E8-21154. Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY:

Department of Education.

ACTION:

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

SUMMARY:

The Department of Education (Department) gives notice that on May 15, 2008, an arbitration panel rendered a decision in the matter of Arizona Department of Economic Security, Rehabilitation Services Administration v. United States Postal Service (Case No. R-S/06-3). This panel was convened by the Department under 20 U.S.C. 107d-1(b), after the Department received a complaint filed by the petitioner, the Arizona Department of Economic Security, Rehabilitation Services Administration.

FOR FURTHER INFORMATION CONTACT:

You may obtain a copy of the full text of the arbitration panel decision from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: [phone]. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339.

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 under FOR FURTHER INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:

Under 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.

Background

The Arizona Department of Economic Security, Rehabilitation Services Administration, the State Licensing Agency (SLA) alleged violations by the United States Postal Service (USPS) of the Randolph-Sheppard Act (Act), and the implementing regulations in 34 CFR part 395. Specifically, the SLA alleged that USPS improperly denied the SLA's request to establish vending facilities comprised of vending machines at postal locations in Mesa and Tucson, Arizona in violation of the priority provisions of the Act at 20 U.S.C. 107(b).

On October 22, 2002, USPS notified the SLA that the Mesa Postal Service was seeking a new vendor for nine postal locations in Mesa, Arizona. On October 29, 2002, the SLA informed USPS that it was exercising its priority under the Act and would be providing vending services to the nine Mesa postal locations. However, on December 16, 2002, USPS sent the SLA a letter to notify them of a change in the projected start up date for the SLA to begin operating the Mesa vending locations.

On April 22, 2003, USPS again notified the SLA that it was in need of vending food service for 15 postal locations in Tucson, Arizona. Following this notification, the SLA and USPS staff met on June 18, 2003. At that time, USPS informed the SLA that it had issued a directive stating that each of the 15 Tucson vending locations would have a permit and each location would require a separate blind vendor to manage the facility.

On July 31, 2003, the SLA sent a letter to USPS indicating that it did not intend to waive the priority under the act regarding the 15 Tucson postal vending locations. Additionally, the SLA requested that USPS clarify in writing and provide a copy of the directive regarding USPS's position that a different blind vendor must operate each of the 15 vending locations.

The Postal Service contracting officer responded to the SLA in a letter dated September 18, 2003. The contracting officer citing Postal Service Handbook EL-602 (August 1994), section 331.1 stated, “It is the Postal Service's policy that a blind vendor may not be assigned vending machines remote from the location for which the permit is issued.” Therefore, USPS informed the SLA each of the 15 vending sites in Tucson for which a permit was issued must be operated by separate blind vendors working full-time and vending sites could not be combined into a single operation for a blind vendor.

On August 17, 2005, the staff of the SLA's Business Enterprise Program contacted USPS's customer relations coordinator for an update on the Mesa vending locations. The customer service coordinator responded that no action had been taken pending the outcome of the SLA's request to operate the Tucson vending locations. Subsequently, the SLA filed a request for federal arbitration with the Secretary of Education regarding this matter. A federal arbitration panel heard this case on August 23, 2007.

The central issue heard by the arbitration panel was: Whether the Act and implementing regulations provided the SLA a priority to operate and manage vending machine routes on USPS property.

Arbitration Panel Decision

After reviewing all of the records and hearing testimony of witnesses, the panel majority ruled that vending locations combined into a single vending route are permissible under the Act and that current USPS policies are not in compliance with either the spirit or letter of the Act. The panel determined that there was nothing in the satisfactory site provisions in 34 CFR 395.31(d) that would exempt a federal entity desiring vending services from the priority under the act. Further, the majority found that there is nothing in the Act or the Postal Service Handbook EL-602 that addresses blind vendors being at a vending site full-time. The panel also found that USPS had not sought and received approval from the Secretary of Education to impose the requirement that blind vendors be on-site at USPS vending facilities full-time and that no similar restriction was imposed on private vending companies.

Based upon the foregoing, the majority concluded USPS's policy of requiring that each vending location have an individual permit and a separate blind vendor constituted a limitation upon the placement of a vending facility on federal property in violation of the act and implementing regulations at 34 CFR 349.31(b).

Thus, the panel majority directed USPS to immediately terminate agreements with private concessionaires providing vending services at the Mesa and Tucson postal locations and to grant a permit(s) to the SLA to operate one or more facilities pursuant to the act. The panel also indicated that USPS should have the understanding that the SLA may choose to assign multiple postal locations to a single blind vendor.

Finally, the panel majority found that USPS's conduct warranted damages in this case. However, the majority did not award damages since they were not sought by the SLA and no individual blind vendor was harmed.

One panel member dissented.

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

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 the following site: http://www.ed.gov/​news/​fedregister.

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at [phone].

Note:

The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at: http://www.gpoaccess.gov/​nara/​index.html.

Dated: September 8, 2008.

Tracy R. Justesen,

Assistant Secretary for Special Education and Rehabilitative Services.