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Commonwealth v. United States

United States District Court, W.D. Kentucky, Paducah Division

April 7, 2015

COMMONWEALTH OF KENTUCKY, by and through the EDUCATION AND WORKFORCE DEVELOPMENT CABINET KENTUCKY OFFICE FOR THE BLIND, Plaintiffs,
v.
UNITED STATES OF AMERICA, Defendant.

MEMORANDUM OPINION AND ORDER

THOMAS B. RUSSELL, Senior District Judge.

This matter comes before the Court upon the motion to stay filed by the United States of America. (Docket No. 43.) The Commonwealth of Kentucky, by and through the Education and Workforce Development Cabinet Office for the Blind ("OFB"), has responded, (Docket No. 44), and the United States has replied, (Docket No. 52). Also before the Court is the United States' motion for reconsideration, (Docket No. 42), to which the OFB has responded, (Docket No. 45), and the United States has replied, (Docket No. 51). Fully briefed, these matters stand ripe for adjudication. For the reasons set forth below, the Court will GRANT the United States' motion to stay, (Docket No. 43), and will DENY the United States' motion for reconsideration, (Docket No. 42), with leave to refile.

Factual Background

As the Court has stated in its prior memoranda, this case concerns the Fort Campbell military base located in Kentucky and operated by the United States through its Department of Defense ("DOD") and the Department of the Army ("the Army"), a DOD subdivision. The contract dispute arises from the solicitation of bids for Contract W91248-13-D-0001, which governs certain services at Fort Campbell's dining facilities. Although the Army had previously contracted for full food services, the solicitation at issue sought bids for only dining facility attendant services ("DFA services")-that is, janitorial and custodial functions, including sweeping, mopping, scrubbing, trash removal, dishwashing, waxing, stripping, buffing, window-washing, pot- and pan-cleaning, and related quality control. ( See Docket No. 40 at 16.) The solicitation pronounced that the Army would accept proposals exclusively from vendors who qualified for the Small Business Association's HUBZone program.

In the instant lawsuit, the OFB filed a motion for permanent injunction, arguing that it was entitled to priority for the contract pursuant to the Randolph-Sheppard Vending Stand Act ("the Randolph-Sheppard Act"). The Randolph-Sheppard Act affords blind vendors priority during the bidding process for the operation of vending facilities in federal buildings. 20 U.S.C. §§ 107-107e. The Army objected, arguing instead that the Randolph-Sheppard Act applies only when solicitations are sought for the operation of military dining facilities, not for only DFA services. The Army argued that the Javits-Wagner-O'Day Act ("the JWOD Act"), 41 U.S.C. §§ 46-48c, established the appropriate statutory scheme for DFA solicitations and contracts and that the Randolph-Sheppard Act did not apply.

The Court initially determined that because the OFB had not exhausted its remedies under the Randolph-Sheppard Act's arbitration scheme, federal jurisdiction was premature. The OFB appealed this decision to the Sixth Circuit. Meanwhile, the parties continued to arbitrate the conflict. On February 14, 2014, an arbitration panel issued a divided decision in the OFB's favor, concluding that the Randolph-Sheppard Act applied to DFA services and that the Army's solicitation improperly failed to afford priority to a blind vendor. On July 21, 2014, the Sixth Circuit held that this Court erred in its earlier jurisdictional analysis and remanded the OFB's request for permanent injunction for decision on its merits.

In its December 29, 2014, memorandum, the Court again considered the OFB's request for permanent injunction. Much of the Court's analysis was devoted to considering whether the arbitration panel's decision in favor of the OFB constituted actual success on the merits. Because the Court concluded that no judicial review was available for a Randolph-Sheppard Act arbitration panel's decision, it determined that the OFB had satisfied this requirement and that injunctive relief was appropriate. The Court ordered the Army to rescind Contract W91248-13-D-0001 and to negotiate a new contract for DFA services in accordance with the Randolph-Sheppard Act's provisions, affording due preference to the OFB's licensed blind vendor.

In the instant motion for reconsideration, the United States points to congressional language enacted only days before the Court's order and that provides a more precise explanation of the two statutory schemes. The Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 ("2015 NDAA") was signed into law on December 19, 2014, authorizing funds "to be appropriated for the fiscal year 2015 for procurement for the Army, the Navy and the Marine Corps, the Air Force, and Defense-wide activities..." Pub. L. No. 113-291, Sec. 101.

The 2015 NDAA incorporates a "Joint Explanatory Statement to Accompany the National Defense Authorization for Fiscal Year 2015, " printed in the Congressional Record for December 4, 2014, and designates that it "shall have the same effect with respect to the implementation of this Act as if it were a joint explanatory statement of a committee of conference." Pub. L. No. 113-291, Section 5. The Explanatory Statement expressed that "concern[] with the lack of regulatory guidance on the application of the JWOD Act (41 U.S.C. 8501 et seq.) and Randolph-Sheppard Act 20 U.S.C. 107 et seq.) to military dining facilities." (Docket No. 42-3, at 92-93.) Although the Explanatory Statement notes that Congress once sought "to resolve this long-standing issue" by requiring a Joint Policy Statement, " it acknowledged that the Statement offered little clarification. "[W]ithout complementary regulations to implement the Joint Policy Statement, confusion remains on when to apply the two acts, particularly with regard to new contracts...." Id. at 93.

Seeking to quell the ongoing confusion, the Explanatory Statement provides:

Pursuant to the Joint Policy Statement, the Randolph-Sheppard Act applies to contracts for the operation of a military dining facility, or full food services, and the Javits-Wagner-O'Day Act applies to contracts and subcontracts for dining support services, or dining facility attendant services, for the operation of a military dining facility.

Id. at 93. The Explanatory Statement further directs that

[n]ot later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall prescribe implementing regulations for the application of the two acts to military dining facilities. Such regulations shall implement the Joint Policy Statement and specifically address ...

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