Federal Prison Industries, also known as UNICOR and FPI, is a wholly owned government corporation created in 1934 by statute and Executive Order that produces goods and services from the labor of inmates of the United States Federal Bureau of Prisons. FPI is restricted to selling its products and services to Federal government agencies and has no access to the commercial market.[1] UNICOR was created in the 1930s, when the employment of prisoners was provided for in the Act of May 27, 1930, and Federal Prison Industries was formally created in 1934.[2][3]
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Federal Prison Industries and UNICOR does not compel inmates to participate in a vocation; the decision to participate in the program is strictly voluntary. While in the program, inmates are given vocational training. By equipping inmates with a strong skill set in a vocation, UNICOR reduces recidivism and gives former inmates the means to support themselves in post-institutional life.[4]
UNICOR is economically self-sustaining and receives no government funding.[5] In fiscal year 1996, UNICOR had net sales of $459 million.[6] In fiscal year 2008, UNICOR employed 21,836 inmates: 17% of eligible inmates held in federal prisons. The company generated US$854.3 million in sales. Of these revenues, 80% went toward the purchase of raw material and equipment; 16% went to staff salaries; 4% went to inmate salaries.[5]
UNICOR has 109 factories in federal prisons, producing about 175 different types of products and services, including clothing and textiles, electronics, fleet management and vehicular components, industrial products, office furniture, recycling activities; and services including data entry and encoding.
Under US laws and regulations, federal agencies, with the exception of the Department of Defense, are required to purchase products (but not services) offered by UNICOR, unless authorized by UNICOR to solicit bids from the private sector. This "mandatory source clause" has drawn controversy over the years, with allegations that UNICOR is unfairly competing with private businesses.[5] From 2002 to 2004, Congress and the Bush Administration made several efforts to mitigate this competitive advantage held by UNICOR over the private sector. In 2003, UNICOR's board of directors eliminated the mandatory source clause for federal purchases under US$2,500, and mandated itself to approve waivers in all cases where the private sector provides a lower cost.[5]
Critics say Federal Prison Industries pays substandard wages, and that inmates work subject to conditions and salary the company itself decides.[7] Under current law, all physically able inmates who are not a security risk or have a health exception are required to work, either for UNICOR or at some other prison job.[5][8] Inmates earn from US$0.23 per hour up to a maximum of US$1.15 per hour, and all inmates with court-ordered financial obligations must use at least 50% of this UNICOR income to satisfy those debts.[5]
One report [9] detailed a FPI operation at a California prison in which inmates de-manufactured computer cathode-type monitors. Industry standard practice for this mandates a mechanical crushing machine to minimize danger from flying glass, with an isolated air system to avoid releasing lead, barium, phosphor compounds to the workplace atmosphere. At the FPI facility prisoners smashed the CRTs with hammers. The report noted, "Smashing CRTs with hammers is not a common practice in the private sector, nor could it ever be considered a 'best practice.'"
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