Nat'l Fed'n of the Blind v. U.S. Abilityone Comm'n

Citation421 F.Supp.3d 102
Decision Date30 September 2019
Docket NumberCase No.: GJH-18-2965
CourtU.S. District Court — District of Maryland

421 F.Supp.3d 102

U.S. ABILITYONE COMMISSION, et al., Defendants.

Case No.: GJH-18-2965

United States District Court, D. Maryland, Southern Division.

Signed September 30, 2019

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Emily Lange Levenson, Anthony J. May, Eve Lynne Hill, Brown, Goldstein & Levy LLP, Baltimore, MD, for Plaintiff.

Tarra DeShields Minnis, Office of the United States Attorney, Baltimore, MD, for Defendants.


GEORGE J. HAZEL, United States District Judge

Plaintiff the National Federation of the Blind ("Plaintiff"), an advocacy organization, brought this action against the U.S. AbilityOne Commission (the "Commission") to challenge its selection of the American Foundation for the Blind ("AFB"), for a role assisting with administration of the agency's federal contracting program for non-profit employers of persons who are blind or have other significant disabilities. Naming the Commission, its executive director, and its chair (collectively, "Defendants"), Plaintiff alleges that the selection of AFB violated the Administrative Procedure Act, 5 U.S.C. § 551 et seq. Pending before the Court are Plaintiff's Motion for Preliminary Injunction, ECF No. 17, and Defendants' Motion to Dismiss, or Alternatively, for Summary Judgment, ECF No. 24. A hearing on the motions was held on September 26, 2019. ECF No. 37. For the reasons that follow, the Court will deny Plaintiff's motion and grant summary judgment to Defendants on all claims.


Plaintiff challenges the selection of AFB for a role assisting the Commission in administering a program designed to increase employment of persons who are blind or have other significant disabilities. Because the nature and structure of the Commission and the program that it manages are somewhat unusual, the Court describes them in some detail before reviewing the procedural status of this case and addressing the merits of the dispute.

A. The U.S. AbilityOne Commission and the AbilityOne Program

The U.S. AbilityOne Commission is a federal agency originally established in 1938 by the Wagner-O'Day Act as the Committee on Purchases of Blind-made Products (the "Committee"). Wagner-O'Day Act, ch. 697, § 1, 52 Stat. 1196 (1938). The Act established a federal policy of increasing employment of the blind by requiring that the federal government obtain certain products only from nonprofit agencies ("NPAs") employing blind workers. Id. §§ 2, 3. The Committee was created to administer this directive by determining fair pricing of the products to be purchased and selecting a "central non-profit-making agency to facilitate the distribution of orders among the agencies for the blind." Id. § 2. National Industries for the Blind ("NIB") was the organization designated for this role. See 41 C.F.R. § 301.2 (1943). In 1971, Congress amended the Act with legislation now referred to as the Javits-Wagner-O'Day Act ("JWOD" or "JWOD Act"). Pub. L. No. 92-28, 85 Stat. 77 (1971) (codified as amended at 41 U.S.C. §§ 8501 – 06 ). The JWOD expanded the mandatory procurement program to include services as well as products and to add NPAs employing the "severely handicapped" as potential suppliers alongside those employing blind workers. Id. § 2(a)(1)(A). The Committee, which the Act renamed to reflect the expanded program, was directed to determine which products and services would be subject to the program

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and to maintain a list to be published in the Federal Register. Id. § 2(a)(1). The Committee was also authorized to designate "a central nonprofit agency or agencies to facilitate the distribution" of orders for listed products "among qualified nonprofit agencies for the blind or such agencies for other severely handicapped." Id. § 2(c). Six NPAs were originally designated as central nonprofit agencies ("CNAs") for the "severely handicapped" component of the program, but were later replaced by a single CNA, National Industries for the Severely Handicapped ("NISH"), which was created for that purpose. See Workshops for the Other Severely Handicapped, 41 Fed. Reg. 21,359 (May 25, 1976).

The Committee is now named by statute as the Committee for Purchase From People Who are Blind or Severely Disabled, but operates as the U.S. AbilityOne Commission, reflecting its 2006 decision to use the name "AbilityOne Program" for the program it administers. See Notice; Adoption of Operational Name for Agency, 76 Fed. Reg. 60,808 (Sept. 30, 2011). The statutory scheme that governs the agency, parts of which are largely unchanged from the JWOD Act, charges the fifteen-member Commission with maintaining the "procurement list" of products that the government may only purchase from qualified NPAs employing blind or severely disabled workers. 41 U.S.C. §§ 8502, 8503(a), 8504.1 The current provision relating to CNAs, 41 U.S.C. § 8503(c), directs that the Commission "shall designate a central nonprofit agency or agencies to facilitate the distribution ... of orders of the Federal Government for products and services on the procurement list among qualified nonprofit agencies for the blind or qualified nonprofit agencies for other severely disabled." § 8503(e) of the statute further directs that the Commission "shall make a continuing study and evaluation of its activities under [the JWOD Act] to ensure effective and efficient administration of [the Act]," and provides that the Commission may work on its own or "with other public or nonprofit private agencies" to study "problems related to the employment of the blind and other severely disabled individuals" and "the development and adaptation of production methods that would enable a greater utilization of the blind and other severely disabled individuals." Id. § 8503(e). Currently, approximately 550 NPAs participate in the AbilityOne Program. Comm. for Purchase From People Who Are Blind or Severely Disabled, Fiscal Year 2019 Budget Justification 3, 20FY2019% 20Budget% 20Justification% 2020180212% 20Final.pdf.2 The NPAs collectively employ approximately 45,000 workers and make more than $3.3 billion in sales annually. Id. at 1, 25.

The Commission has also promulgated regulations governing the operation of the AbilityOne Program pursuant to authority granted by 41 U.S.C. § 8503(d). The regulations establish an expansive set of duties

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for designated CNAs. Among other requirements, each CNA must: represent affiliated NPAs before the Commission; evaluate the NPAs' qualifications and capabilities and report that information to the Commission; gather information from other government components about their procurement needs; recommend products or services for the procurement list and recommend and continually reevaluate pricing; distribute procurement orders among affiliated NPAs and oversee compliance with orders and with the statutory and regulatory requirements of the AbilityOne Program, including through site visits; and perform other administrative functions for the Commission, including activities to increase awareness of the Program across the government and among the public. See 41 C.F.R. § 51-3.2. CNAs may also act as contractors when permitted by the Commission. Id. § 51-3.2(k). Importantly, the regulations authorize CNAs to charge fees to the NPAs whose contracts they facilitate. Id. § 51-3.5. Fees are calculated as a percentage of the NPAs' sales to the government through the AbilityOne Program but are capped by a fee ceiling set by the Commission. Id. Commission materials included in the Administrative Record refer to these charges as "Program Fees." See ECF No. 26-3 at 21.3

NIB and NISH, which is now known as SourceAmerica, have continued to serve as the CNAs for blind workers and disabled workers, respectively, since their original designations. NIB's fee ceiling is 3.9 percent of each contract, while SourceAmerica's ceiling is 3.85 percent. U.S. Ability One Comm'n, Fiscal Year 2017 Performance Accountability Report 22, 20AbilityOne% 20Commission% 20FY% 202017% 20PAR-Final.pdf. Together these Program Fees provide approximately $100 million annually in combined revenue to the two CNAs, which collectively have more than $100 million in reserves and assets. Id. In December 2015, Congress adopted legislation requiring that the Commission enter into written agreements with each of its CNAs within 180 days, without which no CNA could collect fees under the AbilityOne Program. Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, 129 Stat. 2242, 2639 (2015). According to the Amended Complaint and Plaintiff's memorandum in support of its motion for a preliminary injunction, the Commission entered "cooperative agreements" with NIB and SourceAmerica in 2016. ECF No. 2 ¶ 20; ECF No. 17-1 at 7. Plaintiff asserts that Congress's directive was motivated in part by a 2013 Government Accountability Office report identifying significant issues with oversight and transparency of CNAs. ECF No. 2 ¶¶ 19–20; ECF No. 17-1 at 7. Plaintiff's submissions also note subsequent reports from the Department of Defense identifying oversight issues with the Program. ECF No. 2 ¶¶ 21–23; ECF No. 17-1 at 7–8.


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