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Arbitration Panel Decision Under the Randolph-Sheppard Act

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Department of Education.


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


The Department gives notice that on November 1, 2005, an arbitration panel rendered a decision in the matter of Billie Ruth Schlank v. District of Columbia Department of Human Services, Rehabilitation Services Administration (Docket No. R-S/04-6). This panel was convened by the U.S. Department of Education, under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the complainant, Billie Ruth Schlank.

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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 telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) 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.

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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 Start Printed Page 37929administration of vending facilities on Federal and other property.


This dispute concerned alleged violations of the Act (20 U.S.C. 107 et seq.), the implementing regulations in 34 CFR part 395, and State rules and regulations by the District of Columbia Department of Human Services, Rehabilitation Services Administration, the State licensing agency (SLA), regarding complainant's bid to operate a cafeteria at the National Imagery Mapping Agency (NIMA) located at the District of Columbia Navy Yard.

A summary of the facts is as follows: Complainant is a licensed vendor in the District of Columbia Department of Human Services, Rehabilitation Services Administration (DCRSA) Randolph-Sheppard vending facility program. In February 2003, DCRSA entered into a subcontracting agreement with the Department of Defense, Department of the Navy (Navy) and the State of Maryland Business Enterprise Program to operate three cafeterias, including a new cafeteria at NIMA, which was to take effect in March 2003. Subsequently, DCRSA, in accordance with its transfer and promotion policies, solicited bids from interested blind vendors to manage the NIMA cafeteria. The SLA's Promotion and Transfer Committee (Committee) makes decisions about a vendor's eligibility to transfer to another facility. Vendors receive points based on their seniority and performance, and the vendor with the highest number of points is given the first opportunity to transfer to a new facility.

In early 2003, the Committee determined that complainant was the second-ranked vendor who had submitted a bid to manage the NIMA cafeteria. However, soon thereafter, the Committee ruled that the highest-ranked vendor was ineligible and that complainant should be selected for the position.

Subsequently, complainant alleged that, although she was the next eligible vendor, the SLA refused to allow her to read the terms of the NIMA cafeteria contract or to visit the facility, both of which are standard procedures when a vendor is bidding on a new facility. On May 14, 2003, complainant requested an administrative review from DCRSA concerning her dissatisfaction with not being allowed to transfer to the NIMA cafeteria as the next eligible vendor. The SLA did not act on complainant's administrative review request. On May 16, 2003, complainant requested from DCRSA a State fair hearing on this matter.

Complainant alleged that DCRSA also did not act on her request for a State fair hearing. Consequently, in July 2003 complainant filed a request for a Federal arbitration with the Secretary of Education alleging DCRSA's failure to provide a State fair hearing to her concerning her bid on the NIMA cafeteria.

In the meantime, the Department of Education, Rehabilitation Services Administration (RSA) corresponded with the SLA requesting that complainant be given a State fair hearing. By letter dated September 10, 2003, the SLA informed RSA that a pre-hearing was scheduled for September 15, 2003, and a State fair hearing was scheduled for September 18, 2003.

On October 28, 2003, a pre-hearing was held by the SLA on complainant's request for a State fair hearing. However, on December 15, 2003, the SLA filed a Motion to Dismiss the complaint with the District of Columbia's Office of Fair Hearings. The hearing officer granted the SLA's Motion to Dismiss, thus canceling the State fair hearing that was scheduled for January 23, 2004. The SLA adopted the hearing officer's decision as final agency action.

By letter dated March 22, 2004, complainant informed the Commissioner of RSA that the hearing officer had dismissed her complaint and that DCRSA had adopted the hearing officer's decision. Complainant requested review by a Federal arbitration panel of that decision. On April 20, 2004, the Commissioner of RSA issued a letter to complainant and the SLA authorizing the convening of a Federal arbitration panel. A hearing on this matter was held on April 26 and May 12, 2005.

Arbitration Panel Decision

The issues heard by the panel were—(1) whether DCRSA improperly refused complainant the right to transfer to the NIMA cafeteria, in violation of the Act and implementing regulations, and (2) whether DCRSA entered into a binding and enforceable agreement with the State of Maryland's Randolph-Sheppard Business Enterprise Program to subcontract the NIMA cafeteria using a teaming partner.

After reviewing all of the records and hearing testimony of witnesses, the panel majority ruled that the complainant was entitled to be assigned as the new vendor at the NIMA cafeteria in March 2003. Moreover, the panel majority found no evidence to support the SLA's contention that the highest-ranked vendor's protest to the Committee regarding the Committee's decision to withdraw the vendor's assignment justified the Committee's failure to assign complainant as the next eligible vendor.

Concerning the second issue regarding the contractual arrangement between DCRSA and the State of Maryland to operate the NIMA cafeteria, the majority of the panel concluded that, since March 2003, DCRSA had acted in a manner that could be reasonably construed as entering into a subcontracting partnership among the State of Maryland's Business Enterprise Program, the teaming partner, and DCRSA.

Specifically, the majority of the panel found that DCRSA had been receiving monthly payments of the vendor's salary from the teaming partner. However, the panel found that DCRSA had not used the money collected from the NIMA cafeteria contract for any services pertaining to the SLA's Randolph-Sheppard program in violation of the Act and regulations.

Accordingly, the panel majority ruled that the complainant was the next eligible vendor and should have been transferred to the NIMA cafeteria. Additionally, the panel majority ruled that complainant was entitled to back pay at the rate of $3,750.00 per month retroactive to March 2003 minus her monthly set-aside fees. Thus, the amount that the complainant should receive is $2,925.00 per month from March 2003 including interest at the statutory rate as well as reasonable costs of attorney fees.

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.

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Dated: June 27, 2006.

John H. Hager,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. E6-10397 Filed 6-30-06; 8:45 am]