Subject: FPI BOARD OF DIRECTORS' DECISION ON INTERACTIVE KIOSKS
From: [email protected] (Commerce Business Daily)
Date: 1998/12/12
Newsgroups: gov.us.fed.doc.cbd.notices
From Commerce Business Daily, December 15, 1998 PSA-2242
FPI BOARD OF DIRECTORS' DECISION ON INTERACTIVE KIOSKS
The Board of Directors of Federal Prison Industries, Inc. (FPI) now
issues its decision regarding FPI's proposal to initiate production of
interactive kiosks. As required by statute, FPI prepared a comprehensive
impact study, which analyzed the potential impact that FPI's production
may have on the private sector. FPI announced, in the June 2, 1998,
edition of the Commerce Business Daily, its plans to present this
proposal to the Board of Directors; described the procedures for
obtaining a copy of the impact study; and invited public comment on its
proposal. Copies of the impact study analyzing the proposal to produce
interactive kiosks were sent directly to the principal trade
associations, various manufacturers, and other interested parties. FPI
received written comments on its proposal from eight sources, prepared
responses to those comments, and submitted all such information to FPI's
Board of Directors, along with it request to produce interactive kiosks.
One manufacturer of interactive kiosks requested to make oral comments to
the FPI Board of Directors but failed to appear on the designated date.
Members of the Board reviewed all of the materials. The Board of
Directors wishes to thank those parties who took the time and effort to
comment. The Board of Directors is called on by statute to make a
determination as to whether production in the interactive kiosk industry
would result in FPI's assuming no more than a reasonable share of the
market and not unduly impact the industry. In reaching our decision, we
have relied on the entire record, including the impact study, written
comments submitted and informal oral presentations from individuals from
North Communications and Correctional Products and Services, Inc. On the
basis of all the information before us, it is the Board's decision to
approve FPI's request to manufacture interactive kiosks.
THE INTERACTIVE KIOSKS MARKET
In reaching this decision, the Board carefully reviewed
all of the information presented regarding the market for interactive
kiosks. Below is a summary of the Board's analysis and findings.
Background information Federal Prison Industries, Inc. in an effort to
diversify its product base announced its intent to manufacture
interactive kiosks. FPI intends to enter into a partnership agreement
with Correctional Products and Services, Inc. (CPSI) and North
Communications to manufacture this product. FPI plans to start with the
manufacturing of the cabling and the wiring components associated with
the interactive kiosk. In addition, FPI will also be involved in the
assembling process and will eventually manufacture the enclosure used to
house the interactive computer. North Communications will supply the
computer hardware and software used for the interactive kiosk. Federal
market The Federal market is embarking on a new era of providing better
customer service to the people they serve. People today are seeking new
and easier ways to access government at the same time government agencies
are reengineering service delivery. The increasing demand for quality
services coupled with the decreasing availability of resources offered by
the Federal government, created a situation that needs a solution. Many
Federal government agencies are exploring the possibility of providing
better government services through the use of interactive kiosk networks.
Agencies with direct contact with the general public will be the main
buyers of the interactive kiosk. These agencies include but are not
limited to the Social Security Administration, the U.S. Postal Service,
the Internal Revenue Service, the National Park Service, the Immigration
and Naturalization Service, and the Government Printing Office. Ten out
of the thirty-nine manufacturers identified in the impact study, have
sales recorded to the Federal government at the present time. It does not
appear that of the thirty-nine companies identified, any of them will be
significantly impacted if FPI manufactures interactive kiosks. Based on
data outlined in the impact study, in 1993, the total Federal multimedia
kiosk application market, which includes application software and
computer hardware, had estimated sales of $4.7 million. By 1994, sales
increased by a phenomenal 74 percent. The future for the Federal market
for the next five years continues to show substantial increases in the
Federal interactive kiosk market. Federal sales for the interactive kiosk
market are expected to reach $191.2 million by 2003. The rate of growth
is expected to continue because of the demand for faster service and
easier access to government services. Domestic market The domestic market
for interactive kiosks was estimated at $830.8 million in 1998 and is
expected to reach $2.94 billion in 2003. FPI sales would represent 1.9
percent of the domestic market in 1999 and increase to 3.3 percent of the
domestic market in 2003.
PRODUCTION LEVELS
It is the finding of the Board
that sales levels proposed by FPI for interactive kiosks represent a
reasonable share of the market and that proposed production at these
levels will not impose an undue burden of competition on the industry.
Therefore, the Board authorizes FPI to produce interactive kiosks at the
levels outlined below. 1999 -- FPI projected sales $15.7 million,
projected market share 19%; 2000 -- FPI projected sales $27.5 million,
projected market share 24%; 2001 -- FPI projected sales $45.0 million,
projected market share 29%; 2002 -- FPI projected sales $65.8 million,
projected market share 33%; and, 2003 -- FPI projected sales $96.7
million and projected market share 38%. The Board recognizes that it is
difficult to achieve exact sales levels each year. It is therefore
understood that FPI may exceed the annual limits by insubstantial
amounts, as long as the aggregate over the five-year period does not
exceed the five-year approved total of $250.7 million. While the sales
levels equate to a projected market share, as reflected in the study,
primarily for ease of reference and tracking, it is the decision of the
Board to use sales dollars as the measure for expansion. Should any party
believe that circumstances such as (but not limited to) overall industry
growth or Federal procurements have changed sufficiently that FPI's
authorized production is having a substantially greater impact than
anticipated in this decision, that party may provide such written
information to the Board. The Board will then review the information and,
if warranted in light of the information supplied, reexamine FPI's
authorized production levels.
Decided on the 8th day of December, 1998.
For the Board: Joseph M. Aragon, Chairman
Posted 12/11/98 (W-SN279503).
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Thanks Anna!
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