[Federal Register Volume 65, Number 86 (Wednesday, May 3, 2000)]
[Notices]
[Pages 25710-25711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11015]


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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 November 17, 1998, an 
arbitration panel rendered a decision in the matter of Hawaii Division 
of Vocational Rehabilitation, Department of Human Services v. U.S. 
Department of Defense, Department of the Army (Docket No. R-S/97-18). 
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, 
Hawaii Division of Vocational Rehabilitation, Department of Human 
Services.

FOR FURTHER INFORMATION: 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 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at either of the 
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    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
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[[Page 25711]]

Access at: http://www.access.gpo.gov/nara/index.html


SUPPLEMENTARY INFORMATION: Pursuant to 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.

Background

    This dispute concerns the alleged failure of the U.S. Department of 
Defense, Department of the Army (Army), to award a priority under the 
Act to the Hawaii Division of Vocational Rehabilitation, Department of 
Human Services, the State licensing agency (SLA), for a contract to 
operate a cafeteria at Schofield Barracks, Wahiawa, Oahu, Hawaii.
    A summary of the facts is as follows: On October 29, 1996, the SLA 
requested a meeting with the Army's Contracting Officer (CO) and Army 
staff to discuss the possibility of direct negotiations under the Act 
regarding the operation of a cafeteria facility at the Schofield 
Barracks in Wahiawa, Oahu, Hawaii.
    Subsequently, on November 6, 1996, a meeting was held between the 
SLA and the Army's CO. At the meeting, the CO mentioned that the 
previous cafeteria contract had been solicited pursuant to the Small 
Business Administration Section 8(a) set-aside program. In a May 6, 
1997 letter from the Army, the SLA was informed that the Army would 
continue to rely upon a memorandum from the Office of the Assistant 
Secretary, Research Development and Acquisition, dated April 15, 1997. 
This memorandum stated that, because the Act did not apply to 
appropriated-fund contracts, military mess hall contracts would be 
awarded based upon general procurement principles, including 
preferences under the Section 8(a) set-side program. On May 6, 1997, 
the Army solicited proposals under these general procurement 
principles, thereby not awarding a priority under the Act to the SLA. 
By letter dated August 21, 1997, the SLA filed with the Secretary of 
Education a request for arbitration of this dispute. A Federal 
arbitration hearing on this matter was held on July 9 and 10, 1998.

Arbitration Panel Decision

    The central issue before the arbitration panel was whether the 
Randolph-Sheppard Act, 20 U.S.C. 107d-3(e), is applicable to 
appropriated-fund contracts covering military dining facilities, which 
are basically used by military personnel. If so, is the Army then 
required to permit the SLA an opportunity to bid on a contract covering 
military dining facilities in Hawaii on an unrestricted basis under the 
priority provisions of the Act?
    The majority of the panel ruled that, as defined in the regulations 
of the Department of Education and Department of Defense, all of the 
facilities covered under the agreement provide cafeteria services, 
which include a broad variety of prepared foods and beverages. These 
foods are dispensed primarily through the use of a serving line where 
the customer serves or selects food items for himself or herself from 
displayed selections.
    In this case, the military dining facilities covered under the 
Hawaii contract used contractor personnel to provide full food service, 
including food preparation, serving, and cleanup services. The use of 
the facilities was limited to authorized military personnel. On the 
other hand, Randolph-Sheppard vending facilities, whether a stand, 
automatic food dispensing machine, or cafeteria, are open for use by 
the general public. However, they are used most frequently by the 
employees working at the facility and are not supported by appropriated 
funds, but rather by payments for goods and services.
    Further, the majority of the panel noted that the Federal 
Government's procurement process for goods and services to be paid for 
by appropriated funds is subject to procurement laws and regulations. 
These laws and regulations seek to standardize procedures for awarding 
contracts, thereby assuring quality in meeting specifications and 
economy of price. Exceptions are permitted by Congress for certain 
groups, such as those who qualify under the Small Business 
Administration or those who employ severely handicapped or blind 
individuals under the Javits-Wagner-O'Day Act.
    The 1974 amendments to the Act expanded the opportunities for blind 
persons to operate vending facilities, including vending machines and 
cafeterias on Federal property, and required Federal agencies to 
provide locations for vending facilities to be operated by blind 
licensees.
    The panel ruled that if Congress had intended the Act to apply to 
appropriated-fund contracts, it would have included very specific 
language authorizing those contracts because such a reading would 
substantially change the administration of Federal procurement law. 
Because that language is not included, the best reading of the statute 
is that it was not intended. Thus, while not entitled to assert a 
priority under the Act in bidding on an appropriated-fund contract for 
dining facilities, the SLA would not be precluded from applying for a 
preference under the Javits-Wagner-O'Day Act.
    One panel member dissented.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: April 28, 2000.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 00-11015 Filed 5-2-00; 8:45 am]
BILLING CODE 4000-01-U