[Federal Register Volume 60, Number 105 (Thursday, June 1, 1995)]
[Notices]
[Pages 28590-28591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13407]



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DEPARTMENT OF EDUCATION


Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

ACTION: Notice of Arbitration Panel Decision Under the Randolph-
Sheppard Act.

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SUMMARY: Notice is hereby given that on October 21, 1992, an 
arbitration panel rendered a decision in the matter of District of 
Columbia Department of Human Services v. General Services 
Administration (Docket No. R-S/91-9). This panel was convened by the 
Secretary of Education pursuant to 20 U.S.C. 107d-1(b). The Randolph-
Sheppard Act (the Act) provides a priority for blind vendors to operate 
vending facilities on Federal property. Under this section of the Act, 
the State licensing agency (SLA) may file a complaint with the 
Secretary if the SLA determines that an agency managing or controlling 
Federal property fails to comply with the Act or regulations 
implementing the Act. The Secretary then is required to convene an 
arbitration panel to resolve the dispute.

FOR FURTHER INFORMATION CONTACT: A copy of the full text of the 
arbitration panel decision may be obtained from George F. Arsnow, U.S. 
Department of Education, 600 Independence Avenue, SW., Room 3230, Mary 
E. Switzer Building, Washington, DC 20202-2738. Telephone: (202) 205-
9317. Individuals who use a telecommunications device for the deaf 
(TDD) may call the TDD number at (202) 205-8298.

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act (20 
U.S.C. 107d-2(c)), the Secretary publishes a synopsis of arbitration 
panel decisions affecting the administration of vending facilities on 
Federal and other property.

Background

    On August 29, 1986, the District of Columbia Rehabilitation 
Services Administration (DCRSA), the SLA, and the General Services 
Administration (GSA) entered into an interim agreement by which a 
permit was granted to DCRSA by GSA to operate a cafeteria in the GSA 
Regional Office Building (ROB) at 7th and D Streets, SW., Washington, 
DC. The cafeteria opened for business [[Page 28591]] on September 2, 
1986, and was assigned a blind vendor.
    In mid-March 1989, GSA verbally notified the chief of DCRSA's 
Randolph-Sheppard Vending Facility program that, at an unspecified time 
in the future, GSA would be making structural repairs to the ROB 
cafeteria. Subsequently, in a letter dated August 1, 1990, GSA notified 
DCRSA that the repairs would begin on September 1, 1990, and that the 
cafeteria would be closed for approximately four months. The letter 
further indicated that during the renovations the fourth floor snack 
bar in the building would be used as a temporary facility for the blind 
vendor. GSA also alerted DCRSA that the new renovated cafeteria would 
have an upgraded menu, design changes, and increased service levels.
    By letter dated August 14, 1990, DCRSA made various requests 
concerning the renovation and the new cafeteria. Specifically, DCRSA 
requested a walk-through of the temporary site, a proposed menu, an 
opportunity to review the design for the new cafeteria, a market-based 
survey, and a subsidy from GSA to offset the hardship of the vendor's 
employees during the renovation.
    Responding by letter of August 23, 1990, GSA informed DCRSA that it 
would arrange for a walk-through of the temporary site and would waive 
payment from DCRSA of the one and one-half percent franchise fee during 
the renovation period. GSA also offered to meet with DCRSA to discuss 
any of DCRSA's concerns. The renovation project was delayed as the 
result of design errors and the discovery of asbestos.
    On January 29, 1991, GSA met with DCRSA representatives to discuss 
the renovation completion and the operation of the new cafeteria. At 
that time, GSA formally requested by letter dated January 29 that DCRSA 
submit an operating plan for the new cafeteria. GSA's request for the 
plan contained 13 specific items of information.
    DCRSA submitted its proposal on March 8, 1991. By letter dated 
March 28, 1991, GSA rejected DCRSA's proposal as being deficient in 
each of the 13 areas listed in its earlier request. GSA offered to meet 
with DCRSA to discuss the proposal. However, DCRSA declined this offer 
and, instead, asked for and received a written critique. On April 10, 
1991, DCRSA submitted a revised proposal. By letter dated April 19, 
1991, GSA again rejected DCRSA's proposal, and again DCRSA declined 
GSA's offer to meet to discuss the proposal.
    Subsequently, by letter dated April 26, 1991, GSA informed DCRSA 
that it had chosen another contractor to operate the cafeteria and that 
DCRSA would have to close its operation by May 3, 1991.
    On May 3, 1991, the DCRSA's blind vendor filed a complaint with the 
United States District Court for the District of Columbia against 
officials of GSA seeking a temporary restraining order, a preliminary 
injunction, compensatory damages, and attorney's fees.
    The court issued a temporary restraining order effective through 
May 9, 1991, prohibiting GSA from terminating DCRSA's permit. GSA 
agreed not to terminate the permit until after the preliminary 
injunction hearing.
    On May 14th, DCRSA filed a complaint for arbitration with the 
Secretary of Education. The preliminary injunction hearing was held on 
May 28, at which time GSA agreed to terminate its contract with the 
other vendor and conduct a full and open competition pursuant to 34 CFR 
395.33(b). The court denied the preliminary injunction without 
prejudice on May 28 and ordered the parties to pursue arbitration under 
the Randolph-Sheppard Act, as amended.
    The vendor continued to operate the fourth floor snack bar, while 
GSA advertised for bids to operate the fifth floor cafeteria. On June 
7, 1991, GSA issued a Request for Proposal (RFP) for the operation of 
the cafeteria. GSA held a pre-bid proposal conference for offerers on 
June 13. The solicitation closed on July 8, 1991. DCRSA responded to 
the RFP. The maximum number of points to be earned was 1,000 for rating 
each applicant's proposal. The competitive range was set at 900 points 
or better. DCRSA received a point value of 691, which did not fall 
within the competitive range.
    On October 1, 1991, GSA awarded the cafeteria contract to another 
contractor, effective October 15. On October 2, GSA requested that 
DCRSA close the fourth floor snack bar and vacate the fifth floor 
kitchen by October 11, 1991. Shortly thereafter, DCRSA and the vendor 
filed with the United States District Court for the District of 
Columbia a motion for a preliminary injunction, which was denied on 
October 21, 1991. On October 24, 1991, the denial of emergency relief 
was upheld by the United States Court of Appeals for the District of 
Columbia. Consequently, DCRSA vacated the fourth and fifth floor 
facilities on October 25, and the other contractor opened the renovated 
cafeteria on October 28, 1991.
    An arbitration hearing was held on March 17 and 18, 1992, pursuant 
to section 107d-2.

Arbitration Panel Decision

    The arbitration panel in a majority opinion found that GSA fully 
complied with the Act in its negotiations with DCRSA regarding the 
renovations of the cafeteria. The panel further found that, after 
issuing an RFP on June 7, 1991, GSA fully complied with the Act in the 
manner in which it conducted its solicitation of bids for the 
cafeteria. However, the panel ruled that GSA exceeded its authority by 
awarding the contract to GSI, a private contractor, prior to the RFP 
seeking open bids, thereby resulting in DCRSA's motion in United States 
District Court to compel GSA to comply with 34 CFR 395.33(b) by 
publishing an RFP.
    In determining a remedy, the panel instructed GSA to pay DCRSA's 
and the vendor's reasonable attorneys' fees, which they expended in 
seeking relief in court. The parties were instructed to agree upon the 
amount of the attorneys' fees within 30 days of the award, with the 
actual reimbursement to take place within 90 days of the panel's award.
    All other relief sought by the vendor was denied. The panel 
retained jurisdiction over the case for 120 days following the panel's 
award in order to resolve any remaining disputes over the amount of 
attorneys' fees to be paid.
    One panel member dissented.
    On May 6, 1994, the panel made its final award of attorneys' fees 
to DCRSA in the amount of $967.89 and to the vendor in the amount of 
$14,800.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the United States Department of 
Education.

    Dated: May 26, 1995.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 95-13407 Filed 5-31-95; 8:45 am]
BILLING CODE 4000-01-P