History
The company traced its history to the Javits-Wagner-O'Day Act (JWOD Act), 41 U.S.C. § 46 et seq. This is a U.S. federal law mandating that all Federal agencies purchase specified supplies and services from nonprofit agencies employing blind persons or others with severe disabilities. The Act was passed by the 92nd United States Congress in 1971; it is named after Senator Jacob K. Javits, who led efforts to expand the Wagner-O'Day Act of 1938, which in turn was named after Senator Robert F. Wagner and Congresswoman Caroline O'Day.
Senator Javits led the efforts to expand the older law, which applied only to blind persons, and covered supplies but not services. The effort succeeded in spite of objections raised by organizations representing the blind, as expressed for example in Resolution 68-04 passed in 1968 by the American Council of the Blind.
The Federal agency charged with administering the program is currently known as the Committee for Purchase from People Who Are Blind or Severely Disabled. It replaced the Committee on Purchases of Blind Made Products established by the 1938 act. The agency decides which commodities and services the government should purchase under the JWOD Act.
In 1992, ARC was the first nonprofit agency in the country to operate a USDA-approved facility for the production of manufactured goods sold to the feeding programs of the US Government and private industry. They began manufacturing over 125 different varieties of dry mixes, dairy blends and oil products for Federal customers such as the Department of Agriculture and the Department of Defense. ARC Diversified also produced for the private sector and participated in the reinvented Federal procurement Prime Vendor program by delivering to full-line food distributors who are contracted to deliver to Federal installations. Arc-Diversified's accomplishments were recognized in May 2004 by the United States department of Agriculture. They were awarded Javits Wagner O’Day Contractor of the Year award.
In July 2006, ARC Diversified filed for Chapter 11 bankruptcy. Shortly before the bankruptcy was filed the companies two directors resigned from the company. Department of Agriculture officials contested the charity's bid for a higher cooking oil price due to the executives compensation. The impasse in negotiations caused credit problems, layoffs and the forced resignations of the two top officials. After the bankruptcy was filed, ARC closed its doors.
In March 2008 the former two top officials of ARC Diversified settled the judgments filed against them by the nonprofit's federal bankruptcy trustee. The settlement agreement says that judgment is based upon liability for "errors, omissions, negligence and breaches of duty" in connection with their positions with ARC, and not based upon actual fraud.
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