03-18375. Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY:

Department of Education.

ACTION:

Notice of arbitration panel decision under the Randolph-Sheppard Act.

SUMMARY:

The Department gives notice that on July 26, 2002, an arbitration panel rendered a decision in the matter of Illinois Department of Human Services, Office of Rehabilitation Services v. U.S. Department of Defense, Department of the Navy (Docket No. R-S/01-02). This panel was convened by the U.S. Department of Education, under 20 U.S.C. 107d-1(b), after the Department received a complaint filed by the petitioner, Illinois Department of Human Services, Office of Rehabilitation Services.

SUPPLEMENTARY INFORMATION:

Under section 6(c) of the Randolph-Sheppard Act (the Act), 20 U.S.C. 107d-2(c), 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

This dispute concerns the alleged improper awarding of a full food service contract to a nonprofit agency under the Javits-Wagner-O'Day Act (JWOD) by the U.S. Department of Defense, Department of the Navy (Navy), in violation of the Act (20 U.S.C. 107 et seq.) and the implementing regulations in 34 CFR part 395.

A summary of the facts is as follows: On March 16, 1998, in response to solicitation N00140-98-R-1159, the State licensing agency (SLA) notified the Navy in writing that it wished to operate the full food service contract for the Naval Training Center and Recruitment Training Center in Great Lakes, Illinois. On May 12, 1998, the Navy responded that the contract was being awarded to Goodwill Services, Inc., of Southern Wisconsin under the provisions of JWOD. A Federal Register notice, dated May 8, 1998, announced this pending contract award and allowed 30 days for public comment.

The SLA did not submit any comments pursuant to the Federal Register notice. Nearly seven months later, on December 28, 1998, the SLA informed the Navy of its concern that the Navy awarded this contract under JWOD and indicated that it was prepared to take the matter to arbitration under the Act. The SLA also informed the Navy, in an opinion dated November 12, 1998, that the General Counsel for the Department of Defense (DOD) advised that the Act is applicable to military dining facilities. As a result, the SLA indicated that arbitration was unnecessary and that it was eager to enter into negotiations with the Navy for a full food service contract at the facility to be operated by a blind vendor in accordance with the Act. On April 6, 1999, the Navy responded that it had no authority to terminate this contract issued pursuant to JWOD.

There was no further communication between the parties until October 10, 2000, when the SLA requested that the Secretary of Education convene a Federal arbitration panel to hear this complaint. A panel was convened and a hearing on this matter was held on April 9 and 10, 2002.

Arbitration Panel Decision

The issues heard by the panel were—(1) Whether the Navy, in accordance with the Act, must grant priority to the SLA for a contract so that full food services at the Great Lakes Naval Training Center may be provided by a licensed blind vendor; (2) whether the Act, which affords licensed blind vendors statutory priority to operate cafeterias and vending stands on Federal property, including that of DOD/Navy, takes precedence over the JWOD Act; (3) whether an arbitration panel convened under the Act has jurisdiction to determine if the Act takes precedence over the JWOD Act; (4) whether a contracting office has authority to issue a competitive procurement for services that are currently on the JWOD procurement list; and (5) whether the SLA waived any right it may have had to challenge the inclusion of the disputed food services on the JWOD procurement list and the subsequent award of a contract for those services to private vendors.

After considering all of the evidence, including the post-hearing briefs submitted by both parties, the majority of the panel ruled that the dispute should be resolved in favor of the Navy under the laches doctrine because of the SLA's delay in filing for Federal arbitration.

The SLA had alleged that the delay in filing the arbitration request of over 18 months since the time of the last communication from the Navy was not unreasonable because the SLA had program responsibilities under both the Act and JWOD and needed to balance the policy needs under both authorities before determining whether to file for Federal arbitration.

However, the panel determined that there was no reasonable cause for delay by the SLA in seeking Federal arbitration under the Act. The panel's decision was based upon the finding that there are strong reasons to require both timely action and finality in resolving arbitration disputes under the Act.

The panel also determined that the SLA's delay in seeking arbitration greatly prejudiced the Navy and the facility and its current contractor and that there was no reasonable cause for the delay. Therefore, the panel concluded that the SLA had waived its right to Federal arbitration and dismissed the complaint without ruling on the merits of the case.

One panel member dissented.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the U.S. Department of Education.

FOR FURTHER INFORMATION CONTACT:

You may obtain a copy of the full text of the arbitration panel decision from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., room 3232, Mary E. Switzer Building, Washington, DC 20202-2738. Telephone: [phone]. If you use a telecommunications device for the deaf (TDD), you may call the TDD number at [phone].

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large 1 print, audiotape, or computer diskette) on request to the contact person listed in the preceding paragraph.

Electronic Access to This Document

You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site: http://www.ed.gov/​legislation/​FedRegister

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at [phone].

Note:

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 on GPO Access at: http://www.access.gpo.gov/​nara/​index.html

Dated: July 15, 2003.

Loretta Petty Chittum,

Acting, Assistant Secretary for Special Education and, Rehabilitative Services.