Comptroller General

United States Government Accountability Office 

Washington, DC 20548 

of the United States

Decision 

Matter of: Maryland State Department of Education 

File: B-400583; B-400583.2 

Date: November 7, 2008 

Elliott L. Schoen, Esq., and Lauri A. McGuire, Esq., State of Maryland, Office of the 

Attorney General, for the protester. 

Lt. Col. James A. Lewis, Department of the Army, and Jeff Rosen, Esq., Department 

of Education, for the agencies. 

Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the General 

Counsel, GAO, participated in the preparation of the decision. 

DIGEST 

Government Accountability Office will not consider protest by state licensing agency 

(SLA) challenging the elimination of its proposal from the competitive range under a 

solicitation issued pursuant to the Randolph-Sheppard Act (RSA) because 

mandatory binding arbitration procedures by the Department of Education are 

provided for under the RSA to resolve the SLA’s complaint. 

DECISION 

The Maryland State Department of Education (MSDE) of Baltimore, Maryland 

protests the elimination of its proposal from consideration under request for 

proposals (RFP) No. W91QF6-07-R-0007, issued by the Department of the Army for 

food services at Fort Meade, Maryland. 

We dismiss the protest. 

The RFP noted that this procurement would be conducted pursuant to the 

Randolph-Sheppard Act (RSA), which establishes a priority for blind persons 

recognized and represented by state licensing agencies (SLA) under the terms of the 

RSA, in the award of contracts for, among other things, the operation of cafeterias in 

federal buildings. 20 U.S.C. § 107 (2000); 34 C.F.R. § 395.33(a) (2008). Thus, while 

the RFP generally provided for the procurement to be set aside for small businesses, 

it indicated that the designated SLA would also be able to submit a proposal. RFP 

at 132. Under the RSA’s implementing regulations, if a designated SLA submits an 

offer found to be within the competitive range for the acquisition, award must 
generally be made to the SLA. 34 C.F.R. § 395.33(b); Army Regulation 210-25 ¶ 

6.b(1)(b) (June 30, 2004). The only evaluation factors in the RFP were past 

performance and price. The RFP stated “the competitive range will be determined 

based on the evaluation factors set forth in this section and will include all of the 

most highly rated proposals.” RFP at 129. 

 

Three proposals were submitted to the agency in response to the RFP, including that

of the protester, the designated SLA. The agency determined that all three offerors 

had a past performance rating of “low risk.” MSDE’s offered price was higher than 

the independent government estimate and significantly higher than the prices 

submitted by the other two offerors. Consequently, the agency concluded that the 

MSDE’s price was unreasonably high, and for this reason MSDE’s proposal was not

included in the competitive range. Protest attach. 1, Army Letter to MSDE (Sept. 4, 

2008); Army Submission to GAO (Oct. 10, 2008) at 3. This protest followed. 

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. §§ 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. § 107d-1(b); 34 C.F.R. § 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 ¶ 84; Mississippi State Dept. of Rehabilitation Servs., B-250783.8, Sept. 7, 

1994, 94-2 CPD ¶ 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. 

§ 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 

Page 2 B-400583; B-400583.2 
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. § 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. § 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. 

§ 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. § 107d-1(b); 34 C.F.R. § 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. § 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. § 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. § 395.33(b); Army Regulation 210-25 ¶ 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. § 395.37. 34 C.F.R. 

§ 395.33(b). 

Page 3 B-400583; B-400583.2 
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.”1 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 ¶ 169 at 2 (determinations by the Small Business 

Administration under the certificate of competency program pursuant to 15 U.S.C. 

§ 637(b)(7)) (2000); 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) 

(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 

 1

 We believe that our view is also consistent with the congressional intent as 

reflected in the legislative history of the 1974 amendments to the Act, which 

established the arbitration procedure. In this regard, a Senate report on the bill 

declared that: 

It is the expectation of the Committee that the arbitration and review 

procedures adopted in S. 2581 will provide the means by which 

aggrieved vendors and State agencies may obtain a final and 

satisfactory resolution of disputes. It is not anticipated that these 

mechanisms will be used with great frequency, and it is expected that 

the Secretary will refuse to convene an arbitration panel if, in his

reasoned and documented opinion, a complaint is specious or has been 

brought solely for the purpose of harassment.

S. Rep. No. 937, 93d Cong., 2d Sess. 20 (1974).

Page 4 B-400583; B-400583.2 
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 

Page 5 B-400583; B-400583.2 
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 

Page 6 B-400583; B-400583.2 
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. § 395.33(b); 

Army Regulation 210-25 ¶ 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. 2 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,

3

 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. 

Gary L. Kepplinger 

General Counsel 

 2

 While we recognize that MDSE’s protest includes allegations about the other 

proposals included in the competitive range, these relate to the assertion that the 

Army improperly eliminated MDSE’s proposal from the competitive range. 

3

 Although we have considered DOED’s interpretation of the Federal Circuit’s

decision, we do not agree that it requires our Office to consider this protest. We note 

in this regard that DOED does not state that it would not consider a complaint from 

the MDSE under its mandatory arbitration procedures and in fact it appears that

challenges by SLAs relating to the exclusion of an SLA from the competitive range 

that involve procurement related issues have been considered under DOED’s RSA 

arbitration procedures. See Alabama Dept. of Rehabilitation Servs. v. United States

Dept. of Defense, Randolph-Sheppard Arbitration Panel Decision, Nov. 16, 1998, 65 

Fed. Reg. 26,591 (2000); Mississippi Dept. of Rehabilitation Servs. v. United States 

Dept. of Defense, Department of the Air Force, Randolph-Sheppard Arbitration Panel 

Decision, June 11, 1996, 62 Fed. Reg. 40,509 (1997). 

Page 7 B-400583; B-400583.2