Braille Monitor                                                                  March 1985

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The Randolph-Sheppard Act
How to Keep It, How to Lose It

by Kenneth Jernigan

On January 7, 1985, the federal court for the District of Columbia handed down a decision of devastating impact on the blind vendors of the nation. The decision resulted from lawsuits unwisely filed by the American Council of the Blind and its affiliate the Randolph-Sheppard Vendors of America. The result could have been predicted, but the totality of the disaster is hard to believe. To understand the full extent of it requires analysis, perspective, and background.

The federal Randolph-Sheppard Act is a touchy piece of legislation. To preserve it requires expertise, the willingness to fight, the knowledge of when to negotiate and when not to negotiate, and a skillful hand. The Act confers important benefits upon the blind, but it is constantly in danger of being seriously weakened or so watered down as to become virtually useless. The reason is not hard to find. The Randolph-Sheppard Act was originally passed in the 1930's. Although we as blind people had not at that time come to the full maturity of our organization, we had more collective clout than the other disability groups, most of whom were not organized at all and had yet to find their sense of identity and common purpose.

The Randolph-Sheppard Act gave the blind a preference in operating vending facilities on federal property. In 1974 the preference was changed to a "priority," which translated into an expressed intent by Congress that the blind should have the right to operate vending facilities on federal property before opportunities could be made available to others. The preference (or as it was now called, the "priority") was also extended explicitly to cover cafeterias. This meant big dollars and complex maneuvering. We were beyond the stage of magazine stands in the post office lobby. It meant that other disability groups would want a share of the action; it meant that McDonald's and similar fast-food chains would increase their attempts to compete for the profits; and it meant that the paperworkas-usual behavior of the typical federal and state bureaucrat would not be sufficient to preserve what had been won. The game was big and the action fast.

The 1974 amendments provided as follows: "The Secretary ... shall prescribe regulations to establish a priority for the operation of cafeterias on federal property by blind licensees when he determines, on an individual basis and after consultation with the head of the appropriate installation, that such operation can be provided at a reasonable cost with food of a high quality comparable to that currently provided to employees, whether by contract or otherwise."

The 19 74 amendments to the RandolphSheppard Act seemed to hold great promise, but the required regulations were not forthcoming. In the meantime the National Federation of the Blind was not standing still. A cafeteria was to be established in 1976 at the Mine Safety and Health Academy at Beck ley, West Virginia, and the blind were not to get it. We brought a lawsuit in the federal courts, and before trial, we won our point through a negotiated settlement. The cafeteria became part of West Virginia's vending facility program. It still remains so today.

The long waited for regulations were issued March 23, 1977, and they had troublesome features. While they provided that federal property managing agencies could negotiate directly with state agencies for the blind for the installation and operation of cafeterias by blind persons on federal property, they also contained an alternative provision (included because of the efforts of GSA and other property managing agencies). This alternative (seemingly favored by the authors of the regulations) had the effect of watering down and weakening what we had hoped would be a strong priority. The alternative was that federal property managers could submit bids from companies or individuals interested in operating cafeterias and consider those bids in competition with bids from the state licensing agencies. If the state licensing agency did not bid (which was usually the case), the cafeteria would be given to outside contractors. The effect of this dual standard can be seen by the fact mat from the promulgation of the new regulations until the present time, state licensing agencies have been awarded cafeterias in a majority of the instances when negotiations with federal property managers were employed as opposed to the bid procedure. On the other hand, only one cafeteria was given to the blind during that entire time through the competitive bid procedure, but many were given to private contractors.

Shortly after the regulations were issued, the American Council of the Blind, its affiliate the Randolph-Sheppard Vendors of America, and others brought action in the federal court to overturn them. We felt it was unwise to enter this case. As a general rule, it is very difficult to get the courts to alter a federal agency's interpretation of the law as expressed through its regulations, and once the court has decided, the precedent is likely to be harmful and very nearly impossible to overcome. We felt that it was better to work through congressional oversight hearings, negotiation with federal officials, and public education.

Our judgment was vindicated when the United States Court of Appeals for the District of Columbia decided against the ACB and its allies. The court held that the federal regulations issued by the Department of Health, Education, and Welfare were a reasonable exercise of that agency's discretion to interpret and implement the statute. So the regulations (including the practice of bidding for cafeterias) were sanctified by the court decision. The judgmental error in bringing the case has caused untold damage to the vending program and still dogs our steps to the present day. It has limited our options, hindered our negotiations, and seriously weakened the Randolph-Sheppard Act.

In January of 1984 the General Services Administration attempted to take bids from fast-food chains for the operation of the cafeteria in its headquarters building in Washington. Because of the language of the bid solicitation state licensing agencies were precluded from bidding, and the blind would effectively be eliminated. Bad as this was, it could have been Aorse. The actions of GSA were taken in the name of the special regulations governing the issuance of contracts for cafeterias. They did not make an assault upon the general priority governing other types of vending facilities, including vending machines. The .American Council of the Blind-Randolph Sheppard Vendors of American conglomerate advised delay and a wait-and-see attitude. It was clear that this would not do. In a matter of days the bids would be taken and the contracts awarded. Once the damage was done, it would be all but impossible to reverse an accomplished fact.

Federationists know the rest of the story. We took our case to the public and served notice on GSA that we would throw hundreds of pickets around their building if they proceeded. They backed down and made it clear in a letter sent to us by special courier that it was our effort which brought the change. We then picketed the Secretary of Education and hand-delivered a formal petition requesting that the regulations be changed to eliminate the practice of bidding for cafeterias--asking, instead, that permits for the operation of cafeterias be awarded on the basis of negotiation with state licensing agencies.

The American Council of the Blind did not join us in these actions. Instead, they opposed us, telling the blind and the general public that new regulations were not necessary and that they would negotiate with the Assistant Secretary of Education to get a favorable policy statement. Their notion of a "favorable policy statement" was that the state licensing agencies should have the opportunity to bid for federal cafeterias along with others, including the fast-food giants.

This undercutting and negative approach, which muddied the water and indicated willingness to capitulate, retarded our efforts to get the needed regulations. Our negotiations have continued, but the effort has been strenuous and long and still drags on. It has been made unnecessarily difficult by the opposition of the ACB and its allies, who were not even content to remain silent. If they were not prepared to take positive action to support the vendors, they might at least have left the matter alone.

But as later events were to show, the greatest damage done by the ACB maneuvering related only incidentally to cafeterias. It struck at the vending program across the board and has the potential of cutting the very heart out of the Randolph-Sheppard Act itself. In the negotiations concerning the GSA cafeteria in early 1984 the ACB group said that what it wanted was the right for state agencies to bid in competition with others. This would be sufficient provided guidelines for a priority were laid down once the bids were in. Of course, this conceded far too much and was (because of later unwise ACB action) to have the potential for devastating effect.

In mid-1984 events began to occur which led to two lawsuits brought in the federal district court for the District of Columbia. The first of these cases (filed October 18, 1984, was styled: "Randolph-Sheppard Vendors of America et. al., plaintiffs, vs. Casper W. Weinberger et. al., defendants." The suit sought to block a contract between the Navy and the McDonald Corporation for fast-food service at naval bases in the United States and abroad. The second suit (filed November 16, 1984) was styled: "National Council of State Agencies for the Blind et. al, plaintiffs, vs. Casper W. Weinberger et. al., defendants." It sought to overthrow a contract between the Army and Airforce Exchange Service (AAFES) and the Burger King Corporation for setting up Burger King franchises at various military installations.

Since the plaintiffs in both cases were identical and the issues similar, the cases were consolidated. The American Council of the Blind and its allies made much of the fact that they were being joined in the suit by Senator Jennings Randolph. However, the court decided that he did not have standing to sue, so he was not continued as a party. The court also ruled that various other groups and individuals did not have standing to sue--Paul Verner, President of the Randolph-Sheppard Vendors of America; the Association for the Education and Rehabilitation of the Blind and Visually Impaired; and the Affiliated Leadership League of and for the Blind of America. As with the earlier case brought by the American Council of the Blind, we thought the maneuver was unwise and extremely dangerous. There were better ways to try to accomplish the objective; the odds were overwhelmingly against a court victory; and an unfavorable decision could not only make future negotiations difficult but could jeopardize the entire Randolph-Sheppard program. We were urged to join the case, but we said no.

The problem was not just that the court was the wrong arena to use in fighting these particular cases at this particular time but also the incredibly inept way in which the cases were handled. The risks were increased unnecessarily. For example, the ACB and its allies began by stipulating that the fast-food installations in question would not be cafeterias as defined in the Randolph-Sheppard regulations. This needlessly brought before the court the entire question of the priority for the blind in all vending facilities, not just in the cafeterias. The priority in other areas besides the cafeterias had not been significantly challenged up to this point, but now everything was on the line. One has to wonder whether the ACB and its allies had any idea or inkling (or have any yet, for that matter) of the explosive issue they opened and the terrible weapon they gave to the opponents of the Randolph-Sheppard program.

On January 7, 1985, our worst fears were realized. The court handed down its decision, and the ruling was disastrous. It was probably one of the shortest court cases in history. As far as the blind are concerned it was one of the most devastating. We understarxj that the ACB is considering appealing the decision, and in view of the disastrous nature of the ruling, they certainly should. Of course, a loss in the Appeals Court would put us in worse hole than we are already in, but it is possible that elements of the decision can be reversed and the damage at least somewhat mitigated. It is a long shot, and the risks to the livelihood of the vendors keep increasing. The dilemma which we of the Federation now face is not easy. If we do not intervene with at least an amicus brief to try to help bail the situation out, there is danger that the appeal will be as ineptly argued as was the original case, resulting in further damage and potential destruction. On the other hand if we associate ourselves with the case at all, it is similar to fighting a land war in Asia. It is the wrong arena, the wrong timing, the wrong parties, and the wrong poorly built record.

The plaintiffs in the case argued that blind vendors and state licensing agencies had been denied the priority required by the Randolph-Sheppard Act, but the court held that the priority had not been abridged despite the fact that the contracts with McDonald's and Burger King might result in fewer employment opportunities for the blind. This raises the specter of massive competition for the Randolph-Sheppard program in the future. For example, the court held that: "Nonblind vendors may compete with blind vendors for the opportunity to operate vending facilities on federal property. By analogy, the federal government may establish competitive criteria in soliciting contracts for fast-food procurements, and need not ensure that blind vendors are able to satisfy these criteria." In reaching this conclusion the court reasoned that the government (in this case the Department of Defense) has the right to determine the terms of a solicitation and to evaluate whether proposals of respective bidders (including those representing blind vendors) are responsive and competitive. Priority then applies to the ranking of the responsive and competitive bids. In short, the court held that priority does not preclude bidding for vending facilities on federal property.

As we have already noted, this discussion of priority applies to all types of vending facilities. Since 1974, vending facilities have been classified into two categories: those which are cafeterias and those which are not cafeterias. Bid solicitations have been fairly common when a federal agency wants to award a cafeteria contract. But in the case of non-cafeteria vending facilities, direct negotiations have been used and have normally resulted in a permit's being issued by the federal agency to the state licensing agency. Bids for such permits are unheard of—at least, they have been to the present time.

As we have already said, the parties agreed that the contracts in question did not call for establishing cafeterias. Therefore, the opinion that competition is permissible applies to all types of vending facilities. Strategically, it would have been better if the issue could have been narrowed to cafeterias. Then, all other types of vending facilities might have remained safe from competition. Now, they are not.

The court decision reviewed in detail the competitive bidding process now permissible under federal regulations in the case of cafeterias. After giving its stamp of approval to the cafeteria regulations permitting competitive bids, the court stated: "By analogy, blind vendors who operate other types of vending facilities are not protected from all commercial competition, nor are they given the right to insist that the government's contract solicitations contain only terms and conditions which blind vendors can meet. There is no requirement that a bid proposal be tailored so mat blind vendors could satisfy all of its criteria. This is particularly true in a situation such as this where the criteria complained of--the ability to operate a national fast-food operation is unrelated to the condition of blindness. Instead, this requirement is apparently designed to incorporate certain efficiencies which can be achieved through economies of scale. Absent some clear indication from Congress that national procurements such as these are prohibited, the Court declines to enjoin these contracts."

The plaintiffs also argued that in awarding these contracts the Defense Department failed to follow a procedure called for in the Randolph-Sheppard Act, the procedure requiring approval by the Secretary of Education for any limitation imposed on the placement or operation of a vending facility on federal property based on a finding that its placement or operation would adversely affect the interests of the United States. The precise language of the statute is: "Any limitation on the placement or operation of a vending facility based on a finding that such placement or operation would adversely affect the interests of the United States shall be fully justified in writing to the Secretary, who shall determine whether such limitation is justified. A determination made by the Secretary pursuant to this provision shall be binding on any department, agency, or instrumentality of the United States affected by such determination. The Secretary shall publish such determination, along with supporting documentation, in the Federal Register."

The plaintiffs argued that the McDonald's contraact and the Burger King contract would impose a limitation which must first be approved by the Secretary of Education. No request for approval was submitted to the Secretary, and the Secretary made no determination on the question whatsoever.

But (piling disaster on disaster) the court declined to require the Defense Department to obtain prior approval from the Secretary of Education. It found that the contracts in question were not a limitation on the placement or operation of a vending facillity that Congress was trying to curb by including the procedure for approval by the Secretary of Education. So according to this ruling, federal agencies such as the Department of Defense may solicit bids for vending facilities in such a way that blind vendors or state licensing agencies cannot meet the criteria. Then, having done so, they may award a contract to a nonblind competitor. The court said that although this may be a limitation for the Randolph-Sheppard Program, Congress did not prohibit it although it could have done so.

If the American Council of the Blind and its affiliate the Randolph-Sheppard Vendors of America are really concerned about the welfare of blind vendors, why did they not join us in January of IS84 when we picketed the Secretary of Education and petitioned for a rulemaking to change the Randolph-Sheppard regulations? An indisputable test of a thing is: Does it work? Despite the ACB opposition, what we did last January worked. We prevented GSA from setting up a fast food operation in its headquarters building. What ACB attempted did not work.

Yet, in the same year (1984) ACB tried another maneuver involving the RandolphSheppard Act. It was strategically so unwise that one has to wonder why it was undertaken. I have heard (but cannot vouch for the truth of it) that an ACB national staff member said the court case against McDonald's and Burger King was undertaken to show the vendors of the nation that the NFB is not the only organization that works to help vendors. If this is true, what a commentary! Moreover, who needs or wants such help? Be all of this as it may, we must now try to find a way to minimize the damage and pick up the pieces. Perhaps (as already indicated) we should file a brief in the Appeals Court. Perhaps we should ask Congress to pass a resolution making unmistakably clear that the blind should have a priority in food service operations on federal property. Most important of all, perhaps we should urge the ACB to refrain from trying to do what it cannot do and does not understand how to do. The blind vendors of the nation have much to think about as they ponder the significance of the McDonald's and Burger King court cases and the other events of the past year.

If you or a friend would like to remember the National Federation of the Blind in your will, you can do so by employing the following language:

"I give, devise, and bequeath unto National Federation of the Blind, a District of Columbia non-profit corporation, the sum of $ ______ (or "percent of my net estate" or "The following stocks and bonds:") to be used for its worthy purposes on behalf of blind persons."