[Federal Register: May 17, 2001 (Volume 66, Number 96)]
[Page 27494-27495]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



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 November 5, 1999, an 
arbitration panel rendered a decision in the matter of California 
Department of Rehabilitation v. General Services Administration (Docket 
No. R-S/97-11). 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.

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 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 

Electronic Access to This Document

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[[Page 27495]]

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act (20 
U.S.C. 107d-2(c)) (the Act), 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 violation by the General Services 
Administration (GSA) in the termination of the permit of the California 
Department of Rehabilitation, the State licensing agency (SLA), to 
operate a cafeteria at the Internal Revenue Service (IRS) facility, in 
Fresno, California. A summary of the facts is as follows: The SLA and 
GSA entered into an agreement to establish a cafeteria at the IRS 
Building, 5045 E. Butler Avenue, Fresno, California on November 1, 
1995. The facility had been operated by a private vendor under contract 
to GSA.
    Although the vending facility was a cafeteria, the SLA and GSA 
proposed a permit rather than a contract. GSA proposed that the permit 
be issued for a limited term of approximately 1 year, subject to 
renewal or cancellation at the end of that period. While the SLA 
declined to enter into a limited agreement, the permit that was 
eventually issued between the SLA and GSA was for an ``indefinite 
period of time subject to suspension or termination on the basis of 
non-compliance by either party.''
    The operation of the IRS cafeteria began on December 18, 1995. On 
September 25, 1996, an inspection of the cafeteria was conducted by the 
Food and Drug Administration (FDA). The FDA inspector noted numerous 
unsanitary conditions such as improper food preparation and storage, 
pest infestation, and employees eating and drinking beverages outside 
the break area. The violations noted by the FDA inspector were brought 
to the attention of the cafeteria facility manager. On March 5, 1997, 
an FDA inspector conducted another inspection at the IRS cafeteria. 
Again, the FDA inspector observed several violations similar to those 
noted in the September 25, 1996, inspection. Additional violations were 
found such as rodent droppings, improper cleaning of the conveyor belt, 
lack of soap and paper towels at the handwashing sink, and improper 
cleaning of the floor in the dishwashing area. These violations were 
pointed out to the cafeteria manager, who allegedly did not dispute any 
of the FDA inspector's observations. Subsequently, the cafeteria was 
    The SLA alleged that the closure of the IRS cafeteria violated the 
Act and the terms of the permit. Additionally, the SLA alleged that GSA 
violated an agreement to give the SLA revenues from the operation of a 
portable coffee cart in the cafeteria area.
    The SLA filed a request to convene an arbitration panel to hear 
this complaint. A Federal arbitration hearing on this matter was held 
on December 15-18, 1998. A second hearing was convened on March 1-5, 
1999 to conclude testimony.

Arbitration Panel Decision

    The majority of the panel, after considering all of the evidence, 
concluded that the parties jointly agreed to a permit agreement rather 
than a cafeteria contract for the vending facility at the IRS building. 
The panel further found that, while IRS personnel were interested in 
having a food court at the facility, the SLA furnished the vendor with 
equipment that essentially provided for multiple serving stations and a 
broader variety of food similar to the food court concept sought by IRS 
officials. Thus, the panel ruled that there was no convincing evidence 
to support the SLA's allegation that GSA caused the termination of the 
vendor's permit under the pretext of putting in a food court by a 
private vendor.
    Based upon the evidence presented, the majority of the panel 
further concluded that, throughout the vendor's tenure at the IRS, 
there were numerous inspections of the cafeteria. Most notable of the 
inspections were those conducted by FDA on September 25, 1996, and 
March 4, 1997, which identified numerous sanitation, food preparation, 
and storage violations. Those inspections resulted in the cafeteria 
    The panel ruled that the unsanitary conditions created serious 
health risks to thousands of customers of the cafeteria at the IRS 
building. Therefore, it was reasonable and proper for GSA to remove the 
vendor because of the extreme unsanitary conditions. Furthermore, the 
panel ruled that the SLA's allegation concerning the vendor's removal 
lacking due process was without merit.
    Finally, the majority of the panel ruled that the weight of the 
evidence indicated that GSA owed some accounting and commissions to the 
SLA for the coffee cart operation. The panel ordered the parties to 
jointly determine the formula for the amount owed by GSA to the SLA.
    One panel member concurred.
    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: May 11, 2001.
Andrew J. Pepin,
Executive Administrator for Special Education and Rehabilitative 
[FR Doc. 01-12402 Filed 5-16-01; 8:45 am]