By Jack Faris
With the Christmas season in full swing, holiday shoppers are in a mad rush to find just the right thing for that special someone on their gift list. For those who are ready to wrap the big gifts, how about a new armoire for the family television –originally priced at $425, now available for only $295. The natural oak cabinet has two doors and adjustable shelves to make room for the family DVD and VCR players.
Or if you’re looking to give something more practical, why not a nice pair of black, “pucker moc” Oxford shoes with soft, full-grain leather upper and thick, cushioned wedge outsole, reduced half-price to just $8.
Unless you’re shopping on behalf of federal agencies such as the Department of Homeland Security or the Pentagon, don’t expect to get your hands on these bargains. They are just some of the items available at a clearance sale going on now at Unicor, also known as Federal Prison Industries (FPI), a corporation that is wholly owned by the federal government.
Created 70 years ago to help rehabilitate inmates, FPI has taken full advantage of cheap prison labor and protected status to become a huge operation that enjoys an unfair advantage over our nation’s small businesses. In 2002, this monopoly ran 111 factories that benefited from the work of more than 20,000 prisoners who were paid a sub-minimum wage ($1.23 per hour or less). Over 300 products and services were produced by federal prisoners, totaling nearly $680 million in sales to the federal government in 2002.
With cheap labor and exempt from many mandates small businesses must comply with every day, FPI provides clothing and textiles-including custom-made draperies and curtains-vehicle repair, industrial products, office furniture, recycling and a variety of services such as printing.
Surely, among the millions of small businesses in America, the government could find a few that meet its requirements to produce these goods and provide these services. Instead, denied the ability to fairly compete, small businesses have found the walls of government contracting too high to scale. Since FPI was given preferential status in the government procurement process, federal agencies have been locked into buying only from Unicor even if a small-business owner could provide the service or product cheaper, faster, and of better quality – a disservice to small business and to taxpayers forced to pay more money for goods and services.
Dayton, Ohio businesswoman and NFIB member Bobbie Gentile, in testimony before Congress, confirmed that the bidding process for government contracts excluded small firms. Her firm, Q-Mark, Inc., a manufacturer’s representative company offering the services of 15 small businesses, was automatically shut out of the bidding process even though the price she offered was lower than FPI’s. She told lawmakers, “In all cases, my price was lower than the price offered by FPI. The government had no option but to award to them.”
Congress, however, has been paying attention. They may not have wrapped it in pretty paper, but in early December, lawmakers passed and the president signed a bill that bans FPI from locking out small businesses from federal government contracts. For American small-business owners, it’s one of the most sought after gifts on their wish lists: the ability to compete for business that for too long has automatically been awarded to those who have been naughty rather than nice.
–Jack Faris is president of NFIB (the National Federation of Independent Business), the nation’s largest small-business advocacy group. A non-profit, non-partisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington, D.C., and all 50 state capitals. More information is available on-line at www.NFIB.com.
