FR Doc 03-18375
[Federal Register: July 21, 2003 (Volume 68, Number 139)]
[Page 43094-43095]
From the Federal Register Online via GPO Access []

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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 


    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

[[Page 43095]]

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: (202) 205-8536. 
If you use a telecommunications device for the deaf (TDD), you may call 
the TDD number at (202) 205-8298.
    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:
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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 (202) 512-1530.

    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:

    Dated: July 15, 2003.
Loretta Petty Chittum,
Acting, Assistant Secretary for Special Education and, Rehabilitative 
[FR Doc. 03-18375 Filed 7-18-03; 8:45 am]