82 FR 18129 - Arbitration Panel Decision Under the Randolph-Sheppard Act
DEPARTMENT OF EDUCATION Federal Register Volume 82, Issue 72 (April 17, 2017)
Federal Register Volume 82, Issue 72 (April 17, 2017)
| Page Range | 18129-18130 | |
| FR Document | 2017-07728 |
[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] ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION Arbitration Panel Decision Under the Randolph-Sheppard Act AGENCY: Department of Education. ACTION: Notice of arbitration decision. ----------------------------------------------------------------------- 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 document is the document published in the Federal Register. Free internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. 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
![Federal Register / Vol. 82, No. 72 / Monday, April 17, 2017 / Notices 18129
the same attorneys whom he fired on You may also access documents of the Background
July 22, 2009. The Panel then asked the Department published in the Federal This is an arbitration between the
attorneys to confirm that they Register by using the article search Colorado Department of Human
represented Mr. Werwie and proposed a feature at www.federalregister.gov. Services and the United States
conference call to be held on September Specifically, through the advanced Department of Defense, Department of
2, 2010. search feature at this site, you can limit the Air Force, pursuant to the Act.
On August 30, one of the attorneys, your search to documents published by From October 1, 2006 through March
Mr. Leiterman, responded by email that the Department. 31, 2011, Don Hudson, a blind vendor
Mr. Werwie asked him and his Dated: April 11, 2017. licensed by the complainant, the
colleague to represent him in this case. Ruth E. Ryder, Colorado Department of Human
Mr. Leiterman continued that they had Deputy Director, Office of Special Education Services (CO DHS), Division of
‘‘agreed in principle,’’ and they Programs, delegated the duties of the Vocational Rehabilitation, Business
expected the letter of representation to Assistant Secretary for Special Education and Enterprise Program, operated the High
be signed in the next week. However, in Rehabilitative Services. Country Inn, a food service operation
the two weeks that followed, the Panel [FR Doc. 2017–07727 Filed 4–14–17; 8:45 am] located at the United States Air Force
did not hear from either attorney. BILLING CODE 4000–01–P Academy near Colorado Springs,
On September 17, 2010, the Panel Colorado. In 2010, the respondent, the
sent Mr. Werwie a letter indicating that United States Department of Defense,
it would grant the PA OVR’s motion to DEPARTMENT OF EDUCATION Department of the Air Force (Air Force),
dismiss if Mr. Werwie did not respond published a competitive bidding
by November 1, 2010. Neither Mr. Arbitration Panel Decision Under the announcement for the operation of the
Werwie nor his attorneys responded to Randolph-Sheppard Act High Country Inn. The Air Force
the motion to dismiss. On March 17, included in its solicitation for this
2011, the Panel granted the PA OVR’s AGENCY: Department of Education.
contract a requirement that only those
motion to dismiss for failure to ACTION: Notice of arbitration decision. offerors whose price was within 5
prosecute. percent of the lowest offeror’s price
Synopsis of the Panel Decision SUMMARY: The Department of Education would be considered for award of the
(Department) gives notice that, on May contract.
The Panel reviewed the statutory 30, 2012, an arbitration panel (the The CO DHS’s bid was in excess of
language of the Act and the RSA’s Panel) rendered a decision in the matter this 5 percent competitive range and,
implementing regulations, policies, and of the Colorado Department of Human accordingly, the CO DHS was
procedures. The Panel concluded that it Services, Division of Vocational eliminated from competition for the
has the authority to grant a motion to Rehabilitation, Business Enterprise contract. The contract was awarded to
dismiss in this case without first Program v. the United States the lowest bidder.
conducting a hearing. It also concluded Department of Defense, Department of The CO DHS filed a complaint with
that there were unusual circumstances the Air Force (Case no. R–S/10–06). the United States Secretary of Education
present in this case, notably delays in pursuant to the Act and its regulations.
FOR FURTHER INFORMATION CONTACT: You
the process due to the change of Mr. The CO DHS claimed that the 5 percent
may obtain a copy of the full text of the
Werwie’s lawyers. The Panel repeatedly competitive range was set at such a low
Panel decision from Donald Brinson,
warned Mr. Werwie that his failure to figure that it eliminated the priority to
U.S. Department of Education, 400
move the case forward could result in be afforded to blind vendors under the
Maryland Avenue SW., Room 5028,
dismissal and noted that he chose not to Act and its regulations. It also asserted
Potomac Center Plaza, Washington, DC
file a response at all although he was that the Air Force misled it into
20202–2800. Telephone: (202) 245–
given ample time to do so. Because of thinking it had the lowest bid and,
7310. If you use a telecommunications
these circumstances, the Panel decided therefore, the CO DHS did not reduce its
device for the deaf or a text telephone,
that granting the PA OVR’s motion to price when it had the opportunity to
call the Federal Relay Service, toll-free,
dismiss for Mr. Werwie’s failure to revise its bid in response to an
at 1–800–877–8339.
prosecute was an appropriate exercise of amendment to the solicitation. In
its discretion. Individuals with disabilities can
addition, it claimed that the Air Force
The views and opinions expressed by obtain this document in an accessible
should have conducted direct
the Panel do not necessarily represent format (e.g., braille, large print,
negotiations with the blind vendor
the views and opinions of the audiotape, or compact disc) on request
rather than using a competitive process.
Department. to the contact person listed under FOR
The CO DHS also claimed that the Air
FURTHER INFORMATION CONTACT.
Electronic Access to This Document: Force violated 34 CFR 395.20(b) because
The official version of this document is SUPPLEMENTARY INFORMATION: The Panel the 5 percent competitive range was a
the document published in the Federal was convened by the Department under limitation that the Air Force did not
Register. Free internet access to the the Randolph-Sheppard Act (Act), 20 justify in writing to the Secretary of
official edition of the Federal Register U.S.C. 107d-1(b), after receiving a Education. Finally, the CO DHS asserted
and the Code of Federal Regulations is complaint from the Colorado that the 5 percent competitive range was
available via the Federal Digital System Department of Human Services, unlawful because it was based on the
at: www.gpo.gov/fdsys. At this site you Division of Vocational Rehabilitation, August 29, 2006, Joint Report to
mstockstill on DSK30JT082PROD with NOTICES
can view this document, as well as all Business Enterprise Program. Under Congress, which required the setting of
other documents of this Department section 107d-2(c) of the Act, the this competitive range but had not yet
published in the Federal Register, in Secretary publishes in the Federal been implemented.
text or Portable Document Format Register a synopsis of each Panel
(PDF). To use PDF you must have decision affecting the administration of Synopsis of the Panel Decision
Adobe Acrobat Reader, which is vending facilities on Federal and other The Panel held, with one member
available free at the site. property. dissenting, that the CO DHS had waived
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![18130 Federal Register / Vol. 82, No. 72 / Monday, April 17, 2017 / Notices
its claim that the 5 percent competitive be required to initiate a new acquisition the Randolph-Sheppard Act (Act), 20
range on its face violated the Act in compliance with 34 CFR 395.33. U.S.C. 107d–1(a), after receiving a
because the CO DHS failed to protest the Electronic Access to This Document: complaint from Rutherford Beard, a
competitive range at the time the Air The official version of this document is licensed blind operator of a vending
Force issued the solicitation. The Air the document published in the Federal facility at the Joint Forces Training
Force had the discretion to set a Register. Free internet access to the Center. Under section 107d–2(c) of the
competitive range at this level. official edition of the Federal Register Act, the Secretary publishes in the
The Panel also held that the CO DHS and the Code of Federal Regulations is Federal Register a synopsis of each
waived its claim that the 5 percent available via the Federal Digital System Panel decision affecting the
limitation was a limitation on the at: www.gpo.gov/fdsys. At this site you administration of vending facilities on
operation of a vending facility because can view this document, as well as all Federal and other property.
it failed to raise it at the time the Air other documents of this Department
published in the Federal Register, in Background
Force issued the solicitation.
The Panel further held that the Joint text or Portable Document Format The complainant, Rutherford Beard, is
Report was not effective because (PDF). To use PDF you must have a food vendor in the respondent’s, the
regulations implementing that report Adobe Acrobat Reader, which is Michigan Commission for the Blind’s
had never been promulgated and the 5 available free at the site. (Commission), business enterprise
percent competitive range set by the Air You may also access documents of the program (BEP). On May 1, 2008, Mr.
Force was not based on the Joint Report. Department published in the Federal Beard signed a vending facility
The Panel held that, instead, the Register by using the article search agreement to operate a cafeteria at the
competitive range was the product of feature at www.federalregister.gov. Joint Forces Training Center. He was
the Air Force’s need to keep down its Specifically, through the advanced provided with initial inventory and
costs and emphasize the importance of search feature at this site, you can limit equipment, and the cafeteria began to
price to bidders. your search to documents published by sell food. This facility was projected to
In addition, the Panel held that the the Department. generate $150,000 in annual sales with
Air Force was not required to conduct Dated: April 11, 2017. an 11 percent profit. The facility did not
discussions with the CO DHS because Ruth E. Ryder, generate the expected sales and
the Act permits, but does not require, Deputy Director, Office of Special Education ultimately Mr. Beard had to lay off two
such discussions. In addition, the Programs, delegated the duties of the employees. As a result, his staff was
Federal Acquisition Regulation (FAR) Assistant Secretary for Special Education and reduced to himself and a part-time
does not require discussions with Rehabilitative Services. employee.
bidders. The Panel held that, even if the [FR Doc. 2017–07728 Filed 4–14–17; 8:45 am] Because the facility was not
FAR did require discussions, a violation BILLING CODE 4000–01–P generating any profit, Mr. Beard asked
of the FAR cannot be the subject of for a profit percentage exception after
arbitration under the Act. six months. He explained that, if a
The Panel held that such a claim did DEPARTMENT OF EDUCATION vendor does not meet the expected
not involve an alleged violation of the profit margin and does not get an
Act and, therefore, could not be brought Arbitration Panel Decision Under the exception, he is not eligible to bid on a
in arbitration. The Panel also Randolph-Sheppard Act different facility. Mr. Beard testified that
determined that the claim that the Air AGENCY: Department of Education. he ‘‘tried everything,’’ including
Force misled the CO DHS into thinking ACTION: Notice of arbitration decision. opening on some weekends and opening
it had the lowest bid did not involve an for breakfast, but he did not generate a
alleged violation of the Act and, SUMMARY: The Department of Education profit. After Mr. Beard attempted to
therefore, could not be brought in (Department) gives notice that, on transfer to another location, the
arbitration. Under the facts of this case, October 7, 2012, an arbitration panel Commission informed him that he had
the Panel determined that the CO DHS (the Panel) rendered a decision in to remain for at least a year according
could not reasonably claim prejudice Rutherford Beard v. the Michigan to the BEP rules. The cafeteria was then
because of an allegedly misleading Commission for the Blind (Case no. R– closed.
statement by the Air Force. S/09–01). In his appeal, Mr. Beard claimed that
The Panel concluded, with one FOR FURTHER INFORMATION CONTACT: You he did not get sufficient help from the
member dissenting, that the Air Force may obtain a copy of the full text of the BEP and was not allowed to transfer out
violated the Act’s regulations when it Panel decision from Donald Brinson, after six months. He also asserted that
failed to consult with the Secretary of U.S. Department of Education, 400 there were vending machines in
Education during this solicitation. Even Maryland Avenue SW., Room 5045, different buildings on the same grounds
though the Air Force determined that Potomac Center Plaza, Washington, DC that could have been awarded to him to
the CO DHS’s bid was not within the 5 20202–2800. Telephone: (202) 245– lessen the adverse financial effect of the
percent competitive range, the Panel 7310. If you use a telecommunications lack of business. That solution was also
held that 34 CFR 395.33(a) required the device for the deaf or a text telephone, denied. Mr. Beard also contended that
Air Force to consult with the Secretary call the Federal Relay Service, toll-free, because the initial projection for sales at
of Education in order to determine at 1–800–877–8339. this cafeteria was miscalculated, and
whether the blind vendor was entitled Individuals with disabilities can because he was not allowed to transfer
mstockstill on DSK30JT082PROD with NOTICES
to a priority in the solicitation pursuant obtain this document in an accessible after six months, the Commission
to that regulatory provision. The Panel format (e.g., braille, large print, should reimburse him for his losses.
directed that, if the Secretary of audiotape, or compact disc) on request In response, the Commission asserted
Education determines after consultation to the contact person listed under FOR that, under its rules, there is no
with the Air Force that the CO DHS FURTHER INFORMATION CONTACT. guarantee that a vendor will make a
should be afforded a priority pursuant SUPPLEMENTARY INFORMATION: The Panel profit. It also pointed out that Mr. Beard
to 34 CFR 395.33(a), the Air Force will was convened by the Department under did not exercise the procedural rights
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Document Created: 2018-08-25 11:27:55
Document Modified: 2018-08-25 11:27:55
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of arbitration decision. | |
| 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. | |
| FR Citation | 82 FR 18129 |
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