A federal judge has denied a stay request that would have allowed IFB Solutions Inc. to keep one of its three optical contracts with the U.S. Departments of Veterans Affairs, leaving 47 workers without jobs.
The Winston-Salem nonprofit agency said Tuesday that the contract was terminated Sept. 4.
“We are devastated for our employees whose positions have been eliminated with the loss of this VA contract,” David Horton, IFB’s president and chief executive, said in a statement.
Horton said it appears likely the other contracts will end on Sept. 30 and Oct. 31, affecting an additional combined 90 employees. Of the overall 137 jobs, 76 are held by employees who are blind and 15 by veterans.
IFB has been providing prescription eyewear to the VA since the late 1990s. The Winston-Salem company is the largest employer of the blind in the United States with about 1,000 employees overall and 556 locally.
“We worked right up to the wire,” Horton said.
“We are working diligently to help broaden and diversify our portfolio with the optical laboratory and move workers with the skills into other jobs.”
The optical work for the VA means $15.4 million in annual revenue for the nonprofit group, formerly known as Winston-Salem Industries for the Blind Inc. That represents nearly 20% of IFB’s total revenue.
“We believe over time we will be able to generate other revenue sources from new vendors, mining more the ones we have now and creating new opportunities, like the retail store,” Horton said.
In October 2018, IFB spent $500,000 to buy a 0.61-acre site at 631 Coliseum Drive in Winston-Salem. The 4,800-square-foot building and parking lot was a former site of Coliseum Eye Associates.
“But, we will have to tighten up during this gap in time and revenue,” Horton cautioned.
Dan Kelly, chief operating officer of IFB Solutions, said the nonprofit agency bought the property with production expansion in mind.
“Low vision is a growing issue, and with our unique expertise in low-vision services, we want to expand how we serve this need in our community,” Kelly said.
Low vision is defined as a condition caused by eye disease, in which visual acuity is 20/70 or poorer in the better-seeing eye and cannot be corrected or improved with regular eyeglasses.
“We purchased this site as an opportunity to deliver our optical and low-vision services at a location off the IFB Solutions campus,” Kelly said. “We plan to hold a soft opening for the retail site in December and a grand opening in January.”
For decades, IFB’s VA contracts have come through the act known as AbilityOne, passed by Congress in the 1930s, that gives federal government preference to companies that employ the blind or severely disabled. IFB has been providing prescription eyewear products to the VA since the late 1990s.
Four legal cases have been filed in connection with the battle for the VA contracts.
One of the cases involves the VA as the defendant — with IFB joining as an intervenor — and the rival company PDS Consultants Inc. of Sparta, N.J., as the plaintiff.
PDS has provided visual products to the VA since 1998. PDS’s legal claim has been that businesses owned by disabled veterans should have priority over those from AbilityOne, based on a recent U.S. Supreme Court interpretation of the Veterans Benefits Act of 2006.
That act is also known as Veterans First legislation, one of the ways Congress recognizes and repays disabled veterans for their military service.
The first optical laboratory contract was scheduled initially to end July 31, but received two reprieves — the last one with an Aug. 31 deadline.
The VA granted the second extension of the first contract two days after IFB filed a protest with the U.S. Government Accountability Office. IFB expected the VA “to continue extending the contract performance until GAO reaches a decision.”
However, an appeals judge in Federal Claims Court denied IFB’s request for a stay by the VA until its protest with the GAO could be heard.
“The toll on our workforce has been intense, especially for our employees who are blind or visually impaired and who face huge barriers to employment,” Horton said.
“More than half of our employees relocated here to take positions with IFB Solutions as the largest employer of people who are blind or visually impaired in the country.”
“For those employees who’ve just started to put down roots in Winston-Salem, the prospect of losing their positions and possibly leaving our community entirely is heartbreaking,” Horton said.
IFB Solutions is petitioning the U.S. Supreme Court to review a federal appeals court ruling from October 2018 that gave priority to veteran-owned small businesses over agencies employing people who are blind in VA contracting awards.
A decision could come in October or November on whether the Supreme Court accepts the appeal. If it does, it likely could take 18 to 24 months for a decision.
“From the beginning, we’ve said that we will fight for these jobs all the way to the Supreme Court if necessary,” Horton said. “Now, we are doing just that with our official filing.”
The VA said in an August statement that “per the federal laws set by Congress, the VA limits competition for contracts to service-disabled, veteran-owned small businesses in certain circumstances.”
“This is one of those circumstances. This concept was recently affirmed by the Supreme Court in a ruling that Congress also supported in an amicus brief.”
The American Federation for the Blind said the U.S. unemployment rate is about 75% for the 4 million Americans who are completely or partially blind.
For nearly three years, IFB has been attempting to preserve its laboratories’ status as a mandatory AbilityOne source for the VA’s eyeglass manufacturing — meaning the VA is required to contract with IFB for the work.
AbilityOne dates back to the 1930s as a mechanism for providing jobs to the blind or those who have significant disabilities, including veterans.
“The VA is about 97% of the production we have with our optical portfolio,” said Dan Kelly, IFB’s chief operating officer, who is blind.
Federal appellate judges ruled in October 2018 and April on the side of PDS, which has provided visual products to the VA since 1998.
PDS claimed in court, based on a Supreme Court interpretation of the federal Veterans Benefits Act of 2006, that businesses owned by disabled veterans should be prioritized for government contracts.
In its filing with the U.S. Supreme Court, IFB wrote that “the harms from the Federal Circuit’s decision are deeply disturbing.”
“Already, the VA has cancelled numerous contracts held by AbilityOne qualified nonprofit agencies, which will result in the near-immediate termination of employment of hundreds of blind and severely disabled individuals, many of whom are veterans themselves.
“The injury does not stop there. The loss of those jobs means there will be a corresponding reduction in the ancillary services that these nonprofit agencies can provide to the blind and severely disabled in their communities.”
IFB Solutions, along with its fellow AbilityOne agencies and National Industries for the Blind, continue to work with members of Congress on a possible legislative solution.
U.S. Rep. Virginia Foxx sent a letter to VA Secretary Robert Wilkie asking him to personally review the status of IFB’s federal contracts. Foxx said Tuesday that her letter to Wilkie has not been acknowledged.
Foxx said she was following up on a July 11 letter endorsed by 33 U.S. House and Senate members expressing support for AbilityOne. Those include Sen. Thom Tillis, R-N.C., and Rep. Mark Walker, R-N.C.
On Tuesday, Foxx said in a statement that "I know that this means much more than a procurement contract to the men and women who overcome physical challenges every day to support their own livelihoods and use their gifts for such meaningful work."
"My heart goes out to all of the IFB Solutions employees who have lost their jobs. IFB has my support in elevating its plight to the Supreme Court and advocating for continuation of remaining AbilityOne contracts.
"Our blind and significantly disabled Americans deserve nothing less.”
Tillis’ office said in August that the senator submitted a formal request that the VA not terminate the IFB contracts.
On Tuesday, Tillis' office issued a statement saying that the senator "remains in close contact with IFB, VA, and the Senate Veterans Affairs Committee.
"We seek a long-term solution that will preserve the mutual coexistence of important job opportunities for both veteran-owned small businesses and blind and severely disabled Americans.”