82 FR 18134 - 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 January 11, 2012, an arbitration panel (the Panel) rendered a decision in Illinois Department of Human Services, Division of Rehabilitative Services v. U.S. Department of Transportation, Federal Aviation Administration (Case no. R-S/10-02).

[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18134-18135]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07729]


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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 
January 11, 2012, an arbitration panel (the Panel) rendered a decision 
in Illinois Department of Human Services, Division of Rehabilitative 
Services v. U.S. Department of Transportation, Federal Aviation 
Administration (Case no. R-S/10-02).

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 5045, 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 Illinois Department

[[Page 18135]]

of Human Services, Division of Rehabilitative Services. Under section 
107d-2(c) of the Act, the Secretary publishes in the Federal Register a 
synopsis of each arbitration panel decision affecting the 
administration of vending facilities on Federal and other property.

Background

    The complainant, the Illinois Department of Human Services (IL DHS) 
Division of Rehabilitative Services, alleged that the respondent, the 
Federal Aviation Administration (FAA), violated the Act when it 
rescinded a permit authorizing the Business Enterprise Program for the 
Blind (BEPB) to operate vending machines at the FAA facility in Elgin, 
Illinois. The BEPB is responsible for administering the Act in the 
State.
    Specifically, on January 4, 2006, the FAA negotiated and signed a 
permit authorizing BEPB to operate vending machines at the Elgin 
facility. Both parties agreed the facility was a satisfactory site for 
a vending facility under applicable regulations. On July 31, 2006, BEPB 
wrote the FAA asking when vending services would be implemented. On 
December 20, 2006, the FAA responded that there had been a change in 
the requirements for service and that it had awarded a contract to 
another vendor.
    Communication between BEPB and the FAA ceased from December 20, 
2006, until September 2, 2008, when the BEPB program administrator, 
Raven Pulliam, wrote to Lois Flick at the FAA concerning the permit and 
requesting a date for installation of vending equipment. Hearing 
nothing, Pulliam wrote to the administrator of the FAA's regional 
office on September 21, 2010. On October 27, 2010, a representative 
from the regional office responded that the FAA was going to terminate 
the permit, specifying that the FAA's requirements for food service had 
changed. On November 18, 2010, the IL DHS filed a complaint and a 
request for a Federal arbitration with the Secretary of Education.
    IL DHS alleged that the FAA unlawfully: (1) Voided and withdrew an 
irrevocable agreement; (2) identified the Elgin facility as a 
``satisfactory site'' for a vending facility but did not offer priority 
to blind vendors to operate such services; and (3) continued to violate 
the permit by refusing to allow a blind vendor to operate at the Elgin 
facility since January 2006.
    IL DHS requested that the Panel grant the following relief: (1) 50 
percent of all income from vending machines currently in operation at 
the Elgin facility; and (2) prejudgment interest and interest from the 
date of award until paid.
    The FAA raised the affirmative defense that that the Act was not 
applicable because the Elgin facility did not meet the minimum 
requirements of a ``satisfactory site.'' The FAA also argued that: (1) 
The operation of a blind vending facility would adversely affect the 
interests of the United States; (2) the permit was not an agreement or 
a contract but an authorization of the provision of vending services 
that could be terminated with 30-days' notice; and (3) BEPB did not 
raise issues or contest the termination when it was notified of the 
FAA's intention to contract for services in December 2006 (the laches 
defense).
    In response, IL DHS stated that BEPB entered into a contractual 
agreement with the FAA, which could not be unilaterally revoked. It 
also argued there was no Secretarial determination that the placement 
or operation of the vending facility under the permit would be adverse 
to the interest of the United States and that, by signing the permit, 
both parties agreed that the Elgin facility met the minimum criteria 
identified as a ``satisfactory site'' for a vending facility. IL DHS 
contended that the laches defense is not applicable and that the 
applicable State statute of limitations for bringing a contract action 
is 10 years.
    The FAA claimed the laches defense should still apply, stating that 
an opportunity to exercise one of the Act's exemptions would have been 
made possible if it had been aware of the BEPB's position earlier.

Synopsis of the Panel Decision

    The Panel convened a status conference by telephone on November 11, 
2011, and the chair issued a pretrial order requiring both parties to 
submit stipulated facts and exhibits by November 30, 2011. The Panel 
concluded that an evidentiary hearing would not be necessary. A hearing 
was held by telephone conference on January 11, 2012.
    The Panel unanimously determined that, when the FAA and the BEPB 
came to a contractual agreement for the operation of vending machines 
at the Elgin facility, the FAA obligated itself under the Act. 
Furthermore, the Panel determined that the FAA forfeited any statutory 
exemptions given that its signature on the permit removed any claim of 
insufficient space, minimum level of vending machine income, or the 
configuration of the facility's space. Therefore, the Panel determined 
that the FAA was liable to the IL DHS.
    Although the Panel determined that laches did not apply, it also 
found that the BEPB would be unjustly enriched were the Panel to award 
the BEPB damages for the 20-month gap in which it failed to contact the 
FAA. On this basis, the Panel awarded the BEPB a total of $4,320.00 as 
the amount of the FAA's liability through March 2012. The computation 
was based upon a reasonable estimate of 50 percent of net income from 
vending machine operations, or $80 per month, multiplied by 54 months. 
The Panel also determined that BEPB was not entitled to pre-judgment 
interest.
    The Panel found that the permit should remain in place and stated 
that it hoped that the parties would negotiate, without any more delay, 
on establishing a vending facility on the Elgin facility. The Panel 
also retained jurisdiction in this matter to ensure that its decision 
would be adhered to.
    The views and opinions expressed by the Panel do not necessarily 
represent the views and opinions of the Department.
    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. 2017-07729 Filed 4-14-17; 8:45 am]
 BILLING CODE 4000-01-P