FPI's Defense contract monopoly abolished

Wood & Wood Products, Jan, 2002 by Greg Landgraf

As part of the Defense Authorization Bill for Fiscal Year 2002, the U.S. Congress approved a measure eliminating Federal Prison Industry's monopoly over defense contracts. The provision, signed into law by President Bush on Dec. 28, 2001, will allow private companies to compete with FPI on all products bid by the Department of Defense, rather than just contracts that FPI waives its rights to.

"We're very pleased," said Tom Reardon, executive director of the Business and Institutional Furniture Manufacturers Assn. "We've been working this issue for about 13 years. We feel it's a huge first step towards a day when all federal agencies have the freedom to choose their suppliers."

According to FPI's sales reports, it sold $87 million of office furniture to the Defense Department last year. That market will be opened to private companies, though Reardon acknowledged that FPI will continue to win some contracts. "I'm certain that some purchasing agents enjoy doing business with them," he said.

Legislation that would allow private companies to compete with FPI for all federal agency contracts has been introduced in the House and will likely be taken up next year. The bill, entitled "The Competition in Contracting Act" and numbered HR 1577, has the co-sponsorship of 120 Representatives from both parties.

FPI sold a total of $185 million in office furniture last year to all government agencies.