[Federal Register: April 16, 1996 (Volume 61, Number 74)]
[Notice]
[Page 16699-16702]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[[Page 16699]]
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Part V
Department of Education
_______________________________________________________________________
Vending Facility Program for the Blind on Federal and Other Property;
Notice
[[Page 16700]]
DEPARTMENT OF EDUCATION
Vending Facility Program for the Blind on Federal and Other
Property
AGENCY: Department of Education.
ACTION: Notice of final schedule of arbitration fees and expenses under
the Randolph-Sheppard Act.
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SUMMARY: The Secretary presents a schedule of fees and expenses
associated with arbitration proceedings conducted under the Randolph-
Sheppard Act (Act) that will be paid by the Department. The schedule
lists the reasonable costs of arbitration and describes the standards
by which the Secretary will support those costs.
EFFECTIVE DATE: This schedule takes effect on May 16, 1996.
FOR FURTHER INFORMATION CONTACT: George Arsnow, U.S. Department of
Education, 600 Independence Avenue, S.W., Room 3230, Mary E. Switzer
Building, Washington, D.C. 20202-2531. Telephone: (202) 205-9317.
Individuals who use a telecommunications device for the deaf (TDD) may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.
SUPPLEMENTARY INFORMATION: The Randolph-Sheppard Act, 20 U.S.C. 107 et
seq., gives blind persons who are trained and licensed by State
vocational rehabilitation agencies (called ``State licensing agencies''
or SLAs) a priority to operate vending facilities on Federal property.
The Act further provides for arbitration to resolve disputes that arise
under the program between individual vendors and SLAs and between SLAs
and Federal agencies. 20 U.S.C. 107d-1(a) and (b). For each of these
two categories of arbitrations, the Secretary authorizes the convening
of an arbitration panel upon receipt of a complaint filed by either a
vendor against an SLA or by an SLA against a Federal agency. 20 U.S.C.
107d-2(a).
The Act directs each of the parties to an arbitration to appoint
one arbitrator (or panel member) and directs the two party-appointed
arbitrators to select a neutral chairperson. 20 U.S.C. 107d-2(b)(1) and
(2). In order to facilitate this process, the Department sends to the
parties names of potential chairpersons from the Roster of Arbitrators
maintained by the Federal Mediation and Conciliation Service (FMCS). If
the parties seek to appoint a chairperson who is not listed on the FMCS
roster, a biographical sketch of that chairperson is to be sent to the
Department. Once selected, the panel conducts a hearing and renders a
decision, which is subject to appeal and review as a ``final agency
action'' for purposes of the Administrative Procedure Act. 20 U.S.C.
107d-2(a).
The Act, in 20 U.S.C. 107d-2(d), requires the Secretary to pay all
reasonable costs of arbitration in accordance with a schedule of fees
and expenses that the Secretary publishes in the Federal Register.
Pursuant to this requirement, the Department has continued to pay
certain costs associated with arbitration proceedings authorized by the
Secretary in the absence of an established schedule, but has not
published the schedule referred to in the statute.
On August 19, 1994 the Secretary published a notice of proposed
schedule of arbitration fees and expenses under the Act in the Federal
Register (59 FR 42824).
In accordance with 107d-2(d) of the Act, this final schedule
outlines the types of costs that the Secretary considers reasonable
costs of arbitration and the standards by which the Secretary will
determine the rate of payment for these costs. Generally, the Secretary
considers reasonable costs of arbitration to include the cost of
preparing the official record of arbitration proceedings, professional
fees for arbitration panel members, and food, travel, and lodging
expenses of panel members and essential witnesses. The Secretary does
not consider attorney's fees to be part of the reasonable costs of
arbitration supported by the Secretary.
The Department has drawn guidance from information and data
supplied by the FMCS in formulating these standards.
There are no substantive differences between the proposed schedule
and this final schedule other than the authorization of postponement or
cancellation fees for panel members if an arbitration proceeding is
postponed or canceled within 72 hours of its scheduled date and time.
The proposed schedule would have authorized these fees for panel
members only if an arbitration proceeding is postponed or canceled
within 48 hours of its scheduled date and time.
Analysis of Comments and Changes
In response to the Secretary's invitation in the notice of proposed
schedule, two parties submitted comments on the proposed schedule. An
analysis of the comments and of the changes in the schedule since
publication of the notice of proposed schedule follows.
Major issues are grouped according to subject. Technical and other
minor changes--and suggested changes the Secretary is not legally
authorized to make under the applicable statutory authority--are not
addressed.
Postponement or Cancellation Fees
Comments: None.
Discussion: The proposed schedule would have authorized payment of
postponement or cancellation fees for arbitrators if arbitration
proceedings are postponed or canceled within 48 hours of their
scheduled date and time. During the Department's review of the proposed
schedule, it was determined that basing these fees on a two-day
standard is unduly restrictive. The Secretary believes that
authorization of fees for postponements or cancellations made within
three days of a proceeding's scheduled date and time is a fairer basis
for compensating arbitrators if schedule changes arise. Arbitrators
also may receive a portion of their per diem fee that is proportional
to the actual time that they expended in preparing for a postponed or
canceled proceeding regardless of whether the panel member is entitled
to a postponement or cancellation fee.
Changes: The Secretary has revised paragraph (b) of the proposed
schedule to authorize payment of a predetermined, customary, and
reasonable postponement or cancellation fee to panel members if a
scheduled arbitration proceeding is postponed or canceled within 72
hours of its scheduled date and time.
Attorney's Fees
Comments: One commenter opposed the exclusion of attorney's fees
from the reasonable costs of arbitration that are paid by the
Department. This commenter asserted that the Department should pay the
attorney's fees incurred by the parties to an arbitration proceeding so
as not to put blind vendors, who have limited financial resources and
cannot afford to retain an attorney, at a competitive disadvantage with
SLAs, which typically do not have to expend additional resources to
retain legal representation. In addition, this commenter stated that
the refusal of the Department to pay the attorney's fees incurred by
blind vendors during arbitration is inconsistent with the purposes of
the Act and contrary to other statutory authorities such as the Equal
Access to Justice Act, which requires the Department to pay the fees
and other expenses of a prevailing party to certain adjudicative
proceedings held before the Department. This commenter asserted that
Congress intended that the Department pay ``all'' costs incurred during
arbitration proceedings
[[Page 16701]]
conducted under the Act and questions the basis for excluding
attorney's fees from the reasonable costs of arbitration supported by
the Department.
Discussion: Pursuant to the requirements of the Act, the Department
pays the reasonable costs of arbitration from its salaries and expenses
account. Because the Department's financial resources are limited and
because neither the Act nor its legislative history specifies the scope
of the term ``all reasonable costs of arbitration,'' it has been the
Department's longstanding policy to support only the types of costs
identified in this final schedule even though the schedule has not been
published previously in the Federal Register. The Secretary believes
that a Department policy to pay arbitration costs not identified in the
schedule, such as attorney's fees, would significantly hinder the
Department's ability to meet its statutory responsibility to support
the reasonable costs associated with each arbitration that arises under
the Act. Accordingly, the schedule is limited to the general costs
necessary to ensure access to the arbitration process (i.e., the costs
of convening the arbitration panel, developing the written record, and
assembling essential witnesses).
The Secretary emphasizes that the Department plays a very limited
role in arbitration proceedings under the Act, regardless of whether
the arbitration is initiated by a blind vendor against an SLA or an SLA
against another Federal agency. A requirement that the Department pay
the attorney's fees of any party to an arbitration, therefore, would be
inconsistent with the general understanding that only parties to the
litigation can be held liable for damages or attorney's fees. This same
view was advanced recently by the 8th Circuit Court of Appeals in
McNabb v. U.S. Department of Education, 29 F.3d 1303 (8th Cir. 1994),
when it held that the Secretary is not responsible for paying
attorney's fees as part of the reasonable costs of arbitration under
section 107d-2(d) of the Act. Finally, the Secretary notes that the
Equal Access to Justice Act referred to by the commenter is unrelated
to the Randolph-Sheppard program and authorizes Department support of
fees and expenses only in certain adjudicative proceedings to which the
Department is a party (See 34 CFR Part 21).
Changes: None.
Additional costs
Comments: One commenter suggested that the schedule be expanded to
include additional expenses incurred by parties to an arbitration, such
as the costs of conducting depositions or other forms of discovery.
Discussion: The Secretary emphasizes that the schedule limits
Department support to those costs that are incident to arbitrations
conducted under the Act and are necessary to ensure that each grievant
has access to the arbitration process. Thus, the Secretary believes
that expenses incurred by exchanging information between parties (i.e.,
discovery costs), which often are considered part of attorney's fees,
fall outside the scope of the reasonable costs of arbitration for which
the Department is responsible. In addition, the Secretary notes that
Department support of the expenses of witnesses whose testimony is
deemed by the arbitration panel chairperson to be essential to the
proper resolution of the dispute may lessen the need for parties to
conduct certain depositions.
Changes: None.
Dated: April 10, 1996.
(Catalog of Federal Domestic Assistance Number does not apply.)
Richard W. Riley,
Secretary of Education.
Reasonable Costs of Arbitration Under the Randolph-Sheppard Act
The Secretary states that the reasonable costs of arbitration under
20 U.S.C. 107d-2(d) are the following:
(a) Stenographic Record--(1) General Provisions. The Department
will pay the costs of the services of the official reporter assigned to
the arbitration, including preparation of the official transcript of
the hearing and six copies thereof. The official transcript and one
copy thereof must be submitted to the Department. The remaining five
copies of the transcript must be distributed among the parties as
determined by the arbitration panel chairperson. Costs of the services
of the official reporter may not exceed the reasonable and customary
costs for those services in the locality in which the services are
furnished.
(2) Cancellation. The official reporter may charge the Department
its customary fee for cancellation of an arbitration proceeding in
situations in which a proceeding is canceled within 24 hours of its
scheduled date and time.
(b) Fees of Arbitrators--(1) Per Diem. The Department will pay a
per diem fee to arbitration panel members who are not otherwise
employed by the Federal or State Government for their services during
the course of the arbitration. The per diem fee to be paid by the
Department must be the lesser of--
(i) The customary fee charged by the individual panel member; or
(ii) The reasonable and customary fee charged by arbitrators in the
locality where the arbitration will be held.
(2) Postponement or Cancellation within 72 hours. If a scheduled
arbitration proceeding is postponed or canceled within 72 hours of its
scheduled date and time, panel members may charge the Department--
(i) A predetermined, customary, and reasonable postponement or
cancellation fee; and
(ii) That portion of the arbitrator's per diem fee proportional to
the actual time the panel member expended in preparing for the
proceeding.
(3) Other Postponements or Cancellations. If a scheduled
arbitration proceeding is postponed or canceled more than 72 hours
prior to its scheduled date, panel members may charge the Department
only that portion of the per diem fee proportional to the actual time
expended in preparing for the proceeding.
(4) Notice. The customary per diem and predetermined fees charged
by a panel member must be included in a biographical sketch that is to
be sent to the Department following his or her appointment to the
panel.
(c) Travel, Lodging, and Meal Expenses of Arbitrators and
Witnesses--(1) Arbitrators. Notwithstanding that the Secretary urges
the parties to appoint panel representatives from the locality in which
the dispute arose and the hearing is to be held, the Department will
reimburse the travel, lodging, and food expenses of the arbitration
panel members incurred for the purpose of attending hearings and for
the purpose of attending any pre- or post-hearing conferences that
cannot be conducted by telephone. These expenses will be reimbursed at
the rate applicable to Federal Government employees traveling on
government business to the hearing location. The Secretary urges the
two panel representatives appointed by the parties to select a neutral
chairperson from the locality in which the dispute arose and the
hearing is to be held.
(2) Witnesses. The Department will reimburse the travel, lodging,
and food expenses of witnesses for the purpose of testifying at
hearings, if the witness does not reside at the locality of the
arbitration proceeding and the testimony of the witness is deemed by
the arbitration panel chairperson to be essential to the proper
resolution of the dispute. These expenses will be reimbursed at the
rate applicable to Federal Government employees traveling on government
business to the hearing location.
[[Page 16702]]
(d) Unsupported Costs. Attorney's fees are not considered the
responsibility of the Department and are not included in the reasonable
costs of arbitration supported by the Department.
(Authority: 20 U.S.C. 107d-2(d))
[FR Doc. 96-9335 Filed 4-15-96; 8:45 am]
BILLING CODE 4000-01-P