The Randolph-Sheppard Act (“RSA”) grants blind persons, operating through State Licensing Agencies, mandatory priority in the award of contracts for the operation of vending facilities on federal property so long as the SLA contractor satisfies criteria established by the RSA’s implementing regulations prescribed by the U.S. Secretary of Education.  In its recent decision in State of Texas v. United Statesthe Court of Federal Claims (“COFC”) made two key rulings in relation to the RSA:

  1. Prior Government Accountability Office (“GAO”) decisions related to the RSA are not persuasive on the COFC, as GAO lacked jurisdiction to hear these protests, and
  2. The RSA creates a two pronged test before granting a State Licensing Agency (“SLA”) priority in a solicitation for vending services — (i) the SLA must be within the procurement’s competitive range, and (ii) the the contracting agency must perform cost and food quality evaluations pursuant to the solicitation, which may be in addition to a determination of whether the proposal falls within the competitive range.

In State of Texas v. United States, the Air Force issued a solicitation for vending services at Joint Base San Antonio.  The State of Texas, acting by and through one its state agencies that qualified as a SLA under the RSA for the purposes of the procurement, submitted a proposal.  The Air Force originally found that the State of Texas’ proposal did not fall within the competitive range.  In response to being excluded from the competitive range, the State of Texas filed for arbitration with the U.S. Department of Education, as is required by the RSA.

Prior to a decision by the arbitration panel, the Air Force awarded the contract to another contractor and the State of Texas filed a protest with the COFC.  In response, the Air Force voluntarily took corrective action, including canceling the award and re-evaluating bids, which resulted in the Air Force putting the State of Texas in the competitive range.

Based on the State of Texas’ interpretation of the RSA, once its proposal (the proposal of an SLA) was in the competitive range it was automatically entitled to the contract.  However, the Air Force did not read the RSA to compel an award to the SLA, and continued negotiations with all offerors, not just the State of Texas.  As a result, the State of Texas filed a pre-award bid protest.  Relying on GAO decisions that stated “if a designated state licensing agency (SLA) submits an offer found to be within the competitive range for the acquisition, award must be made to the SLA,” the State of Texas argued that the SLA was automatically entitled to the contract once it was found to be within the competitive range. 

The COFC rejected the State of Texas’ arguments, electing not to rely on the GAO decision cited in the protest.  In these GAO decisions, the GAO had concluded it did not have jurisdiction to consider protests alleging that an agency failed to comply with the RSA, because that authority was vested in the United States Secretary of Education.  Because GAO lacked jurisdiction, the COFC decided to disregard GAO’s comments regarding the RSA (that the State of Texas had relied upon) as “dicta type statements.”

After disregarding the GAO decisions, the COFC concluded that the SLA contractor must (1) be within the competitive range, and (2) the SLA contractor’s bid must be evaluated for both cost and food quality, pursuant to the RSA’s implementing regulations.  Specifically, the RSA’s implementing regulations state that:

Priority in the operation of cafeterias by blind vendors on Federal property shall be afforded when the Secretary determines…that such operation can be provided at a reasonable cost, with food of a high quality comparable to that currently provided by employees…

While an analysis of cost and quality may factor into the determination of the competitive range, a simple finding that a contractor is within that competitive range does not trigger priority to the SLA contractor.  Instead, a procuring agency is entitled to continue negotiating with all offerors in order to make a final determination of reasonable cost and food quality, as required by the implementing regulations.  As a result of this two pronged test for priority, the COFC dismissed the State of Texas’ protest as premature because the Air Force was still evaluating proposals.

While the State of Texas’ protest was ultimately dismissed due to ripeness, the decision reveals two key principles for RSA procurements: (1) prior GAO decisions related to the RSA are not persuasive to COFC, as Congress specifically authorized the Department of Education to manage RSA procurements, and (2) the RSA creates a two-part obligation prior to priority being granted to a SLA contractor — (i) the SLA contractor must fall within the competitive range, and (ii) the SLA contractor’s bid must be evaluated on cost and food quality pursuant to the solicitation.

Image Courtesy of Flickr (licensed) by Alan Kotok