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Arbitration Panel Decision Under the Randolph-Sheppard Act

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Department of Education.


Notice of arbitration panel decision under the Randolph-Sheppard Act.

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Notice is hereby given that on December 26, 2000, an arbitration panel rendered a decision in the matter of California Department of Rehabilitation v. General Services Administration (Docket No. R-S/99-1). 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 petitioner, the California Department of Rehabilitation.

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A copy of the full text of the arbitration panel decision may be obtained from George F. Arsnow, U.S. Department of Education, 400 Maryland Avenue, SW., room 3230, Mary E. Switzer Building, Washington, DC 20202-2738. Telephone: (202) 205-9317. If you use a telecommunications device for the deaf (TDD), you may call the TDD number at (202) 205-8298.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed in the preceding paragraph.

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Pursuant to section 6(c) of the Randolph-Sheppard Act (the Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the Federal Register a synopsis of each arbitration panel decision affecting the administration of vending facilities on Federal and other property.


This dispute concerns the alleged improper termination by the General Services Administration (GSA) of a vending permit held by the California Department of Rehabilitation, the State licensing agency (SLA), at the Roybal Building in Los Angeles, California, pursuant to the provisions of the Act (20 U.S.C. 107 et seq.) and the implementing regulations in 34 CFR part 395.

A summary of the facts is as follows: On August 3, 1993, the SLA and GSA entered into a permit agreement to establish a vending facility, including vending machines, at the Roybal Building, 255 East Temple Street, Los Angeles, California. The SLA assigned a permanent vendor to this location with the participation and approval of GSA.

Initially the services provided at the Roybal building consisted primarily of vending machines, but in 1996 GSA remodeled its lobby area to construct a larger facility that provided customers with coffee and various other food items. After completing the remodeling of the vending facility, GSA cancelled the 1993 permit and issued a new permit to the SLA to operate the remodeled facility in the lobby. It was the position of GSA that the newer remodeled facility constituted a new facility that warranted the SLA to conduct a selection process for a vendor to manage the remodeled facility.

Conversely, the SLA took the position that GSA had no right to cancel the 1993 vending permit and that the remodeled facility was not a new facility within the meaning of State rules and regulations that would provide for a new vendor selection process.

The SLA alleged that the real issue focused on GSA's complaint that the vendor, who had been providing service prior to the remodeling of the vending facility, was considered by GSA to be unqualified and unacceptable to manage the remodeled vending facility. The SLA further alleged that GSA demanded that the SLA initiate a selection process for a new vendor to manage the remodeled vending facility only after the facility had been remodeled.

Following the cancellation of the 1993 permit and the SLA's refusal to place another vendor at the facility, GSA awarded a contract to a private concessionaire to operate the Roybal vending facility.

Arbitration Panel Decision

The panel, after considering all of the evidence, ruled that GSA violated the Act and implementing regulations. GSA had no authority to unilaterally cancel the vending permit agreement signed in 1993 between itself and the SLA, since there was no evidence of noncompliance by the SLA with its terms. GSA's issuance of a new permit in 1996 was simply an updated version of the original permit agreement between GSA and the SLA in 1993.

The panel further stated that the new 1996 permit, which essentially upgraded the 1993 permit, obligated GSA to provide a vending facility at the Roybal Building to the SLA so that it could place a qualified blind vendor pursuant to the Act. Additionally, the SLA's original blind vendor had the right to continue to operate the relocated vending facility.

The violations of the Act and the regulations by GSA caused both the SLA and the blind vendor to suffer damages. The damages to the SLA include loss of revenue generated from the blind vendor, which amounts to 6 percent of the net proceeds of the blind vendor. The SLA is also entitled to a fair market rental for its equipment during the time it was being used by GSA.

Finally, the panel instructed GSA that it had 30 days from the date of the panel's decision to provide the SLA with evidence of the blind vendor's lack of qualifications to operate the Roybal Building vending facility; otherwise, GSA would be liable for damages to the blind vendor. The panel ruled that the damages would be the difference between what he had been able to earn and what the private concessionaire earned during the transition period when the SLA was not managing the Roybal Building vending facility, plus interest.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the U.S. Department of Education.

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Dated: July 16, 2001.

Francis V. Corrigan,

Deputy Director, National Institute on Disability and Rehabilitation Research.

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[FR Doc. 01-18072 Filed 7-18-01; 8:45 am]