House Joint Resolution No. 606, agreed to during the 1999 Session of the General Assembly, established a joint subcommittee to study prison industries. As part of its study, the joint subcommittee was directed to examine the laws excepting such industries from competitive bidding requirements.

Virginia Correctional Enterprises (VCE) administers work programs that employ approximately 1,400 inmates. Under Virginia law, goods produced or manufactured by and services provided by inmates are required to be purchased by all departments, institutions and agencies of the Commonwealth supported in whole or in part by state funds. The Director of the Division of Purchases and Supply, within the Department of General Services, may exempt a state government entity from this mandatory procurement provision in certain instances. Though not provided for in statute, VCE also grants waivers if it does not offer the desired product, it has nothing compatible with the state entity's requirements, or the delivery requirement cannot be met. While VCE has a mandate to be self-sufficient, it is restricted in selling its products, in most instances, to only governmental and nonprofit entities. Legislation enacted in 1996, however, authorized the VCE to engage in joint ventures with private sector entities.

In carrying out its charge the joint subcommittee reviewed operations with VCE representatives and the use of mandatory sourcing requirements regarding prison industries in several other states. The joint subcommittee also received public comment from private sector businesses and state entities subject to the mandatory source provision. Public comment revealed concern in the private business sector that the mandatory source provision deprived businesses of opportunities in state contracting and fostered unfair competition resulting in lost business and jobs. Information provided by VCE indicated that prison work programs reduce risks and idleness in facilities, generate salaries to staff and inmates, and introduce inmates to a real life work ethic.

After its review and study of the issues related to prison industries in the state, the joint subcommittee approved a series of recommendations including the elimination of the mandatory source provision by January 1, 2002 and requiring the VCE Advisory Board and the Department of Corrections to report on the progress of implementation to the 2001, 2002 and 2003 sessions of the General Assembly.