GOOD FAITH ANNOUNCEMENT FEDERAL PRISON INDUSTRIES, INC. (FPI) Under the terms of FPI's expansion guidelines, published March 12, 1997, in the Federal Register, FPI submits the following "good faith announcement" for public notice and comment. FPI proposes to manufacture grilles for windows in Bureau of Prisons (BOP) correctional facilities. On June 13, 1996, FPI's Board of Directors granted approval for FPI to initiate production of steel doors and frames for sale to the BOP. Many of the doors purchased by the BOP include grilles. In the effort to vertically integrate its production, FPI manufactures such grilles and includes them with the completed doors. The grilles are included in the price of the door, and all of FPI's grille sales count toward the $5 million annual sales cap imposed by FPI's Board. FPI has been asked by the BOP to provide similar grilles for some of the windows within BOP correctional facilities. Such grilles would be manufactured in the same manner as those already made by FPI, and would function in essentially the same manner; the only difference being they will be located in a window rather than a door. FPI believes that window grilles do not constitute a separate specific product from the grilles FPI already produces. FPI's expansion guidelines use an item's FSC code as the primary determinant of whether it is a separate specific product. The FSC for grilles is 5670 -- Prefabricated Building Components. This FSC code includes door frames. This FSC code was also specifically cited in FPI's impact study as one of the two FSC codes which include steel doors and frames. It is FPI's belief that grilles for windows in BOP correctional facilities are not substantially different in function than those for doors in BOP correctional facilities. For this reason, FPI believes that grilles for windows in BOP correctional facilities do not meet the definition of "new product" as set forth by FPI's expansion guidelines. FPI believes it should be allowed to supply the BOP with grilles for windows, with all sales counting toward the annual sales cap for steel doors and frames set by FPI's Board of Directors. However, FPI recognizes that a reasonable person may construe grilles for windows to be a new product for FPI. Under the terms of FPI's expansion guidelines, interested parties may submit comments regarding the proposed production by FPI. In submitting comments to FPI, the following guidelines will apply: 1) Comments will be due within 21 days of the date of this notice; 2) Relevant comments will focus on and address why the item(s) should be considered a new product, separate and distinct from a similar item currently produced by FPI; 3) While the primary purpose of the comments will be to determine if the item should be defined as a new product, comments related to market share and/or the impact resulting from such a production decision may also be considered relevant. All comments received in response to this announcement will be considered by FPI. All commenters will be advised whether FPI decides to initiate the public involvement guidelines process. Any interested party has a right to raise any question at any time with FPI's Board of Directors. All comments should be addressed to: Manager, Planning, Research and Activation, Federal Prison Industries, Inc., 320 First Street, NW, Washington, D.C. 20534. Posted 07/21/98 (W-SN226495).

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