[Federal Register: November 5, 1996 (Volume 61, Number 215)] [Notices] [Page 56949-56950] From the Federal Register Online via GPO Access [wais.access.gpo.gov] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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