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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle C--Amendments to General Contracting Authorities, Procedures, and Limitations

NDAA Section

House Conference Report 110-477

SEC. 827. MODIFICATION OF COMPETITION REQUIREMENTS FOR PURCHASES FROM FEDERAL PRISON INDUSTRIES.

(a) Modification of Competition Requirements-

(1) IN GENERAL- Section 2410n of title 10, United States Code, is amended by striking subsections (a) and (b) and inserting the following new subsections (a) and (b):

`(a) Products for Which Federal Prison Industries Does Not Have Significant Market Share- (1) Before purchasing a product listed in the latest edition of the Federal Prison Industries catalog under section 4124(d) of title 18 for which Federal Prison Industries does not have a significant market share, the Secretary of Defense shall conduct market research to determine whether the product is comparable to products available from the private sector that best meet the needs of the Department in terms of price, quality, and time of delivery.

`(2) If the Secretary determines that a Federal Prison Industries product described in paragraph (1) is not comparable in price, quality, or time of delivery to products of the private sector that best meets the needs of the Department 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 accordance with the competition requirements applicable to such contract. In conducting such a competition, the Secretary shall consider a timely offer from Federal Prison Industries.

`(b) Products for Which Federal Prison Industries Has Significant Market Share- (1) The Secretary of Defense may purchase a product listed in the latest edition of the Federal Prison Industries catalog for which Federal Prison Industries has a significant market share only if the Secretary uses competitive procedures for the procurement of the product or makes an individual purchase under a multiple award contract in accordance with the competition requirements applicable to such contract. In conducting such a competition, the Secretary shall consider a timely offer from Federal Prison Industries.

`(2) For purposes of this subsection, Federal Prison Industries shall be treated as having a significant share of the market for a product if the Secretary, in consultation with the Administrator of Federal Procurement Policy, determines that the Federal Prison Industries share of the Department of Defense market for the category of products including such product is greater than 5 percent.'.

(2) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect 60 days after the date of the enactment of this Act.

(b) List of Products for Which Federal Prison Industries Has Significant Market Share-

(1) INITIAL LIST- Not later than 60 days after the date of the enactment of this Act, the Secretary of Defense shall publish a list of product categories for which Federal Prison Industries' share of the Department of Defense market is greater than 5 percent, based on the most recent fiscal year for which data is available.

(2) MODIFICATION- The Secretary may modify the list published under paragraph (1) at any time if the Secretary determines that new data require adding a product category to the list or omitting a product category from the list.

(3) CONSULTATION- The Secretary shall carry out this subsection in consultation with the Administrator for Federal Procurement Policy.

The Senate amendment contained a provision (sec. 824) that would tighten requirements for competition in Department of Defense purchases from Federal Prison Industries.

The House bill contained no similar provision.

The House recedes.

Senate Armed Services Committee Report 110-77

The committee recommends a provision that would clarify the competition requirements for Department of Defense (DOD) purchases from Federal Prison Industries (FPI).

Section 2410n of title 10, as added by section 811 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107) and amended by section 819 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (Public Law 107-314), gives DOD procurement officials discretion whether to purchase a product from FPI. If DOD officials conclude that an FPI product is not comparable to the best products available from the private sector in terms of price, quality, and time of delivery, the product may be purchased only on a competitive basis.

Despite the enactment of this legislation, FPI officials continue to argue that DOD is required to purchase FPI products on a sole-source basis. The provision recommended by the committee would clarify the competition requirements in section 2410n to ensure that DOD purchases from FPI are made on a competitive basis.