[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)]
[Notices]
[Pages 55007-55008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26700]



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DEPARTMENT OF EDUCATION


Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

ACTION: Notice of Arbitration Panel Decision Under the Randolph-
Sheppard Act.

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SUMMARY: Notice is hereby given that on May 5, 1994, an arbitration 
panel rendered a decision in the matter of Maryland State Department of 
Education, Division of Vocational Rehabilitation Services v. United 
States Department of Veterans Affairs (Docket No. R-S/92-11). This 
panel was convened by the Secretary of the U.S. Department of Education 
pursuant to the Randolph Sheppard Act (the Act), 20 U.S.C. 107d-1(b), 
upon receipt of a complaint filed by the Maryland State Department of 
Education, Division of Vocational Rehabilitation Services (DORS). The 
Act creates a priority for blind individuals to operate vending 
facilities on Federal property. Under section 107d-1(b) of the Act, the 
State licensing agency (SLA) may file a complaint with the Secretary if 
the SLA determines that an agency managing or controlling Federal 
property fails to comply with the Act or regulations implementing the 
Act. The Secretary then is required to convene an arbitration panel to 
resolve the dispute.

FOR FURTHER INFORMATION CONTACT: A copy of the full text of the 
arbitration panel decision may be obtained from George F. Arsnow, U.S. 
Department of Education, 600 Independence Avenue, S.W., Room 3230, 
Switzer Building, Washington, D.C. 20202-2738. Telephone: (202) 205-
9317. Individuals who use a telecommunications device for the deaf 
(TDD) may call the TDD number at (202) 205-8298.

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act, 20 
U.S.C. 107d-2(c), the Secretary publishes a synopsis of arbitration 
panel decisions affecting the administration of vending facilities on 
Federal and other property.

Background

    In August of 1987, the Department of Veterans Affairs (DVA) began 
construction of a new Veterans Affairs Medical Center (VAMC) at 10 N. 
Greene Street in Baltimore, Maryland. Space allocation in the building 
was completed in 1985, and a final design was completed in 1989. The 
building's construction was completed in July 1992, and the DVA began 
occupying the building in January 1993. 

[[Page 55008]]

    Prior to 1993, the DVA operated a DVA Medical Center at 3900 Loch 
Raven Boulevard in Baltimore. The new facility has substantially more 
square footage than the older medical center. The new facility also 
includes a retail store, a cafeteria, and vending machines that are 
operated by the Veterans Canteen Service (VCS).
    By letter dated December 2, 1991, DORS applied to the DVA for a 
permit to operate a Randolph-Sheppard vending facility at the new VAMC 
in Baltimore. DORS followed up with two additional inquiries regarding 
the new medical center. Subsequently, DVA responded by letter dated 
April 6, 1992, denying the request for a permit. DVA's stated reason 
for denying the DORS' request for a permit was that its authorizing 
statute, 38 U.S.C. 8110(c), gave DVA the exclusive right to determine 
whether an activity, including vending facilities, at any of its 
medical centers would be performed by Federal or non-Federal personnel.
    On June 24, 1992, DORS filed a complaint with the Secretary of the 
Department of Education requesting that an arbitration panel be 
convened. A hearing on this matter was held on July 19 and 20, 1993.

Arbitration Panel Decision

    The arbitration panel in a majority opinion found that the 
Randolph-Sheppard Act applies to any and all Federal departments, 
agencies, and instrumentalities in control of any Federal property, 
citing 20 U.S.C. 107 et seq. and Minnesota v. Riley, 18 F.3d 606, 609 
(8th Cir. 1994).
    The panel ruled that the Randolph-Sheppard Act and its implementing 
regulations established a system under which the Secretary of Education 
promulgates and administers uniform procedures for the establishment of 
Randolph-Sheppard vending facilities. (20 U.S.C. 107(b)) The Act 
contains an ``escape clause'' allowing limitations on the placement of 
vending facilities, but only if the Secretary of Education specifically 
finds that the absence of such a limitation would adversely affect the 
interests of the United States. (20 U.S.C. 107(b)) The panel noted that 
the DVA has not applied for an exemption from any of the requirements 
of the Randolph-Sheppard Act.
    DVA's argument was that it was not required to apply for such a 
limitation, citing its own statute, 38 U.S.C. 8110(c). However, the 
panel rejected this argument, citing Minnesota v. Riley, which ruled 
that the Congressional intent to apply the Randolph-Sheppard Act to the 
VCS is clear from the language of the Act. The panel further stated 
that section 8110(c) was intended to limit contracting out of services 
directly related to patient care, not to preclude the issuance of 
permits for Randolph-Sheppard vending facilities.
    Therefore, the panel ruled that the Randolph-Sheppard Act applies 
to Department of Veterans Affairs medical centers and that section 
8110(c) does not exempt VAMC Baltimore from the Randolph-Sheppard Act's 
requirements.
    Accordingly, in an unanimous award the arbitration panel ruled on 
May 5, 1994, that the parties should enter into negotiations whereby a 
permit would be issued to allow DORS and its licensed blind vendor or 
vendors to operate the retail store at VAMC. The parties were to agree 
upon a permit on or before June 1, 1994, which the panel would adopt as 
its final award. However, if a permit could not be agreed upon by June 
1, 1994, then each party was instructed to submit a proposed permit to 
the panel on or before June 15, 1994. The proposed permit that received 
the majority approval of the panel would be adopted as the final award 
of the panel.
    Following the May 5 panel award, DVA submitted a Motion for 
Reconsideration, which was subsequently denied by the panel. DORS then 
submitted to the panel its proposed permit in accordance with the May 5 
award. In an order dated October 15, 1994, a majority of the panel 
adopted this proposed permit. The panel instructed DVA that, on or 
before October 20, 1994, it should turn over the operation of the 
retail store at VAMC Baltimore to DORS, effective January 1, 1995.
    One panel member dissented regarding the denial of the Motion for 
Reconsideration and from the final award.
    On January 3, 1995, the Maryland State Department of Education, 
Division of Vocational Rehabilitation sought relief in the United 
States District Court of Maryland against the Department of Veterans 
Affairs requesting enforcement of the final arbitration award directing 
DVA to permit a blind vendor to operate a retail store at the VAMC.
    On August 17, 1995, the court found that the arbitration panel had 
no authority under the Act to order DVA to turn over the retail store 
to DORS. Maryland State Department of Education, Division of 
Rehabilitation Services v. U.S. Department of Veterans Affairs, C.A. 
No. K-95-8 (D.MD. order entered 8-17-95). The court ruled that the 
panel's authority under the Act is limited to determining whether the 
agency's actions violated the Act. According to the court, the Act 
leaves the responsibility for remedying violations to the Federal 
entity itself.
    The views and opinions expressed by the arbitration panel do not 
necessarily represent the views and opinions of the U. S. Department of 
Education.

    Dated: October 23, 1995.
Howard R. Moses,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 95-26700 Filed 10-26-95; 8:45 am]
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