Lawmakers lament prison firm's move into computer sales

Lawmakers and contractors says a division of the Bureau of Prisons is unfairly expanding into the information technology market by refurbishing surplus government computers and selling them to the public at discount prices. The division, Federal Prison Industries (also known as Unicor), employs about 20,000 inmates annually to produce $500 million in furniture, clothing, electronics and other products for agencies. Federal rules require agencies to purchase certain items from Unicor. Since 1997, Unicor has received more than 100,000 excess computers, printers and pieces of software from agencies. Prison inmates take the equipment apart and refurbish it before it is sold to the public. Rep. Peter Hoekstra, R-Mich., chairman of the House Education and Workforce Subcommittee on Oversight and Investigations, blasted Unicor's selling of IT products at a hearing Tuesday and accused the agency of "running wild" over federal rules designed to limit what Unicor can sell in commercial markets. Hoekstra said Unicor hurts computer and software vendors because retailers cannot offer the same discount prices as the agency. State and local government agencies and non-profit organizations that would normally receive the excess equipment are losing out to Unicor, he said. Randall McBride, who owns Alpha Omega Computer Solutions in Florida, told lawmakers at the hearing he could not find computer prices as low as Unicor's through normal resale channels. In many cases, he said, Unicor is selling goods at 10 to 20 percent the price normally charged by vendors. Unicor officials were not asked to testify at the hearing. However, Diane Anthony, program manager for Unicor's computer refurbishing effort said federal agencies have been more than willing to give the organization their old and unneeded computer systems for refurbishing. "Our business is to employ inmates and recycle [equipment]. We don't want to undercut the commercial market," said Anthony, noting Unicor's sales of refurbished computer equipment have totaled less than $5 million over the past three years. Anthony said Unicor's low prices are reasonable because the computers do not come with software installed. As for taking computers that could be used by other state and local agencies or other organizations, she said, federal agencies review all requests for the equipment before donating it to Unicor.