An Update for Federal, State, and Private Prison Contractors  
   Vol. 3, Issue 5. September/October 2002




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A R T I C L E S


UNICOR PROTEST
 
CLAIMS UPDATE
 
UPDATE ON HOMELAND SECURITY
 
OFFICE OF THE DETENTION TRUSTEES
 
 

UNICOR PROTEST

GAO Dismisses Protest Filed by UNICOR But Keeps Door Open
for Possible Future UNICOR Protests

The General Accounting Office recently dismissed the first protest filed by UNICOR challenging the Marine Corps' decision not to award a contract to UNICOR.   Until recently, Federal law designated UNICOR as a "mandatory source" for all federal agencies.  However, the Department of Defense's Fiscal Year 2002 Appropriation Act removed the mandatory source rule as it applies to purchases of UNICOR products by DOD.  More specifically, DOD is now authorized to conduct market research to determine whether UNICOR's products are comparable in price, quality and time of delivery with those products offered in the private sector.  If the DOD determines that a UNICOR product is not comparable with the private sector, the DOD is authorized to use competitive procedures for the procurement of that product.

Accordingly, when the Marine Corps recently decided to award furniture contracts to Federal Supply Schedule (FSS) vendors instead of UNICOR, UNICOR protested the Marine Corps' decision.  More specifically, market research conducted by the Corps demonstrated that an FSS vendor could meet the requirement at a price lower than the price reflected in UNICOR's final bill of materials.  In addition, the Corps understood that UNICOR needed a long lead time for delivery and installation and apparently could not meet the delivery schedule of complete installation by the due date.  Accordingly, the Corps determined that UNICOR's products were not comparable to those offered by the FSS vendors.  After conducting an FSS‑type competition, without a formal solicitation, the Corps issued purchase orders to FSS vendors.  In response, UNICOR protested the Corps' decision. 

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CLAIMS UPDATE

DOTBCA Rules in Community Corrections Center Case

On June 19,2002, the Department of Transportation Contract Appeals Board (DOTBCA) denied a community corrections contractor's claim for compensation for increased labor costs resulting from a post-award incorporation of a wage determination.  The community corrections contractor (CCC) also sought damages for BOP's alleged breach of contract for failing to fund the increased minimum wages. 

The contract at issue in CCC's appeal was for residential community corrections center services for Federal offenders in Utah.  Under the contract, the CCC was to provide care, custody, control accountability, and treatment for detainees referred by the BOP and the United States Probation Office.  The contract was subject to the Service Contract Act and at the time of the solicitation, all offerors were notified that the contract was subject to a wage determination by the Department of Labor.

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UPDATE ON HOMELAND SECURITY

House Approves Homeland Security Act, Moving INS Enforcement Out of DOJ & Exempting New AGency from Procurement Laws

Recently, the U.S. House of Representative passed the Homeland Security Act of 2002, H.R. 5005 (2002), approving PresidentBush's plan to create a new Department of Homeland Security (DHS).  Under the bill passed by the House, law enforcement provisions currently handled by the Immigration and Naturalization Service (INS) --  including detention services -- will be transferred to DHS.  If passed, the bill will also allow DHS to procure detention services outside traditional procurement regulations.

Initially, the House Judiciary Committee approved by voice vote an amendment offered by Representative James Sensenbrenner (R-Wis) and Representative John Conyers (D-MN), which would split up the enforcement and services functions of the current INS and send only the law enforcement functions to the new DHS.  For correction contractors purposes, under Rep.Sensenbrenner's amendment, the detention element of the current INS would end up leaving the Department of Justice and being absorbed into the DHS.  Rep. Sensenbrenner expressed concern that if the immigration services section of the current INS leaves the DOJ, it would be treated like the "stepchild" to immigration enforcement and be deprived of adequate funding.  Rep. Sensenbrenner has long been a proponent of abolishing INS and creating two new agencies -- one which handles law enforcement and the other which handles immigration services.  Although the idea of separating INS services from INS enforcement was opposed by Attorney General Ashcroft, Representative Dick Armey (R-TX) drafted a settlement of the issue between the White House and the House of Representatives, leading to the separation of the two functions under the bill passed by the House.

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OFFICE OF THE DETENTION TRUSTEES

Senate FY 2003 Report Language Conflicts with Homeland Security Act

The Senate reported recently on the Fiscal Year 2003 Appropriations for the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies.

The report noted that since submission of the FY 2002 budget, the Department of Justice had centralized funding for the Federal Prisoner Detention Program and the Immigration and Naturalization Service's Service Processing Center within the Office of the Detention Trustee.  However, the Report also noted that while ODT had management responsibility for detention, as well as funding for bed space, detention personnel still remain under the control of the various components.

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