The AbilityOne Program, established by the Javits-Wagner-O’Day (JWOD) Act in 1971, requires federal government agencies to procure certain products and services from community-based nonprofit agencies that employ individuals who are blind or have significant disabilities.
In a recent U.S. Court of Federal Claims decision, SEKRI, Inc. (SEKRI), a Kentucky nonprofit textile and apparel manufacturer that employs severely disabled individuals, filed a pre-award bid protest, claiming that the Defense Logistics Agency (DLA) and the United States Ability One Commission violated the JWOD Act by proposing to award 50% of the solicitation for Advanced Tactical Assault Panels (ATAP) competitively to a commercial supplier. SEKRI argued that 100% of the award should go to SEKRI, the nonprofit agency that AbilityOne had designated to be the mandatory source of supply for 100% of the Department of Defense’s ATAP requirements. Further, SEKRI claimed that DLA could not negotiate a more favorable contract price for ATAP.
The U.S. Court of Federal Claims agreed with SEKRI finding that AbilityOne’s designation of a nonprofit agency as a mandatory source for only 50% of the requirement was unlawful. The Court found that no statutory or regulatory exception allows AbilityOne to limit the scope of ATAP on the procurement list. The nonprofit agency was available to produce the entire quantity of ATAP for DLA within the required time. Moreover, DLA had not issued any purchase exception, and the Court found that no deletion from the procurement limit was appropriate. Accordingly, the Court ordered AbilityOne to update SEKRI’s status on the procurement list to indicate that it is the mandatory source for 100% of the ATAP requirement.
This decision makes clear that all federal agencies must comply with the mandatory purchasing requirements under the JWOD Act. The AbilityOne Commission does not have the regulatory authority to reduce the mandatory source requirement. In the future, any attempts by agencies participating in the AbilityOne Program to make purchases below the 100% threshold to nonprofit agencies will certainly be scrutinized and will likely be found unlawful.
If you have questions about the AbilityOne Program, government contracts, or investigations, contact the author of this advisory or your Stinson counsel.
Case Citation: SEKRI, Inc. v. United States, No. 21-778, 2023 WL 2473533 (Fed. Cl. Mar. 13, 2023)