Planned Cancellation Of N.I.E. Contracts Called Permissible

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Washington--In the opinion of the Education Department's office of the general counsel, the plan of the director of the National Institute of Education (nie) to end existing contracts with the nation's 17 federally supported educational laboratories and research centers one year early is legal.

The legality of the plan, first announced to directors of the labs and centers by nie director Edward A. Curran in March, is disputed by the directors of the existing labs and centers, and the dispute may eventually end in court.

Ending the contracts one year early will allow the nie to pursue, beginning in 1984, a new research agenda that will examine subjects such as tuition tax credits and vouchers, home schooling, and the educational effects of regulations and judicial requirements on classroom instruction.

Contracts' Length in Question

The legal opinion, which was made available to Education Week, addresses the question of whether the government's contracts with the labs and centers are for three years, as Mr. Curran claims, or five years, as the labs and centers claim.

Mr. Curran wants open competition for federal research awards beginning in the fiscal year 1984. The Education Department's lawyers support the position taken by Mr. Curran in hearings before a Senate subcommittee in March, that ending the contracts early would be legal.

But Joseph Schneider, director of the Council for Educational Development and Research (cedar), an organization that represents 16 of the 17 labs and centers, said the opinion provides very weak legal support for Mr. Curran's stance. "I can now understand why they were so reluctant to release it [the legal opinion]," Mr. Schneider said.

cedar maintains that Mr. Curran's proposal violates what the organization says are five-year contracts.

Relying heavily on language contained in a report that accompanied the Omnibus Reconciliation Act of 1981 and that called for more competition in the awarding of future research contracts, the opinion--signed by JoAnne Durako of the office of general counsel--states: "It is our opinion that nie is not required to extend the current awards with the labs and centers beyond the projected November 30, 1982 expiration date."

It continues: "Previous congressional guidance to nie regarding the labs and centers has come from report language accompanying appropriations bills." The opinion says that the language in the Reconciliation Act "expresses a change in policy, upon completion of the current awards," that future contracts be awarded on a competitive basis.

(The budget language, which does not have the force of law, says that the labs and centers "... shall, upon completion of existing contracts, receive future funding in accordance with governmentwide competitive-bidding procedures. ...")

Mr. Schneider counters that basing much of the opinion on the Reconciliation Act's report language is "ridiculous, because report language is not legally binding on the agency or on us."

Issue of 'Best Interest'

The opinion also cites the Education Department General Administrative Regulations (edgar), under which nie's center awards are administered. Under edgar, the opinion states, nie has the authority to end multi-year projects if "Congress has appropriated insufficient funds" or if continuation of the project is not "in the best interest of the federal government."

Regarding this part of the opinion, Mr. Schneider said, "Congress certainly appropriated sufficient funds; in fact, exactly what the administration has requested.

"Also," he continued, "the department will have a difficult time argu-ing that continuing the labs' and centers' contracts isn't in the best interest of the federal government when it has already agreed to provide a fourth year of funding. How can the labs and centers be in the best interest of the government in 1983 and not in 1984?"

The substantial decrease in appropriations "argues against" continuation of the grants and contracts, the opinion says. It states that there is "insufficient language" in the Special Institutional Agreement--a part of the contracts of both the labs and centers--to bind nie to five-year contracts.

"Thoughout the [Agreement]," it says, "reference is made to nie support 'ordinarily for five years' and 'as long as nie receives a sufficient Congressional appropriation."'

"It's absolutely binding," Mr. Schneider said of the Special Institutional Agreement.

The eight regional laboratories and nine research centers were formed in 1964 under the authority of the Cooperative Research Act of 1954 and subsequent amendments to it contained in Title IV of the Elementary and Secondary Education Act of 1965.

In the past, the work of the labs and centers was reviewed at the end of three years and extended for two more if the review was favorable.

Mr. Schneider said his group's lawyers have advised him that the labs and centers must receive official notification of nie's decision before they can take any action. (The letters sent to the labs and centers in March are not official, they say.)

"Once we hear officially that they plan to terminate our contracts and grants we will then ask to dispute the decision," he said.

Vol. 01, Issue 34

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