Department of Defense Procurement from Federal Prison Industries

On March 6, 2015, the Department of Defense Defense Acquisition Regulations System published in the Federal Register Acquisition of Items for Which Federal Prison Industries Has a Significant Market Share; Notice.

On November 19, 2009, a final rule was published at 74 FR 59914 which amended the Defense Federal Acquisition Regulation Supplement ("DFARS") subpart 208.6, to implement section 827 of the National Defense Authorization Act ("NDAA") for Fiscal Year 2008, Public Law 110-181. Section 827 changed DoD competition requirements for purchases from Federal Prison Industries, Inc. ("FPI") by requiring Department of Defense ("DoD") to publish an annual list of product categories for which FPI's share of the DoD market was greater than five percent, based on the most recent fiscal year data available. Product categories on the current list, and the products within each identified product category, must be procured using competitive or fair opportunity procedures in accordance with DFARS 208.602-70.

The Director, Defense Procurement and Acquisition Policy ("DPAP") issued a memorandum dated February 27, 2015, that provides the current list of product categories for which FPI's share of the DOD market is greater than five percent based on Fiscal Year 2014 data from the Federal Procurement Data System. The product categories to be competed effective March 29, 2015, are the following:

3990 (Miscellaneous Materials Handling Equipment)
5210 (Measuring Tools, Craftsmen's)
7110 (Office Furniture)
7125 (Cabinets, Lockers, Bins and Shelving)
7230 (Draperies, Awnings, and Shades)
8405 (Outerwear, Men's)
8410 (Outerwear, Women's)
8415 (Clothing, Special Purpose)

The DPAP memorandum with the current list of product categories for which FPI has a significant market share is posted at: http://www.acq.osd.mil/dpap/policy/policyvault/USA001110-15-DPAP.pdf. The statute as implemented also requires DoD to--

1. Include FPI in the solicitation process for these items; a timely offer from FPI must be considered; and award procedures must be followed in accordance with existing policy at Federal Acquisition Regulation (FAR) 8.602(a)(4)(ii) through (v);
2. Continue to be make acquisitions, in accordance with FAR Subpart 8.6, for items from product categories for which FPI does not have a significant market share. FAR 8.602 requires agencies to conduct market research and make a written comparability determination, at the discretion of the contracting officer. Competitive (or fair opportunity) procedures are appropriate if the FPI product is not comparable in terms of price, quality, or time of delivery; and
3. Section 827 allows modification of the published list if DoD subsequently determines that new data requires adding or omitting a product category from the list.