TITLE: Washington State Department of Services for the Blind, B-293698.2, April 27, 2004
BNUMBER: B-293698.2
DATE: April 27, 2004
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Washington State Department of Services for the Blind, B-293698.2, April 27,
2004
Decision
Matter of: Washington State Department of Services for the Blind
File: B-293698.2
Date: April 27, 2004
Shelly Marie Martin, Esq., and Andrew D. Freeman, Esq., Brown Goldstein
Levy, for the protester.
Maj. Gregg A. Engler, Department of the Army, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest by state licensing agency (SLA) for the blind challenging the
elimination of its proposal from consideration under request for proposals
issued pursuant to the Randolph-Sheppard Act is dismissed; General
Accounting Office will not consider protests from SLAs because arbitration
procedures are provided for under the Act, and decisions of the
arbitration panel are binding on the parties involved.
DECISION
The Washington State Department of Services for the Blind (WSDSB) protests
the elimination of its proposal from consideration under request for
proposals (RFP) No. W911S8‑03‑R‑0001, issued by the
Department of the Army for full food services at Fort Lewis, Washington.
We dismiss the protest.
The RFP here advised that this procurement would be conducted pursuant to
the Randolph-Sheppard Act (the Act), which establishes a priority for
blind persons recognized and represented by state licensing authorities
(SLA) under the terms of the Act, in the award of contracts for, among
other things, the operation of cafeterias in federal buildings. 20 U.S.C.
S: 107 (2000); 34 C.F.R. S: 395.33(a) (2003). Thus, while the RFP
generally provided for the solicitation to be set aside for small
businesses, it indicated that the Washington State SLA would also be
permitted to submit a proposal. Further, in accordance with the Act*s
implementing regulations, the RFP stated that, if the proposal submitted
by the SLA were found to be within the competitive range for the
acquisition, and is included among the proposals that have a reasonable
chance for award, the government would enter into negotiations only with
the SLA. RFP at M-117; 34 C.F.R. S: 395.33(b). WSDSB is the designated
SLA for the procurement.
WSDSB submitted the only timely proposal in response to the solicitation.
After an initial evaluation by the Army, WSDSB*s proposal was *eliminated
from further consideration.* Army Letter to WSDSB, Feb. 5, 2004.
According to the notice to WSDSB, the firm*s proposed price was determined
to be excessive when compared to current pricing and the independent
government estimate.[1] After being debriefed, WSDSB filed this protest.
WSDSB challenges the Army*s determination that its price was excessive.
The Army seeks dismissal of the protest on the basis that the authority
for resolving disputes between SLAs and contracting agencies has been
placed with the Secretary of Education. 20 U.S.C. S: 107d-1(b); 34 C.F.R.
S: 395.37(a). According to the Army, the Act anticipates that complaints
by SLAs about an agency*s handling of a procurement conducted pursuant to
the Act will be addressed through arbitration.
In this regard, the Act vests authority for administering and overseeing
its requirements solely with the Secretary. 20 U.S.C. S: 107 et seq.
Pursuant to this authority, the Secretary has promulgated comprehensive
regulations addressing all aspects of the Act*s requirements. Among the
matters covered by these regulations are rules governing the relationship
between SLAs and blind vendors in each state, rules for becoming a
designated SLA within the meaning of the Act, procedures for oversight of
the SLAs by the Secretary, and rules governing the relationship between
the SLAs and all federal government agencies. 34 C.F.R. part 395. The
Secretary*s authority also includes conducting arbitration proceedings.
In this regard, the Act provides, in relevant part, as follows:
Whenever any [SLA] determines that any department, agency, or
instrumentality of the United States that has control of the maintenance,
operation, and protection of Federal property is failing to comply with
the provisions of [the Act] or any regulations issued thereunder . . .
such [SLA] may file a complaint with the Secretary who shall convene a
panel to arbitrate the dispute . . . and the decision of such panel shall
be final and binding on the parties except as otherwise provided in this
chapter.
20 U.S.C. S: 107d-1(b). The Act similarly provides that any blind
licensee that is *dissatisfied with any action arising from the operation
or administration of the vending facility program may submit to an SLA a
request for a full evidentiary hearing*; in the event that the licensee is
dissatisfied with any action taken or decision rendered as a result of
such hearing, the licensee *may file a complaint with the Secretary,* who
shall convene a panel to arbitrate the dispute, and the decision of such
panel shall be final and binding on the parties (except as otherwise
provided). 20 U.S.C. S: 107d-1(a).
We have interpreted the above provisions of the Act as vesting exclusive
authority with the Secretary regarding complaints by SLAs concerning a
federal agency*s compliance with the Act, including challenges to agency
decisions to reject proposals in response to a solicitation. Mississippi
State Dept. of Rehabilitation Servs., B‑250783.8, Sept. 7, 1994,
94-2 CPD P: 99 at 3. Our view in this regard is consistent with the
stated purpose of the arbitration process, as set forth in the preamble to
the regulations issued to govern the arbitration process: *It is expected
that when [an SLA] is dissatisfied with an action resulting from its
submittal of a proposal for the operation of a cafeteria, it will exercise
its option to file a complaint with the Secretary . . . .* 42 Fed. Reg
15,802, 15,809 (1977).[2] Our position also reflects our more general
view that where, as here, Congress has vested oversight and final
decision-making authority in a particular federal official or entity, we
will not consider protests involving issues subject to review by that
official or entity. Id.; see High Point Sec., Inc.--Recon. and Protest,
B‑255747.2, B-255747.3, Feb. 22, 1994, 94-1 CPD P: 169 at 2
(determinations by the Small Business Administration under the certificate
of competency program pursuant to 15 U.S.C. S: 637(b)(7)); ARA Envtl.
Servs., Inc., B‑254321, Aug. 23, 1993, 93-2 CPD P: 113 at 2 (protest
of award under the Javits-Wagner-O*Day Act, 41 U.S.C. S:S: 46-48c).
WSDSB questions our position, arguing that resort to arbitration under the
Act is voluntary, and that the availability of arbitration does not
preclude an SLA from instead pursuing other remedies, such as a bid
protest filed with our Office. We find WSDSB*s argument unpersuasive.
Aside from our rationale discussed above, we note that the predominant
view of the courts that have considered the issue has been consistent with
ours. Specifically, the view of most courts appears to be that the Act
manifests Congress*s intent that aggrieved SLAs or vendors generally
pursue and exhaust their administrative and arbitration remedies through
the Department of
Education arbitration process before resorting to the federal courts.
Committee of Blind Vendors v. District of Columbia, 28 F.3d 130, 133-35
(D.C. Cir. 1994); Randolph‑Sheppard Vendors of Am. v. Weinberger,
795 F.2d 90, 102-04 (D.C. Cir. 1986); Fillinger v. Cleveland Soc*y for the
Blind, 587 F.2d 336, 338 (6th Cir. 1978); Alabama Dept. of Rehabilitation
Servs. v. United States Dept. of Veterans Affairs, 165 F. Supp. 2d 1262,
1269-71 (M.D. Ala. 2001); State of New York v. United States Postal Serv.,
690 F. Supp. 1346, 1349-51 (S.D. N.Y. 1988); Massachusetts Elected
Committee of Blind Vendors v. Matava, 482 F. Supp. 1186, 1189 (D. Mass.
1980); but cf. Texas State Commission for the Blind v. United States, 6
Cl. Ct. 730, 735 n.12 (1984) (arbitration under the Act is *voluntary*),
rev*d on other grounds, 796 F.2d 400, 404 n.4 (Fed. Cir. 1986) (noting
that Oklahoma had filed an arbitration complaint more than a year earlier
without yet receiving a decision, and stating that the *district court did
not require exhaustion of administrative remedies because of the delay and
the government*s interposing of no objection*), cert. denied, 479 U.S.
1030 (1987); Washington State Dept. of Servs. for the Blind v. United
States, 58 Fed. Cl. 781, 786 n.8 (Fed. Cl. 2003) (court states that it has
jurisdiction under Texas State Commission for the Blind v. United States,
796 F.2d 400, 404 (Fed. Cir. 1986)). [3] The courts* predominant view
appears consistent with congressional intent, as reflected in the
legislative history of the 1974 amendments to the Act, which established
the arbitration procedure. Specifically, a Senate report on the bill
declared that *[i]t is the expectation of the Committee [reviewing the
amendments] that the arbitration and review procedures adopted . . . will
provide the means by which aggrieved vendors and State agencies may obtain
a final and satisfactory resolution of disputes.* S. Rep. No. 937, 93d
Cong., 2d Sess. 20 (1974).
WSDSB maintains that our Office should consider its protest because it
concerns an issue--the propriety of the agency*s price reasonableness
determination‑‑that does not fall under the Act. However,
since the issue raised ultimately goes to the question of whether the SLA
should have been included in the competitive range, we view the issue as
whether the agency*s actions improperly denied the SLA the priority
required under the statutes and regulations; this issue clearly comes
within the scope of the arbitration process.[4] WSDSB also generally
argues that it should not be required to use the arbitration procedure
because the remedy under the procedure is inadequate in that the
arbitration panel does not have authority to stay the award of a new
contract. However, the fact that the protester views the remedies under
the Act as inadequate does not warrant our ignoring Congress*s stated
intent, the predominant view of the courts, and the rationale on which our
own view is based. Accordingly, we will not consider the protest.
The protest is dismissed.
Anthony H. Gamboa
General Counsel
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[1] The Army*s notice to WSDSB further indicated that the agency was
*concerned that [WSDSB*s] proposed teaming arrangement does not comply
with federal and state laws and regulations.* Army Letter to WSDSB, Feb.
5, 2004. However, the Army has since advised our Office that its concerns
regarding WSDSB*s teaming arrangement *would not have been a stand-alone
reason to eliminate WSDSB and the Army*s elimination rested upon [WSDSB*s]
excessive price.* Army Comments, Mar. 17, 2004. (WSDSB had argued that
there was no basis for the agency*s expressed concern with the proposed
teaming arrangement.)
[2] The regulations governing the arbitration process were under Title 45
of the Code of Federal Regulations, 45 C.F.R. S: 1369.37, but are now
under Title 34, 34 C.F.R. S: 395.37.
[3] We note that while the courts have recognized that there may be
circumstances in which it is appropriate to excuse a failure to exhaust
the administrative remedies on the basis of a specific, particularized
showing of futility, such as where an adverse result is certain and
administrative remedies are clearly useless, see Committee of Blind
Vendors v. District of Columbia, 28 F.3d at 133 n.5, again, the majority
of courts have held that generally there must be an exhaustion of the
administrative remedies under the Act.
[4] In this regard, our conclusion that the question of whether an SLA
should have been included in the competitive range comes within the scope
of the arbitration process finds support in the actions of the Department
of Education, which has established Randolph-Sheppard arbitration panels
to consider challenges to an SLA*s exclusion from the competitive range.
Alabama Dept. of Rehabilitation Servs. v. United States Department of
Defense, Randolph-Sheppard Arbitration Panel Decision, Nov. 16, 1998, 65
Fed. Reg. 26,591 (2000); see Mississippi Dept. of Rehabilitation Servs. v.
United States Department of Defense, Department of the Air Force,
Randolph-Sheppard Arbitration Panel Decision, June 11, 1996, 62 Fed. Reg.
40,509 (1997).