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 accumulation of data 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 impact study to obtain relevant information for purposes of developing a comprehensive and fair study. Such information may include, but is not limited to, how a specific product is defined, size of the market, future market trends, and dependence of industry providers on the federal market. 2.) All proposals to produce a new product or to significantly expand the production of an existing product 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 Manager, Planning, Research, and Activation, Federal Prison Industries, 320 First Street, N.W., Washington, D.C. 20534. 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 percentage, if any, of the government market for the specific product constitutes a reasonable share of the market. All comments related to definition of the product, determination of the size of the market, impact on the private sector, and study methodology should be submitted at this time, to allow time for adequate consideration of these comments prior to FPI's dissemination of its final study and recommendations. Failure to provide this information in a timely manner may result in the information not being considered or being given less weight by the Board. 4.) Comments including all attachments should be kept as concise 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. FPI will also provide a copy to the appropriate labor representatives. 6.) A recommendation will be prepared by FPI to be provided to the Board of Directors on what constitutes a reasonable market share for the specific product in question. The recommendation will address all comments which are timely and relevant. 7.) A copy of the written comments submitted in response to the announcement, FPI's responses to the comments, and FPI's final 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. 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. 8.) A final submission, whose sole purpose is to comment on FPI's recommended production levels, may be provided by commenters to the Board for its consideration. The final submission, including any attachments, should be as brief as possible. Comments related to the study methodology, i.e., how the specific product is defined, determination of the size of the market, and impact of FPI on the private sector, should be submitted within the 45 day review period after announcement of the study in the CBD (see Step #3), and not at this stage of the process, in order to be given due consideration by the Board. This final submission should be sent to the Ombudsman 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 Ombudsman at least fifteen (15) days in advance of the Board meeting. 10.) The following rules will apply at the in-person presentation: (a) A maximum of 30 minutes will be allotted to eachcommenter for presentation 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 safeguarded, 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, FPI's recommendations, and materials submitted by commenters in response to FPI's recommendations. No new documentation or arguments from commenters should be presented at the presentation that have not been submitted in compliance with these rules, unless permitted by the Board. The Board reserves the right to exclude from consideration or give less weight to information which should have been submitted at Step #3. (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. 11.) 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 interests of the corporation with the interests of the affected private sector, employing the criteria spelled out in the relevant statutes, legislative history, and corporate regulations. 12.) 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. 13.) 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. 14.) 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.

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