FR Doc E9-365[Federal Register: January 12, 2009 (Volume 74, Number 7)]
[Page 1186-1187]
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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 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.

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

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 


    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

[[Page 1187]]

food service staff not reporting for work. The Contract Officer also 
stated in the letter that the SLA had fifteen days to correct the 
    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.

Electronic Access to This Document

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    Note: The official version of this document is the document 
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official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at:

    Dated: January 6, 2009.
Tracy R. Justesen,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. E9-365 Filed 1-9-09; 8:45 am]