U.S. DEPARTMENT OF LABOR
SECRETARY OF LABOR
WASHINGTON, D.C.
DATE: November 20, 1990
CASE NO. 89-JTP-20
IN THE MATTER OF
LAKE CUMBERLAND COMMUNITY
SERVICES ORGANIZATION,
COMPLAINT,
V.
U.S. DEPARTMENT OF LABOR,
RESPONDENT,
AND
KENTUCKY FARMWORKER PROGRAMS, INC.,
PARTY-IN-INTEREST.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
BACKGROUND
This case arises under the Job Training Partnership Act (JTPA
or the Act), 29 U.S.C. § 1501-1781 (1982), and the
regulations issued thereunder at 20 C.F.R. Parts 629 and 633
(1990) and 29 C.F.R. Part 17 (1990).
On September 2, 1988, the United States Department of Labor
(Department or DOL) published a notice of invitation to public
agencies and private nonprofit organizations to submit to DOL
preapplications and funding applications to provide training and
employment services to migrant and seasonal farmworkers (MSF)
under JTPA.[1] Both the Complainant, Lake Cumberland Community
[PAGE 2]
Services organization (Lake Cumberland), and the Party-in
Interest, Kentucky Farmworker Programs, Inc. (KFP), which was the
incumbent service provider, applied for grants as service
providers under JTPA Section 402, 29 U.S.C. § 1672, for the
State of Kentucky. The Grant Officer selected KFP as the grantee
for the Program Year (PY) 1989.[2] On May 2, 1989, Lake
Cumberland appealed its nonselection as grantee, pursuant to
Section 166(a), JTPA, 29 U.S.C. § 1576(a), and 20 C.F.R.
§ 629.57(a). KFP was added as a party to the proceeding on
December 13, 1989, with full privileges as a participant. In
the Matter of LakeCumberland Community Services Oraanizat
on v. U.S. DeDar men o-Labor and Kentucky Farmworker
Programs, Inc., Case No. 89-JTP-20, Administrative Law Judge
(ALJ) Rudolf L. Jansen, Decision and Order (D. and 0.) issued
June 14, 1990, slip op. at 2.
After a hearing and various submissions by the parties, the
ALJ determined that the Grant Officer's selection of KFP as the
Kentucky MSF program grantee "was not made in accordance with the
law since the applicant [KFP] was ineligible for consideration
due to its having failed to comply with the applicable filing
deadlines." D. and 0. at 11. The ALJ then ordered that Lake
Cumberland be immediately granted the relief in 20 C.F.R. §
633.205(e), providing that a nonselected applicant which
successfully appeals its nonselection is to be selected within 90
days of the ALJ's decision.
The Grant Officer and KFP timely excepted to the ALJ's
decision, and on July 11, 1990, I asserted jurisdiction and
stayed the decision of the ALJ. Thereafter Lake Cumberland moved
(and later renewed its motion) that the order asserting
jurisdiction be modified to lift the stay of the ALJ's decision
of June 14, 1990, and to permit the "switchover" procedure,
whereby Lake Cumberland would be substituted for KFP, to go for-
ward.[3] My Order of September 21, 1990, denied these
motions[4] , noting that 29 C.F.R. § 633.205(e) -- the
regulation pertaining to implementing an ALJ's decision favorable
to a nonselected applicant who successfully appeals the Grant
officer's designation of another applicant -- applies only
if the ALJ's decision is a final adjudicatory act. My July 11
order stayed the ALJ's decision pending my final determination,
embodied in this Final Decision and order which is the final
administrative adjudicatory act. The Act permits Secretarial
review of ALJ determinations, 29 U.S.C. § 1576(b), and it
controls all JTPA regulations including Section 633.205(e).
DISCUSSION
The issue before me is the ALJ's determination that KFP was not
an eligible applicant for the PY 1989 MSF grant because it failed
to comply with one filing requirement of the Department's
September 2, 1988, Notice and Invitation for MSF Grant
[PAGE 3]
Applications. I disagree with the ALJ's analysis supporting his
determination, and reverse his decision.
The Notice has four major elements. The third and fourth
elements are entitled "Part II - Preapplication for Federal
Assistance" and "Part III - Solicitation for Grant Application",
respectively. There is no issue in this case concerning the
applicability of these two parts of the notice to the grant
process, and there is no dispute that KFP complied with the
filing deadline requirements for its submissions to the Grant
officer.
What is in dispute is the applicability of certain language
in the first element which is the preamble of the Notice, and
whether that language is mandatory regarding certain requirements
in the second element. The preamble provides a brief overview of
the Notice. A "Dates" section establishes the deadlines for
preapplications and applications, and states that "no exception
to the mailing and hand-delivery conditions set forth in this
notice will be granted. Preapplications and applications not
meeting the conditions set forth in this notice will not be
accepted." The third section provides the name and address of the
Grant Officer to whom the preapplications and applications must
be mailed or delivered. It does not mention any other
addressee.
The second element of the Notice, entitled "Part I -
Introduction," provides background information on regulations
pertaining to MSF programs and grant administration, and includes
a section headed Comments From the States which provides:
Executive Order 12372, "Intergovernmental Review of Federal
Programs," and the implementing regulations at 29 C.F.R.
Part 17, are applicable to this program. Pursuant to these
requirements, in States which have established a
consultation process expressly covering this program,
applications shall be provided to the State for comment.
Since States may also participate as competitors for this
program, applications shall be submitted to the State upon
the deadline for submission to the DOL. 20 C.F.R. §
633.202(d).[5]
The Comments section continues by specifying a four step
timeframe to be followed for the State's comments concerning
applications it received. The first step requires the reviewing
state agency, the State's Single Point of Contact (SPOC), to
provide its comments to DOL within 60 days after the deadline
date for applications, conforming to 29 C.F.R. § 17.8(a)(2).
The next three steps pertain to the timeframes within which DOL
will forward the SPOC's comments to the applicant; the response
by the
[PAGE 4]
applicant to DOL; and the time from the date of DOL's notice to
the SPOC of its decision concerning the comments and response,
and the implementation date. The balance of Part I
pertains to state planning estimates and the competitive point
advantage an applicant will receive if it has the Governor's
recommendation.
The ALJ held the deadline in the preamble of the Notice to
be mandatory, and controlling with regard to an applicant's
submission to the SPOC as well as to the Grant Officer. After
discussing the preapplication and application filing dates, the
ALJ states: "I interpret both of those provisions to relate to
both the federal application and the state application."
D. and 0. at 10 (emphasis supplied). It should be noted that the
applicant's submission to the SPOC is not an application to the
state for funding, but rather a copy of its federal
funding application on which the SPOC is to comment.
Earlier in the decision, the ALJ characterizes the selection
process for the MSF grants as a "partnership" effort between the
state and Federal agencies.
In my judgment, the provisions of 29 C.F.R. Section
17.1(b) set the tone for the congressional directive
requiring the full participation of the instrumentalities
of state government. . . . [I]t seems clear to me that
congressional intent mandates an equal partnership
between both the federal and state governmental
instrumentalities. . . . I believe that the state's
participation was considered by the Congress to be equally
important as that of the federal government.
D.and 0. at 9-10.
To support his interpretation, the ALJ quotes at length from
the Senate Report accompanying the Senate bill which was enacted
as JTPA.[6] J D. and 0. at 9. The quotation entitled
"Federalism" sets forth an enhanced role for the state and the
Governor in determining service delivery areas and in the basic
supervisory role over job training programs previously performed
by the Federal government. This language, however, does not
pertain to federally administered national programs under Title
IV of JTPA, of which the MSF program is one. The last paragraph
of the Federalism section, omitted from the ALJ's analysis,
details as follows areas which remain within the Federal purview:
[t]he federal government will be responsible for developing
nationwide performance standards, operating national
Programs, conducting research, demonstration and evaluation
activities, and monitoring state performance." [7]
[PAGE 5]
As the Senate Report states, the Migrant and Seasonal
Farmworker programs established under the Comprehensive
Employment and Training Act (CETA), 29 U.S.C. §§ 801,
873 (Supp. V 1981), were "retained" under JTPA.[8] The only
significant modification in JTPA directed the Secretary to
strengthen the selection and administrative processes of MSF
programs by the inclusion of personnel with particular competence
in the
field.[9] The JTPA language concerning the consultative process
with state and local officials actually reduced the likely state
and local role.[10] Neither the Act nor the relevant legislative
history is consistent with the ALJ's view that Congress intended
MSF grantee selection to be a matter of partnership between the
states and the DOL.[11]
The Act and the pertinent regulations, reflecting the
intent of Executive Order No. 12,372, 3 C.F.R. 197 (1982),
reprinted in 31 U.S.C. § 6506 app. at 512 (1982), as
amended, require the Grant Officer to consult with appropriate
state officials. There is no dispute here that the Grant Officer
consulted with the SPOC, that KFP's late filing did not interfere
with the consultative process, and that the Grant Officer
received the SPOC's comments in a timely fashion. D. and 0. at
10. Ronald Ramsey, KFP's Executive Director, testified that the
reason for KFP's late filing with the SPOC was to respond to a
request from the SPOC's manager, Mr. Bob Leonard, for additional
material not included with the application submitted to the Grant
Officer. The additional information was to assist the SPOC in
its evaluation of KFP's grant application. Hearing
Transcript at 7173. The proffered reason for the delay was not
contradicted by Lake Cumberland at the hearing or subsequently.
Nor was there any prejudicial conduct toward any party. D. and
0. at 10. Therefore, nothing of statutory or regulatory
substance occurred that would occasion the setting aside of the
Grant Officer's selection of KFP as the MSF grantee.
The ALJ erred in summarily dismissing the Grant Officer's
argument that the state filing date was directory and not
mandatory. Because of the Grant Officer's responsibility in
selecting MSF grantees, this distinction is critical. The Grant
Officer's responsibility to select a MSF grantee is singular.
The SPOC's recommendation is not binding on the Secretary,
although it provides information that facilitates a reasoned
decision. It was therefore error for the ALJ to elevate a
procedural rule in a preamble concerning the filing of KFP's
submission to the SPOC to a deadline which could act as a
jurisdictional bar to consideration of the project by the Grant
Officer. Ample case law establishes that an agency always has
the discretion to relax procedural rules that are adopted to aid
in the exercise of its discretion, barring a showing of
[PAGE 6]
substantial prejudice to a complaining party. American Farm
Lines v. Black Ball Freight Service, 397 U.S. 532, 538-39
(1969), citing NLRB v. Monsanto Chemical Co., 205 F.2d
763, 764 (8th Cir.
1953); Health Systems Agency of Oklahoma, Inc. v. Norman,
589
F.2d 486, 489-92 (10th Cir. 1978). Here, no such prejudice was
shown.
Further, the record indicates that, had the SPOC received a
funding proposal so late as to compromise its evaluation of the
proposal, under an established procedure it could request the
federal agency not to consider the proposal.[12] As borne out by
the record and by the ALJ's discussion, the eight day delay in
the SPOC's receipt of KFP's application did not result in any
problem for the SPOC's consideration of the application or the
SPOC's timely response to the Grant Officer.
Moreover, I am mindful of a further consideration - program
quality. The Congress intended the Department to fund only
programs of proven effectiveness to meet the employment and
training needs of the Nation's migrant and seasonal farmworker
population.[13] Under JTPA, Federal personnel charged with the
overall responsibility for selection and administration of the
MSF programs were to have "particular competence in this field",
and responsibility for these programs was retained by the
DOL.[14] The statutory goal is to provide a maximum benefit to
the program's participants, and not to benefit putative service
providers.
In this case, a panel of program specialists rated each
application individually, and awarded the incumbent KFP 92.3
points out of a possible 100. Lake Cumberland was awarded 79
points. Even adding 5 points to Lake Cumberland's earned score
because it is a governmental entity, KFP's earned total was
almost 10% higher than Lake Cumberland's enhanced total. In
reviewing the assessment of KFP's application by the Governor's
office and various local organizations, 12 local agencies
endorsed KFP's project as submitted, one conditionally endorsed
the project, two had no comment, and only one, Lake Cumberland
Community Services Organization, indicated that KFP's application
was unsatisfactory.[15] It is my decision that the intent
of the Congress in enacting JTPA is best served by affirming the
Grant Officer's selection of the Kentucky Farmworker Programs,
Inc. as the MSF grantee for Kentucky. Therefore, I REVERSE the
ALJ's determination in this case.
So ORDERED.
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] Job Training Partnership Act: Migrant and Seasonal
FarmworkerPrograms; Preapplications for Federal
Assistance, andSolicitation for Grant Application, 53 Fed. Reg. 34,178
(1988).
[2] Pursuant to the notice, grantees selected for PY 1989
would not have to recompete for funding for PY 1990, provided
applicable regulatory requirements were met, an acceptable
training plan was submitted and funds were available. 53 Fed.
Reg. 34,181; 29 U.S.C. § 1672(c)(2).
[3] Complainant's Motion to Enforce Regulations Requiring
Switchover, dated July 30, 1990; Complainant's Renewed Motion to
Enforce Regulations Requiring Funding Switchover, dated
September 11, 1990.
[4] Sec. Order Denying Complainant's Motion and Renewed Motion
to Enforce Regulations Requiring Funding Switchover.
[5] The language of the regulation at 20 C.F.R. §
633.202(d) differs from the preamble only in that the
implementing regulations of the Executive Order are cited as
being at 1130 C.F.R. Part 46,11 [sic] and the last sentence of
the regulatory subpart continues "instead of the usual 30-day
period for
review."
[6] S. Rep. No. 469, 97th Cong., 2d Sess. 3, reprinted
in 1982 U.S. Code Cong. & Admin. News (USCCAN) 2636.
[7] Id. at 2638 (emphasis supplied).
[8] Id. at 2643.
[9] See Section 402(e), JTPA, 29 U.S.C. § 1672(e). "The
Secretary is directed to take appropriate action to establish
administrative procedures and machinery (including personnel
having particular competence in this field) for the selection,
administration, monitoring and evaluation of migrant and seasonal
farmworker's employment and training programs authorized under
this Act."
[10] Compare Section 402(d), JTPA, 29 U.S.C. §
1672(d) (11..... the Secretary shall consult with appropriate
state and local officials") with Section 303(e), CETA, 29
U.S.C. § 873(e) (Supp. V. 1981) ("[i]n administering
programs under this section, the Secretary shall consult with
appropriate State and local
officials and may enter into agreements with such officials to
assist in the operation of such programs.")
[11] By contrast, it is clear that Congress did contemplate a
"partnership" in the participation of local elected officials and
representation from businesses, education and labor in private
industry councils. See USCCAN at 2638; 29 U.S.C.
§§ 1512-1513.
[12] Letter from Lee Troutwine, commissioner, to John G.
Prather, Esq. dated December 18, 1989. Letter received and date
stamped by the Office of Administrative Law Judges, December 21,
1989. Response to Interrogatory No. 24. See also
Kentucky Intergovernmental Procedural Guide - Section 2 -
Clearinghouse Notification. (The guide is used by the Kentucky
State Clearinghouse which operates as the SPOC for JTPA grant
applications. The Guide states that noncompliance with the
timeframes is not a jurisdictional bar to review but is rather
for the applicant's own best interest since the Clearinghouse
reserves the right to recommend to a funding agency that a late
submitted application not be considered for funding until the
review is completed.)
[13] "The Secretary shall provide services to meet the
employment and training needs of migrant and seasonal farmworkers
through such..... organizations as the Secretary determines to
have . . . a Previously demonstrated capability to
administer effectively a diversified employability development
program for migrant and seasonal farmworkers.11 29 U.S.C. §
1672(c)(1) (emphasis added).
[14] 29 U.S. C. § 1672(e).
[15] Complainant's Exhibit 4, at 156-171.
