State v. United States
| Decision Date | 22 March 2016 |
| Docket Number | Case No. 15-cv-04907-DDC-KGS |
| Citation | 171 F.Supp.3d 1145 |
| Parties | State of Kansas, by and through the Kansas Department for Children and Families, Plaintiff, v. United States, by and through Honorable Ashton B. Carter, Secretary of Defense, and Honorable Patrick J. Murphy, Secretary of the Army, Defendant. |
| Court | U.S. District Court — District of Kansas |
David W. Davies, III, Kansas Department for Children and Families, Topeka, KS, Peter A. Nolan, Winstead PC, Austin, TX, for Plaintiff.
Jackie A. Rapstine, Office of United States Attorney, Topeka, KS, for Defendant.
Daniel D. Crabtree
This matter comes before the Court following an abridged Order (Doc. 26) granting a Motion for Preliminary Injunction (Doc. 17) filed by plaintiff State of Kansas, through the Kansas Department for Children and Families (“Kansas”). Defendant United States, through the Honorable Ashton B. Carter, Secretary of Defense, and the Honorable Patrick J. Murphy, Secretary of the Army (collectively, “the Army”) opposed the preliminary injunction. Doc. 20. And, on February 23, 2016, the Court conducted a hearing on Kansas' motion for preliminary injunction. After considering the evidence and arguments filed with the Court and presented at the preliminary injunction hearing, the Court issued an abridged Order. It preliminarily enjoined the Army from:
conducting any procurement, including making any award of contract in connection with cafeteria services at Fort Riley, except as permitted under the RSA and its regulations, until such time as the arbitration proceeding initiated by Kansas under the RSA is concluded, or further order modifying this preliminary injunction.
See Doc. 26. Because time was of the essence, the Court ruled on the preliminary injunction in a summary fashion. The Court also informed the parties that a future order would expand upon the Court's reasoning. This Order supplements the Court's initial preliminary injunction decision.
This Order also addresses three related motions: (1) the Army's Motion to Dismiss (Doc. 7); (2) the Army's Motion to Strike Plaintiff's Surreply to Defendant's Motion to Dismiss (Doc. 15); and (3) Kansas' Motion for Leave to File First Amended Complaint for Preliminary Injunction (Doc. 16).
The Randolph-Sheppard Vending Facility Act of 1936 (the “RSA”), 20 U.S.C. § 107 et seq. ,
mandates preferential hiring for blind persons in the carrying out of vending services at federal facilities. The RSA's purpose is to “provid[e] blind persons with remunerative employment” and “enlarg[e] the economic opportunities of the blind” by giving them priority in the bidding of contracts to operate vending facilities on federal properties. 20 U.S.C. § 107
. Vending facilities include cafeterias on military bases. See 20 U.S.C. § 107(e)(7) ; Kentucky v. United States , 759 F.3d 588, 592 (6th Cir.2014).
Although the RSA applies to all federal agencies, the Secretary of the United States Department of Education (“DOE”) is charged with interpreting, enforcing, and resolving disputes arising under the RSA. See 20 U.S.C. §§ 107(b)
, 107a, 107d–1. The RSA's implementing regulations are codified in 34 C.F.R. §§ 395.1 –395.38.
To grant priority to blind vendors under the RSA, the Secretary designates a State Licensing Agency in each state “to issue licenses to blind persons ... for the operating of vending facilities” on federal property. 20 U.S.C. § 107a(a)(5)
. Then, when a federal agency solicits vending-facility services, it either may negotiate a contract directly with the State Licensing Agency or it may solicit competitive bids for the contract. See 34 C.F.R. § 395.33(b), (d). When the federal agency solicits bids, it must invite the State Licensing Agency to bid on the contract. See 20 U.S.C. § 107a(a)(5) ; 34 C.F.R. § 395.33(b). The State Licensing Agency then selects a licensed blind vendor and submits a bid. See 34 C.F.R. § 395.33(b) ; Kentucky , 759 F.3d at 592. In a competitive procurement solicitation, if the State Licensing Agency and blind vendor's bid is “within a competitive range and has been ranked among those proposals which have a reasonable chance of being selected for final award,” the federal agency must give priority to the licensed blind vendor selected by the State Licensing Agency. 34 C.F.R. § 395.33(a)–(b).
If a dispute arises between the State Licensing Agency and the federal agency who has solicited vending-facility services, the RSA provides for arbitration of the dispute. See 20 U.S.C. § 107d–1(b)
; 34 C.F.R. §§ 395.33(b), 395.37. The State Licensing Agency may file a complaint with the Secretary of the DOE whenever it “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 RSA or regulations issued under it. 20 U.S.C. § 107d–1(b) ; 34 C.F.R. § 395.37. After the State Licensing Agency has filed a complaint with the DOE's Secretary, the “Secretary ... shall convene a panel to arbitrate the dispute ... and the decision of such panel shall be final and binding on the parties except as otherwise provided in this chapter.” Id. ; see also 20 U.S.C. § 107d–2(a) ( ).
The RSA, however, is not the only federal act that applies to services provided on federal properties. The Javits-Wagner-O'Day Act (the “JWOD”), 41 U.S.C. § 8501 et seq. ,
established a Committee for Purchase from People Who are Blind or Severely Disabled (“the CFP”). 41 U.S.C. § 8502. The CFP “maintain [s] and publish[es] in the Federal Register a procurement list” (the “Procurement List”). 41 U.S.C. § 8503. The CFP determines suitable products and services to place on the Procurement List and, once placed on the list, federal government entities must procure those products and services from qualified organizations that employ the blind and severely disabled. §§ 8501(6), (7), 8503, 8504. The CFP also establishes the prices for the products and services on the Procurement List and establishes rules and regulations to implement the program. See 48 C.F.R. § 8.702. The JWOD's implementing regulations are codified in 41 C.F.R. §§ 51–1.1
–51–10.999. The procurement program established by the JWOD to provide employment opportunities to the blind and severely disabled was renamed the “AbilityOne Program” in 2006. 71 Fed. Reg. 68492. And the CFP now is known by its operating name, “AbilityOne Commission.”
The AbilityOne Commission works with two central nonprofit agencies to administer the AbilityOne Program—National Industries for the Blind and SourceAmerica. SourceAmerica helps implement the AbilityOne Program for the significantly disabled. The National Industries for the Blind helps implement the AbilityOne Program for the blind. When a nonprofit agency such as SourceAmerica identifies a possible service to add to the Procurement List, it puts together a proposal for the AbilityOne Commission to consider. And if the Commission determines that the service is suitable to add to the Procurement List, it publishes a notice of its intent to do so in the Federal Register. The public then has 30 days to comment on the proposed addition, and, after considering any public comments, the AbilityOne Commission ultimately decides whether to add the service to the Procurement List. When it adds a service to the Procurement List, federal entities must procure that service from an AbilityOne qualified nonprofit agency. See 41 U.S.C. § 8504
.
In sum, the RSA adopts certain preferences favoring blind providers and the JWOD favors providers who employ blind and severely disabled employees. But the two acts and their implementing regulations do not define clearly the boundary that separates the reach of one act from the reach of the other, and disputes thus arise about which act should apply to certain dining facility services on federal properties. This action presents such a dispute.
This lawsuit arises out of a contract dispute at Fort Riley, Kansas. Fort Riley is a military base and its cafeterias are vending facilities within the reach of the RSA. See 20 U.S.C. § 107(e)(7)
; Kentucky v. United States , 759 F.3d 588, 592 (6th Cir.2014). The Kansas Department for Children and Families (“Kansas”), plaintiff here, is the designated State Licensing Agency in Kansas under the RSA. The Army solicited competitive bids under the RSA for its last two cafeteria services contracts at Fort Riley. And since September 2006, Kansas has provided the Army with Full Food Service (“FFS”) and Dining Facility Attendant (“DFA”)3 services at Fort Riley under two contracts, contract W911RX-06-D-0003 and the current contract W911RX-11-D-0006 (“the Current Contract”). This history thus suggests that Kansas' bids for vending-facilities services were sufficiently competitive, and Kansas received the contracts under the priority bidding of the RSA. Elliott Smith is Kansas' licensed blind vendor, assigned to work with Food Services, Incorporated of Gainesville (“FSIG”), the commercial vendor who teamed with Mr. Smith to perform the Current Contract.
The Current Contract for dining facility services at Fort Riley was set to expire on August 31, 2015, but the parties agreed to extend it until February 29, 2016. The Army asserts that the next contract at Fort Riley will be for DFA services only because soldiers who were deployed overseas now have returned to Fort Riley. According to the Army, these soldiers will perform some of the duties that were...
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