[Federal Register Volume 61, Number 215 (Tuesday, November 5, 1996)]
[Notices]
[Pages 56949-56950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28334]


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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 June 1, 1996, an arbitration 
panel rendered a decision in the matter of Colorado Department of Human 
Services, Division of Vocational Rehabilitation v. General Services 
Administration, (Docket No. R-S/95-1). This panel was convened by the 
U.S. Department of Education pursuant to 20 U.S.C. 107d-1(b), upon 
receipt of a complaint filed by the Colorado Department of Human 
Services, Division of Vocational Rehabilitation.

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, Mary 
E. 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

    The dispute in this case involved three buildings located at the 
Federal Center Office Building in Denver, Colorado. In each of the 
three buildings, there is a vending facility operated by a licensed 
blind vendor under the auspices of the Colorado Department of Human 
Services, Division of Vocational Rehabilitation, the State Licensing 
Agency (SLA). Also located in each of the three buildings is a full 
service cafeteria operated by a private concessionaire.
    In 1993, the SLA sought support from the General Services 
Administration (GSA) for its position that the cafeteria contract held 
by the private concessionaire allowed for duplication of products being 
sold under permits held by the Randolph-Sheppard vendors and that this 
represented ``direct competition'' and, therefore, was in violation of 
the priority provisions of the Randolph-Sheppard Act (the Act) in 20 
U.S.C. 107 et seq. and the implementing regulations in 34 CFR Part 395.

[[Page 56950]]

    On February 8, 1994, a GSA contract specialist prepared a 
memorandum that supported the SLA's position. On February 15, 1994, the 
private concessionaire concurred with the SLA's position and submitted 
to GSA a list of four items that the private concessionaire proposed to 
discontinue selling in the cafeterias. However, the SLA declined this 
proposal because these products represented very little sales value to 
the Randolph-Sheppard vendors.
    On November 28, 1994, the SLA filed a request with the Secretary of 
Education to convene an arbitration panel pursuant to the Act and 
regulations. Subsequently, on December 22, 1994, staffs of the Vending 
Facility Branch of the Rehabilitation Services Administration, the SLA, 
and the GSA central and regional offices held a teleconference in an 
attempt to resolve the complaint. However, attempts to define separate 
product lines to be sold by the Randolph-Sheppard vending facilities 
and the cafeterias operated by the private concessionaire were 
unsuccessful. On January 23 and 24, 1996, an arbitration hearing was 
held concerning this complaint.

Arbitration Panel Decision

    The three issues before the arbitration panel were--
    (1) Whether a private concessionaire's sale of the same products as 
the licensed blind vendors on the same premises is in violation of the 
priority provisions of the Act and regulations;
    (2) Whether a private concessionaire's sale of the same products as 
the licensed blind vendors on the same premises constitutes direct 
competition in violation of the Act and regulations; and
    (3) Whether GSA can be compelled to provide a blind vendor with a 
satisfactory site pursuant to the provisions of the Act and 
regulations.
    The majority of the panel held that a private concessionaire's sale 
of the same products as the licensed blind vendor does not violate the 
priority provisions of the Act. The panel concluded that the priority 
provisions of the Act require the property manager to offer the SLA the 
first opportunity to operate a vending facility on Federal property. 
However, the panel considered that this does not preclude the 
possibility that there will be a private concessionaire operating a 
facility on the same premises as a licensed blind vendor. Consequently, 
the panel concluded that priority rights do not translate into an 
exclusive right to sell specific products.
    On the second issue concerning direct competition, the majority of 
the panel held that Congress recognized the probable existence of 
direct competition from other vending facilities, including cafeterias. 
The panel stated that by definition direct competition is ``the 
presence and operation of a vending machine or a vending facility on 
the same premises as a vending facility operated by a blind vendor.'' 
The panel concluded that this language of the Act does not prohibit 
direct competition except in specific instances that involve vending 
machines that are in direct competition with a blind vending location. 
The income generated from vending machines in direct competition with a 
Randolph-Sheppard vending facility is subject to the income-sharing 
provisions of the Act.
    On the third issue, which concerned a satisfactory site, the 
majority of the panel determined that the Denver Federal Center 
building was occupied prior to the 1974 amendments to the Act, and, 
therefore, the building was not subject to the space requirements for a 
satisfactory site. The panel did note that GSA had offered to the SLA 
additional space on the upper floors of the building following their 
renovation.
    One panel member dissented from the majority opinion.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: October 29, 1996.
Howard R. Moses,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 96-28334 Filed 11-4-96; 8:45 am]
BILLING CODE 4000-01-P