AbilityOne Program: Court Shoots Down “Arbitrary and Capricious” Contract Award

The AbilityOne Program cannot be used to award a contract when it is questionable whether the contractor will comply with the requirement that significant portions of the work be performed by the severely disabled, according to a recent decision of the U.S. Court of Federal Claims.

In Systems Application & Technologies, Inc., No. 12-526C (2012), Judge Eric Bruggink, in an opinion brimming with colorful quotes, shot down the Army’s effort to award a contract involving significant degrees of physical labor at a remote location to an erstwhile AbilityOne participant, holding that the prospective awardee had not come close to demonstrating that the work would (or could) be performed by the severely disabled.

For contractors concerned that the AbilityOne program may be subject to misuse, the Systems Application case is confirmation both that questionable practices occur in AbilityOne contracting, and that such practices will not be tolerated by the Court.

The Systems Application case involved an Army contract for operation and maintenance services at the Yakima Training Center in western Washington State.  The site is in a remote desert area, with no public transportation available.

Systems Application & Technologies, Inc. or SA-TECH, was the incumbent contractor.  SA-TECH had been awarded the contract under full and open competition.  Under the incumbent contract, SA-TECH performed a variety of management and maintenance work, including maintaining a live fire range.  The job descriptions for SA-TECH’s employees required them to be able to drive, lift up to 100 pounds, engage in strenuous physical activity during stressful conditions, and be available 24 hours a day.

Although the Army had no complaint with SA-TECH’s performance, it decided that it wished to pursue the possibility of performing the follow-on contract under the auspices of the AbilityOne Program, which was created by the Javits-Wagner-O’Day Act (AbilityOne procurements are sometimes referred to as JWOD procurements).  The Army contacted the National Institute for the Severely Handicapped, or NISH, one of the agencies responsible for facilitating AbilityOne procurements.  Soon thereafter, the Army and NISH agreed that the contract was a candidate for the AbilityOne program.

In order for a contract to be awarded under the AbilityOne Program, the products and services at issue must be added to a “Procurement List” maintained by the Committee For Purchase From People Who Are Blind Or Severely Disabled.  Before adding a contract to the Procurement List, the Committee must determine four things: (1) that putting the contract on the Procurement List has the potential to create jobs for the severely disabled, (2) that the proposed AbilityOne contractor is a qualified entity, (3) that, at the time the contractor would begin performing, it has the capability to meet Government quality standards and delivery schedules, and (4) whether procuring through the AbilityOne program will have an adverse impact on the incumbent contractor.  Over SA-TECH’s strenuous objections, the Committee added the contract to the Procurement List.

Using the AbilityOne Program, the Army intended to award the contract to Skookum Educational Systems.  Skookum proposed to provide 20 severely disabled workers, of the 30 positions called for in the contract.  Skookum’s proposal was accepted despite a statutory requirement that 75% of employees be severely disabled (Skookum disagreed with how the 75% calculation should be performed, insisting that it had proposed to meet the 75% requirement).

The statutory definition of “severely disabled” provides that those individuals “are, by definition, not commercially employable.”  Despite this definition, Skookum indicated that it intended to evaluate SA-TECH’s incumbent workforce for employment on the new contract, stating that “Skookum estimates that 10% of the current labor force may have conditions to meet the criteria for severely disabled.”  Skookum stated that “severely disabled” is a broad definition, and “frequently includes people some may be surprised would meet this criteria.”

Although Skookum pledged to ultimately provide 20 severely disabled employees, Skookum stated that it would begin performance with only nine severely disabled individuals.  When Skookum was asked how it would locate these individuals, it referred merely to “statistics about the ‘disabled’ in the Yakima area.”  None of the nine individuals were identified by name, capability, or by disability.  At one point, Skookum vaguely stated “there are folks out there who will qualify.”  Skookum presented no plan for transporting any of the severely disabled individuals to and from the remote job site.

SA-TECH filed a bid protest with the Court, challenging the award to Skookum.  Judge Bruggink agreed, holding that the Committee had mis-evaluated at least two of the four required factors, and “acted in an arbitrary and capricious way in placing the YTC contract on the Procurement List . . .”

Judge Bruggink held that the Committee had not reasonably determined that awarding the contract to Skookum would create new jobs for the severely disabled, nor had it reasonably determined that Skookum had the capability to perform the contract.

Given the nature of the contract, Judge Bruggink wrote, the Committee should have posed questions such as “is it appropriate to put someone who has severe post-traumatic stress disorder with depressive and anxiety order on or even near a live fire range.  Or, can someone who has degenerative disease or polio meet the physical requirements of the job.”  However, “[i]nstead of asking such questions, the Committee staff shifted the burden to SA-TECH and relied on high minded policy” regarding what individuals with disabilities “can do.”

“It was not SAT-TECH’s burden to show that the severely disabled are ‘inherently incapable’ of performing any of the tasks on the YTC contract,” Judge Bruggink continued.  Rather, “[i]t was Skookum’s burden, given the numerous reasons for concern, to show that there were a sufficient number of specific jobs that could be done by severely disabled workers.”

In light of Skookum’s vague plan for finding and hiring severely disabled workers, “Skookum’s confidence in the face of the unique tasks could be attributable to optimism.  Alternatively, the Committee had reason to be concerned that Skookum would accomplish the job without really making use of the severely disabled.”

Judge Bruggink pointed out that Skookum’s plan “involved the hope that Skookum might be able to reclassify SA-TECH’s existing employees.”  According to the judge, “[t]his should have triggered a concern that the incumbent would be ousted on the basis of improperly reclassifying persons who were disabled, but not unemployed, or that Skookum did not have a feasible plan for hiring the severely disabled.”

Judge Bruggink sharply criticized the Army’s behavior, writing, “[i]t is of particular concern to the court that the individual at the Army whose responsibility it was to protect the Army’s interests showed a inclination to accept creative applications of the term ‘severely disabled, and seemed more eager to promote AbilityOne in general an Skookum in particular than to address the serious misgivings being raised” by SA-TECH and others.

Judge Bruggink continued: “Although the Committee has, by statute, the last word on setting aside contracts for AbilityOne contractors, Congress plainly assumed that the contracting agency would be something of a counter-weight, providing a reality check to ensure that critical work can actually be done by the severely disabled. The reason the record does not demonstrate that placement of this contract on the Procurement List has the potential to provide employment to the severely disabled, or that Skookum had the capability to meet Government quality standards is that [the Army] did not provide that counter-weight. Instead, it became an advocate for AbilityOne in general and Skookum in particular.”

Judge Bruggink entered summary judgment in SA-TECH’s favor, and issued an injunction prohibiting the Committee from placing the contract on the Procurement List and from contracting with Skookum for the work.

Don’t get me wrong: I am an advocate for providing employment opportunities for the severely disabled, and I believe that the AbilityOne program, if used correctly, serves an important function in our society.  But after hearing from many contractors concerned about a perception that the AbilityOne program is vulnerable to misuse, I would be lying if I said I wasn’t cheering when I read Judge Bruggink’s decision in Systems Application.

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