United States: GAO Not The Proper Forum For State Licensing Agencies To Protest Randolph-Sheppard Act Solicitations

David Black is a Partner and Amy Fuentes is an Associate in the Tysons office

The U.S. General Accountability Office (GAO) recently dismissed a protest by a state licensing agency (SLA) challenging the elimination of its proposal from the competitive range under a solicitation issued pursuant to the Randolph-Sheppard Act.1 In Georgia Business Enterprise Program–Vocational Rehabilitation Agency, GAO held that Randolph-Sheppard Act complaints about the evaluation of its price proposal that made no reference to the Randolph-Sheppard Act or implementing regulations were nevertheless subject to the U.S. Department of Education's (DOE) binding arbitration provisions and therefore could not appropriately be considered by GAO.2 Following this decision, contractors should be aware that GAO will not hear protests by SLAs seeking to benefit from the Randolph-Sheppard Act priority in food service procurements. SLAs can consider other procedures for raising and litigating their concerns, such as an agency-level protest and/or a DOE arbitration.

Brief Summary of the Randolph-Sheppard Act

The Randolph-Sheppard Act is a federal law that mandates a federal priority for blind persons to operate "vending facilities" on federal government property.3 Vending facilities governed by Randolph-Sheppard Act regulations include cafeterias, cart service, snack bars and automatic vending machines.4 The Randolph-Sheppard Act directs the DOE to designate SLAs, which are state agencies responsible for recruiting, training and licensing blind individuals or persons with a vision impairment to manage vending facilities.5

In practice, SLAs act as prime contractors and train and license blind individuals to act as managers of dining facilities. The blind vendor often works with a government contractor specializing in food services as a teaming partner. The government contractor assists the blind vendor in operations, provides expertise and helps with start-up costs.

Summary of GAO's Decision

The solicitation at issue in Georgia Business Enterprise Program stated that it would be conducted pursuant to the Randolph-Sheppard Act and that the procurement would be set aside for service-disabled veteran-owned small business concerns.6 The solicitation was issued by the U.S. Army for food services at various dining facilities located on Fort Benning in Georgia. The designated SLA accordingly submitted a proposal in response to the solicitation.

As explained above, the Randolph-Sheppard Act mandates a federal priority for blind vendors to operate vending facilities on federal government property. However, the Army excluded the SLA's proposal from the competitive range because it "was not one of the most highly rated proposals and does not have a realistic chance of receiving contract award."7 Following its exclusion, the SLA timely filed a protest, arguing that its proposal was improperly excluded from the competitive range.8

GAO declined to hear the case on the merits and dismissed the protest because it interpreted the Randolph-Sheppard Act and its implementing regulations as vesting authority with the Secretary of Education regarding SLA complaints concerning an agency's compliance with the act.9 Notably, the SLA did not reference the Randolph-Sheppard Act once in its protest and instead argued its proposal was improperly excluded from the competitive range. However, despite the noticeable absence of references to the Randolph-Sheppard Act in the protest itself, GAO still found that the SLA's protest implicated a potential violation of the act. Based on this interpretation, GAO concluded that it did not have bid protest jurisdiction to hear complaints subject to the Randolph-Sheppard Act's binding arbitration provisions—despite the protester not referencing the Randolph-Sheppard Act once in its protest.

Key Takeaways

The obvious takeaway from the Georgia Business Enterprise Program decision is that it is likely futile for a SLA to file a protest with GAO related to evaluation of proposals under solicitations for which the SLA is seeking to invoke the Randolph-Sheppard priority. However, the Georgia Business Enterprise Program decision does not go so far as to say that contractors cannot utilize the GAO protest forum as a means filing a pre-award protest of improprieties in solicitations for food services unrelated to compliance with the Randolph-Sheppard Act.

Further, while GAO correctly notes that disappointed SLAs may initiate the binding arbitration process of the DOE, SLAs, their licensed vendors and support contractors should be aware that complaints filed to the Secretary of the DOE through this process are lengthy, take over a year or more, and do not result in an automatic stay. Another option available to disappointed SLAs is to raise concerns directly with the agency via an agency-level protest. While no guarantee exists the agency will respond to an agency protest, agencies have the flexibility to consider such concerns and take voluntary corrective action under the FAR 33.103 agency-level protest process as a matter of business discretion, notwithstanding the Randolph-Sheppard arbitration process. Filing an agency-level protest offers a much more expedited process than the DOE arbitration process.

Holland & Knight's Government Contracts team is ready to assist SLAs and their licensed vendors and contractor teaming partners in protests and complaints related to solicitations involving the Randolph-Sheppard Act's priority.

Footnotes:

1 Georgia Bus. Enter. Program–Vocational Rehab. Agency, B-416182.2, 2018 WL 6266283, at *1 (Comp. Gen. Nov. 23, 2018).

2 Id. at 1-2.

3 See 20 U.S.C. § 107 et seq.

4 See 34 CFR §395.1; 34 C.F.R. § 395.33(a).

5 See 20 U.S.C. § 107a.

6 Georgia Bus. Enter. Program, 2018 WL 6266283, at *1.

7 Id. at 2.

8 Id.

9 Id. (citing 20 U.S.C. §107d–1(b); 34 C.F.R. §395.37).

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