Maryland State Department of Education
B-400583,B-400583.2: Nov 7, 2008
The Maryland State Department of Education (MSDE) of Baltimore, Maryland protests the elimination of its proposal from consideration under request for proposals (RFP) No. W91QF6-07-R-0007, issued by the Department of the Army for food services at Fort Meade, Maryland.
We dismiss the protest.
B-400583; B-400583.2, Maryland State Department of Education, November 7, 2008
Government Accountability Office will not consider protest by state licensing agency (SLA) challenging the elimination of its proposal from the competitive range under a solicitation issued pursuant to the Randolph-Sheppard Act (RSA) because mandatory binding arbitration procedures by the Department of Education are provided for under the RSA to resolve the SLA's complaint.
The Maryland State Department of Education (MSDE) of
The RFP noted that this procurement would be conducted pursuant to the Randolph-Sheppard Act (RSA), which establishes a priority for blind persons recognized and represented by state licensing agencies (
Three proposals were submitted to the agency in response to the RFP, including that of the protester, the designated
MSDE protests the elimination of its proposal from the competitive range because of its high price. MSDE also contends that the agency, in evaluating proposals, did not determine whether the offerors' proposals were in compliance with the Service Contract Act (41 U.S.C. sections 351 et seq.), unreasonably determined that the past performance of the competitive range offerors was equal to MSDE's, and allowed a potential offeror a site visit after the designated site visit.
The Army requests dismissal of the protest on the basis that the authority for administering the requirements of the RSA--and specifically for resolving disputes between SLAs and contracting agencies--has been placed with the Secretary of Education and the mandatory binding arbitration established by the Department of Education. 20 U.S.C. sect. 107d-1(b); 34 C.F.R. sect. 395.37(a). In this regard, the Army notes that our Office has consistently dismissed protests by SLAs for this reason. See, e.g.,
MSDE maintains that our Office should consider its protest here because the protest does not allege a violation of the RSA, but involves standard procurement issues that have been addressed by GAO numerous times in protest decisions and are independent of the application of the RSA. Protest at 14. In support of its contention that our Office should take jurisdiction in this matter, the SLA references a 2005 decision of the Court of Appeals for the Federal Circuit in Kentucky, Educ. Cabinet, Dept. for the Blind v.
The RSA has the stated purpose of providing blind persons with remunerative employment, enlarging the economic opportunities of the blind, and stimulating the blind to greater efforts in striving to make themselves self'supporting. 20 U.S.C. sect. 107(a). The RSA directs the Secretary of Education to designate state agencies responsible for training and licensing blind persons, and provides that [i]n authorizing the operation of vending facilities on Federal property, priority shall be given to blind persons licensed by a State agency. 20 U.S.C. sect. 107(b). For purposes of the instant case, the RSA includes cafeterias and snack bars within the definition of a vending facility. 20 U.S.C. sect. 107e(7). With respect to the operation of cafeterias at federal facilities, the Act directs the Secretary of Education to issue regulations to establish a priority for blind licensees whenever such operation can be provided at a reasonable cost with food of a high quality comparable to that currently provided to employees, whether by contract or otherwise. 20 U.S.C. sect. 107d-3(e).
Pursuant to this authority, the Secretary of Education has promulgated regulations addressing the RSA's requirements. Among the matters covered by these regulations are rules governing the relationship between the SLAs and blind vendors, rules for becoming a designated
With respect to disputes between SLAs and federal agencies, both the statute and the regulations provide for the filing of complaints with the Secretary, which are then resolved by binding arbitration. 20 U.S.C. sect. 107d-1(b); 34 C.F.R. sect. 395.37. Specifically, the regulation, which tracks closely the language of the statute, provides:
Whenever any [SLA] determines that any department, agency, or instrumentality of the United States which has control of the maintenance, operation, and protection of Federal property is failing to comply with the provisions of the Act or of this part and all informal attempts to resolve the issues have been unsuccessful, such licensing agency may file a complaint with the Secretary.
34 C.F.R. sect. 395.37(a). An arbitration panel would then be established to resolve such
As indicated above, the regulations issued by the Department of Education (DOED) implementing the RSA provide for SLAs to submit proposals for cafeteria services on solicitations that establish criteria under which all responses will be judged and [i]f the proposal received from the [SLA] is judged to be within a competitive range and has ranked among those proposals which have a reasonable chance of being selected for final award, the SLA should generally be selected to provide the cafeteria services. 34 C.F.R. sect. 395.33(b); Army Regulation 210-25 para. 6.b(1)(b). The regulation issued by the DOED further provides that [i]f the [
As stated above, we have interpreted the RSA and its implementing regulations as vesting authority with the Secretary of Education regarding
Here, the MSDE argues that it should not be required to use the arbitration procedure outlined above because the Court of Appeals for the Federal Circuit found in Kentucky, Educ. Cabinet, Dept. for the Blind v. U.S., 424 F.3d 1222 (Fed. Cir. 2005), that the authority of the DOED to arbitrate complaints by state agencies applies to only those complaints that allege a violation of the RSA or its attendant regulations.
We solicited the views of the DOED regarding this matter. A representative of the Office of General Counsel of that agency expressed the view, based on its review of the protest pleadings filed by the protester and the Army, that because MSDE did not specifically contend that there was a violation of the RSA or its implementing regulations, in a manner consistent with the Kentucky case, we believe that this issue is not appropriate to be handled through arbitration under the [RSA]. DOED Letter to GAO (
While we recognize the arguments in favor of our taking jurisdiction, we conclude, for the reasons set out below, that dismissal is appropriate.
The key question for our Office is whether the Federal Circuit's decision in the
Arbitration, however, was not meant to cover every complaint by a state licensing agency concerning the procurement of vending services. Congress enacted the arbitration provisions to fill a gap in the existing statutory scheme, under which vendors and state licensing agencies could bring claims based on a breach of contract or a violation of other federal procurement provisions, but could not bring a claim arising under the RSA. [citation omitted] Congress specifically sought to fill that gap in a targeted fashion, covering only claims alleging a failure to comply with the RSA. There is no reason to believe that Congress meant to funnel every complaint by a state licensing authority against a federal agency into arbitration, thus duplicating remedies that the failed bidders already had against the government. The Senate report on the arbitration provisions noted that [i]t is not anticipated that these [arbitration] mechanisms will be used with great frequency. S.Rep.No. 93-937, at 20. Congress had that expectation because it intended that the arbitration provisions would be triggered only if the state licensing agency alleged a violation of the RSA, and not in the case of other, more common allegation such as a breach of contract or a violation of government procurement provisions.
Because of the facts--and the outcome--of the
The Kentucky SLA then took its protest to the Court of Federal Claims, which also declined to consider the SLA's complaint concerning its elimination from the competitive range because the SLA had not exhausted the RSA's mandatory arbitration process provided for SLA complaints.
The Kentucky SLA appealed to the Court of Appeals for the Federal Circuit, and it is the Federal Circuit's decision that the MSDE is relying on before us in the instant protest. We recognize, of course, that the Federal Circuit's decision included the language quoted above with respect to the limited scope of the arbitration process. More importantly, however, the Federal Circuit affirmed the decision of the Court of Federal Claims that the court lacked jurisdiction to consider the Kentucky SLA's complaint because the
We recognize that the MDSE's protest did not specifically assert a violation of the RSA or its implementing regulations. Indeed, the protest does not mention the RSA except to argue that the protest is not alleging a violation of the Act. Our jurisdiction, however, should turn on the substance of a challenge to a procurement action, not the form or language in which it is couched. Notwithstanding the careful wording used by the MDSE here, the resolution of its protest of the SLA's exclusion from the competitive range has specific consequences set forth in the RSA's implementing regulations, which provide that the SLA would generally receive the award if its proposal were included in the competitive range. 34 C.F.R. sect. 395.33(b); Army Regulation 210-25 para. 6.b(1)(b). In this regard, we note the striking similarity between the contention at the heart of MSDE's protest here and that of the
The protest is dismissed.
Gary L. Kepplinger
 We believe that our view is also consistent with the congressional intent as reflected in the legislative history of the 1974 amendments to the Act, which established the arbitration procedure. In this regard, a Senate report on the bill declared that:
It is the expectation of the Committee that the arbitration and review procedures adopted in S. 2581 will provide the means by which aggrieved vendors and State agencies may obtain a final and satisfactory resolution of disputes. It is not anticipated that these mechanisms will be used with great frequency, and it is expected that the Secretary will refuse to convene an arbitration panel if, in his reasoned and documented opinion, a complaint is specious or has been brought solely for the purpose of harassment.
S. Rep. No. 937, 93d Cong., 2d Sess. 20 (1974).
 While we recognize that MDSE's protest includes allegations about the other proposals included in the competitive range, these relate to the assertion that the Army improperly eliminated MDSE's proposal from the competitive range.
 Although we have considered DOED's interpretation of the Federal Circuit's decision, we do not agree that it requires our Office to consider this protest. We note in this regard that DOED does not state that it would not consider a complaint from the MDSE under its mandatory arbitration procedures and in fact it appears that challenges by SLAs relating to the exclusion of an SLA from the competitive range that involve procurement related issues have been considered under DOED's RSA arbitration procedures. See