FEDERAL PRISON INDUSTRIES PUBLIC INVOLVEMENT PROCEDURES The following steps will be followed whenever FPI proposes to produce a new product or to significantly expand production of an existing product. These procedures are substantially identical to the original procedures which were adopted following consultation with private industry and labor, shortly after the passage of the industry involvement guidelines. The principal changes are to provide for early data collection and removal of strict page limitations, so as to make it easier to file comments with the Board. 1. Parties who are known to have an interest in a proposal by FPI to produce a new specific product or significantly expand in the production of an existing product will be contacted prior to the drafting of any market inpact study to obtain relevant information for purposes of developing a comprehensive and fair study. 2. All proposals to produce a new product or to significantly expand the production of an existing prduct shall be announced in the Commerce Business Daily (CBD), and a copy of the announcement shall be mailed to known interested parties. 3. The announcement will state that interested parties may obtain a copy of the study which analyzes the impact, if any, on the private sector resulting from the proposed production initiatives by writing to the Ombudsmun, Federal Prison Industries, 330 First Street, N.W., Washington, D.C. 20534, Attention: Ombudsmun. The announcement will further state that comments on the study should be submitted in writing to the Chief Operating Officer. It will further state that comments are due no later than 45 days from the date of the announcement and that the comments should address the issue of what precentage, if any, of the Government market for the specific product constitutes a reasonable share of the market. 4. Comments, including all attachments, should be keep as brief as possible. 5. FPI will contact known trade associations representing manufacturers of the relevant product, provide them with a copy of the announcement and the market analysis, and request their written and oral comments in an attempt to arrive at a mutually agreeable percentage figure as to what constitutes a reasonable share of the market. 6. A recommendation will be prepared by FPI to be provided to the Board of Directors on what constitutes a reasonable market share, if any, for the specific product in question. The recommendation will address all comments which are timely and relevant as well as the views of the trade association(s). 7. A copy of written comments submitted in response to the announcement, FPI's responses to the comments, and FPI's proposed recommendation to the Board of Directors shall also be provided to commenters who filed a timely submission. The material will be provided to the commenters no less than forty-five (45) days before the date of the Board meeting at which the proposal for production of the specific product at issue will be considered. 8. A final submission, whose purpose is to comment on FPI's recommendations, may be provided by commenters to the Board for its consideration. The final submission, including any attachments, should be as brief as possible. The submission should be sent to the Ombudsmun of FPI for transmittal to the Board. If a commenter wishes to appear at the Board meeting to make a statement, that request should be made in connection with the final submittal, together with the names of the individuals desiring to appear before the Board. 9. All final submittals, together with any request to appear before the Board, must be received by the Omsbudsmun at least fifteen (15) days in advance of the Board meeting. 10. In addition, all commenters will be advised in an appropriate manner of the date, time and location of the Board meeting at which the proposal will be discussed, and advised of the opportunity to address the Board in person. 11. The following rules will apply at the in-person presentation: (a) a maximum of 30 minutes will be allotted to each commenter for presentations to the Board, unless the Board extends the time; (b) The presentation to the Board is open to the public. However, the hearing may be closed, or other safeguards taken, where the Board determines that proprietary information must be safeguard, or for other good and sufficient reason. (c) The record before the Board at the time of the presentation is limited to the market study, comments and materials submitted in response to the market study (including the trade association's comments), corporate management's recommendations and materials submitted as part of corporate management's recommendations, and materials submitted by commenters in response to corporate management's recommendations. No new documentation or arguments from commenters will be received or heard at the presentation that have not been submitted in compliance with these rules, unless permitted by the Board. (d) The Chairman of the Board will preside at the hearing and impose such further rules as are reasonable to assure a full and orderly presentation, covering such matters as who may address the Board, the order in which presentations are made, what documents will constitute the record, what issues are relevant, and any questions concerning how much time is to be allotted to each presentation. The Federal Rules of Civil Procedure and formal rules of evidence will not be followed. (e) The Board members may direct questions to a commenter to elicit further information, and may request that additional material be provided for the record. 12. The Board will determine whether a proposed new product may be produced or whether a proposed expansion of an existing product should be approved, and what the reasonable market share is with regard to the specific product in question. In determining the reasonable market share for a specific product, the Board will balance the interest of the corporation with the interest of the affected private sector, employing the criteria spelled out in the relevant statutes, legislative history, and corporate regulations. 13. The decision of the Board will be made by majority vote. In the case of a tie, the position of the group which includes the Chairman will prevail. 14. The decision, together with the reasons for the decision, will be published in the CBD within 10 days of the date of the Board's decision. 15. Modification of these rules will be granted by the Board only in compelling circumstances. Requests should be addressed to Chairman, Board of Directors, Federal Prison Industries, Inc., 320 First Street, N.W., Washington, D.C. 20534, Attn: Ombudsmun.

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