WASHINGTON — The American Apparel & Footwear Association called on the presidential candidates to commit to ending the government’s reliance on federal prison labor to make apparel and uniforms for the military, which it claimed is “stifling” competition for private sector apparel manufacturers.
The AAFA is pressing the candidates to commit to eliminating the mandatory sourcing requirement for Federal Prison Industries, also known as UNICOR, that the association said essentially allows UNICOR to get first dibs on a certain percentage of federal contracts over private companies.
UNICOR can also compete on government contracts after they have exceeded the mandatory sourcing requirement, as long as its bid is comparable in price, quantity and delivery.
“UNICOR’s government-mandated advantages in the marketplace continue to create problems for American business enterprises, leading to lost U.S. jobs, closed U.S. factories, and U.S. manufacturers going out of business,” said Rick Helfenbein, president and chief executive officer at the AAFA.
Helfenbein sent letters to Democratic candidate Hillary Clinton and Republican candidate Donald Trump, as well as to Libertarian party candidate Gary Johnson and the Green Party’s Jill Stein.
Helfenbein said in an e-mail to WWD that UNICOR gets first dibs on bidding for Berry Amendment apparel.
“With wage rates as low as 28 cents an hour, it’s very hard for the government contractors to compete when they are required to give full benefits and pay full minimum wage. These contractors form the core center of the Made in USA movement. If they go under, the base is gone,” Helfenbein said.
He said in the letters that UNICOR is not subject to the same health or safety laws as private manufacturers in the U.S. and significantly benefits from a mandatory “source” requirement that requires the federal government to give contracts to UNICOR first for up to 5 percent of a government contracted product’s market share. Once it exceeds the mandatory requirement, UNICOR is allowed to compete for contracts that are set aside for small, women-owned, veteran-owned or disadvantaged businesses.
UNICOR is a government-run entity that employs some 12,000 inmates in about 83 factories at prisons around the country. Its annual revenues reached $500 million last year, according to AAFA.
Stephen Lamar, executive vice president at the AAFA, said 22 FPI factories make apparel and textiles, which generated about $177 million in sales last year.
Lamar said small U.S. apparel manufacturers competing for government contracts often are often third or fourth generation companies with 50 to 200 employees operating one or two factories. Three-quarters of them are family owned, he added.
“What you’ve got is this large leviathan competing on small business contracts,” Lamar said. “They don’t have to provide pricing that reflects economic [factors such as paying a minimum wage or health benefits] so it’s easy for them take small business contacts.”
“The whole impetus behind Federal Prison Industries is not about business, but instead, about inmate release preparation — helping offenders acquire the skills necessary to successfully make that transition from prison to law-abiding, contributing members of society,” the Justice Department, which oversees the program, said on its web site. “The production of items and provision of services are merely by-products of those efforts.”
Helfenbein concluded in the letter, “We all want more Made in USA opportunities, but we cannot create more Made in USA jobs when those opportunities are eliminated by competition from U.S. prison factories.”
AAFA is asking the candidates to commit to support Made in USA manufacturing if elected by eliminating UNICOR’s mandatory source requirement and prohibiting UNICOR from competing as a small business.