[Federal Register Volume 61, Number 74 (Tuesday, April 16, 1996)]
[Notices]
[Pages 16700-16702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9335]




[[Page 16699]]


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Part V





Department of Education





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Vending Facility Program for the Blind on Federal and Other Property; 
Notice

  Federal Register / Vol. 61, No. 74 / Tuesday, April 16, 1996 / 
Notice  

[[Page 16700]]



DEPARTMENT OF EDUCATION


Vending Facility Program for the Blind on Federal and Other 
Property

AGENCY: Department of Education.

ACTION: Notice of final schedule of arbitration fees and expenses under 
the Randolph-Sheppard Act.

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SUMMARY: The Secretary presents a schedule of fees and expenses 
associated with arbitration proceedings conducted under the Randolph-
Sheppard Act (Act) that will be paid by the Department. The schedule 
lists the reasonable costs of arbitration and describes the standards 
by which the Secretary will support those costs.

EFFECTIVE DATE: This schedule takes effect on May 16, 1996.

FOR FURTHER INFORMATION CONTACT: George Arsnow, U.S. Department of 
Education, 600 Independence Avenue, S.W., Room 3230, Mary E. Switzer 
Building, Washington, D.C. 20202-2531. Telephone: (202) 205-9317. 
Individuals who use a telecommunications device for the deaf (TDD) may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339 
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: The Randolph-Sheppard Act, 20 U.S.C. 107 et 
seq., gives blind persons who are trained and licensed by State 
vocational rehabilitation agencies (called ``State licensing agencies'' 
or SLAs) a priority to operate vending facilities on Federal property. 
The Act further provides for arbitration to resolve disputes that arise 
under the program between individual vendors and SLAs and between SLAs 
and Federal agencies. 20 U.S.C. 107d-1(a) and (b). For each of these 
two categories of arbitrations, the Secretary authorizes the convening 
of an arbitration panel upon receipt of a complaint filed by either a 
vendor against an SLA or by an SLA against a Federal agency. 20 U.S.C. 
107d-2(a).
    The Act directs each of the parties to an arbitration to appoint 
one arbitrator (or panel member) and directs the two party-appointed 
arbitrators to select a neutral chairperson. 20 U.S.C. 107d-2(b)(1) and 
(2). In order to facilitate this process, the Department sends to the 
parties names of potential chairpersons from the Roster of Arbitrators 
maintained by the Federal Mediation and Conciliation Service (FMCS). If 
the parties seek to appoint a chairperson who is not listed on the FMCS 
roster, a biographical sketch of that chairperson is to be sent to the 
Department. Once selected, the panel conducts a hearing and renders a 
decision, which is subject to appeal and review as a ``final agency 
action'' for purposes of the Administrative Procedure Act. 20 U.S.C. 
107d-2(a).
    The Act, in 20 U.S.C. 107d-2(d), requires the Secretary to pay all 
reasonable costs of arbitration in accordance with a schedule of fees 
and expenses that the Secretary publishes in the Federal Register. 
Pursuant to this requirement, the Department has continued to pay 
certain costs associated with arbitration proceedings authorized by the 
Secretary in the absence of an established schedule, but has not 
published the schedule referred to in the statute.
    On August 19, 1994 the Secretary published a notice of proposed 
schedule of arbitration fees and expenses under the Act in the Federal 
Register (59 FR 42824).
    In accordance with 107d-2(d) of the Act, this final schedule 
outlines the types of costs that the Secretary considers reasonable 
costs of arbitration and the standards by which the Secretary will 
determine the rate of payment for these costs. Generally, the Secretary 
considers reasonable costs of arbitration to include the cost of 
preparing the official record of arbitration proceedings, professional 
fees for arbitration panel members, and food, travel, and lodging 
expenses of panel members and essential witnesses. The Secretary does 
not consider attorney's fees to be part of the reasonable costs of 
arbitration supported by the Secretary.
    The Department has drawn guidance from information and data 
supplied by the FMCS in formulating these standards.
    There are no substantive differences between the proposed schedule 
and this final schedule other than the authorization of postponement or 
cancellation fees for panel members if an arbitration proceeding is 
postponed or canceled within 72 hours of its scheduled date and time. 
The proposed schedule would have authorized these fees for panel 
members only if an arbitration proceeding is postponed or canceled 
within 48 hours of its scheduled date and time.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the notice of proposed 
schedule, two parties submitted comments on the proposed schedule. An 
analysis of the comments and of the changes in the schedule since 
publication of the notice of proposed schedule follows.
    Major issues are grouped according to subject. Technical and other 
minor changes--and suggested changes the Secretary is not legally 
authorized to make under the applicable statutory authority--are not 
addressed.

Postponement or Cancellation Fees

    Comments: None.
    Discussion: The proposed schedule would have authorized payment of 
postponement or cancellation fees for arbitrators if arbitration 
proceedings are postponed or canceled within 48 hours of their 
scheduled date and time. During the Department's review of the proposed 
schedule, it was determined that basing these fees on a two-day 
standard is unduly restrictive. The Secretary believes that 
authorization of fees for postponements or cancellations made within 
three days of a proceeding's scheduled date and time is a fairer basis 
for compensating arbitrators if schedule changes arise. Arbitrators 
also may receive a portion of their per diem fee that is proportional 
to the actual time that they expended in preparing for a postponed or 
canceled proceeding regardless of whether the panel member is entitled 
to a postponement or cancellation fee.
    Changes: The Secretary has revised paragraph (b) of the proposed 
schedule to authorize payment of a predetermined, customary, and 
reasonable postponement or cancellation fee to panel members if a 
scheduled arbitration proceeding is postponed or canceled within 72 
hours of its scheduled date and time.

Attorney's Fees

    Comments: One commenter opposed the exclusion of attorney's fees 
from the reasonable costs of arbitration that are paid by the 
Department. This commenter asserted that the Department should pay the 
attorney's fees incurred by the parties to an arbitration proceeding so 
as not to put blind vendors, who have limited financial resources and 
cannot afford to retain an attorney, at a competitive disadvantage with 
SLAs, which typically do not have to expend additional resources to 
retain legal representation. In addition, this commenter stated that 
the refusal of the Department to pay the attorney's fees incurred by 
blind vendors during arbitration is inconsistent with the purposes of 
the Act and contrary to other statutory authorities such as the Equal 
Access to Justice Act, which requires the Department to pay the fees 
and other expenses of a prevailing party to certain adjudicative 
proceedings held before the Department. This commenter asserted that 
Congress intended that the Department pay ``all'' costs incurred during 
arbitration proceedings

[[Page 16701]]

conducted under the Act and questions the basis for excluding 
attorney's fees from the reasonable costs of arbitration supported by 
the Department.
    Discussion: Pursuant to the requirements of the Act, the Department 
pays the reasonable costs of arbitration from its salaries and expenses 
account. Because the Department's financial resources are limited and 
because neither the Act nor its legislative history specifies the scope 
of the term ``all reasonable costs of arbitration,'' it has been the 
Department's longstanding policy to support only the types of costs 
identified in this final schedule even though the schedule has not been 
published previously in the Federal Register. The Secretary believes 
that a Department policy to pay arbitration costs not identified in the 
schedule, such as attorney's fees, would significantly hinder the 
Department's ability to meet its statutory responsibility to support 
the reasonable costs associated with each arbitration that arises under 
the Act. Accordingly, the schedule is limited to the general costs 
necessary to ensure access to the arbitration process (i.e., the costs 
of convening the arbitration panel, developing the written record, and 
assembling essential witnesses).
    The Secretary emphasizes that the Department plays a very limited 
role in arbitration proceedings under the Act, regardless of whether 
the arbitration is initiated by a blind vendor against an SLA or an SLA 
against another Federal agency. A requirement that the Department pay 
the attorney's fees of any party to an arbitration, therefore, would be 
inconsistent with the general understanding that only parties to the 
litigation can be held liable for damages or attorney's fees. This same 
view was advanced recently by the 8th Circuit Court of Appeals in 
McNabb v. U.S. Department of Education, 29 F.3d 1303 (8th Cir. 1994), 
when it held that the Secretary is not responsible for paying 
attorney's fees as part of the reasonable costs of arbitration under 
section 107d-2(d) of the Act. Finally, the Secretary notes that the 
Equal Access to Justice Act referred to by the commenter is unrelated 
to the Randolph-Sheppard program and authorizes Department support of 
fees and expenses only in certain adjudicative proceedings to which the 
Department is a party (See 34 CFR Part 21).
    Changes: None.

Additional costs

    Comments: One commenter suggested that the schedule be expanded to 
include additional expenses incurred by parties to an arbitration, such 
as the costs of conducting depositions or other forms of discovery.
    Discussion: The Secretary emphasizes that the schedule limits 
Department support to those costs that are incident to arbitrations 
conducted under the Act and are necessary to ensure that each grievant 
has access to the arbitration process. Thus, the Secretary believes 
that expenses incurred by exchanging information between parties (i.e., 
discovery costs), which often are considered part of attorney's fees, 
fall outside the scope of the reasonable costs of arbitration for which 
the Department is responsible. In addition, the Secretary notes that 
Department support of the expenses of witnesses whose testimony is 
deemed by the arbitration panel chairperson to be essential to the 
proper resolution of the dispute may lessen the need for parties to 
conduct certain depositions.
    Changes: None.

    Dated: April 10, 1996.

(Catalog of Federal Domestic Assistance Number does not apply.)
Richard W. Riley,
Secretary of Education.

Reasonable Costs of Arbitration Under the Randolph-Sheppard Act

    The Secretary states that the reasonable costs of arbitration under 
20 U.S.C. 107d-2(d) are the following:
    (a) Stenographic Record--(1) General Provisions. The Department 
will pay the costs of the services of the official reporter assigned to 
the arbitration, including preparation of the official transcript of 
the hearing and six copies thereof. The official transcript and one 
copy thereof must be submitted to the Department. The remaining five 
copies of the transcript must be distributed among the parties as 
determined by the arbitration panel chairperson. Costs of the services 
of the official reporter may not exceed the reasonable and customary 
costs for those services in the locality in which the services are 
furnished.
    (2) Cancellation. The official reporter may charge the Department 
its customary fee for cancellation of an arbitration proceeding in 
situations in which a proceeding is canceled within 24 hours of its 
scheduled date and time.
    (b) Fees of Arbitrators--(1) Per Diem. The Department will pay a 
per diem fee to arbitration panel members who are not otherwise 
employed by the Federal or State Government for their services during 
the course of the arbitration. The per diem fee to be paid by the 
Department must be the lesser of--
    (i) The customary fee charged by the individual panel member; or
    (ii) The reasonable and customary fee charged by arbitrators in the 
locality where the arbitration will be held.
    (2) Postponement or Cancellation within 72 hours. If a scheduled 
arbitration proceeding is postponed or canceled within 72 hours of its 
scheduled date and time, panel members may charge the Department--
    (i) A predetermined, customary, and reasonable postponement or 
cancellation fee; and
    (ii) That portion of the arbitrator's per diem fee proportional to 
the actual time the panel member expended in preparing for the 
proceeding.
    (3) Other Postponements or Cancellations. If a scheduled 
arbitration proceeding is postponed or canceled more than 72 hours 
prior to its scheduled date, panel members may charge the Department 
only that portion of the per diem fee proportional to the actual time 
expended in preparing for the proceeding.
    (4) Notice. The customary per diem and predetermined fees charged 
by a panel member must be included in a biographical sketch that is to 
be sent to the Department following his or her appointment to the 
panel.
    (c) Travel, Lodging, and Meal Expenses of Arbitrators and 
Witnesses--(1) Arbitrators. Notwithstanding that the Secretary urges 
the parties to appoint panel representatives from the locality in which 
the dispute arose and the hearing is to be held, the Department will 
reimburse the travel, lodging, and food expenses of the arbitration 
panel members incurred for the purpose of attending hearings and for 
the purpose of attending any pre- or post-hearing conferences that 
cannot be conducted by telephone. These expenses will be reimbursed at 
the rate applicable to Federal Government employees traveling on 
government business to the hearing location. The Secretary urges the 
two panel representatives appointed by the parties to select a neutral 
chairperson from the locality in which the dispute arose and the 
hearing is to be held.
    (2) Witnesses. The Department will reimburse the travel, lodging, 
and food expenses of witnesses for the purpose of testifying at 
hearings, if the witness does not reside at the locality of the 
arbitration proceeding and the testimony of the witness is deemed by 
the arbitration panel chairperson to be essential to the proper 
resolution of the dispute. These expenses will be reimbursed at the 
rate applicable to Federal Government employees traveling on government 
business to the hearing location.

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    (d) Unsupported Costs. Attorney's fees are not considered the 
responsibility of the Department and are not included in the reasonable 
costs of arbitration supported by the Department.

(Authority: 20 U.S.C. 107d-2(d))

[FR Doc. 96-9335 Filed 4-15-96; 8:45 am]
BILLING CODE 4000-01-P