Events/Tradeshows

Notes to Financial Statements

(Dollars in Thousands)

 click here to download 2003 Independent Audit pdf

Federal Prison Industries, Inc. (FPI) was established in 1934 by an act of the United States Congress. FPI operates under the trade name UNICOR, as a wholly owned federal government corporation within the Department of Justice, and functions under the direction and control of a Board of Directors, (the “Board”). Members of the Board are appointed by the President of the United States of America and represent retailers and consumers, agriculture, industry, labor, the Attorney General, and the Secretary of Defense. FPI’s statutory mandate is to provide employment and training for inmates in the Federal Prison System while remaining self-sufficient through the sale of its products and services.

FPI’s federal government customers include departments, agencies and bureaus such as the Department of Justice, the Department of Defense, the Department of Homeland Security, the Social Security Administration, and the General Services Administration. These and other federal organizations are required to purchase products from FPI, if its products meet the customer’s price, quality, and delivery standards, under a mandatory source preference specified in FPI’s enabling statute and the Federal Acquisition Regulation. FPI’s source preference may, at some time, be impacted by legislative changes. Subsequent to the end of this fiscal year, the House of Representatives passed H.R. 1829, which if enacted, would eliminate FPI’s source preference and require other operational changes. FPI is unable to predict the probability of enactment, or if enacted the impact of this, or other legislation until it is finalized.

As of September 30, 2003, FPI had industrial operations at 112 factories located at 71 facilities within the Federal Prison System; these factories employed 20,274 inmates representing approximately 16% of the total federal inmate population.