Use the variable and not the hex value.

lms/static/sass/course/_open_ended_grading.scss

@@ -39,7 +39,7 @@
         .notification-title 
         {
             text-transform: uppercase;
-            background: #1d9dd9;
+            background: $blue;
             color: white;
             padding: 5px 0px;
             font-size: 1.1em;