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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 of Education (Department) gives notice that on August 2, 2008, an arbitration panel rendered a decision in the matter of Janet Dickey v. Wisconsin Department of Workforce Development, Case no. R-S/07-10). This panel was convened by the Department under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the petitioner, Janet Dickey.

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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 accessible format (e.g., braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

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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 administration of vending facilities on Federal and other property.


Ms. Janet Dickey (Complainant) alleged that the Wisconsin Department of Workforce Development, Division of Vocational Rehabilitation, the state licensing agency (SLA) improperly administered the Act and the implementing regulations in 34 CFR part 395 concerning her management of an Army cafeteria at Fort McCoy, Wisconsin from April 1, 2003 until September 30, 2006. Specifically, Complainant alleged that the SLA failed to provide her with adequate training and management support services to operate the cafeteria.

Following the award of the cafeteria contract to the SLA, the SLA entered into a management service agreement with Blackstone Consulting Inc. (BCI). BCI is a full service contractor who has experience with military dining food service contracts and with teaming partnership agreements. The management service agreement between the SLA and BCI provided that the SLA and the Complainant would rely on BCI's experience and expertise to manage the cafeteria. Also, the management service agreement provided that BCI would provide Complainant with training for the life of the contract.

Thereafter, the Complainant and BCI entered into a joint venture agreement, which stated that BCI would provide: (a) Consulting services to the SLA and the Complainant by directly negotiating the bidding performance criteria for the cafeteria contract at Fort McCoy, (b) food service in accordance with the cafeteria contract with the Army, and (c) on-the-job training for the Complainant in coordination with the SLA so that Complainant would be prepared to carry out the management responsibilities of the cafeteria contract.

By letter dated July 20, 2006, the Army's Fort McCoy Contract Officer (Contract Officer) contacted the SLA's Business Enterprise Program (BEP) Manager to notify the SLA that there had been numerous problems concerning the cafeteria contract. The Contract Officer alleged problems with such things as: opening the cafeteria late or not at all, running out of food, and Start Printed Page 1187food service staff not reporting for work. The Contract Officer also stated in the letter that the SLA had fifteen days to correct the deficiencies.

On August 1, 2006, the Contract Officer sent another letter to the SLA indicating that the problems with the cafeteria had become worse. The letter also stated that unless the SLA took steps to correct the problems by August 11, 2006, the Army was considering terminating the cafeteria contract. On August 2, 2006, the SLA responded, stating that Complainant was the interim on-site manager and would be responsible for the overall management and coordination of the contract.

On August 14, 2006, the Contract Officer sent a follow up letter to the SLA, withdrawing the Army's earlier letter of intent to renew the contract for option year four due to continued contract deficiencies. The next day the SLA responded to the Contract Officer's letter acknowledging receipt of the withdrawal letter. The SLA also stated that it would not seek to exercise option year four of the contract.

During 2006, Complainant received two deficiency notices from the Army and brought her concerns to the attention of BEP Manager. However, Complainant alleged that the BEP Manager informed her that her role was to work with BCI, the teaming partner, and that BCI was responsible for the provision of food services under the contract. Subsequently, Complainant requested a state fair hearing on this matter.

A hearing was held on March 14, 2007. On March 31, 2007, the hearing officer affirmed the SLA's decision not to renew the cafeteria contract at Fort McCoy. On April 18, 2007, the SLA adopted the hearing officer's decision as final agency action. It was this decision that Complainant sought review by a Federal arbitration panel. A Federal arbitration hearing was held on May 22, 2008.

According to the arbitration panel, the issue to be resolved was: Whether the Wisconsin Department of Workforce Development complied with its responsibilities to blind vendors under the Act and Chapter 47 of the Wisconsin Statute in relation to the contract in effect at Fort McCoy between April 1, 2003, and September 30, 2006.

Arbitration Panel Decision

After reviewing all of the records and hearing testimony of witnesses, the panel ruled that the Army, after due notice and an opportunity to correct the deficiencies, was poised to cancel the food service contract at Fort McCoy because of repeated failures by the SLA to provide full service as required, inadequate staffing, and missed meals. The panel further concluded that while Army had detailed its complaint explicitly, the SLA had failed to properly respond. However, rather than correct the deficiencies, the SLA decided not to exercise its option for the fourth year of the contract. Accordingly, the panel ruled that the SLA failed in its responsibility to the Complainant regarding her management of the cafeteria at Fort McCoy.

Complainant requested that the Federal arbitration panel award her $550,000 to make her whole. The panel ruled that this amount was excessive. Instead, the panel averaged the amounts on Complainant's W-2 statements from 2003 to 2006. The total of the average amounts on the W-2 statements equaled $237,234.68. However, the panel reduced the award to $225,000 considering the fact that Complainant did not manage the cafeteria during the entire contract period. Additionally, the panel directed the SLA to help Complainant in expanding and upgrading her present facility.

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

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Dated: January 6, 2009.

Tracy R. Justesen,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. E9-365 Filed 1-9-09; 8:45 am]