DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Virgin Islands Dept. of Human Services
Docket No. 88-4
Reconsideration of DGAB No. 890
DATE: March 23, 1988
RULING ON REQUEST FOR RECONSIDERATION
The Virgin Islands Department of Human Services (appellant)
requested
reconsideration of Virgin Islands Commission on Aging, DGAB No.
890
(1987), in which the Board upheld the decision by the Administration
on
Aging disallowing $399,211 1/ in meal costs charged to a grant
under
title III-C of the Older Americans Act for the period February
10
through August 31, 1986. The Board found that the only issue
presented
was whether the costs should have been allowed because they were
paid
pursuant to an order of the Territorial Court of the Virgin
Islands.
Appellant conceded that the costs were otherwise unallowable because
the
contracts for meal services were awarded to Duvergee, Inc. in
violation
of applicable procurement standards. The Board concluded that
while the
court order required appellant to award the contracts to Duvergee,
it
did not require federal reimbursement of the contract
The Board's regulations at 45 C.F.R. 16.13 state that the Board
may
reconsider a decision where a party promptly alleges a clear error
of
fact or law. As discussed below, we find that appellant has not
met
that standard here. Accordingly, we deny the request
for
reconsideration.
In requesting reconsideration, appellant asserted first that the Board
had
erred in concluding that no deference was due the decision of the
Territorial
Court. Appellant took the position that, although the
decision was not
binding, the Board should have deferred to the court's
interpretation of the
Virgin Islands' preferred bidders statute as well
as to the court's factual
conclusions regarding Duvergee's status as a
responsible bidder. We
find that reconsideration is not warranted on
this basis, however. DGAB
No. 890 states, and the record for that
decision substantiates, that
appellant agreed that the preferred bidders
statute should not have been
applied and that the contract should not
have been awarded to Duvergee.
Since appellant itself elected not to
defer to the decision of the
Territorial Court on these matters, the
Board did not consider the issue
whether the decision was entitled to
deference. The Board's failure to
consider an argument on behalf of a
party which is plainly inconsistent with
the position the party has
taken before the Board cannot reasonably be
considered an error of law
or fact.
Appellant further argued that the Board erred in not considering
the
regulation which permits a grantee to reject bids when there are
"sound
documented business reasons in the best interest of the
program." 45
C.F.R. Part 74, Appendix G, 11(b)(2)(e). Appellant
contended that it had
effectively raised this issue when it took the position
that "it had to
comply with the court order to keep the program operating . .
. [while]
proper action was being taken through the judicial system."
Appellant's
submission dated February 23, 1988, p. 3.
We are not persuaded that this is an adequate basis for
reconsideration
either. The statement in the prior proceeding to which
appellant
alludes was:
It is the
Appellant's position that this disallowance
should
be
denied on the grounds that proper action has been
taken
through the judicial system and that the Appellant
during
the
1986-87 award was under a court mandate to award
the
contract to Duvergee. Thus, because the Appellant was
not
free
to make its own decision, . . . the Appellant
should
not
be penalized for the decision of the lower court
in
awarding the contract to Duvergee.
Appellant's brief dated April 27, 1987, p. 11. The point being
made
here was that appellant should not be penalized since it duly
appealed
the court order requiring it to award the contracts to
Duvergee. This
is not tantamount to an argument that appellant awarded
the contract to
Duvergee for sound business reasons. Appellant also
mentioned elsewhere
its concern that there would have been a "detrimental
effect on the food
services to . . . [elderly people]" if the court had
stayed the matter
pending appellant's appeal of its decision to award the
contract to
Duvergee. Id., p. 10. Merely because the court
proceeded so as not to
cause an interruption of meal services does not mean
that the award to
Duvergee represented an exercise of sound business
judgment, however.
Thus, even if appellant had cited the regulation in
question, there
would have been no basis in the record for the Board to
conclude that it
applied. Accordingly, the Board's failure to consider
it was not an
error.
Finally, appellant argued that the Board erred in sustaining the
Agency's
finding that Duvergee was not a responsible bidder with respect
to the
contract for meal services on St. Croix. (The disallowance
covered the
cost of meals provided on St. Thomas and St. Croix.)
Appellant asserted that
since Duvergee's operations on St. Croix were
never inspected, there was no
basis to question its status as a
responsible bidder on that island.
We find no basis here for reconsideration of DGAB No. 890.
Since
appellant conceded there that the contract should not have been
awarded
to Duvergee, the Board did not make any finding regarding
Duvergee's
responsibility. Consequently, there was no error as alleged
by
appellant. Conclusion
For the reasons discussed above, we deny appellant's request
for
reconsideration and reaffirm our decision in DGAB No. 890.
________________________________ Judith
A.
Ballard
________________________________ Norval
D.
(John) Settle
________________________________
Alexander
G. Teitz Presiding Board Member
1. Respondent subsequently found that this amount included
a
non-federal matching share of $59,882, and reduced a
subsequent
disallowance (for the period September 1, 1986 through March 13,
1987)
to correct the error. Letter dated October 20, 1987 from Fisk
to
Rhymer, p.