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.

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