Amicus Curiae Brief — Winston-Salem Industries for the Blind, Petitioner v. PDS Consultants, Inc., et al.
Supreme Court briefOct 10, 2019
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No. 19-329
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In The
Supreme Court of the United States
-----------------------------------------------------------------WINSTON-SALEM INDUSTRIES FOR THE BLIND,
Petitioner,
v.
UNITED STATES OF AMERICA;
PDS CONSULTANTS, INC.,
Respondents.
-----------------------------------------------------------------On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Federal Circuit
-----------------------------------------------------------------Brief of Alphapointe; Association for Vision
Rehabilitation and Employment, Inc.; Austin
Lighthouse; Beacon Lighthouse, Inc.; Beyond Vision;
Central Association for the Blind & Visually
Impaired; Cincinnati Association for the Blind &
Visually Impaired; Envision; LC Industries, Inc.;
Lighthouse for the Blind – St. Louis; Lighthouse
Louisiana; Olmsted Center for Sight; San Antonio
Lighthouse for the Blind & Vision Impaired; and
The Lighthouse for the Blind, Inc. – Seattle as
Amici Curiae in Support of Petitioner and Reversal
-----------------------------------------------------------------LAWRENCE S. EBNER
Counsel of Record
CAPITAL APPELLATE ADVOCACY PLLC
1701 Pennsylvania Ave., NW
Washington, DC 20006
(202) 729-6337
lawrence.ebner@capitalappellate.com
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i
TABLE OF CONTENTS
Page
INTEREST OF THE AMICI CURIAE........................ 1
SUMMARY OF ARGUMENT ..................................... 5
ARGUMENT ................................................................ 8
The Court should grant review because the Federal
Circuit’s ruling jeopardizes the AbilityOne
Program’s job-creation purpose …………………….. ... 8
A. The AbilityOne Program's purpose is both
beneficial and necessary ……………………….. .... 8
1. AbilityOne NPAs employ thousands of people
who are blind ………………………………….. .. 8
2. Most NPA employees who are blind are
unable to find employment elsewhere .......... 11
B. The Federal Circuit’s ruling already is
undermining the AbilityOne Program .............. 14
1. The VA’s immediately effective “Class
Deviation” implements the court’s
decision ......................................................... 14
2. The VA has begun to replace AbilityOne
contracts and eliminate jobs for people who
are blind........................................................ 17
ii
C. Additional federal departments and agencies
may latch onto the Federal Circuit’s ruling....... 21
1. The ruling purports to correctly apply well-
established principles of statutory
construction to supposedly conflicting
statutes ........................................................ 21
2. The ruling will exacerbate existing
noncompliance with JWOD's mandatorysource requirement ..................................... 22
CONCLUSION .......................................................... 26
iii
TABLE OF AUTHORITIES
Page(s)
Cases
Kingdomware Techs., Inc. v. United
States, 136 S. Ct. 1969 (2016) ................................ 6
Nat’l Telecommuting Inst., Inc. v. United
States, 123 Fed. Cl. 595 (2015) .............................. 6
Statutes
Competition in Contracting Act, 41
U.S.C. § 3304(a)(5) ............................................... 16
Javits-Wagner-O’Day Act, 41 U.S.C.
§§ 8501-8506 ........................................................... 2
41 U.S.C. § 8503(b) ............................................... 10
41 U.S.C. § 8503(c) ............................................... 23
41 U.S.C. § 8504(a) ......................................... 4, 5, 9
National Defense Authorization Act for
Fiscal Year 2017, Pub. L. 114-328,
§ 898 ...................................................................... 25
Veterans Benefits, Health Care, and
Technology Information Act of 2006
38 U.S.C. § 8127(d)................................................. 5
38 U.S.C. § 8127(a)(1) ............................................ 6
iv
Regulations
13 C.F.R. § 121.406.................................................... 11
13 C.F.R. § 121.1201 et seq. ....................................... 11
41 C.F.R. § 51-1.1(a) .................................................... 8
41 C.F.R. § 51-1.2(a) .................................................... 9
41 C.F.R. § 51-5.2(a) .................................................... 9
41 C.F.R. § 51-5.3(a) .................................................. 23
41 C.F.R. § 51-5.5 ...................................................... 10
41 C.F.R. § 51-5.8 ...................................................... 24
Department of Veterans Affairs
Acquistion Regulation
48 C.F.R. § 808.002 .............................. 7, 14, 15, 16
48 C.F.R. § 808.002(a)(1)(iv) & (a)(2)
(rev. June 24, 2019) .............................................. 15
Federal Acquisition Regulation
48 C.F.R. § 8.002 .................................................. 15
48 C.F.R. § 8.002(a)(1)(iv) & (a)(2) ...................... 15
v
Other Authorities
71 Fed. Reg. 68431, 68492 (Nov. 27,
2006) ....................................................................... 2
84 Fed. Reg. 29389, 29390 (June 24,
2019) ..................................................................... 15
AbilityOne.gov,
https://www.abilityone.gov .................................... 2
Am. Found. for the Blind, Key
Employment Statistics for People
Who Are Blind or Visually Impaired
(2017) .................................................................... 11
David Barrett, Nat’l Indus. for the Blind
Program Manager, ETS (Pers.
Commc’n) (Sept. 19, 2019) ................................... 24
Kirk Adams, Journeys Through Rough
Country: An Ethnographic Study of
Blind Adults Successfully Employed
in American Corporations (March
2019) (unpublished Ph.D.
dissertation, Antioch University) (on
file with the Antioch University
Repository & Archive) .................................... 12, 13
Nat’l Indus. for the Blind, Essentially
the Same (ETS): The Overall Process
(last visited Oct. 1, 2019) ..................................... 23
NIH Nat’l Eye Inst., Blindness Data and
Statistics (updated May 2019) ............................. 12
vi
Roger Waldron, Under the radar: The
Air-Force’s e-commerce ‘pilot,’
Federal News Network (Sept. 21,
2018) ..................................................................... 24
U.S. AbilityOne Comm’n, Fact Sheet
(updated Aug. 2019) ......................................... 9, 13
U.S. AbilityOne Comm’n, Policy
Declaration, (May 17, 2010).............................. 8, 9
U.S. AbilityOne Comm’n, Office of
Inspector General, Top Management
and Performance Challenges Report
(Dec. 21, 2018) .................................... 22, 23, 24, 26
U.S. Dept. of Defense, Panel on Dep’t of
Defense and AbilityOne Contracting
Oversight, Accountability, and
Integrity, 2018 First Annual Rpt. to
Cong. (June 29, 2018)........................................... 25
U.S. Dep’t of Veterans Affairs,
Acquisition Policy Flash! 19-18 (May
21, 2019) ............................................................... 15
U.S. Dep’t of Veterans Affairs, Mem.
from Deputy Senior Procurement
Executive to Heads of the
Contracting Activities, Class
Deviation from VAAR 808.002 (May
20, 2019) ......................................................... 14, 15
1
INTEREST OF THE AMICI CURIAE 1
Amici curiae (listed below in alphabetical order)
are fourteen § 501(c)(3) nonprofit agencies (“NPAs”)
that currently employ 2,000 people who are blind.
These NPAs also employ more than 250 U.S. military
veterans, about 35 of whom are blind.
• Alphapointe (Kansas City, Missouri)
(alphapointe.org)
• Association for Vision Rehabilitation and
Employment, Inc. (AVRE) (Binghamton, New
York) (avreus.org)
• Austin Lighthouse (Austin, Texas)
(austinlighthouse.org)
• Beacon Lighthouse, Inc. (Wichita Falls, Texas)
(beaconwf.com)
• Beyond Vision (Milwaukee, Wisconsin)
(beyondvision.com)
• Central Association for the Blind & Visually
Impaired (CABVI) (Utica, New York) (cabvi.org)
1 Petitioner’s and Respondents’ counsel of record were provided
timely notice and have consented to the filing of this brief. In
accordance with Supreme Court Rule 37.6, amici curiae certify
that no counsel for a party authored this brief in whole or part,
and that no party or counsel other than the amici curiae and their
counsel made a monetary contribution intended to fund
preparation or submission of this brief. Prior to the filing of the
petition for writ of certiorari, counsel for amici curiae provided
Petitioner’s counsel with limited preliminary advice in
connection with Petitioner’s application to this Court for a stay of
mandate.
2
• Cincinnati Association for the Blind &
Visually Impaired (CA.BVI) (Cincinnati, Ohio)
(cincyblind.org)
• Envision (Wichita, Kansas) (envisionus.com)
• LC Industries, Inc. (LCI) (Durham, North
Carolina) (lcindustries.com)
• Lighthouse for the Blind – St. Louis (St. Louis,
Missouri) (lhbindustries.com)
• Lighthouse Louisiana (New Orleans,
Louisiana) (lighthouselousiana.org)
• Olmsted Center for Sight (Buffalo, New York)
(olmstedcenter.org)
• San Antonio Lighthouse for the Blind &
Vision Impaired (SALB) (San Antonio, Texas)
(salighthouse.org)
• The Lighthouse for the Blind, Inc. – Seattle
(Seattle, Washington) (lhblind.org)
These NPAs’ skilled and dedicated, full-time
employees—most of whom would have great difficulty
finding stable and gainful employment elsewhere—
manufacture or provide a variety of products and
services for federal departments and agencies,
including the Department of Veterans Affairs (“VA”),
under the AbilityOne Program established by the
Javits-Wagner-O’Day Act (“JWOD”), 41 U.S.C.
§§ 8501-8506. See https://www.abilityone.gov.
AbilityOne “provides employment opportunities for
people who are blind or have other severe disabilities
in the manufacture and delivery of products and
services to the Federal Government.” 71 Fed. Reg.
3
68431, 68492 (Nov. 27, 2006).
The AbilityOne
Commission’s “Procurement List” of mandatorysource, NPA-manufactured, SKILCRAFT®, cobranded, and other products is wide ranging. It
includes aircraft, vehicular, and electrical equipment
and supplies; clothing, textiles, and individual
equipment; food products and packaging; medical and
dental supplies and equipment; office supplies,
equipment, and furnishings; cleaning and janitorial
supplies; mattresses and bedding; and paints and
tools. See AbilityOne Procurement List Products. 2
The similarly varied Procurement List of
AbilityOne services that NPA employees provide to
federal departments and agencies includes, for
example, staffing switchboards at VA medical centers;
supplying custodial, environmental, administrative,
transcription, computer technology, fleet supervision,
and contract management support services; and
operating Base Supply Centers at U.S. military
installations. See AbilityOne Procurement List
Services. 3
The ready availability of these AbilityOne products
and services, all of which are needed by federal
departments and agencies or the U.S. military,
reflects numerous NPAs’ substantial, long-term
investments in both customized manufacturing
facilities and equipment and highly specialized
training of employees who are blind or severely
2 Avail. at
https://abilityone.gov/procurement_list/product_list.html
3 Avail. at
https://abilityone.gov/procurement_list/services_list.html
4
disabled. AbilityOne employees long have relied on
the AbilityOne Program for financial stability, and for
acquiring skills and work experiences that enable
them to lead dignified, productive, and independent
lives.
Revenues generated by federal procurement of
AbilityOne products and services enable NPAs for the
blind to employ individuals at locations throughout
the United States. These funds also help NPAs offer
an array of employee and community services that
otherwise would not be available. They include low
vision clinics; vision rehabilitation therapy;
orientation & mobility and other daily living skills
training; computer and adaptive technology
instruction; vocational training; educational and
recreational programs for children, teenagers, and
young adults; and other programs that empower
people who are blind to lead enriched, fruitful lives.
Loss of AbilityOne revenues, even from a single
department or agency such as the VA, would have a
significant, and in some cases devasting, impact on
many NPAs’ ability to employ people who are blind
and continue offering (often as the only local provider)
many essential community services.
*****
The NPAs submitting this amicus brief are deeply
concerned about the actual and potential impacts of
the Federal Circuit’s decision in this case. The entire
AbilityOne Program is founded upon JWOD’s decadesold requirement for mandatory-source—i.e., noncompetitive—procurement of AbilityOne products and
services from qualified NPAs for the blind or severely
disabled. See 41 U.S.C. § 8504(a). The court of
5
appeals held, however, that a “narrower” and “laterenacted,” department-specific requirement applicable
to competitive procurements—the 2006 Veterans
Benefits, Health Care, and Technology Information
Act (“VBA”) “Rule of Two” competitive-bidding
preference for veteran-owned small businesses, 38
U.S.C. § 8127(d)—“override[s]” JWOD’s unequivocal
mandate that all federal government entities
intending to acquire a product or service on the
AbilityOne Procurement List “shall procure” it from a
qualified NPA. 41 U.S.C. § 8504(a); Pet. App. 23a,
25a.
As the petition for a writ of certiorari
demonstrates, the Federal Circuit’s deeply flawed
application of statutory construction principles turns
the federal procurement system on its head.
This Court should grant certiorari and reverse the
Federal Circuit’s holding. It not only is wrong as a
matter of law, but also, as this amicus brief explains,
poses a significant threat to the venerable AbilityOne
Program. Loss of AbilityOne business from the VA—
and potentially from other AbilityOne customers
looking for ways to circumvent JWOD’s mandatorysource directive—would cause enormous harm to
NPAs, their employees, and the communities they
serve.
SUMMARY OF ARGUMENT
The Federal Circuit’s facile application of statutory
construction principles purports to reconcile the VBA
with JWOD by holding that the former’s Rule of Two
restricted-competition preference for veteran-owned
small businesses (including service-disabled veteranowned small businesses) must be given higher priority
than JWOD’s non-competitive, government-wide, job-
6
creating, AbilityOne mandatory-source requirement.
But rather than resolving a conflict, the court of
appeals has created one—an unnecessary and illusory
clash between two statutes that the court’s opinion
acknowledges were enacted to serve different
purposes. See Pet. App. 3a (“JWOD was enacted . . .
to provide employment opportunities for the blind
. . . .”); id. at 24a (“The VBA . . . was expressly enacted
to ‘increase contracting opportunities for small
business concerns owned and controlled by veterans
and . . . by veterans with service-connected
disabilities.’”) (quoting 38 U.S.C. § 8127(a)(1)). See
also Kingdomware Techs., Inc. v. United States, 136 S.
Ct. 1969, 1973 (2016) (the VBA was enacted to
“encourage contracting with veteran-owned and
service-disabled veteran-owned small businesses by
restricting competition”); Nat’l Telecommuting Inst.,
Inc. v. United States, 123 Fed. Cl. 595, 598 (2015)
(JWOD was enacted “to provide jobs”).
Instead of recognizing that the two statutes,
because of their different goals, do not conflict and can
continue to co-exist harmoniously, the court of appeals
unnecessarily has set two equally worthy groups—
military veterans and individuals who are blind or
severely disabled—against each other, at least in the
complex world of federal procurement. And the court
has done so despite any hint that Congress intended
to jeopardize the AbilityOne Program in this manner.
This is reason enough for the Supreme Court to grant
certiorari and reverse the Federal Circuit’s judgment.
AbilityOne NPAs for the blind are heavily
dependent upon Procurement List revenues to create
and maintain employment opportunities for blind or
7
visually impaired individuals, and to fund myriad
programs for them and the broader community of
people with vision loss. NPA employees who are blind
thrive at their jobs, which typically require NPAs to
make major financial investments in specialized
equipment and training. But these employees would
encounter tremendous obstacles, and suffer
significant hardship, if forced to look for similarly
meaningful work outside of the nonprofit
environment. This is why social enterprise in the form
of the AbilityOne Program continues to be essential.
The Federal Circuit’s ruling represents a serious
peril to the stability and operation of the AbilityOne
Program, and for some NPAs, poses an existential
threat. When the court’s mandate issued last Spring,
the VA instantaneously revised its procurement
regulation on use of mandatory sources, 48 C.F.R.
§ 808.002, to give the VBA’s Rule of Two restrictedcompetition
set-aside
priority
over
JWOD’s
mandatory-source directive. The VA already has
begun to solicit competitive bids from veteran-owned
small businesses to replace longtime AbilityOne NPA
contracts and employees who are blind.
If the Federal Circuit’s opinion is allowed to stand,
other federal departments and agencies can be
expected to rely on that court’s easy-to-follow roadmap
for circumventing the AbilityOne Procurement List.
In fact, lack of compliance with JWOD’s mandatorysource requirement within many federal procurement
offices already is a problem.
8
ARGUMENT
The Court should grant review because the
Federal Circuit’s ruling jeopardizes the
AbilityOne Program’s job-creation purpose
A. The AbilityOne Program’s purpose is both
beneficial and necessary
1. AbilityOne NPAs employ thousands of
people who are blind
The Federal Circuit’s opinion acknowledges that
“JWOD was enacted in 1938 to provide employment
opportunities for the blind, and was amended in 1971
to provide such opportunities for ‘other severely
disabled’ individuals.” Pet. App. 3a. Indeed, in May
2010 the AbilityOne Commission issued a formal
Policy Declaration emphasizing that AbilityOne “is an
employment program for people who are blind or
have other severe disabilities” and “achieves its
mission of creating employment through the
effective and innovative use of the Federal
procurement system.” 4 See also 41 C.F.R. § 51-1.1(a)
(“It is the policy of the Government to increase
employment and training opportunities for persons
who are blind or have other severe disabilities through
the purchase of commodities and services from
4 Avail. at
https://www.abilityone.gov/media_room/documents/Policy_Decla
ration.pdf
9
qualified nonprofit agencies employing persons who
are blind or have other severe disabilities.”).
AbilityOne’s job-creation mission has been
immensely successful. The Program is the nation’s
largest employer of individuals with disabilities. See
AbilityOne Comm’n Policy Decl., supra. AbilityOne
employs more than 45,000 people who are blind or
have severe disabilities, including approximately
3,000 veterans, some of whom are wounded warriors.
See AbilityOne Program Fact Sheet (updated Aug.
2019). 5
Achievement of the AbilityOne Program’s
objectives is dependent upon federal departments’ and
agencies’ compliance with JWOD’s mandatory-source
requirement: “An entity of the Federal Government
intending to procure a product or service on the
[AbilityOne Commission’s] Procurement List . . . shall
procure the product or service from a qualified
nonprofit agency for the blind . . . .” 41 U.S.C.
§ 8504(a) (emphasis added); see also 41 C.F.R.
§ 51-5.2(a) (“Nonprofit agencies designated by the
[Commission] are mandatory sources of supply for all
entities of the Government for commodities and
services included on the Procurement List.”)
(emphasis added); id. § 51-1.2(a) (Mandatory source
priorities) (“The JWOD Act mandates that
commodities or services on the Procurement List . . .
be procured . . . from a nonprofit agency employing
persons who are blind or have other severe
Avail. at
https://www.abilityone.gov/media_room/documents/2019_Ability
One_Fact_Sheet_v20190807.pdf
5
10
disabilities, at a price established by the [AbilityOne
Commission] . . . . the JWOD Act has priority . . . over
any other supplier of the Government’s requirements
for commodities and services on the . . . Procurement
List.”) (emphasis added).
The alternative—requiring AbilityOne NPAs to
compete with for-profit corporations for federal
procurement of goods and services—would destroy the
AbilityOne Program. AbilityOne NPAs provide their
products and services at the “fair market price”
established by the AbilityOne Commission. See 41
U.S.C. § 8503(b) & 41 C.F.R. § 51-5.5. Those fair
market prices offer enormous value (as well as high
quality) to federal departments and agencies, while
taking into account the fact that due to many factors,
NPAs almost never can compete with the commercial
sector on a lowest-price-wins basis.
For example, compared to for-profit companies,
NPAs’ overhead costs generally are higher since they
use domestic materials whenever available, strictly
adhere to federal design and performance
specifications, and often invest substantial amounts in
customized manufacturing and/or adaptive equipment
and specialized training for employees who are blind
or severely disabled. Further, although NPAs’
manufacturing operations are semi-automated, they
typically seek to maximize employment opportunities
by using comparatively less automated manufacturing
equipment and processes than for-profit companies.
And unlike many for-profit suppliers, AbilityOne
NPAs employ their own production personnel—and
provide them with fair, meaningful wages and benefits
that foster financial independence—rather than rely
11
directly or indirectly upon low-paid foreign labor. In
fact, the VA permits service-disabled veteran-owned
small businesses to avoid capital investments in
production equipment, and instead subcontract and
supply foreign-produced items, by taking advantage of
the
Small
Business
Administration’s
“nonmanufacturer rule,” 13 C.F.R. § 121.406, and class
waivers to that rule, id. § 121.1201 et seq.
Finally, since NPAs are nonprofit organizations
and thus not accountable to shareholders, they use
part of their AbilityOne revenues to help fund many
costly employee and community programs, often not
otherwise available, for people who are blind or
severely disabled.
2. Most NPA employees who are blind are
unable to find employment elsewhere
Although JWOD’s roots go back 80 years, the need
for the AbilityOne Program remains as vital today as
ever. Based on Bureau of Labor Statistics data, the
American Foundation for the Blind (“AFB”) reports
that for the period May 2016 through April 2017, 63%
of working-age individuals (ages 16 to 64) with vision
loss were not in the labor force (i.e., they either have
dropped out of the labor force or never entered it). In
contrast, during the same period, only 27% of the
general working-age population was not in the labor
force. See AFB, Key Employment Statistics for People
Who Are Blind or Visually Impaired. 6 Further,
according to the National Eye Institute, the number of
6
Avail. at https://www.afb.org/research-andinitiatives/statistics/key-employment-statistics
12
cases of blindness in the United States is projected to
quadruple between what it was in 2010 and is
expected to be in 2050. See NIH Nat’l Eye Inst.,
Blindness Data and Statistics (updated May 2019). 7
Kirk Adams, President & Chief Executive Officer
of the American Foundation for the Blind and
previously President & Chief Executive Officer of
amicus curiae Lighthouse for the Blind – Seattle,
began his recent doctoral dissertation by explaining
that “[b]lind and visually impaired people in the
United States face a dire employment situation within
professional careers and corporate employment.” Kirk
Adams, Journeys Through Rough Country: An
Ethnographic Study of Blind Adults Successfully
Employed in American Corporations (March 2019) at
iii (unpublished Ph.D. dissertation, Antioch
University) (on file with the Antioch University
Repository & Archive). 8
Dr. Adams focused his research on “corporate
America” since “there is clear direction among our
major institutions dealing with disability toward
elimination
of
specialized,
facilities-based
employment settings.” Id. at 13. He found, however,
that “[c]orporate inclusion of blind employees is in its
infancy.” Id. at iii (emphasis added). There are many
well-known reasons why mainstream employers
continue to be reluctant to hire people who are blind.
Avail. at https://nei.nih.gov/learn-about-eye-health/resourcesfor-health-educators/eye-health-data-and-statistics/blindnessdata-and-statistics
7
8
Avail. at https://aura.antioch.edu/etds/467/
13
They include, for example, mistaken beliefs that
employees who are blind may be incapable of
performing job responsibilities, or may be unreliable,
or may increase an employer’s potential liability, or
may be too difficult or expensive to accommodate.
Dr. Adams observed that in contrast, social
enterprises such as AbilityOne NPAs “are succeeding
to a degree mainstream employers do not.” Id. at 17.
Referring to the AbilityOne NPA he previously
headed, he explained that “[t]he problems and
barriers that exist in most other organizations—
marginalization, stigmatization, the need to mask
disabilities, fear of asking for accommodations—do not
exist in this [NPA] organization.” Id. Noting that
integration into mainstream corporations “may not be
the work of choice for many people with disabilities,”
Dr. Adams indicated that within the environment of
an AbilityOne NPA, “blind employees have
demonstrated low absenteeism, longevity of
employment, low turnover, loyalty, and enthusiasm.”
Id. at 17, 18.
The AbilityOne Program continues to fulfill an
important—and necessary—role for thousands of
people who are blind by enabling them “to achieve
their maximum employment potential.” Ability One
Fact Sheet, supra.
14
B. The Federal Circuit’s ruling already is
undermining the AbilityOne Program
1. The VA’s immediately effective “Class
Deviation” implements the court’s
decision
The VA wasted no time implementing the Federal
Circuit’s decision. On May 20, 2019—the same day
that the Federal Circuit’s mandate issued—the VA
issued a Class Deviation from VAAR [Department of
Veterans Affairs Acquisition Regulation] 808.002
(Priorities for Use of Government Supply Sources), 48
C.F.R. § 808.002.
According to the Memorandum accompanying the
Class Deviation, “[t]he mandate issued by the Federal
Circuit created a binding circuit precedent that, when
a product or service is on the AbilityOne Procurement
List and ordinarily would result in award under the
JWOD program, the [Veterans Benefits] Act instead
unambiguously requires that priority be given to
Veteran-owned small business.” Mem. from Deputy
Senior Procurement Executive to Heads of the
Contracting Activities (emphasis added). 9 The
Memorandum states that “effective immediately,”
rather than adhering to the “Current VAAR Policy
[that] “supplies and services on the AbilityOne
Procurement List . . . are mandatory,” the VA’s “New
Policy” is that “Contracting officers shall apply the VA
Rule of Two . . . prior to awarding any contract to
AbilityOne non-profit organizations” (emphasis
9
VA, Mem., Class Deviation from VAAR 808.002, avail. at
https://www.va.gov/oal/docs/business/pps/deviationVaar20190
520.PDF
15
added). Id.; see also VA Acquisition Policy Flash! 1918 (“This revised Class Deviation revises VAAR
808.002 to reflect language consistent with the
decision of the . . . Federal Circuit . . . in PDS
Consultants, Inc.). 10
The “New Policy” described in the Class Deviation
is reflected in a VA “temporary rule” revising VAAR
808.002. See 84 Fed. Reg 29389 (June 24, 2019)
(setting forth a revised version of 48 C.F.R. § 808.002).
Before the Federal Circuit’s ruling, VAAR 808.002
paralleled Federal Acquisition Regulation (FAR) 8.002
(setting forth “Priorities for use of mandatory
Government
sources,”
including
AbilityOne
Commission products and services, which are referred
to in FAR 8.002(a)(1)(iv) & (a)(2) as products and
services on the Procurement List maintained by the
Committee for Purchase From People Who Are Blind
or Severely Disabled).
The VA’s new rule, however, states that “[p]rior to
considering award of a contract under the AbilityOne
program, contracting officers shall apply the VA Rule
of Two to determine whether a requirement should be
awarded to veteran-owned small businesses . . . . If
[such] an award is not made . . . . AbilityOne remains
a mandatory source in accordance with FAR 8.002.”
VAAR 808.002(a)(1)(iv) & (a)(2) (rev. June 24, 2019)
(emphasis added); see 84 Fed. Reg. at 29390. This
radical change to VAAR 808.002—like the Federal
Circuit’s decision—turns the statutorily established
order of federal acquisition priorities upside down.
10
See https://www.va.gov/oal/business/pps/flash19-18.asp
16
See Petition For a Writ of Certiorari at 9-11
(explaining that under the Competition in Contracting
Act, 41 U.S.C. § 3304(a)(5), statutes such as JWOD
requiring that acquisition of particular goods and
services be made from a specified, i.e., mandatory,
source take priority over competitive procurement
procedures).
Moreover, as a result of the Federal Circuit’s
ruling, the VA appears to be flouting its own new rule
to the detriment of NPAs. Case in point:
Since 1995, amicus curiae Alphapointe has
produced over 800 million prescription drug bottles for
the VA’s Consolidated Mail Outpatient Pharmacy
(“CMOP”) program. In March 2017, prior to the
Federal Circuit’s decision, and after the VA conducted
a Rule of Two review during 2016, the AbilityOne
Commission, with the express concurrence of VA
procurement
officials,
added
child-resistant
prescription bottle caps to the AbilityOne
Procurement List.
Relying upon its longtime
relationship with the VA, Alphapointe not only
developed the child-resistant bottle caps specifically
and exclusively for the VA CMOP program, but also
invested hundreds of thousands of dollars in
production equipment so that it could fulfill the VA
CMOP program’s needs. The VA itself invested
hundreds of thousands of dollars to outfit their
CMOPs to accept the new bottle caps.
But rather than adhering to its own revised
version of VAAR 808.002 and awarding the bottle cap
contract to Alphapointe in light of the VA’s
unsuccessful 2016 Rule of Two review, the VA has
conducted a second Rule of Two review. It is unclear
17
at this time whether, despite Alphapointe’s major,
good faith investment in child-resistant bottle cap
production equipment to meet the VA’s needs, the VA
will award the bottle cap contract instead to a veteranowned small business—perhaps even to a small
business that will obtain a non-manufacturer waiver
so that it can subcontract bottle cap production to a
foreign entity rather than investing in its own
production equipment. The VA’s position apparently
is that as a result of the Federal Circuit’s ruling, at
least some AbilityOne contracts cannot be awarded to
NPAs even if a Rule of Two Review does not identify
qualified veteran-owned small businesses capable of
doing the work. This example of the aggressive and
inequitable manner in which the VA is interpreting
and applying the Federal Circuit’s decision is
incredibly troubling and disruptive.
2. The VA has begun to replace AbilityOne
contracts and eliminate jobs for people
who are blind
Due to the way that the VA instantly seized upon
issuance of the Federal Circuit’s mandate, all
AbilityOne NPAs that have contracts with the VA, or
that seek future business with the VA, now face a
significant risk that the VA’s acquisition of many
AbilityOne products and services soon will end or be
curtailed. This will inflict a severe blow to the many
AbilityOne NPAs which long have depended upon
revenues from VA procurement to help fund their
community activities, including creating and
18
maintaining meaningful employment opportunities
for individuals who are blind or severely disabled.
Indeed, just the fourteen NPAs submitting this
amicus brief employ approximately 270 individuals
who are blind and work on VA contracts, which until
the Federal Circuit’s ruling accounted for more than
$42 million in annual sales to the VA (out of $113
million annual AbilityOne sales to the VA). Because
of the Federal Circuit’s decision, these individuals’
jobs either already have been lost or now are in
jeopardy of being eliminated.
As discussed above, unlike the general labor force,
employment opportunities for individuals who are
blind are exceedingly limited. Laid-off AbilityOne
employees face formidable barriers in finding other
employment due to the hardship of having to relocate
themselves and their families to a different city or
region;
employer
misperceptions,
bias,
or
discrimination; and lack of employer accommodations
such as accessible work environments and adaptive
technology and equipment.
Some of the NPAs submitting this amicus brief—
and their employees—already have begun to suffer the
consequences of the Federal Circuit’s ruling by losing
longtime VA medical center switchboard operator
contracts and employment.
• Alphapointe had provided switchboard services
at the Kansas City VA Medical Center since 2003. But
in June 2019, the VA issued a solicitation notice for
those services as a set-aside for veteran-owned small
businesses. In July 2019, the VA awarded the
switchboard services contract, effective October 1,
19
2019, to a veteran-owned small business.
This
represents a loss of $650,000 in annual AbilityOne
revenues to Alphapointe, as well as a loss of jobs or
major salary reduction for 9 Alphapointe employees, 7
of whom are blind.
• Along the same lines, Lighthouse Louisiana
had been providing switchboard services at the VA
Gulf Coast Veterans Health Care System in Biloxi,
Mississippi, for the past 17 years. Rather than
allowing Lighthouse Louisiana to enter its second
option year under its current contract, the VA is
soliciting competitive bids from veteran-owned small
businesses to replace that AbilityOne NPA. If the
contract is awarded to a veteran-owned small
business,
Lighthouse
Louisiana
will
lose
$600,00 in annual AbilityOne revenues. Even worse,
10 Lighthouse Louisiana employees, 9 of whom are
blind, will lose their switchboard operator jobs.
• CABVI has been forced to team with a veteranowned small business in order to retain its
switchboard and reception desk contract at the VA
Medical Center in Albany, New York. This will result
in the loss of jobs by 4 CABVI employees who are
blind, and the loss of more than half of the previous
$350,000 annual revenues attributable to that
contract.
• Olmsted Center for Sight has provided
switchboard services at VA Western New York
Medical Center in Buffalo and the VA Medical Center
in Erie Pennsylvania for the past 23 years. Those
contracts employ 23 people, 19 of whom are blind. But
in June 2019 the VA issued a “sources sought”
solicitation to veteran-owned small businesses. Since
20
no qualified veteran-owned small businesses
expressed interest in those locations at this time,
Olmsted’s contracts were renewed—for now.
• Similarly, AVRE almost lost its switchboard
contracts at VA Medical Centers located in the Bronx
(New York City) and in the Hudson Valley (Montrose
and Castle Point). Those contracts make it possible
for AVRE to employ 16 individuals, 15 of whom are
blind. No veteran-owned small business has yet
expressed interest in those locations, so the VA has
exercised the final option year for those contracts.
The looming draconian impacts of the Federal
Circuit’s ruling on NPAs that do or seek business with
the VA are not limited to medical center switchboard
services. For example, in addition to Alphapointe’s
possible loss of its investment in child-resistant bottle
cap production facilities and equipment for the VA,
Lighthouse for the Blind – Seattle was deterred from
seeking a blood-pressure cuff contract with the VA as
a result of the court’s decision. That contract would
have created 25 jobs for people who are blind.
Further, the VA is in the process of launching its
Medical/Surgical Prime Vendor (MSVP) 2.0 program,
a major procurement activity that will encompass
acquisition of thousands of products used by VA
facilities. In view of the VA’s quickly expanding
embrace of the Federal Circuit’s decision, the extent to
which that new program will include—or exclude—
AbilityOne products is at best uncertain.
For
example, Lighthouse Louisiana’s AbilityOne-listed
paper cup products, which previously have accounted
21
for $1.3 million in annual sales to the VA, already
have been dropped from the VA’s MSVP 2.0 program.
C. Additional federal departments and agencies
may latch onto the Federal Circuit’s ruling
1. The ruling purports to correctly apply
well-established principles of statutory
construction to supposedly conflicting
statutes
The Federal Circuit’s opinion addresses the
supposed conflict between the Veterans Benefits Act
and JWOD. But the court’s flawed application of
statutory construction principles may be general
enough to tempt other federal departments and
agencies—at least those subject to procurement
statutes that seemingly conflict with JWOD’s
mandatory-source requirement—to construe the
ruling as a green light for bypassing the AbilityOne
Commission’s Procurement List.
In the Federal Circuit’s topsy-turvy view, a federal
statute requiring that contracts be awarded “on the
basis of competition,” in some way “applies to all
contracts—not only competitive contracts.” Pet. App.
22a. And a “more specific, later-enacted statute” that
“applies only” in the “narrower arena” of a particular
department’s restricted-competition procurements
somehow “overrides” JWOD’s mandatory-source
requirement, which the court of appeals acknowledges
not only is non-competitive, but also “applies to all
agencies of the federal government.” Id. 23a, 25a.
Based on this superficial and puzzling analysis, the
court implausibly held—in the absence of the slightest
hint that Congress intended to decimate AbilityOne’s
22
decades-old employment program for people who are
blind or severely disabled—that a department-specific
procurement provision “unambiguously demands”
that JWOD’s government-wide, mandatory-source
requirement be relegated to a lower priority. Id. 28a.
2. The ruling will exacerbate existing
noncompliance with JWOD’s mandatorysource requirement
The NPA amici fear that unless this Court grants
review and reverses the Federal Circuit, additional
federal departments and agencies will adapt the
court’s analysis as a basis for circumventing JWOD’s
mandatory-source requirement. In view of the
programmatic erosion that the AbilityOne Program
already experiences due to inadvertent or knowing
lack of compliance on the part of many federal
procurement personnel within various federal
departments and agencies, there is a solid basis for
this concern.
In December 2018 the AbilityOne Commission’s
Office of Inspector General issued a Top Management
and Performance Challenges Report. 11 The OIG
report identifies “Erosion of Statutory Program
Authority” as the top challenge facing the AbilityOne
Program. OIG Report at 2. According to the report,
“the challenge of program erosion is at a pivotal stage.”
Id. at 4. The report identifies the Federal Circuit’s
ruling in this case as a key example of how the
AbilityOne Commission is “confronted with program
11
Avail. at https://www.oversight.gov/sites/default/files/oigreports/TMC%20Web%20Posting%20V3%20%2821DEC2018%2
9.pdf
23
encroachment.” Id. at 4, 5. “Efforts by the Small
Business Administration to assert its preference
programs over the mandated priority of the JWOD
Act,” are identified as another top AbilityOne
challenge. Id. at 8.
More broadly, the AbilityOne OIG report expresses
concern about the “[l]ack of enforcement capabilities
for the AbilityOne Program to assert its mandated
source-priority when federal agencies fail to purchase
AbilityOne products and services.” Id. In fact, federal
departments’ and agencies’ lack of compliance with
the AbilityOne Program (due to misunderstanding,
ignorance, neglect, or otherwise), has become so
rampant, the National Industries for the Blind—one
of the central nonprofit agencies designated by the
AbilityOne Commission to help administer the
program, see 41 U.S.C. § 8503(c)—has established an
“Essentially the Same” (“ETS”) process (i) for
determining whether a commercial product should be
designated as essentially-the-same as an AbilityOnelisted product; (ii) for monitoring federal e-commerce
sites, including the GSA Federal Supply Schedules, to
help foster compliance with AbilityOne; (iii) for
reviewing NPA-reported instances of failure to comply
with AbilityOne’s mandatory-source requirement; and
(iv) for notifying federal purchasing agents in
instances of noncompliance. See NIB, Essentially the
Same (ETS): The Overall Process; 12 41 C.F.R.
§ 51-5.3(a) (indicating that the AbilityOne mandatory12 Avail. at
http://www.nib.org/sites/default/files/bulletin/The%20ETS%20Pr
ocess-%20updated%2011%2015%202012.docx
24
source requirement covers items that are “essentially
the same as the listed item”); id. § 51-5.8 (“Any alleged
violations of the JWOD Act . . . by entities of the
Government shall be investigated . . . .”).
Since FY 2015, NIB’s ETS Team has achieved
conversion of 525 misdirected federal solicitations to
AbilityOne, representing a potential value of $156
million. 13
The AbilityOne OIG report, supra, indicates that
another major source of AbilityOne Program erosion is
“Government-wide use of procurement through
commercial e-commerce portals,” which is “both an
opportunity and a challenge to the AbilityOne
Program.” OIG Report at 8. According to the report,
federal government use of e-commerce portals poses a
“risk for significant [AbilityOne Program] erosion.”
Id. Thus, “[i]t is paramount that . . . government
agencies and their purchase officers, understand that
the customer the E-Commerce platform seeks to serve
is the AbilityOne Program itself.” Id.
But that is not always the case. The Air Force, for
example, has embarked upon an e-commerce pilot
program for use of the Amazon Business marketplace
in connection with purchases below the current
$10,000 “micro-purchase threshold” established by the
Department of Defense (DoD). The Air Force pilot
program, however, apparently does not require
“blocking” of Amazon Business marketplace products
that are “essentially the same” as AbilityOne-listed
products. See Roger Waldron, Under the radar: The
13 Personal communication from David Barrett, NIB Program
Manager, ETS (Sept. 19, 2019).
25
Air-Force’s e-commerce ‘pilot,’ Federal News Network
(Sept. 21, 2018) (noting that “it would be helpful to
understand” how mandatory-source requirements like
AbilityOne “will be addressed” by the Air Force Pilot
program since, “[b]y way of example, under GSA
contracts and electronic systems, there is blocking to
ensure that ‘essentially the same’ commercial
products are not offered where an AbilityOne item
exists and is offered”). 14
Since DoD is an important consumer of AbilityOne
products and services, its procurement officers’ full
compliance
with
JWOD’s
mandatory-source
requirement is essential. Section 898 of the National
Defense Authorization Act for Fiscal Year 2017, Pub.
L. 114-328, established a Panel on Department of
Defense and AbilityOne Oversight, Accountability,
and Integrity. That Panel’s 2018 First Annual Report
to Congress (June 2018) notes previous DoD oversight
activities, including a June 2016 DoD Office of
Inspector audit report, which “found issues both with
how DoD contracting personnel used AbilityOne and
their understanding of the Program.” Panel Report at
7. 15 The Panel has developed a list of
recommendations which, “when implemented, will
result in greater awareness and compliance with the
AbilityOne Program requirements with respect to
DoD contracts.” Id. at 3. Along the same lines, the
14 Avail. at
https://federalnewsnetwork.com/commentary/2018/09/underthe-radar-the-air-forces-e-commerce-pilot/
15 Avail. at
https://www.acq.osd.mil/dpap/cpic/cp/docs/First_Annual_RTC_o
n_the_Panel_on_DoD_and_AbilityOne_Signed_18_July_18.pdf
26
AbilityOne OIG report explains that “it is vital to
ensure that contracting officials have a thorough
understanding of the [AbilityOne] Program to ensure
its growth and proper implementation.” OIG Report
at 9.
“In an effort to improve awareness about the
AbilityOne Program, the AbilityOne Commission’s
initiative of issuing educational materials and
providing presentations to agencies is vital.” Id. If
allowed to stand, however, the Federal Circuit’s
decision in this case will result in further erosion of
JWOD’s mandatory-source imperative by engendering
confusion and uncertainty, and perhaps outright
defiance, in procurement offices throughout the
federal government.
CONCLUSION
The Court should grant the petition for a writ of
certiorari.
Respectfully submitted,
LAWRENCE S. EBNER
Counsel of Record
CAPITAL APPELLATE
ADVOCACY PLLC
1701 Penn. Ave., NW
Washington, DC 20006
(202) 729-6337
lawrence.ebner@capital
appellate.com
October 2019
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.