UNICOR Products: Federal Prison Industries Can Further Ensure Customer Satisfaction
GGD-86-6
Published: Nov 01, 1985. Publicly Released: Nov 01, 1985.
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Highlights
Pursuant to a congressional request, GAO examined the operations of the Federal Prison Industries (UNICOR) to determine whether improvements were needed in: (1) setting and maintaining prices for its products and services; (2) staying abreast of and dealing with customer problems; and (3) granting clearances for federal agencies to buy elsewhere.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Justice | The Attorney General should direct the Commissioner, UNICOR, to treat the pricing support problems as a corporatewide concern. The Commissioner should direct the product divisions to comply with the corporate policy of checking market prices for its products and services for which comparable market products exist and documenting price determinations. Consideration should be given to having the corporation's internal auditors periodically check to ensure compliance with corporate policy. Also, guidance should be provided on the type of documentation required so that prices will be supported in a standard manner. The documentation should include the basis or support for any determination that no comparable market products exist for a specific UNICOR product or product line. |
Closed – Implemented
The corporation issued a directive: (1) requiring separate files to explain and document price determinations; and (2) defining the data to be used in setting/documenting prices. These changes were included in the corporate policy manual. Compliance is being checked through quarterly management reviews. Justice auditors will be asked to review this area in fiscal year 1987.
|
| Department of Justice | The Attorney General should direct the Commissioner, UNICOR, to define current market price for its products and services. UNICOR should provide guidance on such things as how many prices need to be checked or attempts made to check prices, how frequently prices need to be checked, and what factors should determine where, within the price range, the UNICOR price should fall. |
Closed – Implemented
A price documentation checklist was developed. The Department of Justice stated that this serves to define market price. It does, in part, identify numbers, dates, and sources of market prices. However, it does not address frequency of checks, number of prices to be checked, or how the UNICOR price should be calculated.
|
| Department of Justice | The Attorney General should direct the Commissioner, UNICOR, to require each division and factory to follow UNICOR cost-accounting procedures. |
Closed – Implemented
A December 12, 1985, corporate directive advised product divisions of the need to follow cost-accounting procedures. This is being emphasized during factory manager meetings, which includes cost-accounting training. The internal and contract audit staffs will also determine reasons for problems with unit cost statements and critique adequacy of training in this area.
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| Department of Justice | The Attorney General should direct the Commissioner, UNICOR, to reduce the number of situations requiring clearances by adding to the UNICOR catalogs, wherever feasible, a description of product types it does not manufacture or plan to manufacture but which are frequently requested by customers. The catalog should contain a statement indicating that items identified as not manufactured do not require a clearance. Also, UNICOR should notify its employees that clearances should not be prepared for items UNICOR does not make. |
Closed – Not Implemented
Justice disagreed with this recommendation and believes that it would be difficult and costly to maintain up-to-date catalogs. Justice also believes that its present system allows it to identify new potential products.
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Topics
Commodity marketingComparative analysisCorrectional facilitiesCost accountingPrice regulationProgram managementRehabilitation programsIndustrial facilitiesProfitsProcurement