FPI PRODUCTION OF CAFETERIA FURNITURE FEDERAL PRISON INDUSTRIES, INC. (FPI) The Board of Directors for FPI has established maximum levels for FPI's sales of cafeteria furniture to the Federal government through FY 2004. FPI's Board of Directors first approved FPI to manufacture and sell cafeteria furniture to the Federal government in December, 1991. At that time, the Board restricted FPI's cafeteria furniture sales to $1.5 million annually through FY 1997. However, FPI's Board did not establish sales limits for cafeteria furniture beyond FY 1997. Since it began production, FPI's annual sales of cafeteria furniture have remained less than $600,000. After reviewing the original decision approving FPI to make cafeteria furniture, FPI's Board has established maximum production levels for FPI's cafeteria furniture sales through FY 2004. The Board used the original decision's $1.5 million annual sales limit, then adjusted it for inflation. The actual rate of inflation was used for 1998, with a calculation of 3% annually for FY 1999 and beyond. Using this formula, FPI's sales limit for cafeteria furniture is as follows: FY 1998 -- $1,515,240 FY 1999 -- 1,560,697 FY 2000 -- 1,607,518 FY 2001 -- 1,655,744 FY 2002 -- 1,705,416 FY 2003 -- 1,756,578 FY 2004 -- 1,809,276 FPI's Board of Directors believe these sales limits will allow FPI to meet its inmate employment mandate by adjusting its cafeteria furniture sales to keep pace with rising costs, while not increasing its impact on the industry. The increase in FPI's sales ceiling for cafeteria furniture is only to keep place with inflation. The increase does not constitute a "significant expansion" under FPI's guidelines, so it is not necessary for FPI to initiate its industry involvement guidelines process. As discussed in FPI's industry involvement guidelines, any interested party has a right to raise a question at any time with FPI's Board of Directors. All correspondence should be addressed to: Manager, Planning, Research and Activation, Federal Prison Industries, Inc., 320 First Street, NW, Washington, D.C. 20534. Posted 11/05/99 (W-SN398644).

Loren Data Corp. http://www.ld.com (SYN# 0335 19991109\SP-0009.MSC)