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BROTHERS CLEANING SERV. v. CHAIR

February 24, 1998

BROTHERS CLEANING SERVICE, INC., Plaintiff,
v.
CHAIR, COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED, et al., Defendants.



The opinion of the court was delivered by: SULLIVAN

MEMORANDUM AND ORDER

 This matter is before the Court on defendants' motions to dismiss, or in the alternative, for summary judgment, plaintiff's opposition, and federal defendant's reply thereto. *fn1" Upon consideration of the undisputed facts, the relevant statutes, regulations and case law, and the record herein, the defendants' motions to dismiss are GRANTED.

 I. BACKGROUND

 Plaintiff, Brothers Cleaning Service, Inc. ("Brothers"), a minority-owned corporation, commenced this action against the Chair of the Committee for Purchase from People Who Are Blind or Severely Disabled ("the Committee") and against the National Industries for the Severely Handicapped ("NISH"), a designated "central nonprofit agency" pursuant to the Javits-Wagner-O'Day Act ("the JWOD Act"). Brothers alleges that the Committee and NISH violated the procedures prescribed by the JWOD Act and failed to follow the Committee's procedures by allowing a building cleaning contract to be placed on the procurement list it maintains.

 The JWOD Act implements the federal government's policy to facilitate procurement from nonprofit agencies employing persons who are blind or severely disabled. Pursuant to the JWOD Act, the Committee is an independent federal agency responsible for establishing and publishing a procurement list consisting of commodities and services the Committee determines to be "suitable for procurement by the Government" by "qualified nonprofit agencies for the blind or other severely handicapped." Id. § 47(a)(1). The procurement list is a mandatory procurement source for the federal government. *fn2"

 Under the Act, the Committee is required to designate one or more central nonprofit agencies, such as NISH, to "facilitate the distribution of orders . . . among qualified nonprofit agencies." 41 U.S.C. § 47(c). As the "central nonprofit agency" representing "nonprofit agencies employing persons with . . . severe disabilities," 41 C.F.R. § 51-3.1, NISH is responsible for evaluating the "qualifications and capabilities of its nonprofit agencies," id. § 51-3.2(b), and then providing the Committee with this information. Thus, NISH facilitates the Committee's procedures and administrative functions in the interest of nonprofit agencies that employ people who are severely disabled. Id. § 51-1.3.

 II. FACTS

 In 1992, Brothers contracted through the United States Small Business Administration to provide custodial services at facilities used by the Department of the Army at the Fort Leavenworth base in Kansas. The Army, through its contracting officer, orally requested in July 1994 that Brothers assume janitorial services for two newly constructed buildings, the Combined Arms Research Library and the General Instructional Facility, collectively referred to as Eisenhower Hall. Brothers agreed to perform and indeed performed custodial services at Eisenhower Hall from July 1994 through November 1994. However, a written contract modification was never drafted. Brothers submitted invoices and received payment for work performed during that period in accordance with the original oral request by the contracting officer.

 In mid-November 1994, the contracting officer informed Brothers that its custodial services at Eisenhower Hall were no longer required. Helping Hand of Goodwill Industries Extended Employment Sheltered Workshop, Inc. ("Goodwill") received the contract beginning in December 1994, and Brothers was asked to vacate Eisenhower Hall so that Goodwill could take its place.

 Brothers subsequently learned from the Army contracting officer that Goodwill's assumption of custodial services at Eisenhower Hall had been facilitated by NISH, pursuant to the JWOD Act and the Committee's implementing regulations. Brothers inquired as to the legitimacy of its dismissal and replacement with Goodwill. According to Brothers, the contracting officer informed it that the government was required under the JWOD Act to award the contract for Eisenhower Hall to Goodwill.

 Brothers subsequently filed this action against the Committee and NISH seeking review of the Committee's and NISH's actions.

 III. DISCUSSION

 Brothers alleges that the Committee and NISH violated the procedures prescribed by the JWOD Act and failed to follow the Committee's procedures when the Committee added janitorial services for Eisenhower Hall to the procurement list.

 Specifically, Brothers alleges that, under Section 706 of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 553, 702 seq., the Committee's actions were arbitrary and capricious in (1) adding Eisenhower Hall to the procurement list after Goodwill had begun performing services at Eisenhower Hall; (2) permitting Goodwill to "assume performance of custodial services at Eisenhower Hall" (Compl. P 29) prior to Eisenhower Hall's addition to the procurement list; (3) failing to conduct an impact study of the effect of its decision on Brothers, in violation of 41 C.F.R. § 51-2.4(e); and (4) denying Brothers' request for reconsideration. In addition, Brothers claims that ...


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