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Prison Industry Authority: Outside Purchase of Goods & Services
From the Introduction section of the Auditor's report:
The California Penal Code, Section 2807(b), requires state agencies to purchase the PIA's products or the PIA can grant state agencies a waiver allowing them to purchase goods and services from other sources. The PIA can also sell its products and services to cities, counties, special districts, and public schools in the State, as well as to public agencies in other states whose laws permit it, federal agencies, and foreign governments and businesses. The CDC is the PIA's largest single customer. If the PIA cannot produce enough products or render services to meet demand, it purchases comparable finished goods and services from the private sector. The PIA calls this activity a "buyout." The PIA subsequently resells these items to its customers at its published prices. Buyouts frequently occur for the PIA's food, including bread and milk. From July 1994 through December 1997, the PIA purchased finished goods and services, including clothing, printing, and food items, 656 times from the private sector...
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