on-the-job, with the civilian supervisors and

experienced inmates explaining and demonstrating the work to newly assigned inmates.
Where skills require more formal training, such as soldering, classroom instruction is
provided by UNICOR staff.
FPI makes capital investments in building and improvements, machinery and equipment
as necessary in the conduct of its industrial operations. Other expenses charged to the
industrial manufacturing program include inmate accident compensation.
In 1988 Congress amended FPI’s statute regarding the production of new products and
significant product expansion (18 U.S.C. 4122). Before any significant product
expansion or new products are manufactured, a review process is conducted, which
includes full notice to and input from the public and interested parties. Implementing
guidelines were first promulgated in 1990 and updated in 1997, with input from the
private sector.
As required under the Federal rules, commonly referred to as the Guidelines process,
when FPI proposes to produce a new product or expand its market share of an existing
product, they first must conduct a market impact study. This study must identify and
consider the number of vendors currently meeting the requirements of the Federal
government; the proportion of the Federal market for the product currently served by
small business, small disadvantaged businesses, or businesses operating in labor
surplus areas; the size of the Federal/non-Federal markets for the product; the
projected growth in the Federal government’s demand for the product; and the projected
ability of the Federal market to sustain both FPI and private vendors. FPI then must
announce in the Federal Business Opportunities (Fed Biz Opps) its proposal and invite
comments from private industry. FPI must also directly notify those trade associations
affected and allow them to provide comment.

FPI’s Board of Directors is appointed by the President and by statute is composed of six
members representing Industry, Labor, Retailers and Consumers, Agriculture, the
Secretary of Defense and Attorney General. The Board is provided copies of the
market impact study, the comments received, and FPI’s recommendations. The Board
also holds hearings which the public can attend and provide testimony.
At the conclusion of the above process, the Board renders its decision, which is also
published in the Federal Business Opportunities (Fed Biz Opps). Parties can appeal to
the Board if and when market conditions change or new facts could impact the decision.

2. PERFORMANCE AND RESOURCES TABLE
Decision Unit: Federal Prison Industries
DOJ Strategic Goal/Objective: 4.5
Workload/Resources

Workload
Base number of factories
Number of Inmate Jobs added
Inmates employed at year-end
Total Costs and FTE
(reimbursable FTE are included, but reimbursable
costs are bracketed and not included in the total)

TYPE/
STRATEGIC
OBJECTIVE

Performance

Program
Activity
Performance
Measure

Efficiency
Measure

Sales Volume
Comparative Recidivism for
FPI inmates vs. non-FPI
inmates (3 yrs.)
Comparative Recidivism for
FPI inmates vs. non-FPI
inmates (6 yrs.)
Number of Inmates
Employed

Final Target

Actual

Estimate

Changes

Requested (Total)

FY 2006

FY 2006

FY 2007

Current Services Adjustments
and FY 2008 Program Changes

FY 2008 Request

115
726
20,446

108
1,485
21,205

115
0
21,205

1
288
288

116
288
21,493

FTE
2,295

$000
766,662

FTE
2,295

FY 2006

$000
790,620
FY 2006

FTE
1,914

$000
900,445

FY 2007 President’s Budget

FTE
16

$000
12,337

FY 2008 Current Services
Adjustments and Program
Change

FTE
1,930

$000
912,782

FY 2008 Request

FTE

$000

FTE

$000

FTE

$000

FTE

$000

FTE

$000

2,295

766,662

2,295

790,620

1,914

900,445

16

12,337

1,930

912,782

15%

23%

15%

0

15%

10%

10%

10%

0

10%

21,500

288

21,788

25%

0

25%

20,446

21,205

OUTCOME

Number of inmates
employed as a percentage
of inmates housed in low,
medium, and high security
25%
institutions.
* The FY 2006 Final Target has not been revised from the FY 2007 President’s Budget.

Data Definition, Validation, Verification, and Limitations:
1. Base number of factories equal the number of factories at the beginning of the year and previous year’s base number of factories adjusted to agree with previous year-end results.
2. Sales volume is equal to gross revenues for the fiscal year.
3. Decrease is the result of reduction of cost and delayed activations.
4. In FY2005, a Baseline was established for comparative recidivism rates for FPI inmates vs. non-FPI inmates who are less likely to recidivate 3 years after release and less likely to recidivate 6
years after release. In addition, FY 2006 – FY 2008 targets have been developed.

2. PERFORMANCE MEASURE TABLE (cont’d)
Decision Unit: Federal Prison Industries
Department of Justice Strategic Goal/Objective: 4.5
Performance Report and Performance Plan
Targets
Performance Comparative Recidivism for FPI
Measure
inmates vs. non-FPI inmates (3 yrs.)
Comparative Recidivism for FPI
inmates vs. non-FPI inmates (6 yrs.)
Efficiency
Measure

Number of Inmates Employed

BY 2000
Actual

FY 2001
Actual

FY 2002
Actual

FY 2003
Actual

FY 2004
Actual

N/A

N/A

N/A

N/A

N/A

FY 2005
Actual
Baseline
Established

N/A

N/A

N/A

N/A

N/A

21,688

22,560

21,778

20,274

19,337

FY 2006
Target
Actual

FY 2007
Target

FY 2008
Target

15%

23%

15%

15%

Baseline
Established

10%

10%

10%

10%

19,720

20,446

21,500

21,788

21,205

3. Performance, Resources and Strategies
a. Performance Plan and Report for Outcomes
Inmate Employment: The Federal Prison Industries (FPI) actual inmate employment of
21,205 at the end of FY 2006 is 4 percent above the target level of 20,446. The
projected number of inmates employed increases consistent with the activation of new
institutions.
The recidivism measure was new in FY 2005. Baseline data for this measure was
established in FY 2005. A study, to establish a baseline was conducted of 15,406 FPI
participants and an equal number of comparison subjects released between 1994
through 1998. Results indicate that inmates who participate in FPI are significantly less
likely to recidivate. Now that baseline information is available, FPI will begin targeting
and collecting data to report in outyears against a long-term and annual PART measure.
The FY 2008 target is 15 percent less likely to recidivate 3 years after release and 10
percent less likely to recidivate 6 years after release.
b. Strategies to Accomplish Outcomes
FPI’s performance goals are part of the Department of Justice (DOJ). The primary FPI
goal, population management, is to proactively manage the offender population through
meaningful work programs.
FPI meets this objective by reducing undesirable inmate idleness through a full time
work program that provides constructive industrial work wherein job skills can be
developed and work habits acquired. Inmate idleness is the number one cause of
inmate unrest and violence in prison, and FPI employs over 20,000 inmates and
provides skills training to help ensure the safe and secure operation of the institutions.
FPI plays a vital role in the management of inmates, and also improves the likelihood
that inmates will remain crime-free upon their release from BOP custody.
For FY 2008, a total of 2,075 positions and 1,930 workyears are requested for FPI.
Further, $2,477,000 is included as the Administrative Expenses limitation.

c. Results of Program Assessment Rating Tool (PART) Reviews
N/A

Program Increases
Item Name: FCI Pollock, LA
Budget Decision Unit: Federal Prison Industries, Inc.
Strategic Goal/Objective: 4.5: Provide services and programs to facilitate inmates successful reintegratio
into society consistent with community expectations and standards.
Organizational Program: Inmate Work Programs
Component Ranking of Item: 1 of 1
Program Increases:

Positions
17
17

New Facility
FCI Pollock, Louisiana (1,152 beds)
Total, Increase

FTE
16
16

(Non-Appropriated)
Dollars ($000)
($11,720)
($11,720)

Description of Item
This request represents a program increase of 17 positions and 16 workyears for FY 2008.
These positions are being requested for the operation of factories at Pollock, LA which will employ 288 in
Justification
FPI reduces inmate idleness by providing a full-time work program for the inmate population. The operatio
of work programs at the location cited will provide employment for approximately 288 inmates.
Impact on Performance (Relationship of Increase to Strategic Goals)
FPI employment of inmates reduces inmate idleness at BOP facilities and provides job skills and work habit
that assist an inmate's reintegration into society. This request supports the DOJ Strategic Plan, Goal IV
ensure the fair and efficient operation of the Federal Justice System and provide services and programs to
facilitate inmates' successful reintegration into society, consistent with community expectations and stan
Funding
(Dollars in thousands)
Base Funding
FY 2006 Enacted
Pos

FTE
0

FY 2007 Estimate

Dollars
0

Pos
$0

FTE
0

FY 2008 President's Budget
Currrent Services
Dollars
Pos
FTE
Dollars
0
$0
0
0
$0

Personnel Increase Cost Summary

Type of Position
AW I&E
Factory, Business & Sys Mgr
Assistant Factory Mgr
QA Mgr, Contract Spec. & Acct
Ungraded Positions
Total Personnel

Non-Personnel Increase Cost Summary

Cost per
Position
($000)
108.0
77.3
64.0
53.3
56.4
359.1

Number of
Positions
Requested
1
3
1
3
9
17

FY 2008
Request
($000)
108.0
232.0
64.0
160.0
508.0
1,072