SOURCE: 43 FR 25337, June 12, 1978, unless otherwise noted.

§ 260.1 Reissuance and purpose.

This part updates part 260 to implement the provisions of the RandolphSheppard Vending Stand Act and 45 CFR part 13, part 1369, and establishes within the Department of Defense:

(a) Uniform policies for application of priority accorded the blind to operate vending facilities;

(b) Requirements for satisfactory vending facility sites in DoD Component-owned or occupied buildings; and,

(c) Vending machine income-sharing requirements on property under the jurisdiction of a DoD Component.

§ 260.2 Applicability.

The provisions of this part apply to the office of the Secretary of Defense, the Military Departments, and the Defense Agencies (hereafter referred to as "DoD Components") in the 50 States, the District of Columbia, Puerto Rico, American Samoa, Guam, and the Virgin Islands.

$260.3 Policy.

In implementation of the RandolphSheppard Act, priority on DoD-controlled property will be extended to the blind as set out below:

(a) The blind will be given a priority in establishment and operation of vending facilities.

(b) The blind will be given a priority in award of contracts to operate cafeterias.

(c) In conjunction with acquisition or substantial alteration or renovation of property, satisfactory sites will be provided for operation of blind vending facilities.

(d) Certain income from vending machines operated by a DoD Component either directly or by contract will be given to State licensing agencies.

(e) DoD components will take necessary action to ensure that, within their areas of responsibility, the requirements set forth below are implemented.

(f) The blind have a priority right to operate vending facilities on DoD-controlled property when the opportunity to operate them becomes available.

The priority extended allows blind licensees to be gainfully employed. While primary responsibility for carrying out this intent falls upon the State licensing agency, it is nevertheless a responsibility of the on-site official to ensure that the operator is in fact a State licensed blind person and that sighted employees or assistants are utilized only to the extent reasonably necessary.

(1) This priority will not be accorded when the on-site official determines, after conferring with the Head of the DoD component, that the interest of the United States would be adversely affected if the priority were accorded.

(2) Any determination that according the priority would be adverse to interests of the United States must be fully justified in writing through the head of the DoD component concerned (who will consult with the Assistant Secretary of Defense (Manpower, Reserve Affairs and Logistics)) (ASD(MRA&L)). The justification then shall be sent to the Secretary, Department of Health, Education, and Welfare (HEW), who has authority to determine whether the failure to accord the priority is justified by the circumstances. This determination by the Secretary, HEW must be published in the FEDERAL REGISTER and is binding upon the DoD component.

(3) Applications for permits by the State licensing agency to operate vending facilities (except cafeterias) on DoD controlled property must be submitted in writing to the head of the DoD component concerned, through the on-site official. When an application is not approved, the head of the DoD component will advise the State licensing agency in writing and will indicate the reasons for the disapproval. When issued, permits will describe the location of the vending facility and will be subject to the following requirements:

(i) The permit will be issued in the name of the State licensing agency.

(ii) The permit will be issued for an indefinite period of time subject to suspension or termination upon failure to comply with agreed upon terms; and subject to termination by either party upon 60 days written notice to the other party, in cases of

(A) Inactivation of the installation or activity,

(B) Loss of use of a building or other facility housing the vending facility, (C) Change in the DoD component's requirements for service, or

(D) Inability of the State licensing agency to continue to operate the vending facility.

(iii) The permit will provide that:

(A) No charge will be made by the DoD component to the State licensing agency for normal repair and maintenance of the building, or for cleaning areas adjacent to the designated vending facility boundaries, or for trash removal from a designated collection point.

(B) The State licensing agency will be responsible for cleaning and maintaining the appearance of and for the security of the vending facility within the designated boundaries of such facility and for all costs of every kind in conjunction with vending facility equipment, merchandise and other products to be sold, except as provided in paragraph (f)(3)(iii)(E) of this section. Neither party will be responsible for loss or damage to the other's property, unless proximately caused by its acts or omissions. The State licensing agency will also be responsible for the acts or omissions of the blind vendor, his employees or agents.

(C) Articles sold at such vending facilities may consist of newspapers, periodicals, publications, confections, tobacco products, foods, beverages, chances for any lottery authorized by State law and conducted by an agency of a State within such State, and other articles or services traditionally found in blind operated vending facilities operated under the Randolph-Sheppard Act as determined by the State licensing agency in consultation with the onsite official, to be suitable for a particular location (articles and services may be dispensed automatically or manually);

(D) Vending facilities will be operated in compliance with applicable health, sanitation and building codes, ordinances, and regulations;

(E) Installation, modification, relocation, removal, and renovation of vending facilities will be subject to the prior approval of the on-site official

and the State licensing agency. Costs of installation, modification, removal, relocation or renovation will be paid by the initiating party. In any case of suspension or termination of a permit to operate a vending facility on the basis of noncompliance by either party, the costs of removal from the building will be borne by the noncomplying party.

(iv) The permit will also contain appropriate requirements for reimbursement or direct payment for support services such as utilities and telephone service.

(v) In the event the blind licensee fails to provide satisfactory service or otherwise fails to comply with the requirements of the permit issued to the State licensing agency, the on-site official will, after coordinating with the Head of the DoD Component, notify the State licensing agency of this deficiency in writing and request corrective action within a specified reasonable time. The notice will indicate that failure to correct the deficiency will result in temporary suspension or termination of the permit, as appropriate. Suspension or termination action will be taken by the Head of the DoD Component concerned after consultation with the ASD (MRA&L).

(g) The blind have a priority right to operate cafeterias on DoD-controlled property, as set out in paragraph (g) (1) or (2) of this section, when the cafeteria operation involved is contracted.

(1) Procuring activity solicitations, when issued, will establish basic requirements and the criteria for judging proposals. One copy of each solicitation will be provided to the State licensing agency for the blind. The criteria upon which proposals will be evaluated may include factors such as sanitation practices, personnel, staffing, menu pricing and portion sizes, variety, budget and accounting practices, fees, and other relevant considerations.

(i) If the State licensing agency submits a proposal and it is not within the competitive range established by the contracting officer, award may be made to another offeror following normal procurement procedures, but only after the on-site official confers with the Head of the DoD Component.

(ii) If the State licensing agency submits a proposal and it is within the

competitive range established by the contracting officer, the contract will be awarded to the State licensing agency except as provided in paragraph (g)(1)(iii) of this section.

(iii) The contracting officer may award to other than the State licensing agency when the on-site official determines that award to the State licensing agency would adversely affect the interests of the United States and the Secretary, HEW, approves the determination (processing will be in accordance with paragraph (f)(2) of this section), or when the on-site official determines, after conferring with the Head of the DoD Component, and the Secretary, HEW, agrees, that the blind vendor does not have the capacity to operate a cafeteria in such a manner as to provide food service at a comparable cost and of comparable high quality as that available from other providers of cafeteria services.

(2) Direct negotiations may be undertaken with State licensing agencies whenever the on-site official, with concurrence of the Head of the DoD Component, has determined that State licensing agency, through its blind licensee, can provide the cafeteria services required at a reasonable cost, with food of a high quality comparable to that available from other providers of cafeteria services. In the event direct negotiations fail to result in a contract with the State licensing agency, the procedures prescribed in paragraph (g)(1) of this section, will be followed.

(3) The operation of a cafeteria by a blind vendor will be governed by contractual agreement, not by a permit. Normal contract administration procedures will apply, except that termination actions will not be taken without prior coordination with the Head of the DoD Component concerned.

(4) All contracts for the operation of cafeterias on DoD-controlled property with other than State licensing agencies will, upon expiration, be processed under the above paragraphs unless the State licensing agency informs the onsite official that it is not prepared to exercise its priority at that time.

(h) Any DoD Component acquired (purchased, rented, leased, constructed), or substantially altered or renovated building is required to have

one or more satisfactory sites (as defined in §260.6) for a blind-operated vending facility, except as provided in paragraph (h)(1) of this section.

(1) A determination that a building contains a satisfactory site or sites is presumed made if the State licensing agency and the on-site official consult and agree that the site or sites provided are satisfactory.

(i) DoD Components will notify by certified or registered mail, return receipt requested, the appropriate State licensing agency of buildings to be acquired or substantially altered or renovated. This notification will be provided at least 60 days in advance of the intended aquisition date or the initiation of actual construction, alteration or renovation. As a practical matter, the State licensing agency should be contacted early in the planning or design stage of a project. (This notice requirement does not apply in cases as described in paragraph (h)(1)(i)(C) of this section.) This notification will:

(A) Indicate that a satisfactory site or sites for the location and operation of a blind vending facility is included in the plans for the building,

(B) Forward a copy of a single line drawing indicating the proposed location of such site or sites,

(C) Assure the State licensing agency that, subject to the approval of the DoD Component involved, it will be offered the opportunity to select the location and type of vending facility to be operated by a blind vendor prior to completion of the final space layout of the building, and

(D) Also indicate that an unexplained response indicating that the State licensing agency does not desire to establish and operate a vending facility, or the absence of a response within 30 days will be construed by the DoD Component concerned as a determination by the State licensing agency that the number of persons using the property is or will be insufficient to support a vending facility.

(ii) The State licensing agency must respond within 30 days acknowledging receipt of the correspondence from the DoD Component and indicating whether it is interested in establishing a vending facility, and if interested, indicating its agreement or alternate se

lection of a location and its selection of type of vending facility. A copy of the written notice to the State licensing agency and the State licensing agency's response, if any, will be provided to the Secretary, HEW.

(iii) If the State licensing agency responds indicating that it does not desire to establish and operate a vending facility and sets forth any specific basis other than the insufficiency of persons to support a vending facility, then a satisfactory site which meets anticipated needs of the DoD Component will be incorporated. Each such satisfactory site will meet or exceed the requirements defined in § 260.6.

(iv) If an unexplained response indicating that the State licensing agency does not desire to establish and operate a vending facility is received, or if no response is received within the 30 day period, the on-site official will, through the Head of the DoD Component, notify the Secretary, HEW, that the State licensing agency's response or failure to respond has been construed as a determination by the State licensing agency that the number of persons using the property is or will be insufficient to support a vending facility and that a satisfactory site to be operated under the auspices of the State licensing agency will not be incorporated, unless directed by the Secretary, HEW. This notification will also be provided if the State licensing agency responds and affirmatively indicates that it has made such a determination.

(2) The Secretary, HEW, has determined that the requirement to provide a satisfactory site does not apply:

(i) When fewer than 100 Federal employees (as defined in § 260.6) will be located in the building during normal working hours; or

(ii) When the building contains less than 15,000 square feet to be used for Federal Government purposes in the case of a building in which services are to be provided to the general public.

(3) The provisions of paragraph (h)(2) of this section, do not preclude arrangements under which vending facilities to be operated by blind vendors may be established in buildings of a size or with an employee population less than that specified. For example, if

a building is to be constructed which would contain only 80 Federal employees, upon agreement of the on-site official and the State licensing agency, the DoD Component concerned may determine to provide a satisfactory site in which the blind have agreed to operate a vending facility.

(4) When a DoD Component is leasing all or part of a privately owned building in which the lessor or any of its tenants have an existing restaurant or other food facility in a part of the building not covered by the lease and operation of a vending facility would be in substantial direct competition with such restaurant or other food operation, the requirement to provide a satisfactory site does not apply.

(i) Effective January 2, 1975, vending machine income generated by DoD will be shared with State licensing agencies for the blind and/or blind vendors as set forth below. The on-site official is responsible for the collection of, and accounting for, such vending machine income (as defined in § 260.6) and for otherwise ensuring compliance with the requirements of this paragraph.

(1) The vending machine incomesharing requirements are as follows:

(i) One hundred percent (100%) of the vending machine income from vending machines in direct competition with blind-operated vending facilities will be provided the State licensing agency.

(ii) Fifty percent (50%) of the vending machine income from vending machines not in direct competition with blind-operated vending facilities will be provided the State licensing agency.

(iii) Thirty percent (30%) of the vending machine income from vending machines not in direct competition with blind-operated vending facilities and located where at least 50 percent of the total hours worked on the premises occurs during other than normal working hours (as defined in § 260.6) will be provided the State licensing agency.

(2) The determination of whether a vending machine is in direct competition with the blind-operated vending facility is the responsibility of the onsite official subject to the concurrence of the State licensing agency.

(3) These vending machine incomesharing requirements do not apply to:

(i) Income from vending machines operated by or for the military exchanges or ships' stores systems; or

(ii) Income from vending machines, not in direct competition with a blindoperated vending facility, at any individual location, installation, or facility (as defined in § 260.6) where the total of the vending machine income (as defined in §260.6) from all such machines at such location, installation, or facility does not exceed $3,000 annually.

(4) The payment to State licensing agencies under these income-sharing requirements must be made quarterly on a calendar year basis. The first payment of income, however, will be made no later than April 30, 1978. This first payment will be for the period March 23, 1977, through the end of calendar year 1977. It will also include amounts collected and set aside during the period January 2, 1975, through March 22, 1977, for distribution to State licensing agencies. DoD Component activities which did not set aside vending machine income for distribution during the period January 2, 1975, through March 22, 1977, will consider taking steps to determine the amounts of such vending machine income which should have been withheld during that period and withhold such amounts from future income for distribution. All subsequent quarterly payments will be made within 60 days after expiration of the applicable calendar quarter.

$260.4 Responsibilities.

(a) The Assistant Secretary of Defense (Manpower, Reserve Affairs and Logistics) (ASD (MRA&L)) will monitor the overall DoD program and consult with DoD Components on all determinations (1) that the granting of a priority to the blind would be adverse to the interests of the United States, and (2) to suspend or terminate a permit to operate a vending facility.

(b) The Head of the DoD Component concerned, in monitoring its program shall:

(1) Approve/disapprove State licensing agency applications for permits and the provision of satisfactory sites;

(2) Consult with the on-site official on determinations that granting a priority to the blind would be adverse to the interests of the United States and