59 -- FPI Production in FSC Code 5965

This notice announces a decision by the Board of Directors for Federal Prison Industries, Inc. (FPI) regarding FPI's production in Federal Supply Classification (FSC) code 5965 - Headsets, Handsets, Microphones and Speakers. FPI's new product/significant expansion guidelines were published March 12, 1997 in the Federal Register. A provision of the guidelines allows for FPI to exceed a specific product's expansion threshold in cases of public exigency, such as a national defense emergency. The guidelines require that FPI receive a specific order or request from the Department of Defense (DoD) or Executive Branch officials for this provision to be invoked. Upon invoking this provision, the guidelines allow that “increased sales resulting from national exigencies will not be considered a violation of the guidelines ceiling in the year in which they occur.” On May 20, 2003, FPI received an official request from the Department of the Army's Program Executive Office - Command, Control, and Communications Tactical at Fort Monmouth, New Jersey. The correspondence requested FPI to fulfill DoD's need for loudspeaker control monitors in FSC code 5965. FPI's FY 2003 sales ceiling for FSC code 5965 is $8.7 million. Based on year-to-date sales, the additional work represented by the DoD request would cause FPI to exceed the sales ceilings for FSC code 5965. The DoD request stated that FPI is the only source for this item, which has experienced sharply increased demand as a result of Operation Enduring Freedom and Operation Iraqi Freedom. The DoD request said “Specifically, many previously unequipped National Guard units have been called to duty to support these two operations. Many of these units were not forecasted to receive this equipment this year....UNICOR was called upon to expeditiously fill this important and unforseen demand.” FPI presented its Board of Directors with a request to invoke the guidelines' “national exigency” provision. In light of the military's critical need for this item, FPI staff requested its Board to invoke the “national exigency” provision for FSC code 5965. On June 26, 2003, FPI's Board of Directors officially approved this request. Accordingly, FPI's sales in FSC code 5965 may temporarily exceed the guidelines ceiling without constituting a guidelines violation. It should be noted that the national exigency provision of FPI's guidelines is temporary. It does not authorize FPI to utilize the higher sales level as a future production baseline. FPI is not certain how long the current exigency will last due to the ongoing military operations. While the requested production levels are deemed to be on a temporary basis, at this time, DoD does not know how long the requirement for additional production in this FSC code will last. At a minimum, however, it is expected that increased production levels as a result of DoD's expanded needs will continue through the balance of the current fiscal year and into FY 2004. Interested parties have a right to raise questions at any time with FPI's Board of Directors. Any correspondence should be addressed to: Chief Administrative Officer, Research, Activation and Corporate Support, Federal Prison Industries, Inc., 320 First Street, NW, Washington, DC 20534. Attention: FPI Board of Directors.