[Federal Register: November 5, 1997 (Volume 62, Number 214)]
[Page 59852-59853]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

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


SUMMARY: Notice is hereby given that on June 6, 1997, an arbitration 
panel rendered a decision in the matter of Richard Fracasso v. Rhode 
Island Department of Human Services, Office of Rehabilitation Services 
(Docket No. R-S/94-2). This panel was convened by the U. S. Department 
of Education pursuant to 20 U.S.C. 107d-1(a), upon receipt of a 
complaint filed by petitioner, Richard Fracasso.

FOR FURTHER INFORMATION CONTACT: A copy of the full text of the 
arbitration panel decision may be obtained from George F. Arsnow, U. S. 
Department of Education, 600 Independence Avenue, S.W., Room 3230, Mary 
E. Switzer Building, Washington D.C. 20202-2738. Telephone: (202) 205-
9317. Individuals who use a telecommunications device for the deaf 
(TDD) may call the TDD number at (202) 205-8298.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 

Electronic Access to This Document

    Anyone may also view this document, as well as all other Department 
of Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:


    To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office toll free at 1-888-293-6498.
    Anyone may also view these documents in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The documents are located under Option 
G--Files/Announcements, Bulletins and Press Releases.

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard 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.


    Mr. Richard Fracasso, a blind licensee, completed the Randolph-
Sheppard vending facility training program under the auspices of the 
Rhode Island Department of Human Services, Office of Rehabilitation

[[Page 59853]]

Services, the State licensing agency (SLA).
    Mr. Fracasso was placed on the Graduate Permanent Transfer 
Seniority List, effective November 22, 1991. The SLA, according to 
section IX of its Rules and Regulations governing the Randolph-Sheppard 
vending program in Rhode Island, maintains two lists regarding vendor 
transfer and promotions. One list is a Vendor Permanent Transfer 
Seniority List, which ranks licensed operators based on the length of 
time the licensee actually has operated a vending facility. The other 
is a Graduate Permanent Transfer Seniority List, which ranks graduate 
licensees awaiting a vending facility location by seniority, based upon 
each person's graduation date from the vending facility training 
    In May 1993, the Woonsocket Post Office vending facility became 
open for bid, and complainant decided not to submit a bid for this 
location. Also, no other licensed operator or licensee awaiting a 
vending assignment submitted a bid at the time of the bid closing. 
Subsequently, the SLA assigned another recent licensee to this 
location, which placed the new graduate on the Vendor Permanent 
Transfer Seniority List.
    In July 1993 the Providence Health Lab came up for bid, and Mr. 
Fracasso submitted his bid for this location. The official bidding 
period closed, and the SLA notified complainant that the Providence 
Health Lab had been awarded to the licensee who had been assigned to 
operate the Woonsocket Post Office.
    Mr. Fracasso requested and received on December 16, 1993, a State 
fair hearing regarding the placement of the other new licensee at the 
Providence Health Lab. The complainant alleged that the SLA illegally 
awarded that location to the other vendor since the other new vendor 
never actually operated the Woonsocket Post Office vending facility. 
Mr. Fracasso further alleged that the SLA's action in placing the new 
graduate on the Vendor Permanent Transfer Seniority List gave that 
vendor an unfair advantage over complainant in his bid on the 
Providence Health Lab.
    On March 4, 1994, the Hearing Officer issued his opinion affirming 
the SLA's decision to place the other new graduate at the Woonsocket 
Post Office since no one else from either of the two transfer seniority 
lists had placed a bid on the facility. The Hearing Officer also 
concluded that ``when the health laboratory vending facility became 
subject to a bid solicitation, the award was granted to the most senior 
vendor who bid. The most senior vendor who bid was the recent graduate 
from the training activity who had been awarded the vending facility in 
Woonsocket, R.I. on July 12, 1993.''
    The SLA adopted the Hearing Officer's decision as final agency 
action, and it was this decision that Mr. Fracasso sought to have 
reviewed by a Federal arbitration panel. A Federal arbitration hearing 
was held on December 4, 1995, concerning this complaint. On December 
20, 1996, the panel reconvened, one panel member dissenting, at the 
request of the complainant to hear additional evidence.
    The issues heard by the arbitration panel were--(1) Whether the SLA 
violated its bidding procedures in a manner that adversely affected Mr. 
Fracasso; (2) If the SLA were found in violation of its bidding 
procedures, whether an arbitration panel convened by an administrative 
agency of the Executive branch of government could order a State to pay 
money damages to a private individual under the Randolph-Sheppard Act; 
and (3) If the SLA were found in violation of its bidding procedures, 
what other remedies, if any, would be appropriate to redress the 
deprivation caused by the SLA of the complainant's enforceable rights.

Arbitration Panel Decision

    Based upon the evidence presented at the hearing on this matter, 
the majority of the arbitration panel concurred with the SLA's 
acknowledgement that it had violated its own bidding procedures in 
awarding the Providence Health Lab vending facility to another vendor.
    While admitting the violation, the SLA stated that the violation 
was not intentional and was a result of a bureaucratic error. The 
complainant, on the other hand, argued that the violation was 
intentional and was specifically directed in favor of the other vendor. 
On this point, the majority of the panel ruled that there was no 
compelling evidence presented to support the complainant's contention 
that the SLA intentionally favored the other vendor.
    The panel next took up the issue of what remedies, if any, exist 
once a finding has been made that the SLA violated its bidding 
    The majority of the panel ruled, after extensive review of case 
law, that any award that required the State of Rhode Island to 
compensate Mr. Fracasso for misdeeds committed against him is barred by 
the sovereign immunity principle contained in the Eleventh Amendment to 
the United States Constitution despite the fact that the SLA had 
violated its own bidding procedures.
    The panel noted further that the United States Court of Appeals for 
the Eighth Circuit in McNabb v. U.S. Department of Education, 862 F.2d 
681 (8th Cir. 1988), has allowed prospective damages--those that accrue 
after initiation of the arbitration--but not retrospective damages. 
However, the panel found that the complainant did not continue to incur 
damages as a result of the SLA's violation of the Act. In addition, the 
panel found that, while the complainant could be awarded costs under 
section 107d-2(d) of the Act, these costs did not include attorney's 
    Concerning the remedy for the SLA's violation affecting 
complainant's seniority rights, the majority of the arbitration panel 
ruled that the Eleventh Amendment presented no bar because payment of 
money damages was not involved. The majority of the panel found that 
complainant was entitled to be reinstated to his appropriate place on 
the SLA's seniority list, and the SLA was directed to take any and all 
steps necessary to reinstate him.
    One panel member dissented from the majority opinion.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: October 31, 1997.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 97-29270 Filed 11-4-97; 8:45 am]