Are federal prison programs your competitors or customers?

by Tom Johnson, publisher, Set-Aside Alert

Most business owners don’t like to have their government competing with them, but sometimes there are benefits that flow both ways. Laws designate specific products and services to be sourced from government employment programs, and in return, those programs purchase significant amounts of raw materials, components, logistical support and other supply chain resources from contractors.

We recently focused on the AbilityOne program, which provides jobs and opportunities to workers with disabilities. We all want to see those fellow Americans reach their potential, and the AbilityOne program provides employment and fulfillment.

Similarly, UNICOR, the brand name of Federal Prison Industries (FPI), provides occupational training, employment skills and meaningful work to those who are incarcerated, preparing them to reenter the workforce in productive roles. According to FPI, more than 95% of inmates eventually will be returned to society.

FAR regulations

To support these programs, the Federal Acquisition Regulations provide the framework in FAR Part 8.002 Priorities for Use of Mandatory Sources. Under this regulation, FPI and AbilityOne have higher priority than do depots run by the General Services Administration or Defense or Veterans Affairs departments, and are ahead of GSA Schedules, based on the FPI Schedule and the AbilityOne Procurement List. In the case of UNICOR, FAR Part 8.6 is the policy guideline.

AbilityOne has the lead opportunity in services and UNICOR in products.

For descriptions of what UNICOR purchased from its $533 million revenue stream in fiscal 2013, check out UNICOR’s website http://www.unicor.gov/. It lists the products and services mandatory to UNICOR as the source. There also is a section on “Doing Business with UNICOR” to help you determine whether this is a market for you.

UNICOR-mandated products

So, what kinds of products are to be primarily sourced through UNICOR? You might be surprised:

• Bed Linens, Mattresses and Bed Frames;
• HVAC Filters;
• Cable Assemblies, Wire Harnesses and Circuit Boards;
• Office Chairs, Desks and Work Stations;
• Racking, Storage and Lockers;
• Prescription & Safety Eyewear
• Coats, Shirts, Pants, Shoes and Boots;
• Embroidered Apparel;
• Signs, Decals, Awards and Plaques;
• License Plates.

UNICOR-mandated services:

• Data and Document Conversion, including Digitizing, OCR, coding & indexing;
• Printing of brochures & catalogs;
• Product and order fulfillment services;
• Inbound Customer Service and Sales;
• Outbound (B2B) Telemarketing to Federal agencies;
• Electronics Recycling.

Selling to UNICOR

While AbilityOne buys primarily from a limited and closed set of non-profit training organizations, UNICOR buys its requirements from the contractor community, just like other federal agencies. UNICOR’s requirements are posted on FBO.gov, if over $25,000, and their buyers are federal contracting officers located at the headquarters of the Justice Department (DOJ) Bureau of Prisons, or at local prison facilities throughout the country.

UNICOR negotiates small business goals with the Small Business Administration under DOJ’s targets. UNICOR ranks quite high within DOJ with a 45% small business contracting rate.

In fiscal 2013, the federal prison system spent $2.9 billion on contracts, according to USASpending.gov. Texas and California were the lead states, but there are purchases virtually in all 50. UNICOR’s contract spending was not immediately available.

UNICOR features

UNICOR, which only sells to the federal government, touts three key features: products are made in the United States; replacement is offered for any unsatisfactory item; and items have a National Stock Number.

Other compelling attributes are that there is no need to get three quotes, pricing is competitive with or better than GSA’s and there is an easy payment process. UNICOR has 78 factory operations at 62 prisons, producing and stocking items for which many agencies have proven needs, and ordering is simpler than publicizing invitations to bid.

UNICOR agreements

UNICOR states on its website that it is interested in teaming agreements with private sector firms to produce both products and services, using federal facilities and inmate labor. Team members must be willing to subcontract the manufacturing and marketing to UNICOR. A sample teaming agreement is posted on the website.

UNICOR is particularly interested in “bringing sales otherwise sent to foreign countries back into the United States of America.” If you are losing federal customers to overseas suppliers, this may be a way to recover those lost sales, as UNICOR is the preferred supplier to federal agencies.

Tom Johnson is the publisher of Set-Aside Alert, and a consultant on federal marketing and sales. You may reach him at tjohnson@setasidealert.com.

VA OIG rips FedBid

Are CO Representatives getting good training?

GSA card, travel spending drops dramatically

NASA SEWP V starts cooking

Column: Are federal prison programs your competitors or customers?

Washington Insider: