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 Kentucky Department for the Blind v. U.S. Department of Defense, Department of the Army (Docket No. R-S/01-11). 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, the Kentucky Department for the Blind.

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 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If you use a telecommunication device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.

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

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 noncompliance with the Act by the U.S. Department of Defense, Department of the Army (the Army), regarding its cancellation of a food service contract at Ft. Campbell, Kentucky, operated by the Kentucky Department for the Blind, the State licensing agency (SLA), 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 February 15, 1996, the SLA was awarded a contract to provide full food services in the military dining facilities at Ft. Campbell, Kentucky. Following the contract award, the SLA appointed a qualified Randolph-Sheppard vendor to perform the contract requirements. Subsequently, the vendor entered into a joint venture contract agreement with First Choice Food Service to assume the contractual obligations.

On January 21, 2000, at the end of the third option period for the food service contract at Ft. Campbell, the SLA contacted the Army to request that both parties enter into negotiations for the continuation of the food service contract. The Army did not respond to this initial request. Then on August 9, 2000, both parties met to discuss continuation of the food service contract, but this meeting did not result in a negotiated contract.

Later in March 2001, the SLA alleged that, without explanation, the Army discontinued the SLA's contract effective April 1, 2001. The SLA further alleged that, despite repeated requests to negotiate the Ft. Campbell food service contract with the Army, there was no communication until June 20, 2001, when an Army contracting officer posted a solicitation announcement in Commerce Business Daily (CBD) for provision of the dining facility attendant services at Ft. Campbell. The procurement was limited to Small Business Administration (SBA) certified personnel.

On July 25, 2001, the Governor of Kentucky wrote to the Secretary of the Army requesting that the Army reconsider its decision to exclude the SLA from competing for the contract to provide dining facility attendant services at Ft. Campbell. The Army did not respond to the Governor's letter. On August 14, 2001, the Army amended its CBD announcement. On August 24, the Army issued a solicitation stating that the procurement was to be administered by an SBA 8(a) set-aside contractor.

The SLA alleged that, as the result of a recent court case, NISH and Goodwill Services, Inc. v. Cohen, 95 F. Supp.2d 497, 503-04 (E.D. Va. 2000), military dining facilities have been determined to come within the definition of cafeteria under the Act.

The SLA further maintained that neither the Act nor its implementing regulations differentiate between the performance of “full food services” or “dining facility attendant services” in military dining facilities. In fact, it was the SLA's position that dining facility attendant services and full food services constitute cafeteria operations under the Act.

Therefore, the SLA alleged that the Army's refusal to allow the SLA to renegotiate its food service contract at Ft. Campbell demonstrated the Army's unwillingness to comply with the Act and its implementing regulations.

As a result of this dispute, the SLA requested the Secretary of Education to convene a Federal arbitration panel to hear this complaint. A panel was convened, and a hearing on this matter was held on May 13, 2002.

Arbitration Panel Decision

The arbitration panel heard the following issue: whether the Army's alleged failure to negotiate with the SLA in good faith for the full food services and dining facility attendant services contract at Ft. Campbell, Kentucky, constituted a violation of the Act (20 U.S.C. 107 et seq.) and the implementing regulations in 34 CFR part 395.

After considering the evidence presented, the majority of the panel ruled that the Act clearly covers all types of food service operations including military troop dining facilities. The panel stated that the Army's provision of cooks for the dining facility at Ft. Campbell did not mandate the exclusion of the SLA from the opportunity to provide other services.

Further, the panel found that the Army's issuance of a new solicitation amounted to a limitation on the placement or operation of vending facility services on Federal property as provided by the Act. The panel also noted that the Act states that Federal agencies may give priority to SLAs through direct negotiation whenever a vending facility can be provided at a reasonable cost with food of a high quality, comparable to that currently provided.

Accordingly, the panel ruled that the Army failed to present any evidence that it complied with the requirements of the Act and the implementing regulations prior to excluding the SLA from its procurement for food services at Ft. Campbell, Kentucky.

Therefore, the panel ruled that the Army should engage in direct negotiations with the SLA for its dining facility attendant services requirement at Ft. Campbell, Kentucky.

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.

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: www.ed.gov/news/fedregister.

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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.gpoaccess.gov/nara/index.html.