FR Doc E6-10397
[Federal Register: July 3, 2006 (Volume 71, Number 127)]
[Page 37928-37930]
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 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.

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 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 

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

[[Page 37929]]

administration 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 
    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.

Electronic Access to This Document

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[[Page 37930]]

    Dated: June 27, 2006.
John H. Hager,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. E6-10397 Filed 6-30-06; 8:45 am]