We have interpreted the RSA and its implementing regulations as vesting authority with the Secretary of Education regarding SLA complaints concerning a federal agency’s compliance with the RSA. Washington State Dept. of Servs. for the Blind, B‑293698.2, Apr. 27, 2004, 2004 CPD para. 84 at 3-5; Mississippi State Dept. of Rehabilitation Servs., B-250783.8, Sept. 7, 1994, 94-2 CPD para. 99 at 3. In our view, this means that such complaints are subject to the RSA’s binding arbitration provisions and are not for consideration by our Office under its bid protest jurisdiction.

Maryland State Dept. of Education, B-400583, B-400583.2, Nov. 7, 2008, 2008 CPD para. 209 at 5. Our view in this regard reflects our more general view that where, as here, Congress has vested oversight and final decision-making authority in a particular federal official or entity, we will not consider protests involving issues subject to review by that official or entity. Washington State Dept. of Servs. for the Blind, supra; see, e.g., High Point Sec., Inc.--Recon. and Protest, B-255747.2, B‑255747.3, Feb. 22, 1994, 94-1 CPD para. 169 at 2 (determinations by the Small Business Administration under the certificate of competency program pursuant to 15 U.S.C. sect. 637(b)(7)) (2000); ARA Envtl. Servs., Inc., B-254321, Aug. 23, 1993, 93-2 CPD para. 113 at 2 (protest of award under the Javits‑Wagner-O’Day Act, 41 U.S.C. sections 46-48c (2000)).

LRS asserts that its Randolph-Sheppard Vending Program has priority under the RSA for the provision of vending facilities and food services on all federal property (in Louisiana), and that NASA was required under the RSA to issue LRS a permit for service of the vending machines and/or allow LRS to submit an offer in competition to provide the cafeteria service at the Michoud Assembly Facility. Protest at 1. This assertion clearly concerns NASA’s alleged failure to comply with the provisions of the RSA, and the RSA provides for binding arbitration. See 34 C.F.R. sect. 395.37(a). Accordingly, the matter is not for consideration by our Office under our bid protest function.  (Louisiana State Department of Social Services, Louisiana Rehabilitation Services, B-400912.2, July 1, 2009)  (pdf)

MSDE protests the elimination of its proposal from the competitive range because of its high price. MSDE also contends that the agency, in evaluating proposals, did not determine whether the offerors’ proposals were in compliance with the Service Contract Act (41 U.S.C. sections 351 et seq.), unreasonably determined that the past performance of the competitive range offerors was equal to MSDE’s, and allowed a potential offeror a site visit after the designated site visit.

The Army requests dismissal of the protest on the basis that the authority for administering the requirements of the RSA--and specifically for resolving disputes between SLAs and contracting agencies--has been placed with the Secretary of Education and the mandatory binding arbitration established by the Department of Education. 20 U.S.C. sect. 107d-1(b); 34 C.F.R. sect. 395.37(a). In this regard, the Army notes that our Office has consistently dismissed protests by SLAs for this reason. See, e.g., Washington State Dept. of Servs. for the Blind, B-293698.2, Apr. 27, 2004, 2004 CPD para. 84; Mississippi State Dept. of Rehabilitation Servs., B‑250783.8, Sept. 7, 1994, 94-2 CPD para. 99 at 3.

MSDE maintains that our Office should consider its protest here because the protest does not allege a violation of the RSA, but involves “standard procurement issues that have been addressed by GAO numerous times in protest decisions and are independent of the application of the RSA.” Protest at 14. In support of its contention that our Office should take jurisdiction in this matter, the SLA references a 2005 decision of the Court of Appeals for the Federal Circuit in Kentucky, Educ. Cabinet, Dept. for the Blind v. U.S., 424 F.3d 1222 (Fed. Cir. 2005), which addressed this issue.

The RSA has the stated purpose of “providing blind persons with remunerative employment, enlarging the economic opportunities of the blind, and stimulating the blind to greater efforts in striving to make themselves self‑supporting.” 20 U.S.C. sect. 107(a). The RSA directs the Secretary of Education to designate state agencies responsible for training and licensing blind persons, and provides that “[i]n authorizing the operation of vending facilities on Federal property, priority shall be given to blind persons licensed by a State agency.” 20 U.S.C. sect. 107(b). For purposes of the instant case, the RSA includes cafeterias and snack bars within the definition of a “vending facility.” 20 U.S.C. sect. 107e(7). With respect to the operation of cafeterias at federal facilities, the Act directs the Secretary of Education to issue regulations to establish a priority for blind licensees whenever “such operation can be provided at a reasonable cost with food of a high quality comparable to that currently provided to employees, whether by contract or otherwise.” 20 U.S.C. sect. 107d-3(e).

Pursuant to this authority, the Secretary of Education has promulgated regulations addressing the RSA’s requirements. Among the matters covered by these regulations are rules governing the relationship between the SLAs and blind vendors, rules for becoming a designated SLA within the meaning of the Act, procedures for the oversight of SLAs by the Secretary, and rules governing the relationship between SLAs and other federal government agencies. 34 C.F.R. Part 395.

With respect to disputes between SLAs and federal agencies, both the statute and the regulations provide for the filing of complaints with the Secretary, which are then resolved by binding arbitration. 20 U.S.C. sect. 107d-1(b); 34 C.F.R. sect. 395.37. Specifically, the regulation, which tracks closely the language of the statute, provides:

Whenever any [SLA] determines that any department, agency, or instrumentality of the United States which has control of the maintenance, operation, and protection of Federal property is failing to comply with the provisions of the Act or of this part and all informal attempts to resolve the issues have been unsuccessful, such licensing agency may file a complaint with the Secretary.  34 C.F.R. sect. 395.37(a). An arbitration panel would then be established to resolve such SLA complaints, whose decision would be “final and binding,” subject to appeal and review. 34 C.F.R. sect. 395.37(b).

As indicated above, the regulations issued by the Department of Education (DOED) implementing the RSA provide for SLAs to submit proposals for cafeteria services on solicitations that “establish criteria under which all responses will be judged” and “[i]f the proposal received from the [SLA] is judged to be within a competitive range and has ranked among those proposals which have a reasonable chance of being selected for final award,” the SLA should generally be selected to provide the cafeteria services. 34 C.F.R. sect. 395.33(b); Army Regulation 210-25 para. 6.b(1)(b). The regulation issued by the DOED further provides that “[i]f the [SLA] is dissatisfied with an action taken relative to its proposal, it may file a complaint with the Secretary” under the binding arbitration provisions of 34 C.F.R. sect. 395.37. 34 C.F.R. sect. 395.33(b).

As stated above, we have interpreted the RSA and its implementing regulations as vesting authority with the Secretary of Education regarding SLA complaints concerning a federal agency’s compliance with the RSA, including challenges to agency decisions to reject or not include SLA proposals in the competitive range. Washington State Dept. of Servs. for the Blind, supra; Mississippi State Dept. of Rehabilitation Servs., supra. In our view, this meant that such complaints are subject to the RSA’s binding arbitration provisions. Washington State Dept. of Servs. for the Blind, supra. Our view in this regard is consistent with the stated purpose of the arbitration process, as set forth in the preamble to the regulations issued to govern the arbitration process: “It is expected that when [an SLA] is dissatisfied with an action resulting from its submittal of a proposal for the operation of a cafeteria, it will exercise its option to file a complaint with the Secretary.” 42 Fed. Reg 15,802, 15,809 (1977). Our position also reflects our more general view that where, as here, Congress has vested oversight and final decision-making authority in a particular federal official or entity, we will not consider protests involving issues subject to review by that official or entity. Washington State Dept. of Servs. for the Blind, supra; see, e.g., High Point Sec., Inc.--Recon. and Protest, B‑255747.2, B‑255747.3, Feb. 22, 1994, 94-1 CPD para. 169 at 2 (determinations by the Small Business Administration under the certificate of competency program pursuant to 15 U.S.C. sect. 637(b)(7)) (2000); ARA Envtl. Servs., Inc., B‑254321, Aug. 23, 1993, 93-2 CPD para. 113 at 2 (protest of award under the Javits-Wagner-O’Day Act, 41 U.S.C. sections 46-48c) (2000).

Here, the MSDE argues that it should not be required to use the arbitration procedure outlined above because the Court of Appeals for the Federal Circuit found in Kentucky, Educ. Cabinet, Dept. for the Blind v. U.S., 424 F.3d 1222 (Fed. Cir. 2005), that the authority of the DOED to arbitrate complaints by state agencies applies to “only those complaints that allege a violation of the RSA or its attendant regulations.” Id. at 1225. Because MSDE here protests only the Army’s determination that MSDE’s proposed price was “unreasonable and outside the competitive range,” as well as other violations of procurement regulations, and does not specifically allege a violation of the RSA, the protester contends that our Office should assume jurisdiction of its protest.

We solicited the views of the DOED regarding this matter. A representative of the Office of General Counsel of that agency expressed the view, based on its review of the protest pleadings filed by the protester and the Army, that because MSDE did not specifically contend that there was a violation of the RSA or its implementing regulations, “in a manner consistent with the Kentucky case, we believe that this issue is not appropriate to be handled through arbitration under the [RSA].” DOED Letter to GAO (Oct. 10, 2008).

While we recognize the arguments in favor of our taking jurisdiction, we conclude, for the reasons set out below, that dismissal is appropriate.

The key question for our Office is whether the Federal Circuit’s decision in the Kentucky case warrants abandoning our settled case law in this area. MSDE points, appropriately, to language in that decision that emphasizes the limits of the scope of arbitration under the SRA:

Arbitration, however, was not meant to cover every complaint by a state licensing agency concerning the procurement of vending services. Congress enacted the arbitration provisions to fill a gap in the existing statutory scheme, under which vendors and state licensing agencies could bring claims based on a breach of contract or a violation of other federal procurement provisions, but could not bring a claim arising under the RSA. [citation omitted] Congress specifically sought to fill that gap in a targeted fashion, covering only claims alleging a failure to comply with the RSA. There is no reason to believe that Congress meant to funnel every complaint by a state licensing authority against a federal agency into arbitration, thus duplicating remedies that the failed bidders already had against the government. The Senate report on the arbitration provisions noted that “[i]t is not anticipated that these [arbitration] mechanisms will be used with great frequency.” S.Rep.No. 93-937, at 20. Congress had that expectation because it intended that the arbitration provisions would be triggered only if the state licensing agency alleged a violation of the RSA, and not in the case of other, more common allegation such as a breach of contract or a violation of government procurement provisions.

Id. at 1226.

Because of the facts--and the outcome--of the Kentucky case, we conclude that the court’s decision does not weigh against dismissal of the protest before our Office here. Specifically, as in the present protest, in the Kentucky case, the SLA (the Kentucky Department for the Blind) protested to our Office that its proposal was improperly excluded from the competitive range because the contracting agency had determined that its price was too high as compared to the proposals found to be in the competitive range. On May 4, 2004, we dismissed this protest in an unpublished decision, consistent with our prior precedent, stating that we “will not review issues that go to the question of whether the SLA should have been included in the competitive range, because such issues ultimately challenged whether agency’s actions improperly denied the SLA the priority required under the statutes and regulations, and therefore must be resolved through the [RSA] arbitration process.”

The Kentucky SLA then took its protest to the Court of Federal Claims, which also declined to consider the SLA’s complaint concerning its elimination from the competitive range because the SLA had not exhausted the RSA’s mandatory arbitration process provided for SLA complaints. Kentucky, Educ. Cabinet, Dept. for the Blind v. United States, 62 Fed. Cl. 445 (2004). The Court of Federal Claims found that the arbitration process was mandatory for the SLA’s complaint about its exclusion from the competitive range because the matter of the SLA’s exclusion from the competitive range could not be said to be a procurement issue separate from the RSA. In so doing, the Court of Federal Claims also observed, “[i]t is doubtful, however, whether procurement award issues exist that are truly independent of the Act,” and that the “very broad language” of the RSA’s arbitration provisions “encompasses all federal agency actions that have a reasonable nexus to the Act, which beyond a doubt would include a challenge to any agency decision to reject a proposal in response to a solicitation involving (in the term of the Act) the ‘operation’ of a vending facility.” 62 Fed. Cl. at 462.

The Kentucky SLA appealed to the Court of Appeals for the Federal Circuit, and it is the Federal Circuit’s decision that the MSDE is relying on before us in the instant protest. We recognize, of course, that the Federal Circuit’s decision included the language quoted above with respect to the limited scope of the arbitration process. More importantly, however, the Federal Circuit affirmed the decision of the Court of Federal Claims that the court lacked jurisdiction to consider the Kentucky SLA’s complaint because the SLA had not exhausted the mandatory administrative remedy, that is, the RSA binding arbitration provisions. Kentucky, Educ. Cabinet, Dept. for the Blind v. United States, 424 F.3d at 1229. The Federal Circuit found that the SLA’s complaints about its exclusion from the competitive range also included contentions that the exclusion violated the RSA and related regulations, given that the SLA’s proposal’s inclusion in the competitive range would have resulted in the SLA receiving priority for award under the competition, so that the SLA’s complaint was required to be resolved under the RSA’s binding arbitration provisions. Id. at 1227. The parallel with the instant protest is so close that we believe that the outcome in the Kentucky case—dismissal--is appropriate here as well.

We recognize that the MDSE’s protest did not specifically assert a violation of the RSA or its implementing regulations. Indeed, the protest does not mention the RSA except to argue that the protest is not alleging a violation of the Act. Our jurisdiction, however, should turn on the substance of a challenge to a procurement action, not the form or language in which it is couched. Notwithstanding the careful wording used by the MDSE here, the resolution of its protest of the SLA’s exclusion from the competitive range has specific consequences set forth in the RSA’s implementing regulations, which provide that the SLA would generally receive the award if its proposal were included in the competitive range. 34 C.F.R. sect. 395.33(b); Army Regulation 210-25 para. 6.b(1)(b). In this regard, we note the striking similarity between the contention at the heart of MSDE’s protest here and that of the SLA in the Kentucky case, that is, that the Army unreasonably eliminated the SLA’s proposal from the competitive range because its price was determined to be too high in relation to the competitive range proposals. Faced with the similar facts and the similar challenge, the Federal Circuit found that the SLA in Kentucky was required to submit its complaint to the administrative remedy of binding arbitration, and affirmed that the Court of Federal Claims therefore did not have jurisdiction over the SLA’s complaint. We believe that the approach endorsed by the Federal Circuit in the Kentucky case, dismissal of a protest challenging an SLA’s proposal’s exclusion from a competitive range, is appropriate here as well. This is because we find, contrary to the contentions of the MDSE and the DOED, that the protest implicates a potential violation of the RSA and its implementing regulations through the Army’s allegedly improper elimination of the SLA’s proposal from the competitive range, given that if that proposal were in the competitive range, the RSA’s implementing regulations would provide for the SLA to receive the award.

The protest is dismissed.  (Maryland State Department of Education, B-400583; B-400583.2, November 7, 2008) (pdf)

We have interpreted the above provisions of the Act as vesting exclusive authority with the Secretary regarding complaints by SLAs concerning a federal agency’s compliance with the Act, including challenges to agency decisions to reject proposals in response to a solicitation. Mississippi State Dept. of Rehabilitation Servs., B‑250783.8, Sept. 7, 1994, 94-2 CPD ¶ 99 at 3. Our view in this regard is consistent with the stated purpose of the arbitration process, as set forth in the preamble to the regulations issued to govern the arbitration process: “It is expected that when [an SLA] is dissatisfied with an action resulting from its submittal of a proposal for the operation of a cafeteria, it will exercise its option to file a complaint with the Secretary . . . .” 42 Fed. Reg 15,802, 15,809 (1977). Our position also reflects our more general view that where, as here, Congress has vested oversight and final decision-making authority in a particular federal official or entity, we will not consider protests involving issues subject to review by that official or entity. Id.; see High Point Sec., Inc.--Recon. and Protest, B‑255747.2, B-255747.3, Feb. 22, 1994, 94-1 CPD ¶ 169 at 2 (determinations by the Small Business Administration under the certificate of competency program pursuant to 15 U.S.C. § 637(b)(7)); ARA Envtl. Servs., Inc., B‑254321, Aug. 23, 1993, 93-2 CPD ¶ 113 at 2 (protest of award under the Javits-Wagner-O’Day Act, 41 U.S.C. §§ 46-48c). (Washington State Department of Services for the Blind, B-293698.2, April 27, 2004) (pdf)

The evaluation of proposals and the determination of whether a proposal is in the competitive range are principally matters within the contracting agency's discretion, since agencies are responsible for defining their needs and for deciding the best method for meeting them.  EAA Capital Co., L.L.C., B-287460, 2001 CPD ¶ 107 at 3-4.   The criterion for inclusion in the competitive range is that a proposal must be one of the most highly rated, including cost and non-cost factors.  SCIENTECH, Inc., B‑277805.2, Jan. 20, 1998, 98-1 CPD ¶ 33 at 7.  Federal Acquisition Regulation § 15.306(c).  This standard applies even where a procurement is subject to the RSA priority, and there is no requirement that in order to be included in the competitive range, an SLA's proposal must be rated as high technically as other competitive range proposals or be very close to them in price.  See Centro Mgmt., Inc., B-286935, B-286935.2, Feb. 26, 2001, 2001 CPD ¶ 41 at 4.  In this instance, where only two proposals were received, both of which were technically acceptable, there is no basis to question the agency's decision to include the SLA in the competitive range notwithstanding the 16 percent higher proposed cost, where technical factors were significantly more important than cost, both offerors' proposed costs were within IGCE, and the SLA's proposal was considered technically superior.  As explained above, under Department of Defense regulations, where an SLA's proposal is included in the competitive range, the SLA must be awarded the contract (absent circumstances not present here).  Id.; Mississippi State Dept. of Rehab. Servs., B‑250783.8, Sept. 7, 1994, 94-2 CPD ¶ 99 at 1-2.  Cantu points out that if the SLA's cost is determined not to be reasonable, the regulations and the solicitation provide that the agency may follow a procedure that may eventually result in consulting with the Secretary of Education to seek approval not to award to the SLA.  However, once the SLA's proposal has reasonably been included in the competitive range, the RSA and its implementing regulations vest the decision to award or not with the agency and the Secretary of Education, and that decision is not subject to review by our Office.  See Centro Mgmt. Inc., supra, at 3.  (Cantu Services, Inc., B-289666.2; B-289666.3, November 1, 2002)

Arbitration, however, was not meant to cover every complaint by a state licensing agency concerning the procurement of vending services. Congress enacted the arbitration provisions to fill a gap in the existing statutory scheme, under which vendors and state licensing agencies could bring claims based on a breach of contract or a violation of other federal procurement provisions, but could not bring a claim arising under the RSA. See Wilson, 309 F. Supp. at 271. Congress specifically sought to fill that gap in a targeted fashion, covering only claims alleging a failure to comply with the RSA. There is no reason to believe that Congress meant to funnel every complaint by a state licensing authority against a federal agency into arbitration, thus duplicating remedies that the failed bidders already had against the government. The Senate report on the arbitration provisions noted that “[i]t is not anticipated that these [arbitration] mechanisms will be used with great frequency.” S. Rep. No. 93-937, at 20. Congress had that expectation because it intended that the arbitration provisions would be triggered only if the state licensing agency alleged a violation of the RSA, and not in the case of other, more common allegations such as a breach of contract or a violation of government procurement provisions.

Apart from the purpose and history of the arbitration provision, it would be odd to interpret the statute to direct vendors and state licensing agencies into RSA arbitration even if their complaints had nothing to do with a federal agency’s violation of the RSA. The arbitration system is administered by the Department of Education, which has expertise in the RSA, but no special expertise in general matters of federal procurement law. For claims relating to procurement disputes not based on the RSA and its regulations, there would be no reason to bypass conventional bid protest and federal contract remedies in favor of arbitration by panels convened by the Secretary of Education.  (Commonwealth of Kentucky, Education Cabinet, Department For The Blind, v. U. S., No. 05-5010, September 21, 2005) (pdf)