Two American companies which make military uniforms are laying off hundreds of workers as the federal government decides to use prison inmates to make soldier fatigues. American Apparel currently charges $29.44 per uniform. The cost will increase by 15 percent when Federal Prison Industries (FPI) convicts begin sewing the clothing at a cost of $34.18 each. FPI also functions under the name UNICOR.

When the American Power Source government contract runs out in October, the work will shift from private sector employees to inmates. A 1930s federal laws allows Federal Prison Industries the first right of refusal on all United Stated government contracts, according to Fox News.

Alabama-based American Apparel was forced to close one plant and downsize at others due to the loss of contracts to prison inmates, according to company spokesman and retired Air Force Colonel Kurt Wilson. A total of 190 employees had their hours cut, and 255 others were laid off this year.

Wilson had this to say about the layoffs:

“The way the law is, Federal Prison Industries gets first dibs and contracts up to a certain percentage before they have to compete against us. The army combat uniform, for instance, is an item that they take off the top. As a result, American taxpayers pay more for it, but the bottom line is each soldier is paying more for their uniform. It has been going on for some time. Unfortunately what comes to bear now is, as demand for uniforms begins to decrease, budgets decrease, and the problem gets bigger for us. Therefore we have to lay people off.”

FPI currently operates approximately 80 factories with more than 13,000 convict workers. The correctional institute factories are not permitted to sell goods to the private sector. The law mandates that federal agencies buy the products, even when they are not the least expensive available option, the Digital Journal reports.

Although not commenting on the private sector layoffs, federal correctional agency did issue the following statement:

“It is important to note that FPI produces only 7 percent of the textile garments purchased by the DLA. The other 93 percent are produced by other entities. FPI’s percentage has remained fairly consistent over the past decade with slight declines.”

The release also clams that the program directly protects society by reducing crime and preparing inmates for successful release back into society to become law-abiding citizens.

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