Public Contract Law Journal

Shepherd Away from Arbitration: Rethinking the Randolph-Sheppard Act’s Arbitration Scheme

by Stephanie Villalta

I.   Introduction

The Randolph-Sheppard Act (RSA or “Act”) aims to increase economic opportunities for the blind, provide the blind remunerative employment, and increase efforts to help make the blind self-supporting.To achieve that objective, the Randolph-Sheppard Act requires priority be given to blind persons licensed by a designated state licensing agency whenever vending facilities are set up on any federal property.2 The state licensing agency licenses3 and trains blind vendors on how to operate vending facilities,4 and ensures licensed blind vendors have vending facility equipment and initial products to stock that equipment.5

For nearly a century, the Randolph-Sheppard Act has been a source of revenue for blind vendors.6 According to the U.S. Department of Education, the Department charged with implementing the Randolph-Sheppard Act,7 during Fiscal Year (FY) 2014, 2,108 blind vendors operated 2,389 vending facilities, generating approximately $693.6 million in revenue and leaving each vendor with approximately $59,012 in earnings.8 During FY 2015, total gross income under the Randolph-Sheppard Act was $697 million — leaving vendors with $118.2 million in earnings.9 Evidently, for nearly a century, many contracts have been and currently are being awarded pursuant to the Randolph-Sheppard Act.10 Despite the many contract awards made pursuant to the Act, the Act’s language and case law reveals that bid protests lodged by state licensing agencies relating to the Act do not follow traditional bid protest procedures.11

Congress built a comprehensive arbitration scheme into the Randolph- Sheppard Act.12 Under the Act’s arbitration scheme, the Secretary of Education must convene an arbitration panel whenever a blind vendor is dissatisfied with actions arising from a vending facility program’s operation or administration, or when a dispute arises between a state licensing agency and a federal agency that fails to comply with the Randolph-Sheppard Act’s provisions.13 Arbitration panel decisions are reviewable under the Administrative Procedure Act.14 Notably, the Randolph-Sheppard Act requires an arbitration panel to adjudicate disputes brought by state licensing agencies against federal agencies whenever federal agencies fail to comply with any of the Act’s provisions or regulations, including, for example, limiting a vending facility’s placement or operations.15 The Act thus gives arbitration panels the ability to hear a broad category of disputes, and sends to arbitration all Randolph-Sheppard Act-related disputes lodged by state licensing agencies against federal agencies.16 Thus, the Randolph-Sheppard Act makes no procedural distinction between contract award controversies and controversies or claims arising during the administration or performance of a contract subject to the Act.17

In government procurement law, disputes challenging a contract’s award follow certain procedures18 — procedures that procurements subject to the Randolph-Sheppard Act do not follow.19 Conventionally, in government procurement law, disputes brought by aggrieved parties challenging a contract’s award are deemed bid protests,20 and are reviewed exclusively by the Government Accountability Office (GAO) and/ or the U.S. Court of Federal Claims,21 not the U.S. Federal District Courts (“traditional bid protest dispute process” or “traditional bid protest procedures”).22 Unlike the traditional bid protest dispute process, the GAO has held that it does not have jurisdiction to entertain bid protests presented by state licensing agencies concerning the Randolph-Sheppard Act.23 The U.S. Court of Federal Claims has had to ascertain whether the Randolph-Sheppard Act’s arbitration scheme is mandatory, what disputes must go to arbitration, 24 and has had to weigh the court’s broad bid protest jurisdiction against the Randolph-Sheppard Act’s broad arbitration scheme.25 Ultimately, the U.S. Court of Appeals for the Federal Circuit has deemed arbitration under the Randolph-Sheppard Act mandatory if a Randolph-Sheppard violation is alleged, and has held that government procurement violations need not be arbitrated, but sent to arbitration a state licensing agency’s bid protest.26 Furthermore, unlike the traditional bid protest dispute process,27 district courts have even issued preliminary injunctions pending arbitration for bid protests lodged by state licensing agencies concerning the Randolph-Sheppard Act, and have also deemed arbitration under the Act mandatory.28 Evidently, bid protests lodged by state licensing agencies for procurements subject to the Randolph-Sheppard Act do not follow traditional bid protest procedures.29

This Note will posit both legal and practical reasons for why Congress should clarify the Randolph-Sheppard Act’s arbitration scheme such that bid protests lodged by state licensing agencies challenging procurements subject to the Act are not arbitrated, and transform the arbitration scheme such that those bid protests are directed to the GAO and/ or the U.S. Court of Federal Claims to follow traditional bid protest procedures. Accordingly, Part II will examine the Randolph-Sheppard Act’s statutory scheme and, in particular, its arbitration provisions. Part III will detail traditional bid protest procedures. Part IV will detail problems with the Randolph-Sheppard Act’s arbitration scheme and how these can be resolved by transforming the Act’s arbitration scheme to reflect traditional bid protest procedures. Part V suggests how Congress should transform the Act’s arbitration scheme to reflect traditional bid protest procedures.

II.  Examining the Randolph-Sheppard Act's Statutory Scheme

In 1936, Congress enacted the Randolph-Sheppard Act to provide the blind with remunerative employment and increase efforts to help make the blind self-supporting.30 The Act requires federal agencies to give priority to blind persons licensed by a designated state agency whenever vending facilities31 are set up on any federal property (except when the placement or operation of the vending facility would adversely affect the United States’ interests).32 The Randolph-Sheppard Act vests implementation of the Act in the Education Secretary, and thus directs the Secretary to ensure the Rehabilitation Services Administration is the principal agency charged with carrying out the Act’s mandates.33 Accordingly, the Randolph-Sheppard Act charges the Rehabilitation Services Administration with establishing uniform policies and requirements to carry out the Act’s mandates.34

The Randolph-Sheppard Act sets up a “two tiered system” of administration.35 First, the Act charges the Education Secretary with designating a state agency or a public agency for each state.36 The Education Secretary thus authorizes each designated agency to issue licenses to eligible blind vendors.37 Second, the state licensing agency licenses blind persons to operate vending facilities on federal property or other property in the given state.38 In issuing licenses to blind vendors, the Randolph-Sheppard Act directs the state licensing agency to give preference to blind persons in need of employment.39

The Act also vests the state licensing agency with other important tasks.40 Under the Act, the state licensing agency agrees to provide each licensed blind vendor vending-facility equipment, and to furnish each blind vendor with an adequate supply of initial products to stock the vending equipment.41 Furthermore, under the Act’s implementing regulations, each state licensing agency is directed to train blind persons in vending facility operations and to provide blind vendors vocational and training materials.42 Additionally, whenever a federal agency contemplates a cafeteria contract, that agency must invite the appropriate state licensing agency to respond to the solicitation.43

In 1974, Congress found that it needed to remove obstacles preventing the Randolph- Sheppard Act’s growth, and thus sought to create an administrative or judicial framework under which blind vendors, state licensing agencies, and the federal government would be treated fairly.44 Prior to 1974, the Act did not detail a fair means of addressing state licensing agencies’ or blind vendors’ complaints.45 Before then, complaints presented by state licensing agencies or blind vendors were reviewed by the agency head where the vending facility was located, 46 thus the federal agency in control of the federal property where the vending facility was located rendered a final decision on any Randolph-Sheppard Act dispute.47 Accordingly, in 1974, Congress amended the Randolph-Sheppard Act and included arbitration provisions to enable state licensing agencies and blind vendors to resolve ongoing disputes relating to the Act.48 The arbitration provisions indicate the Education Secretary must convene an arbitration panel for two different dispute types,49 and details the arbitration panels’ composition for both dispute types.50

One of the instances an arbitration panel may be convened is whenever a blind licensee is dissatisfied with actions surrounding a vending program’s operation or administration.51 However, that instance is irrelevant for purposes of this Note because it focuses on grievance procedures initiated by blind vendors, not by state licensing agencies. The second instance an arbitration panel may be convened is when a state licensing agency determines that a federal agency or department that controls, maintains or operates federal property is not complying with the Randolph-Sheppard Act’s provisions or its attendant regulations.52 The state licensing agency is then allowed to file a complaint with the Education Secretary, and the Education Secretary must convene an arbitration panel to adjudicate the dispute.53 The arbitration panel in this instance is composed of: (1) an individual chosen by the state licensing agency; (2) an individual chosen by the head of the federal agency that controls the federal property giving rise to the dispute; and (3) an individual chosen jointly by the aforementioned individual designated by the state licensing agency and the aforementioned individual designated by the federal agency, but who is not an employee of the federal agency that controls the federal property over which the dispute arose; this individual is deemed a chairman.54 Under this type of arbitration proceeding, if the arbitration panel finds that the federal agency’s “acts or practices” violate any part of the Randolph- Sheppard Act or its implementing regulations, the head of the violating agency or department must terminate such actions, and ensure the arbitration panel’s decision is effectuated fully.55

Under either arbitration procedure, the Randolph-Sheppard Act deems an arbitration decision final and binding on the parties,56 the Secretary pays all arbitration costs,57 and the Federal Register publishes all arbitration proceedings.58 Furthermore, an arbitration panel’s decision is “subject to appeal and review as a final agency action” under the Administrative Procedure Act.59

A.  Is Arbitration Under the Randolph-Sheppard Act Mandatory? Examining Federal Courts’ Attempts to Determine Whether the Randolph-Sheppard Act’s Arbitration Scheme Is Mandatory

Federal courts have largely deemed arbitration under the Randolph- Sheppard Act mandatory.60 This section explores the positions U.S. Federal District Courts and judges at the U.S. Court of Federal Claims have taken on whether arbitration under the Randolph-Sheppard Act is mandatory, and the different reasons they have posited to support their conclusions.

After Congress amended the Randolph-Sheppard Act to include arbitration provisions, federal courts had to determine whether arbitration must be exhausted before a court could entertain a Randolph-Sheppard Act case on the merits.61 The Sixth Circuit held that the Randolph-Sheppard Act’s arbitration amendments reflected Congress’ policy that parties arbitrate before resorting to federal court.62 Similarly, the D.C. Circuit held a lower court’s ruling invalid because arbitration was not exhausted.63 The D.C. Circuit held that arbitration was required before seeking the District Court’s review because the Randolph-Sheppard Act’s arbitration scheme was “clear and explicit” and thus evidenced Congress’ intent that state licensing agencies be prevented from directly resorting to federal court.64 The court reasoned that Congress purposefully restricted judicial review of arbitration decisions by making them reviewable as final agency actions, rather than making the decisions subject to de novo review.65

Judge Merow, in the U.S. Claims Court (“Claims Court”), the predecessor to the U.S. Court of Federal Claims, was unwilling to deem the Randolph- Sheppard Act’s arbitration provisions mandatory.66 Judge Merow described arbitration under the Act’s arbitration scheme as not mandatory, but permissive.67 He examined the Act’s language and noted that the Act allows state licensing agencies to file complaints with the Secretary of Education (using the word “may”), but mandates arbitration (using the word “shall”), and thus concluded that the Randolph-Sheppard Act’s language demonstrates that Congress did not intend for arbitration to be mandatory.68 He also noted that nothing in the Act’s legislative history indicated that Congress intended for arbitration to be a precondition for judicial review.69

Many years after the aforementioned case, Judge Lawrence Block of the Court of Federal Claims considered whether arbitration under the Randolph- Sheppard Act was mandatory, and conceded that the Act’s language does not explicitly require arbitration exhaustion, but nevertheless held arbitration to be mandatory.70 Judge Block posited three main reasons for why he deemed the Act’s arbitration scheme mandatory.71 First, similar to the D.C. Circuit, he held that the Act’s detailed arbitration scheme incorporating a restricted method of judicial review evidenced Congress’ intent for arbitration to “supercede” judicial review.72 Second, he emphasized viewing the Randolph- Sheppard Act as a whole, noting the Act’s uses of the word “may” (e.g., “any… licensing agency may file a complaint with the Secretary…”) are overridden by “indications of legislative intent” in the statute’s purpose and context.73 Third, he emphasized that courts should not get involved prematurely with agency decisions.74 On appeal, the Federal Circuit upheld Judge Block’s holding that arbitration under the Randolph-Sheppard Act, in that case, was mandatory.75 The Federal Circuit determined that Congress’ creation of a detailed arbitration scheme evidences Congress’ intent that the Randolph-Sheppard Act’s arbitration scheme be exclusive.76 The Federal Circuit further held that under the Act, “may” refers to the state licensing agency’s preliminary discretion to challenge an agency’s action, however if the state licensing agency then does decide to challenge said agency action, that dispute must be arbitrated.77 Evidently, courts have largely deemed arbitration under the Randolph-Sheppard Act a prerequisite to bringing a claim to federal court.78

Besides questioning whether the Randolph-Sheppard Act’s arbitration scheme is mandatory, some state licensing agencies have attempted to avoid arbitration by arguing that their disputes are bid protests and not disputes arising under the Act.79 Furthermore, courts also have been confronted with litigants challenging whether the court has jurisdiction to issue a remedy for a Randolph-Sheppard Act-related bid protest lodged by a state licensing agency absent arbitration or while arbitration is pending.80 These arguments thus have forced courts to consider the questions: If arbitration is mandatory, what type of Randolph-Sheppard-related disputes must go to arbitration — are there certain types of disputes exempt from arbitration?81 Does this court have jurisdiction to issue a remedy for a Randolph-Sheppard Act-related bid protest pending or absent arbitration?82 The next section demonstrates how courts have attempted to answer these questions.

B.  Where Do Disputes Go? What Disputes Go Where? Examining Federal Courts’ Attempts to Define Where State Licensing Agencies’ Randolph-Sheppard Act Disputes Must Be Entertained

State licensing agencies have attempted to avoid arbitration by arguing their disputes are bid protests not subject to arbitration,83 and other parties have disputed different courts’ jurisdiction over state licensing agencies’ disputes.84 The Federal Circuit has held that arbitration must occur only if the state licensing agency alleges a Randolph-Sheppard Act violation, not government procurement violations or contract breach claims.85 Despite the Federal Circuit’s holding, its application of that standard required a state licensing agency’s Randolph-Sheppard Act-related bid protest to go to arbitration.86 Some District Courts have even issued remedies pending arbitration.87 This section will explore how the Court of Federal Claims treated Randolph-Sheppard Act bid protests early on, how the Court of Federal Claims and the Federal Circuit have resolved whether they have jurisdiction to entertain Randolph-Sheppard Act bid protests presented by state licensing agencies, and the District Courts’ attempts to define where Randolph-Sheppard Act-related bid protests must be entertained.

Before the Federal Circuit’s Kentucky decision, where it held that arbitration under the Randolph-Sheppard Act was mandatory for disputes alleging a violation of the Act,88 Judge Hewitt of the Court of Federal Claims had to determine whether she could interpret various Randolph-Sheppard Act provisions during a pre-award bid protest brought by a state licensing agency.89 In Washington State Dep’t of Services for the Blind, Judge Hewitt, when presented with a state licensing agency’s pre-award bid protest that had not been arbitrated, held that she could interpret whether the Randolph-Sheppard Act applied to a contract.90 Among other things, Judge Hewitt held the court could determine whether the Act applied to a solicitation because deciding that issue required statutory construction within the court’s “conventional expertise” — not the agency expertise that would require sending the issue to the agency.91 Furthermore, she noted that arbitration decisions regarding the Act’s application to the contract could result in inconsistent rulings because arbitration decisions as to that issue were themselves inconsistent.92

After Judge Hewitt rendered the foregoing decision, the Court of Federal Claims (and on appeal, the Federal Circuit) held that arbitration under the Randolph-Sheppard Act was mandatory, and attempted to specify what types of disputes must go to arbitration.93 In Kentucky, the Court of Federal Claims had to determine whether a post-award bid protest, namely, an elimination from the competitive range, could be reviewed under the Court of Federal Claims’ bid protest Tucker Act jurisdiction or as a Randolph-Sheppard Act dispute.94 The judge held that because Congress gave arbitration panels the authority to construe the Act’s provisions, if the court made a determination on procurement issues, it might end up construing the Randolph-Sheppard Act, which it is not allowed to do.95 The judge thus reasoned that agency actions that have a “reasonable nexus” to the Randolph-Sheppard Act should be arbitrated.96 Importantly, the state licensing agency pointed out the danger of inconsistent results if, for example, a state licensing agency and a non- state licensing agency offeror “protest the same award in different fora.”97 The judge determined that the problem was not within the court’s purview, but was of Congress’ concern.98

On appeal, the Federal Circuit attempted to limit the Court of Federal Claims’ broad “reasonable nexus” standard for determining what claims must be entertained by a Randolph-Sheppard Act arbitration panel.99 The Federal Circuit thus held that only complaints that claim “a violation of the RSA or its attendant regulations” are eligible to be arbitrated.100 The court also stated that Congress expected arbitration to occur only if the state licensing agency alleged a violation of the Act, not government procurement violations or contract breach claims.101 Furthermore, the court stated that conventional bid protest remedies for disputes based on procurement law need not be bypassed for “disputes not based on the RSA and its regulations.”102 Despite the Federal Circuit’s holding that only disputes that allege a Randolph-Sheppard Act violation are eligible to be arbitrated, the Federal Circuit sent to arbitration the state licensing agency’s bid protest that alleged that the state licensing agency was wrongfully excluded from the competitive range during a Randolph-Sheppard Act procurement.103

The Randolph-Sheppard Act’s arbitration scheme also has resulted in litigants challenging whether a particular court has jurisdiction to issue a remedy for a Randolph-Sheppard Act-related bid protest brought by a state licensing agency absent arbitration, or at least, while arbitration is pending.104 In determining whether they have jurisdiction to issue certain remedies, courts have had to weigh the Court of Federal Claims’ broad jurisdiction over bid protests against the Act’s broad arbitration scheme.105 A judge in the Court of Federal Claims, in Colorado Dep’t of Human Services, held the court did not have jurisdiction to grant a preliminary injunction in response to a state licensing agency filing a bid protest pending an arbitration panel’s decision.106 The judge reasoned that to grant a preliminary injunction, the court must “eventually” have jurisdiction over the state licensing agency’s claims.107 Thus, the judge questioned whether the court would have jurisdiction to review the arbitration panel’s decision once the panel concluded.108 The judge determined the court had jurisdiction to review claims under the Tucker Act as amended under the Administrative Dispute Resolution Act,109 but not under the Administrative Procedure Act.110 However, because Randolph-Sheppard Act arbitration decisions are reviewable under the Administrative Procedure Act and thus Congress created a comprehensive framework to adjudicate Randolph-Sheppard Act disputes, the court determined that its possible Tucker Act jurisdiction over the claim was preempted.111

Federal District Courts also have had to assess the Court of Federal Claims’ broad jurisdiction over bid protests against the Randolph-Sheppard Act’s arbitration scheme to determine whether federal district courts have jurisdiction to grant certain remedies pending arbitration.112 In Johnson v. United States, the United States District Court for the Western District of Texas granted a state licensing agency’s request for a preliminary injunction to prevent the Army from moving forward with a solicitation.113 The federal government challenged the District Court’s jurisdiction over the claim alleging that the Court of Federal Claims had “exclusive jurisdiction” over the state licensing agency’s claim.114 The District Court, however, found Colorado Dep’t of Human Services instructive,115 and reasoned that because the Randolph-Sheppard Act’s comprehensive arbitration scheme makes arbitration decisions reviewable under the Administrative Procedure Act, the District Court — not the Court of Federal Claims — had jurisdiction to consider the state licensing agency’s request for a preliminary injunction.116

Recently, the United States District Court for the District of Kansas also weighed the Court of Federal Claims’ broad jurisdiction over bid protests against the Randolph-Sheppard Act’s broad arbitration scheme to determine whether the District Court had jurisdiction to grant a preliminary injunction.117 In Kansas v. United States, the court determined that it did have jurisdiction to consider a state licensing agency’s motion for a preliminary injunction118 to prevent the Army from re-procuring the state licensing agency’s soon-to expire contract under the Javits-Wagner-O’Day Act pending the arbitration proceeding.119 The court held that it had jurisdiction to issue a preliminary injunction120 because the state licensing agency alleged a violation of the Randolph-Sheppard Act, thus even if the Tucker Act uses broad language to describe disputes subject to the Court of Federal Claims’ jurisdiction and the Randolph-Sheppard Act’s arbitration provisions are equally broad,121 under Kentucky, the state licensing agency had to arbitrate before the Court of Federal Claims could have jurisdiction over the state licensing agency’s claim.122 In addition, the court held that it had jurisdiction to issue a preliminary injunction because it could review an arbitration panel’s decision under the Administrative Procedure Act, and the possibility of irreparable harm existed in the case.123 On appeal, the Tenth Circuit upheld the District Court’s exercise of jurisdiction over the state licensing agency’s claim.124 Accordingly, the Tenth Circuit held that because the state licensing agency had not yet arbitrated its claim, the Court of Federal Claims did not yet have jurisdiction over the case.125

Evidently, federal courts have attempted to define what dispute types are eligible to be arbitrated, and have tried to identify the appropriate forums to grant remedies pending arbitration.126 The GAO also has had to determine if it fits within the Act’s arbitration framework.127

C.  “We Dismiss the Protest”: The Government Accountability Office’s Refusal to Entertain Randolph-Sheppard Bid Protests Brought by State Licensing Agencies

The GAO has also had occasion to determine whether it has jurisdiction to entertain bid protests brought by state licensing agencies against federal agencies under the Randolph-Sheppard Act.128 However, the GAO has held that it does not have such jurisdiction.129 This section examines the GAO’s position.

When the GAO has been presented with bid protests lodged by state licensing agencies against federal agencies relating to the Randolph-Sheppard Act, it has often dismissed the protests by emphasizing the Act’s comprehensive statutory scheme.130 The Act’s comprehensive statutory scheme and its arbitration provisions, the GAO has noted, vest the Education Secretary with the power to administer, oversee, and ensure compliance with the Randolph-Sheppard Act.131 Accordingly, the GAO has suggested that because Congress decided to include arbitration provisions in the Act, Congress intended that state licensing agencies file their complaints with the Secretary, and thus foreclosed the GAO’s review of those complaints.132 Furthermore, some state licensing agencies have argued that arbitration under the Randolph-Sheppard Act should not be required because an arbitration panel cannot stay a contract’s award, and thus the panel’s remedy is inadequate.133 The GAO has noted that even if the Act’s remedies are inadequate, that is not a reason for the GAO to ignore Congress’ intent.134

After the Federal Circuit rendered the Kentucky decision holding that arbitration under the Act is required only for state licensing agencies’ complaints alleging a Randolph-Sheppard Act violation, the GAO was challenged with determining whether it could consider a Randolph-Sheppard Act-related bid protest presented by a state licensing agency.135 In Maryland State Dep’t of Education, the GAO dismissed a state licensing agency’s bid protest challenging the state licensing agency’s elimination from the competitive range for a contract to provide food services at an Army facility.136 The GAO again emphasized the Act’s comprehensive arbitration scheme and the Secretary of Education’s authority over the Act.137 However, in light of the state licensing agency’s reference to Kentucky, the GAO solicited the Department of Education’s view on whether arbitration was warranted in that situation.138 Notwithstanding the Department of Education’s indication that the state licensing agency’s claim did not need to be arbitrated, the GAO dismissed the protest because the state licensing agency’s bid protest fact pattern closely aligned with the facts in Kentucky where the Federal Circuit sent to arbitration a bid protest challenging the state licensing agency’s elimination from the competitive range.139

Evidently, the GAO has dismissed bid protests lodged by state licensing agencies against federal agencies concerning the Randolph-Sheppard Act.140

III.  Examing Traditional Bid Protest Procedures

In government procurement law, contract award controversies, or bid pro- tests, are disputes arising when offerors, prospective offerors, or other parties are dissatisfied with a federal agency’s procurement actions.141 These parties may bring protests when they believe that they have been wrongly denied a contract or an opportunity to compete for a contract, or when they believe a contract has been or will be awarded incorrectly or illegally.142 Contract award controversies must thus be differentiated from contract performance disputes, wherein third parties, generally, cannot dispute actions arising during contract performance.143

Before 1982, bid protests were entertained without specific statutory authority.144 By 1982, Congress formalized the bid protest process, and promulgated various statutes to govern bid protests.145 Ultimately, three forums for filing bid protests remain: (1) the U.S. Court of Federal Claims, (2) the Government Accountability Office, and (3) the contracting agency.146

The U.S. Court of Federal Claims’ bid protest jurisdiction originally was premised on the Tucker Act under which there existed an implied-in-fact contract for the government to treat solicited bids fairly.147 In 1996, Congress, in the Administrative Dispute Resolution Act, made explicit the Court of Federal Claims’ jurisdiction over bid protests.148 The Court of Federal Claims was thereby given jurisdiction over:

an action by an interested party objecting to a solicitation by a [f]ederal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.149

Thus, the Court of Federal Claims was given jurisdiction to entertain pre- and post-award bid protests.150 When the Administrative Dispute Resolution Act was passed, it granted both the Court of Federal Claims and the U.S. Di trict Courts jurisdiction to entertain bid protests.151 However, the Administrative Dispute Resolution Act also contained a sunset provision under which Congress determined that the Federal District Courts would lose their ability to hear bid protests, unless Congress extended the courts’ jurisdiction.152 Congress did not extend the date, thus jurisdiction over bid protests was lodged exclusively with the Court of Federal Claims.153 The Court of Federal Claims may provide various remedies including: declaratory and injunctive relief, bid preparation and proposal costs, and attorney’s fees (if eligible under the Equal Access to Justice Act).154

The GAO, for a long time, was the only forum to entertain contract award disputes.155 In 1984, the Competition in Contracting Act gave the GAO specific statutory jurisdiction over bid protests. 156 An aggrieved party may bring a bid protest to the GAO if the party is an “interested party,” thus “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by failure to award a contract.”157 Filing a bid protest at the GAO triggers an automatic stay during which an agency may not award a contract or must suspend contract performance.158 If the GAO receives a timely pre-award bid protest, it advises the contracting agency of the bid protest, and the agency cannot award the disputed contract.159 If the GAO receives a timely post-award bid protest, it advises the contracting agency of the bid protest, and the agency must suspend performance under the disputed contract immediately.160 Furthermore, the GAO’s decisions are deemed recommendations.161 The GAO may issue recommendations for the contracting agency to, among other things, terminate a contract, “recompete a contract,” or “issue a new solicitation.”162 Protestors at the GAO have been able to recoup costs incurred pursuing a bid protest, such as attorney’s fees and bid or proposal preparation costs.163 Furthermore, courts may afford GAO’s decisions deference because of the GAO’s extensive government contracts knowledge.164

Bid protests generally are reviewed by the Court of Federal Claims and/ or the GAO.165 However, bid protests brought by state licensing agencies relating to the Randolph-Sheppard Act have been sent to an arbitration panel for review because of the Act’s comprehensive arbitration scheme.166 Thus, Randolph-Sheppard bid protests follow a different procedural path.

IV.  Problems with the Randolph-Sheppard Act's Arbitration Scheme & How Treating Randolph-Sheppard Bid Protest Procedures Would Help to Resolve Those Problems

Juxtaposing the procedural process for Randolph-Sheppard bid protests brought by state licensing agencies and the procedural process for traditional bid protests, four main issues with the Randolph-Sheppard Act’s arbitration scheme become apparent. First, is the multiple forums issue — state licensing agencies pursing Randolph-Sheppard-related bid protests often have to visit multiple forums to prevent a contract from being awarded improperly.167 Second, is the expertise issue — arbitration panels convened pursuant to the Randolph-Sheppard Act are not required to have expertise in government procurement law.168 Third, is the arbitration time issue — arbitration panels convened pursuant to the Randolph-Sheppard Act, some have noted, take time to conclude.169 Fourth, is the problem posed by courts acting outside of their jurisdiction — especially, as regards District Courts granting remedies to state licensing agencies for what are, arguably, bid protests even when District Courts do not have bid protest jurisdiction.170 This section examines these four issues, and how treating bid protests brought by state licensing agencies relating to the Randolph-Sheppard Act under traditional bid protest procedures would help to resolve them.

First, under the Randolph-Sheppard Act’s mandatory arbitration scheme, disputes appearing to be bid protests relating to the Act are sent to arbitration, thus state licensing agencies often have to visit multiple forums to fully remedy their grievances.171 As mentioned, District Courts have entertained state licensing agencies’ requests for preliminary injunctions to prevent federal agencies from moving forward with procurements pending arbitration.172 Furthermore, some preliminary injunction requests have been appealed to federal appeals court.173 Thus, besides asking the Education Secretary to convene an arbitration panel, state licensing agencies have found it necessary to resort to District Courts to seek injunctions and thus have the opportunity to fully remedy their grievances until an arbitration decision is rendered.174 Therefore, the Randolph-Sheppard Act’s current arbitration scheme burdens state licensing agencies with visiting multiple fora to be able to remedy their grievances.175

The multiple fora issue could potentially be solved by treating Randolph-Sheppard bid protests under traditional bid protest procedures. As mentioned, once a party files a bid protest with the GAO, an automatic stay provision is triggered, and a procuring agency must stay a contract’s award or suspend contract performance until the bid protest is resolved.176 If Randolph-Sheppard bid protests were to follow traditional bid protest procedures, then the GAO’s stay provisions177 could be available to state licensing agencies, thus eliminating their need to seek preliminary injunctions in federal district court and allowing GAO to issue a decision on the merits. Furthermore, while the Court of Federal Claims does not provide for automatic stays, state licensing agencies could seek preliminary injunctions (or temporary restraining orders) at the court to prevent contract award or performance and obtain a decision on the merits.178 Accordingly, if Randolph-Sheppard bid protests were to follow traditional bid protest procedures, the Court of Federal Claims, for example, could issue preliminary injunctions and render a decision on the merits,179 thus eliminating state licensing agencies’ need to seek preliminary injunctions in federal district court. 180

Second, under the Randolph-Sheppard Act’s arbitration scheme for state licensing agencies, an arbitration panel’s composition is statutorily defined —  with no provision requiring expertise in government procurement law.181 As described, an arbitration panel convened on complaint by a state licensing agency is composed of three individuals — an individual from the state licensing agency, an individual from the federal agency that controls the federal property over which the dispute commenced, and an individual chosen by the two.182 Under the Act, these individuals are not required to have knowledge in government procurement law.183 Consequently, if a state licensing agency takes a Randolph-Sheppard bid protest to arbitration, the arbitration panel might decide issues related to government procurement law even when the panel has no expertise (or at least is not required to have expertise) in government procurement law. Accordingly, the Act’s arbitration scheme poses a serious lack of expertise issue.

This expertise issue could potentially be solved by treating Randolph-Sheppard Act-related bid protests under traditional bid protest procedures. If these bid protests were treated similar to traditional bid protests, they could potentially be reviewed by the GAO and/ or the Court of Federal Claims. As mentioned, the GAO has extensive government contracting knowledge.184 The GAO has reviewed government contracts disputes for over seventy-five years, and it creates a uniform body of law governing procurement processes upon which parties can rely.185 Furthermore, during FY 2017, the GAO received approximately 2,433 bid protests, and closed 2,471 bid protests.186 The Court of Federal Claims also receives a sizeable share of bid protests — during FY 2017, the court received 129 cases and disposed of 133 cases.187

Furthermore, as mentioned, in 2003, before the Federal Circuit’s Kentucky decision, Judge Hewitt in the Court of Federal Claims decided that she could determine whether the Randolph-Sheppard Act applied to a contract during a pre-award bid protest.188 Judge Hewitt reasoned that deciding whether the Act applied to a particular contract involved statutory interpretation — not the kind of agency expertise that would require sending the issue to the agency for arbitration.189 If Randolph-Sheppard Act-related bid protests were to follow traditional bid protest procedures, the Court of Federal Claims would be no less effective than an arbitration panel would be with regards to expertise with the Randolph-Sheppard Act, because as Judge Hewitt noted, deciding whether the Act applies to a particular contract involves statutory interpretation within the court’s “conventional expertise.”190

Third, and related to the first issue, arbitration panels convened pursuant to the Randolph-Sheppard Act take time to conclude.191 The Act does not statutorily define within how much time an arbitration panel must convene (or conclude).192 One of the reasons state licensing agencies find themselves forced to resort to District Courts to request preliminary injunctions pending arbitration is, as some have observed, that arbitration panels take some time to conclude.193 According to a state licensing agency, some arbitration panels have taken upwards of a year to conclude.194

This timeliness issue potentially could be resolved by treating Randolph- Sheppard bid protests under traditional bid protest procedures. If a Randolph- Sheppard Act-related bid protest were to be filed with the Government Accountability Office, the GAO would be required to render a decision on the protest within 100 days after the protest is filed, unless an express option schedule is requested (where the decision is decided under a sixty-five-day schedule).195 If Randolph-Sheppard Act-related bid protests were to follow traditional bid protest procedures, the GAO’s bid protest decision timeline196 potentially could be available, thus eliminating state licensing agencies’ struggle to get a timely arbitration decision.

Fourth, the possibility of Randolph-Sheppard bid protests going to District Court risks the District Courts acting outside their jurisdiction.197 As mentioned, the Administrative Dispute Resolution Act contained a sunset provision under which Congress’ failure to extend the District Courts’ bid protest jurisdiction past the sunset date would cause the courts’ jurisdiction over bid protests to expire.198 Because Congress did not extend that deadline, the courts’ jurisdiction over bid protests ceased and was lodged instead with the Court of Federal Claims.199 As illustrated by some of the cases presented, some disputes are essentially bid protests except that they challenge procurements subject to the Randolph-Sheppard Act or which require interpreting a Randolph-Sheppard Act regulation.200 Furthermore, if these claims are arbitrated, and then appealed from arbitration, they might be appealed to the district courts.201 Thus, on appeal, district courts would be entertaining what are in essence still bid protests, even when Congress has taken the district courts’ bid protest jurisdiction away.202

This jurisdictional issue potentially could be resolved by treating Randolph- Sheppard Act-related bid protests presented by state licensing agencies under traditional bid protest procedures. If such bid protests brought by state licensing agencies were funneled to the Government Accountability Office and/ or the Court of Federal Claims, parties would seek remedies in those forums, which do have statutory bid protest jurisdiction, and would not have to resort to district courts to seek preliminary injunctions.203

The Randolph-Sheppard Act’s comprehensive arbitration scheme creates problems particularly with regards to Randolph-Sheppard Act-related bid protests brought by state licensing agencies. Treating Randolph-Sheppard bid protests under traditional bid protest procedures could help to remedy these issues. However, this solution can only occur by congressional fiat — the next section details how Congress can ensure that Randolph-Sheppard Act-related bid protests brought by state licensing agencies follow traditional bid protest procedures.

V.  How to Modify the Randolph-Sheppard Act's Arbitration Scheme so that Randolph-Sheppard Bid Protests Follow Traditional Bid Protest Procedures   

Bid protests lodged by state licensing agencies challenging procurements subject to the Randolph-Sheppard Act should be fixed to follow traditional bid protest procedures. The Act’s arbitration scheme sends any Randolph- Sheppard Act dispute presented by a state licensing agency to arbitration,204 and courts’ efforts to determine what disputes must go to arbitration have generated confusion.205 Accordingly, Congress should step in to ensure that Randolph-Sheppard Act-related bid protests brought by state licensing agencies follow traditional bid protest procedures.

For Congress to ensure Randolph-Sheppard Act-related bid protests follow traditional bid protest procedures, Congress must amend the Act’s arbitration provisions. Congress should include the following language beneath 20 U.S.C. § 107(d)-(1)(b):

Whenever any state licensing agency has reason to believe that any department, agency, instrumentality of the United States that has control of the maintenance, operation, and protection of federal property has, or is about to, award a contract improperly or illegally, or that they have been unfairly denied a contract or an opportunity to compete for a contract, such licensing agency may file a bid protest with the Government Accountability Office and/ or the Court of Federal Claims.206

This language would likely ensure the GAO and the Court of Federal Claims have jurisdiction over Randolph-Sheppard Act-related bid protests presented by state licensing agencies. Perhaps the Randolph-Sheppard Act’s arbitration scheme can remain for other disputes arising under the Act, however, this Note does not purport to address those disputes.

VI.  Conclusion

The Randolph-Sheppard Act has had great consequences for blind vendors.207 However, because the Act’s comprehensive arbitration scheme encompasses Randolph-Sheppard Act-related bid protests brought by state licensing agencies,208 federal courts have had to determine whether Randolph-Sheppard Act-related bid protests must go to arbitration,209 and state licensing agencies have been forced to pursue preliminary injunctions in District Court pending an arbitration panel’s decision.210 Accordingly, Congress should amend the Randolph-Sheppard Act such that Randolph-Sheppard bid protests lodged by state licensing agencies follow traditional bid protest procedures, and are funneled to the GAO and/ or the U.S. Court of Federal Claims.

Entity:
Topic:
  1. 20 U.S.C. § 107(a) (2012).
  2. Id. § 107(b)(1)–(2) (stating vending facilities need not be established on federal property when placement or operation of the vending facility would adversely affect U.S. interests).
  3. Id. §107(a)(5).
  4. Training program for blind individuals, 34 C.F.R. § 395.11 (2018) (“The State licensing agency shall ensure that effective programs of vocational and other training services, including personal and vocational adjustments, books, tools, and other training materials, shall be provided to blind individuals as vocational rehabilitation services. . . . Such programs shall include on-the-job training in all aspects of vending facility operation for blind persons. . . .”).
  5. 20 U.S.C.§ 107(b)(2).
  6. See generally Federal Support for the Randolph-Sheppard Vending Facility Program: Memorandum for the Heads of Executive Departments and Agencies, 77 Fed. Reg. 3917 (Jan. 25, 2012). The Memorandum states: “For [seventy-five] years, blind business managers have successfully operated food services and commercial ventures at Federal, State, and private buildings and locations nationwide. We honor and celebrate this program’s historic achievement. We also trust that the Randolph-Sheppard Program will continue to be a leading model for providing high-quality entrepreneurial opportunities for blind individuals. From a simple snack shop, to tourist services at the Hoover Dam, to full food-services operations at military installations, blind entrepreneurs have provided exceptional customer service to Federal and State employees, the Armed Forces, and the general public. . . . This program is responsible today for providing entrepreneurial opportunities for over 2,500 individuals who are blind. In turn, these business managers have hired thousands of workers, many of whom are individuals with disabilities.” Id.
  7. 20 U.S.C. § 107(a)(1). The Randolph-Sheppard Act directs the Secretary of Education to ensure that the Rehabilitation Services Administration is the principal agency charged with carrying out the Randolph-Sheppard Act’s mandates.
  8. Purpose, U.S. Dep’t of Educ., https://www2.ed.gov/print/programs/rsarsp/index.html (last visited Jan. 1, 2019). These figures represent income generated under the Randolph-Sheppard program by blind vendors operating vending facilities on federal and other property.
  9. Id.
  10. See generally Federal Support for the Randolph-Sheppard Vending Facility Program, 77 Fed. Reg. at 3917.
  11. See, e.g., 20 U.S.C. § 107(d)-(1)(b); Kentucky v. United States, 424 F.3d 1222, 1226–27, 1229 (Fed. Cir. 2005) (holding there is no reason to send government procurement violations to arbitration, but sending to arbitration the state licensing agency’s complaint that it was excluded from the competitive range. Holding also that because arbitration had not been exhausted, the Court of Federal Claims did not have jurisdiction over the state licensing agency’s complaint).
  12. See 20 U.S.C. §§ 107(d)-(1), (d)-(2).
  13. Id. § 107(d)-(1). Blind vendor’s complaints first are considered in an evidentiary hearing provided by the state licensing agency. If the blind vendor is dissatisfied with the hearing decision, the blind vendor can file a complaint with the Education Secretary who would then convene the arbitration panel. This note will focus mainly on the arbitration scheme established for disputes arising between state licensing agencies and federal agencies failing to comply with the Randolph-Sheppard Act’s provisions and regulations, not on disputes initiated by blind vendors.
  14. Id. § 107(d)-(2)(a).
  15. Id. § 107(d)-(1)(b).
  16. See id.; see also Operation of Cafeterias by Blind Vendors, 34 C.F.R. § 395.33(b) (2018) (“If the proposal received from the State licensing agency is judged to be within a competitive range and has been ranked among those proposals which have a reasonable chance of being selected for final award, the property managing department, agency, or instrumentality shall consult with the Secretary as required under paragraph (a) of this section. If the State licensing agency is dissatisfied with an action taken relative to its proposal, it may file a complaint with the Secretary under the provisions of § 395.37.”).
  17. See 20 U.S.C. § 107(d)-(1)(b). But see, e.g., John Cibinic, Jr. & Ralph C. Nash, Jr., Formation of Government Contracts 1483 (3d ed. 1998) (“Contract award controversies must be distinguished from controversies arising during contract performance. As a general rule, performance controversies occur between the parties to a contract, and third parties cannot challenge actions that occur during the performance of a contract.”).
  18. See generally ABA Section of Public Contract Law, Government Contract Law: The Deskbook for Procurement Professionals 356 (4th ed. 2017). For example, when informed that it has not received an award, a disappointed bidder can decide to file a bid protest with the Government Accountability Office and/or the Court of Federal Claims.
  19. See, e.g., 20 U.S.C. § 107(d)-(1)(b) (complaints lodged by state licensing agencies against federal agencies failing to comply with the Randolph-Sheppard Act are subject to arbitration); id. § 395.33(b) (stating that if a state licensing agency is dissatisfied with actions taken concerning its proposal, it should file a complaint with the Secretary under § 395.37).
  20. ABA Section of Public Contract Law, supra note 18, at 327 (citing Office of General Counsel, United States Government Accountability Office, Bid Protests at GAO: A Descriptive Guide (9th ed. 2009)).
  21. Id. at 327, 356 (stating there are currently three fora for filing protests challenging a procurement action: (1) the agency, (2) the Government Accountability Office, or (3) the U.S. Court of Federal Claims).
  22. See Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *9–10 (W.D. Tex. Sept. 12, 2014); see also Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 344 n.4 (2006). These cases explain that Federal District Courts once had concurrent jurisdiction over bid protests with the Court of Federal Claims. However, Congress established a sunset provision in the Administrative Dispute Resolution Act under which the Federal District Courts’ jurisdiction over bid protests would expire if Congress did not extend the deadline. Congress never extended the deadline; thus the Federal District Courts’ jurisdiction over bid protests expired.
  23. See, e.g., Md. State Dep’t of Educ., B-400583 et al., 2008 CPD ¶ 209, at 1 (Comp. Gen. Nov. 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.”).
  24. See, e.g., Kentucky v. United States, 62 Fed. Cl. 445, 456–62 (2004).
  25. See generally Colo. Dept. of Human Serv., 74 Fed. Cl. at 347–48.
  26. Kentucky, 62 Fed. Cl. at 447–48 (granting government’s motion for summary judgement and holding Randolph-Sheppard Act requires administrative remedies to be exhausted) aff’d in part, Kentucky v. United States, 424 F.3d 1222, 1226–27 (Fed. Cir. 2005) (affirming Court of Federal Claims’ holding that it had no jurisdiction to entertain state licensing agency’s claim because state licensing agency had not arbitrated its bid protest concerning its elimination from the competitive range which arose under the Randolph-Sheppard Act).
  27. ABA Section of Public Contract Law, supra note 18, at 327.
  28. Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *4–6, *28 (W.D. Tex. Sept. 12, 2014); Kansas v. United States, 192 F. Supp. 3d 1184, 1188, 1192, 1195 (D. Kan. 2016).
  29. See, e.g., Kentucky, 424 F.3d at 1226–27 (holding there is no reason to send government procurement violations to arbitration, but sending to arbitration the state licensing agency’s complaint that it was excluded from the competitive range); Georgia Bus. Enter. Program-Vocational Rehabilitation Agency, B-416182.2, 2018 CPD ¶ 400, at 1–4 (Comp. Gen. Nov. 23, 2018) (holding that, even if the state licensing agency did not mention the Randolph-Sheppard Act in its protest, the Government Accountability Office would not consider a state licensing agency’s bid protest challenging its elimination from the competitive range under a procurement conducted pursuant to the Randolph-Sheppard Act because the Randolph-Sheppard Act provides for mandatory arbitration conducted by the Department of Education to resolve the state licensing agency’s complaint).
  30. 20 U.S.C. § 107(a).
  31. Id. § 107(a)(5). Vending facilities, according to the Randolph-Sheppard Act, would sell items such as: “newspapers, periodicals, confections, tobacco products, foods, beverages, and other articles or services dispensed automatically or manually and prepared on or off the premises in accordance with all applicable health laws, as determined by the State licensing agency, and including the vending or exchange or chances for any lottery. . . .” Id.
  32. Id. § 107(b)(1)-(2).
  33. Id. § 107(a).
  34. Id. § 107(a)(1).
  35. Randolph Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 93 (D.C. Cir. 1986).
  36. 20 U.S.C. § 107(a)(5).
  37. Id.
  38. Id.
  39. Id. § 107(a)–(b).
  40. See, e.g., id. § 107(a)–(c) (stating that, subject to specific approvals, the state licensing agency is authorized to select the facility type to be established and the location for each facility).
  41. Id. § 107(b)(2).
  42. Id. § 395.11 (“Such programs shall include on-the-job training in all aspects of vending facility operation for blind persons with the capacity to operate a vending facility, and upward mobility training (including further education and additional training or retraining for improved work opportunities) for all blind licensees.”).
  43. 34 C.F.R. § 395.33(b).
  44. Randolph-Sheppard Act Amendments of 1974, Pub. L. No. 93-516, § 201, 88 Stat. 1622 (1974).
  45. See Randolph Sheppard Act for the Blind Amendments of 1971, Subcomm. on Handicapped Workers of the Comm. on Labor and Public Welfare (Sept. 22, Oct. 1, and Dec. 9, 1971) (Statement by American Foundation for the Blind).
  46. Id.
  47. Id.
  48. Kentucky v. United States, 424 F.3d 1225–26 (Fed. Cir. 2005).
  49. 20 U.S.C. § 107(d)-(1).
  50. Id. § 107(d)-(2)(b)(1)(2).
  51. Id. § 107(d)-(1)(a); see also id. § 107(d)-(2)(b)(1). Whenever a blind licensee is dissatisfied with “any action arising from the operation or administration of the vending facility program,” the licensee may request an evidentiary hearing from their respective state licensing agency. The state licensing agency must then hold the hearing, and if the blind licensee is not satisfied with the hearing decision, the licensee may file a complaint with the Education Secretary who must convene an arbitration panel to adjudicate the dispute. The arbitration panel in this instance is composed of (1) “one individual designated by the State licensing agency;” (2) “one individual designated by the blind licensee;” and (3) one person, who does not work for the state licensing agency, but is chosen by the aforementioned individual chosen by the state licensing agency and the aforementioned individual chosen by the blind licensee; this person would serve as chairman. This note does not concern this arbitration mechanism. Rather, this Note concerns arbitration panels convened on complaint by state licensing agencies against federal agencies.
  52. Id. § 107(d)-(1)(b) (“Whenever any State licensing agency determines that any department, agency, or instrumentality of the United States that has control of the maintenance, operation, and protection of Federal property is failing to comply with the provisions of this chapter or any regulations issued thereunder (including a limitation of the placement or operation of a vending facility as described in section 107(b) of this title and the Secretary’s determination thereon) such licensing agency may file a complaint with the Secretary who shall convene a panel to arbitrate the dispute pursuant to section 107d-2 of this title, and the decision of such panel shall be final and binding on the parties except as otherwise provided in this chapter.”).
  53. Id.
  54. Id. § 107(d)-(2)(b)(2) (“If any party fails to designate a member under subparagraph (2) (A), (B), or (C), the Secretary shall designate such member on behalf of such party.”).
  55. Id. § 107(d)-(2)(b) (“If the panel appointed pursuant to paragraph (2) finds that the acts or practices of any such department, agency, or instrumentality are in violation of this chapter, or any regulation issued thereunder, the head of any such department, agency, or instrumentality shall cause such acts or practices to be terminated promptly and shall take such other action as may be necessary to carry out the decision of the panel.”).
  56. Id. § 107(d)-(1)(a)–(b).
  57. Id. § 107(d)-(2)(d).
  58. Id. § 107(d)-(2)(c).
  59. Id. § 107(d)-(2)(a).
  60. See generally Fillinger v. Cleveland Soc’y for the Blind, 587 F.2d 336, 338 (6th Cir. 1978); Randolph Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 100–04, 111 (D.C. Cir. 1986); Kentucky v. United States, 424 F.3d 1222, 1229 (Fed. Cir. 2005) (holding that arbitration is mandatory for claims arising under the Randolph-Sheppard Act).
  61. See Fillinger, 587 F.2d at 337–38 (holding that although blind vendors filed case prior to Congress passing 1974 Randolph-Sheppard Act amendments, blind vendors had to exhaust arbitration before the district court could review the case under the Administrative Procedure Act). Although Fillinger was brought by blind vendors, not by a state licensing agency, it illustrates the court’s early position regarding arbitration exhaustion. See also Randolph-Sheppard Vendors, 795 F.2d at 100–04. But see Texas State Comm’n for Blind v. United States, 6 Cl. Ct. 730, 735–36 n.12 (1984).
  62. Fillinger, 587 F.2d at 338.
  63. Randolph-Sheppard Vendors, 795 F.2d at 93, 111.
  64. Id. at 102–03.
  65. Id. at 103 (“In contrast to de novo review, judicial review of final agency action is ‘severely circumscribed,’ requiring a reviewing court to determine whether a decision is within the ambit of the agency’s discretion and supported by the record.”) (citing Process Gas Consumers Group v. U.S. Dep’t of Agriculture, 694 F.2d 728, 740 (D.C. Cir. 1981)).
  66. Texas State Comm’n for Blind, 6 Cl. Ct. at 735–36 n.12 (claiming “decisions in other jurisdictions requiring prior arbitration are not persuasive”).
  67. Id.; but see Kentucky v. United States, 424 F.3d 1222, 1229 (Fed. Cir. 2005) (criticizing the Claims Court’s comments in Texas State Comm’n for Blind that Randolph-Sheppard Act arbitration is permissive as dicta).
  68. Texas State Comm’n for Blind, 6 Cl. Ct. at 735–36 n.12 (“Whenever any state licensing agency determines that any department…is failing to comply with the provisions of this chapter or any regulations thereunder…such licensing agency may file a complaint with the Secretary who shall convene a panel to arbitrate.”).
  69. Id.
  70. Kentucky v. United States, 62 Fed. Cl. 445, 456, 460 (2004).
  71. Id. at 457–59.
  72. Id. at 457.
  73. Id. at 458 (quoting United States v. Rodgers, 461 U.S. 677, 706 (1983), and Thompson v. Clifford, 408 F.2d 154, 158 (D.C. Cir. 1968)).
  74. Id. at 458–59 (“The judiciary should ordinarily exercise restraint in entering into the province of the agency until such time as the agency has completed its own action or acted in such a matter as to necessitate judicial intervention” (quoting McKart v. United States, 395 U.S. 185, 193 (1969)).
  75. Kentucky v. United States, 424 F.3d 1222, 1229 (Fed. Cir. 2005).
  76. Id. at 1228 (“In the absences of a clear indication to the contrary, Congress’s creation of a comprehensive remedial scheme is a strong indication that the scheme prescribed by statute was intended to be exclusive.”).
  77. Id.
  78. See, e.g., Fillinger v. Cleveland Soc’y for the Blind, 587 F.2d 336, 338 (6th Cir. 1978); Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 104, 111 (D.C. Cir. 1986); Kentucky v. United States, 62 Fed. Cl. 445, 460 (2004); Kentucky, 424 F.3d at 1229 (holding arbitration is mandatory for claims arising under the Randolph-Sheppard Act).
  79. See, e.g., Kentucky, 62 Fed. Cl. at 447, 460–63.
  80. See, e.g., Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 342–43 (2006); Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *4–7 (W.D. Tex. Sept. 12, 2014) (the blind vendor originally commenced this action; however, the state licensing agency then became involved and the parties moved jointly to realign the state licensing agency as the plaintiff); Kansas v. United States, 192 F. Supp. 3d 1184, 1188 (D. Kan. 2016).
  81. See generally Kentucky, 62 Fed. Cl. at 447–48, 460–63.
  82. See, e.g., Colo. Dep’t of Human Serv., 74 Fed. Cl. at 346–47; Johnson, 2014 U.S. Dist. LEXIS 185377, at *5, *10–13; Kansas, 192 F. Supp. 3d at 1190.
  83. See, e.g., Kentucky, 62 Fed. Cl. at 447–48, 460–63.
  84. See, e.g., Colo. Dep’t of Human Serv., 74 Fed. Cl. at 343; Johnson, 2014 U.S. Dist. LEXIS 185377, at *6–7; Kansa, 192 F. Supp. 3d at 1188, 1190.
  85. Kentucky v. United States, 424 F.3d 1222, 1226 (Fed. Cir. 2005).
  86. Id. at 1224, 1227.
  87. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, at *5, *27–28 (issuing a preliminary injunction because plaintiffs might suffer irreparable injury if Army not enjoined).
  88. Kentucky, 424 F.3d at 1226, 1229.
  89. See Wash. State Dep’t of Serv. for the Blind v. United States, 58 Fed. Cl. 781, 781, 784–87 (2003).
  90. Id. at 784, 787, n.9.
  91. Id. at 786–88. The court noted the state licensing agency in this case did not contest whether the decision to be made was within the Court of Federal Claims’ “conventional expertise.” Id. The court then proceeded to determine “whether the Army’s refusal to apply the Randolph Sheppard Act’s priority to the D[ining] F[acility] A[ttendant] [DFA] solicitation was ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’” Id. The court stated, “[t]his determination turns on a question of statutory and regulatory interpretation, specifically, whether the DFA services described in the DFA solicitation constitute the ‘operation of a cafeteria’ and thereby compel the application of RSA to the solicitation.” Id.
  92. Id. at 787.
  93. Kentucky v. United States, 62 Fed. Cl. 445, 462 (2004); Kentucky, 424 F.3d at 1225–27.
  94. Kentucky, 62 Fed. Cl. at 445, 460–61.
  95. Id. at 462.
  96. Id. In referring to 20 U.S.C. § 107(d)-(1)(b), the court stated, “Surely this very broad language encompasses all federal agency actions that have a reasonable nexus to the Act, which beyond a doubt would include a challenge to any agency decision to reject a proposal in response to a solicitation involving (in the term of the Act) the “operation” of a vending facility.” Id.
  97. Id. at 463–64. The court explained the state licensing agency’s (KDB) argument: “KDB argues that a non-SLA offeror could “fast track” its protest through the Court of Federal Claims while the SLA would first need to submit to arbitration before seeking judicial review. While an arbitration panel could rule in favor of an SLA, the Court of Federal Claims may find in favor of the non-SLA offeror or even the agency. In other words, “the agency could prevail in one proceeding but not the other, which might place it in the position of violating a decision by this court in its effort to comply with the decision of the arbitration panel or vice versa.” Id.
  98. Id. at 464.
  99. Kentucky v. United States, 424 F.3d 1222, 1225–27 (Fed. Cir. 2005).
  100. Id. at 1225.
  101. Id. at 1226.
  102. Id.
  103. Id. at 1224, 1227. In this case, the state licensing agency complained that the Army’s contracting officer wrongfully eliminated the state licensing agency from the competitive range because the contracting officer knew that if the state licensing agency was deemed to be in the competitive range, it would receive that contract under the Randolph-Sheppard Act. The Federal Circuit determined that because the state licensing agency’s complaint clearly alleged a Randolph-Sheppard Act violation, and, where it stated that the state licensing agency was “entitled to the contract ‘under the Randolph Sheppard Act and related regulations,’” the state licensing agency’s claim arose under the Randolph Sheppard Act. Id.
  104. See, e.g., Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 343, 347 (2006); Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *4–7 (W.D. Tex. Sept. 12, 2014); Kansas v. United States, 192 F. Supp. 3d 1184, 1188 (D. Kan. 2016).
  105. See, e.g., Colo. Dep’t of Human Serv., 74 Fed. Cl. at 347–48; Johnson, 2014 U.S. Dist. LEXIS 185377, at *9–13; Kansas, 192 F. Supp. 3d at 1191, 1193.
  106. Colo. Dep’t of Human Serv., 74 Fed. Cl. at 342, 348–49. This case is unusual, among other things, because it is not clear whether a procurement existed in this case such that the Court of Federal Claims could have Tucker Act jurisdiction over the state licensing agency’s claims. However, it illustrates how the court treats the Randolph-Sheppard Act’s arbitration scheme against its Tucker Act jurisdiction.
  107. Id. at 347.
  108. Id.
  109. Id. at 344.
  110. Id. at 347 n.7.
  111. Id. at 348–49.
  112. See Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *5, *7–13 (W.D. Tex. Sept. 12, 2014).
  113. Id. at *3, *27–28. The District Court ultimately granted the state licensing agency’s request for a preliminary injunction based on, among other things, the irreparable injury that the state licensing agency would suffer if the Army was not enjoined.
  114. Id. at *6–7.
  115. Id. at *11–13. The District Court here pointed out: “[T]he [g]overnment was arguing in Colo. Dep’t that the Court of Federal Claims lacked jurisdiction, and that the case should be heard by a district court because the action was governed by the APA. This is the very opposite of the position it now takes before this Court, where it is arguing that the action is governed by the Tucker Act over which the Court of Federal Claims has exclusive jurisdiction.” Id.
  116. Id.
  117. Kansas v. United States, 192 F. Supp. 3d 1184, 1188, 1190, 1193 (D. Kan. 2016).
  118. Id. at 1187–88, 1208. Intervenors, SourceAmerica, an agency charged with administering the proposed contract under the Javits-Wagner-O’ Day Act, and Lakeview, a non-profit agency that might have been able to sell its services to the federal government under the Javits-Wagner-O’Day Act, moved to dismiss the state licensing agency’s claim for lack of subject matter jurisdiction. The intervenors argued that the District Court “ha[d] no business hearing this case” because the state licensing agency’s claim was a bid protest under the Tucker Act and was thus subject to the exclusive jurisdiction of the U.S. Court of Federal Claims. Id.
  119. Id. at 1887–88; see also Kansas v. SourceAmerica, 874 F.3d 1226, 1232 (10th Cir. 2017). The Javits-Wagner-O’ Day Act also aims to provide employment opportunities for the blind and others with severe disabilities. Unlike the Randolph- Sheppard Act, under the Javits-Wagner-O’Day Act, a commission maintains a list of products and services provided by non-profit agencies for government agencies to purchase in the Federal Register. Id.
  120. Kansas, 192 F. Supp. 3d at 1190.
  121. Id. at 1193 (“On one hand, the Tucker Act uses expansive language to describe disputes that only the Court of Federal Claims can hear. Namely, only that court can hear an objection by any interested party “to a solicitation…for bids or proposals” for a proposed [f]ederal agency contract, to an “award of” such a contract, or—most expansively yet— “any alleged violation” of any statute or regulation “in connection with” any such procurement or proposed procurement.” But the RSA uses equally expansive language to confer arbitration rights on state licensing agencies. Namely, the RSA empowers any state licensing agency—a status Kansas indisputably occupies—to seek relief in a DOE arbitration “whenever” it “determines that” a federal agency has failed to comply with the RSA or its regulations.”) (internal citations omitted).
  122. Id. at 1193–95.
  123. Id. at 1208.
  124. Kansas, 874 F.3d at 1252.
  125. Id. at 1245–46.
  126. See generally Kentucky v. United States, 424 F.3d 1222, 1225–26 (Fed. Cir. 2005) (holding arbitration applies only if state licensing agency alleges a violation of the Randolph-Sheppard Act); see also Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *5–7, *13 (W.D. Tex. Sept. 12, 2014); Kansas, 192 F. Supp. 3d at 1190–91.
  127. See, e.g., Md. State Dep’t of Educ., B-400583 et al., 2008 CPD ¶ 209, at 1, 2, 5 (Comp. Gen. Nov. 7, 2008); La. State Dep’t of Soc. Serv., La. Rehab. Serv., B-400912.2, 2009 CPD ¶ 145, at 1 (Comp. Gen. July 1, 2009); Wash. State Dep’t of Serv. for the Blind, B-293698.2, 2004 CPD ¶ 84, at 1, 3 (Comp. Gen. Apr. 27, 2004).
  128. See, e.g., Md. State Dep’t of Educ., 2008 CPD ¶ 209, at 1; La. State Dep’t of Soc. Serv., La. Rehab. Serv., 2009 CPD ¶ 145, at 1; Wash. State Dep’t of Serv. for the Blind, 2004 CPD ¶ 84, at 1, 3.
  129. See, e.g., Md. State Dep’t of Educ., 2008 CPD ¶ 209, at 1; La. State Dep’t of Soc. Serv., La. Rehab. Serv., 2009 CPD ¶ 145, at 2; Wash. State Dep’t of Serv. for the Blind, 2004 CPD ¶ 84, at 1, 3–4. Again, this note deals specifically with state licensing agencies bringing bid protests against federal agencies concerning the Randolph-Sheppard Act. The GAO has had the opportunity to consider bid protests lodged by losing offerors protesting a federal agency’s award to a state licensing agency. See, e.g., Cantu Serv., Inc., B-408012 et al., 2013 CPD ¶ 135, at 1 (Comp. Gen. May 23, 2013). This note does not concern those bid protests.
  130. See La. State Dep’t of Soc. Serv., La. Rehab. Serv., 2009 CPD ¶ 145, at 2–3; Wash. State Dep’t of Serv. for the Blind, 2004 CPD ¶ 84, at 2–3.
  131. See Wash. State Dep’t of Serv. for the Blind, 2004 CPD ¶ 84, at 2–3; La. State Dep’t of Soc. Serv., La. Rehab. Serv., 2009 CPD ¶ 145, at 2.
  132. See Wash. State Dep’t of Serv. for the Blind, 2004 CPD ¶ 84, at 3–4.
  133. Id. at 4–5.
  134. Id. at 5.
  135. See, e.g., Md. State Dep’t of Educ., B-400583 et al., 2008 CPD ¶ 209, at 1, 4, 5 (Comp. Gen. Nov. 7, 2008).
  136. Id. at 1–2. The Army requested that the GAO dismiss the state licensing agency’s protest claiming that the Secretary of Education has been given the authority to entertain disputes between state licensing agencies and federal agencies under the mandatory arbitration provisions. The state licensing agency argued that it was not alleging a violation of the Randolph-Sheppard Act, but that it was alleging other procurement violations, and thus the GAO had jurisdiction over the protest.
  137. Id. at 3–4.
  138. Id. at 5 (“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].”).
  139. Id. at 5–7. See also Ga. Bus. Enter. Program-Vocational Rehabilitation Agency, 2018 CPD ¶ 400, at 1–4 (holding that, even if the state licensing agency did not mention the Randolph-Sheppard Act in its protest, the GAO would not consider a state licensing agency’s bid protest challenging its elimination from the competitive range under a procurement conducted pursuant to the Randolph-Sheppard Act because, among other things, the state licensing agency’s exclusion from the competitive range has “specific consequences set forth in the RSA’s implementing regulations”).
  140. See, e.g., Md. State Dep’t of Educ., 2008 CPD ¶ 209, at 1.
  141. Cibinic & Nash, supra note 17, at 1481.
  142. ABA Section of Public Contract Law, supra note 18, at 327 (citing Office of General Counsel, United States Government Accountability Office, Bid Protests at GAO: A Descriptive Guide (9th ed. 2009)).
  143. Cibinic & Nash, supra note 17, at 1483.
  144. Id. at 1481.
  145. Id.
  146. ABA Section of Public Contract Law, supra note 18, at 327.
  147. Id. at 348 (citing 28 U.S.C. § 1491(a)(1)).
  148. Id. at 348.
  149. 28 U.S.C. § 1491(b)(1) (2012).
  150. ABA Section of Public Contract Law, supra note 18, at 348, 349–50.
  151. Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 344 n.4 (2006).
  152. Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *9–10 (W.D. Tex. Sept. 12, 2014); see also Colo. Dep’t of Human Serv., 74 Fed. Cl. at 344, n.4.
  153. Johnson, 2014 U.S. Dist. LEXIS 185377, at *9–10.
  154. ABA Section of Public Contract Law, supra note 18, at 355.
  155. Cibinic & Nash, supra note 17, at 1491 (then called the “Government Accounting Office”).
  156. Id. at 1492. See also ABA Section of Public Contract Law, supra note 18, at 327, 330.
  157. 31 U.S.C. § 3551(1), (2)(A) (2012). See ABA Section of Public Contract Law, supra note 18, at 330.
  158. 31 U.S.C. § 3553(c)(1), (d)(3)(A). See ABA Section of Public Contract Law, supra note 18, at 337.
  159. 31 U.S.C. § 3553(c)(1). See ABA Section of Public Contract Law, supra note 18, at 337.
  160. 31 U.S.C. § 3553(d)(3)(A). See ABA Section of Public Contract Law, supra note 18, at 337 (subject to timeliness considerations).
  161. See ABA Section of Public Contract Law, supra note 18, at 344.
  162. Id.
  163. Cibinic & Nash, supra note 17, at 1530.
  164. ABA Section of Public Contract Law, supra note 18, at 347.
  165. See id. at 327.
  166. See 20 U.S.C. § 107(d)-(1)(b); see also Kentucky v. United States, 424 F.3d 1222, 1227 (Fed. Cir. 2005).
  167. See, e.g., Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *4–7 (W.D. Tex. Sept. 12, 2014) (seeking a preliminary injunction to prevent Army from moving forward with solicitation).
  168. See generally 20 U.S.C. § 107(d)-(2)(b)(2).
  169. See, e.g., Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 342 (2006) (requesting a preliminary injunction alleging that “Randolph-Sheppard arbitrations almost always take over a year to complete”); Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 101 (D.C. Cir. 1986).
  170. See generally Johnson, 2014 U.S. Dist. LEXIS 185377, at *4–5, *9–10, *28; Kansas v. United States, 192 F. Supp. 3d 1184, 1190–91 (D. Kan. 2016).
  171. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, at *4–7; Kansas, 192 F. Supp. 3d at 1188.
  172. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, at *4–7; Kansas, 192 F. Supp. 3d at 1188.
  173. Kansas v. SourceAmerica, 874 F.3d 1226, 1231 (10th Cir. 2017).
  174. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, *5–7, *28–29; Kansas, 192 F. Supp. 3d at 1188.
  175. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, at *6–7; Kansas, 192 F. Supp. 3d at 1188.
  176. 31 U.S.C. § 3553(c)(1), (3)(A).
  177. Id.
  178. ABA Section of Public Contract Law, supra note 18, at 352–53.
  179. Id. at 352–353, 355.
  180. See, e.g., Johnson, 2014 U.S. Dist. LEXIS 185377, at *6–7.
  181. See 20 U.S.C. § 107(d)-(2)(b)(2).
  182. Id.
  183. See id.
  184. ABA Section of Public Contract Law, supra note 18, at 347.
  185. Bid Protests at GAO: A Descriptive Guide, Background, U.S. Gov’t Accountability Office, https://www.gao.gov/decisions/bidpro/bid/background.html (last accessed Jan. 9, 2019).
  186. U.S. Gov’t Accountability Office, B-158766, GAO Bid Protest Annual Report to Congress for Fiscal Year 2017 (2017).
  187. Statistical Report for the Fiscal Year Oct. 1, 2016–Sept. 30, 2017, U.S. Court of Federal Claims, https://www.uscfc.uscourts.gov/sites/default/files/FY17%20stats%20for%20website.pdf (last accessed Mar. 1, 2019).
  188. Wash. State Dep’t of Serv. for the Blind v. United States, 58 Fed. Cl. 781, 784, 787 (2003).
  189. Id. at 786–88.
  190. Id. at 787.
  191. See, e.g., Colo. Dep’t of Human Serv. v. United States, 74 Fed. Cl. 339, 342 (2006).
  192. See 20 U.S.C. §§ 107(d)-(1)(b), (d)-(2).
  193. See generally Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 101 (D.C. Cir. 1986).
  194. See, e.g., Colo. Dep’t of Human Serv., 74 Fed. Cl. at 342.
  195. ABA Section of Public Contract Law, supra note 18, at 344.
  196. Id.
  197. See generally Kansas v. United States, 192 F. Supp. 3d 1184, 1192, 1195 (D. Kan. 2016) (“Intervenors here argue that Kansas’ claims ‘fall squarely within the exclusive bid protest jurisdiction of the Court of Federal Claims.’” (internal citation omitted)).
  198. Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *9–10 (W.D. Tex. Sept. 12, 2014); see also Colo. Dep’t of Human Serv., 74 Fed. Cl. at 344 n.4.
  199. Johnson, 2014 U.S. Dist. LEXIS 185377, at *9–10. See also Colo. Dep’t of Human Serv., 74 Fed. Cl. at 344, n.4.
  200. See generally Kentucky v. United States, 424 F.3d 1222, 1226 (Fed. Cir. 2005).
  201. 20 U.S.C. § 107(d)-(2)(a) (stating that arbitration panel decisions are reviewable as final agency actions under the Administrative Procedure Act).
  202. See generally Johnson, 2014 U.S. Dist. LEXIS 185377, at *9–10. See also Colo. Dep’t of Human Serv., 74 Fed. Cl. at 344, n.4.
  203. Johnson, 2014 U.S. Dist. LEXIS 185377, at *6–7, *9–10.
  204. 20 U.S.C. § 107(d)-(1)(b).
  205. See, e.g., Md. State Dep’t of Educ., B-400583 et al., 2008 CPD ¶ 209, at 5–6 (Comp. Gen. Nov. 7, 2008) (Government Accountability Office dismissing state licensing agency’s bid protest in light of the Kentucky decision despite Department of Education’s indication that state licensing agency’s bid protest did not need to be arbitrated).
  206. This language comes from previously approved language in 20 U.S.C. § 107(d)-(1)(b), and language included in ABA Section of Public Contract Law, supra note 18, at 327 (citing Office of General Counsel, United States Government Accountability Office, Bid Protests at GAO: A Descriptive Guide (9th ed. 2009)).
  207. See, e.g., Federal Support for the Randolph-Sheppard Vending Facility Program, 77 Fed. Reg. at 3917.
  208. See 20 U.S.C. § 107(d)-(1)(b).
  209. Kentucky v. United States, 424 F.3d 1222, 1225–27 (Fed. Cir. 2005).
  210. See, e.g., Johnson v. United States, EP-14-CV-00317-DCG, 2014 U.S. Dist. LEXIS 185377, at *4–7 (W.D. Tex. Sept. 12, 2014).