SourceAmerica v. U.S. Dep’t of Educ.

Two nonprofits that seek to enhance economic opportunities for the blind requested review of an arbitration panel’s decision that the U.S. Army violated the Randolph-Sheppard Act in seeking to award the plaintiffs a contract for services in Army dining facilities, rather than to an intervening state agency that also seeks to enhance economic opportunities for the blind. Because the panel incorrectly concluded that the Act’s preference for the blind applies to this contract, its finding must be set aside.

The contract here was for lesser services than the “operation of vending facilities” to which the Act’s preference applies. Under the Act, operation requires control or management over the site as a whole. But this contract was for janitorial and custodial services, which are ancillary to the facility’s operation. However, the arbitration panel correctly held that the Army violated the Act’s review requirement, under which it must justify its decision to terminate contractors’ operation of vending facilities.

The panel also violated the Administrative Procedures Act in preventing the plaintiffs from participating in the arbitration. The plaintiffs were interested persons, and their exclusion was not harmless. The proper remedy is to vacate the panel’s decision as “not in accordance with law.” Additional equitable relief requested by the plaintiffs is inappropriate because there is no reason to believe they will be wronged again. With the issues resolved at this stage and the panel lacking the ability to fashion remedies, remand is unnecessary.

Motions for summary judgment granted in part and denied in part.

SourceAmerica v. U.S. Dep’t of Educ., No. 1:17cv893, Mar. 15, 2019. EDVA at Alexandria (Ellis).

Categories: Opinions, U.S. District Court - Eastern District of Virginia

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