82 FR 18129 - Arbitration Panel Decision Under the Randolph-Sheppard Act

DEPARTMENT OF EDUCATION

Federal Register Volume 82, Issue 72 (April 17, 2017)

The Department of Education (Department) gives notice that, on May 30, 2012, an arbitration panel (the Panel) rendered a decision in the matter of the Colorado Department of Human Services, Division of Vocational Rehabilitation, Business Enterprise Program v. the United States Department of Defense, Department of the Air Force (Case no. R- S/10-06).

[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18129-18130]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07728]


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DEPARTMENT OF EDUCATION


Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

ACTION: Notice of arbitration decision.

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SUMMARY: The Department of Education (Department) gives notice that, on 
May 30, 2012, an arbitration panel (the Panel) rendered a decision in 
the matter of the Colorado Department of Human Services, Division of 
Vocational Rehabilitation, Business Enterprise Program v. the United 
States Department of Defense, Department of the Air Force (Case no. R-
S/10-06).

FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the full text 
of the Panel decision from Donald Brinson, U.S. Department of 
Education, 400 Maryland Avenue SW., Room 5028, Potomac Center Plaza, 
Washington, DC 20202-2800. Telephone: (202) 245-7310. If you use a 
telecommunications device for the deaf or a text telephone, call the 
Federal Relay Service, toll-free, at 1-800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or compact 
disc) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: The Panel was convened by the Department 
under the Randolph-Sheppard Act (Act), 20 U.S.C. 107d-1(b), after 
receiving a complaint from the Colorado Department of Human Services, 
Division of Vocational Rehabilitation, Business Enterprise Program. 
Under section 107d-2(c) of the Act, the Secretary publishes in the 
Federal Register a synopsis of each Panel decision affecting the 
administration of vending facilities on Federal and other property.

Background

    This is an arbitration between the Colorado Department of Human 
Services and the United States Department of Defense, Department of the 
Air Force, pursuant to the Act.
    From October 1, 2006 through March 31, 2011, Don Hudson, a blind 
vendor licensed by the complainant, the Colorado Department of Human 
Services (CO DHS), Division of Vocational Rehabilitation, Business 
Enterprise Program, operated the High Country Inn, a food service 
operation located at the United States Air Force Academy near Colorado 
Springs, Colorado. In 2010, the respondent, the United States 
Department of Defense, Department of the Air Force (Air Force), 
published a competitive bidding announcement for the operation of the 
High Country Inn. The Air Force included in its solicitation for this 
contract a requirement that only those offerors whose price was within 
5 percent of the lowest offeror's price would be considered for award 
of the contract.
    The CO DHS's bid was in excess of this 5 percent competitive range 
and, accordingly, the CO DHS was eliminated from competition for the 
contract. The contract was awarded to the lowest bidder.
    The CO DHS filed a complaint with the United States Secretary of 
Education pursuant to the Act and its regulations. The CO DHS claimed 
that the 5 percent competitive range was set at such a low figure that 
it eliminated the priority to be afforded to blind vendors under the 
Act and its regulations. It also asserted that the Air Force misled it 
into thinking it had the lowest bid and, therefore, the CO DHS did not 
reduce its price when it had the opportunity to revise its bid in 
response to an amendment to the solicitation. In addition, it claimed 
that the Air Force should have conducted direct negotiations with the 
blind vendor rather than using a competitive process.
    The CO DHS also claimed that the Air Force violated 34 CFR 
395.20(b) because the 5 percent competitive range was a limitation that 
the Air Force did not justify in writing to the Secretary of Education. 
Finally, the CO DHS asserted that the 5 percent competitive range was 
unlawful because it was based on the August 29, 2006, Joint Report to 
Congress, which required the setting of this competitive range but had 
not yet been implemented.

Synopsis of the Panel Decision

    The Panel held, with one member dissenting, that the CO DHS had 
waived

[[Page 18130]]

its claim that the 5 percent competitive range on its face violated the 
Act because the CO DHS failed to protest the competitive range at the 
time the Air Force issued the solicitation. The Air Force had the 
discretion to set a competitive range at this level.
    The Panel also held that the CO DHS waived its claim that the 5 
percent limitation was a limitation on the operation of a vending 
facility because it failed to raise it at the time the Air Force issued 
the solicitation.
    The Panel further held that the Joint Report was not effective 
because regulations implementing that report had never been promulgated 
and the 5 percent competitive range set by the Air Force was not based 
on the Joint Report. The Panel held that, instead, the competitive 
range was the product of the Air Force's need to keep down its costs 
and emphasize the importance of price to bidders.
    In addition, the Panel held that the Air Force was not required to 
conduct discussions with the CO DHS because the Act permits, but does 
not require, such discussions. In addition, the Federal Acquisition 
Regulation (FAR) does not require discussions with bidders. The Panel 
held that, even if the FAR did require discussions, a violation of the 
FAR cannot be the subject of arbitration under the Act.
    The Panel held that such a claim did not involve an alleged 
violation of the Act and, therefore, could not be brought in 
arbitration. The Panel also determined that the claim that the Air 
Force misled the CO DHS into thinking it had the lowest bid did not 
involve an alleged violation of the Act and, therefore, could not be 
brought in arbitration. Under the facts of this case, the Panel 
determined that the CO DHS could not reasonably claim prejudice because 
of an allegedly misleading statement by the Air Force.
    The Panel concluded, with one member dissenting, that the Air Force 
violated the Act's regulations when it failed to consult with the 
Secretary of Education during this solicitation. Even though the Air 
Force determined that the CO DHS's bid was not within the 5 percent 
competitive range, the Panel held that 34 CFR 395.33(a) required the 
Air Force to consult with the Secretary of Education in order to 
determine whether the blind vendor was entitled to a priority in the 
solicitation pursuant to that regulatory provision. The Panel directed 
that, if the Secretary of Education determines after consultation with 
the Air Force that the CO DHS should be afforded a priority pursuant to 
34 CFR 395.33(a), the Air Force will be required to initiate a new 
acquisition in compliance with 34 CFR 395.33.
    Electronic Access to This Document: The official version of this 
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    Dated: April 11, 2017.
Ruth E. Ryder,
Deputy Director, Office of Special Education Programs, delegated the 
duties of the Assistant Secretary for Special Education and 
Rehabilitative Services.
[FR Doc. 2017-07728 Filed 4-14-17; 8:45 am]
 BILLING CODE 4000-01-P