Randolph-Sheppard Act and permits

Introduction to the Randolph-Sheppard Act

Implementing the Food Service Guidelines for Federal Facilities requires an understanding of the Randolph-Sheppard Act. The Randolph-Sheppard Act established the Randolph-Sheppard Vending Facility Program, a federal law that gives priority to blind vendors for certain food service facilities on federal government property. The program’s purpose is to provide blind persons with financially rewarding employment and to enhance their economic well-being.

In 1936, Congress enacted the Randolph-Sheppard Act, which created the Randolph-Sheppard Vending Facility Program. A 1974 amendment to the Randolph-Sheppard Act expanded the program’s scope to include state, county, and municipal, properties, as well as adding cafeterias to the list of eligible facilities.  

Today, the US Department of Education’s Rehabilitation Services Administration administers the federal Randolph-Sheppard Vending Facility Program. A State Vocational Rehabilitation agency, serving as a state licensing agency (SLA), implements the Randolph-Sheppard Vending Facilities Program for federal facilities located in its state. The program operates in every state except Wyoming and the US territories of Guam and Puerto Rico. The SLA, called the Business Enterprise Program in some states, has the authority to recruit, train, and license blind vendors as operators and owners of food service facilities located on government property. 

The SLA serves 2 important roles: It can enter into an operating or licensing agreement with the blind vendor to operate the food service facility on government property, and it can develop permits or contracts with government property management to provide food service operations. The SLA typically designs, builds, and initially supplies the inventory for food service operations.

The licensing agreements with vendors and permits or contracts with government property managers are negotiated with active participation from an Elected Committee of Blind Vendors, which is a peer-elected body of blind vendors that represent the interests of the blind vendors in the state. The Elected Committee of Blind Vendors actively collaborates with the SLA in making decisions that affect the overall administration of the federal Randolph-Sheppard Vending Facility Program, including the implementation of the Food Service Guidelines for Federal Facilities

“Mini Randolph-Sheppard Acts”

Most states have passed “Mini Randolph-Sheppard Acts” that mimic the federal Randolph-Sheppard Act. In other words, these state laws generally require that priority be given to blind vendors for certain facilities on state government property (this often applies to vending machines and self-service facilities). This section explains the federal process for issuing permits under the federal Randolph-Sheppard Act, but refer to the Public Health Law Center’s 50-state scan to learn about any individual state’s “Mini Randolph-Sheppard Act.”

Applicable facilities

Under the Randolph-Sheppard Act, priority for blind individuals is given for the following facilities on federal property. Descriptions of these facilities are available in the glossary.

  • Vending machines
  • Sundry stands
  • Prepackaged snack shop or bar
  • Limited on-site snack shop or bar
  • On-site grill
  • Café
  • Cafeterias

When food service is provided through the Randolph-Sheppard Vending Facility Program, federal government agencies issue permits to state licensing agencies for all facilities listed above, except cafeterias. For cafeterias, federal government agencies use contracts.

Permits, contracts, subcontracts, and licensing agreements

Permits, contracts, subcontracts, and licensing agreements are types of legal agreements used to implement the Randolph-Sheppard Vending Facility Program. The standards included in the Food Service Guidelines for Federal Facilities should be included in each of the following documents.

Permits

A permit is a legal document that is created by the government property management representative and a state licensing agency (SLA). It allows a blind vendor to operate a food service facility at a specific government location for an indefinite period of time. Permits apply to vending machines, sundry stands, prepackaged snack bars, limited on-site snack bars, on-site grills, and cafés.

To implement nutrition standards, the government agency must incorporate the Food Service Guidelines for Federal Facilities into the permit when it is drafted or revised. Permits are usually drafted or revised when (a) a new government building is acquired (owned or leased); (b) a facility is remodeled, which results in a need for a different level of food service or a relocation of the food service facility within the building; or (c) there is significant interest in making revisions to the permit, and both the property manager and the state licensing agency agree to revise it. 

When planning a new food service operation, the government property management representative and a concession specialist will determine the location, level of service, and types of product offerings. Then a Randolph-Sheppard offer letter will be sent to the SLA informing them that a new location is available for a blind vendor. The SLA has 30 days to accept or reject the new location.

Once accepted, the SLA will work with the government property management representative to design the space for the food service facility. Once the design is approved, a permit is created for the location. The permit includes information about the space available in the building, level of service, approved equipment, number and location of vending machines, types of products offered, and hours of operation. 

Generally, existing permits can be changed if a facility is remodeled; this may result in the need for a different level of service or a facility relocation within the building. Alternatively, if there is significant stakeholder interest in making revisions to the permit, a permit may be changed.

Contracts

In 1974, the Randolph-Sheppard Act was amended to include cafeterias: “The operation of a cafeteria by a blind vendor shall be covered by a contractual agreement and not by a permit” (34 CFR 395.35). Food Service Guidelines for Federal Facilities should be included in the contracts for cafeterias.

Subcontracts

In order to satisfy the government agency’s needs, permits may allow the state licensing agency (SLA) or blind vendor to subcontract with a private vendor or third party vendor who is not a blind vendor. Subcontracts may be needed when the SLA or blind vendor cannot manage the food service facility due to size, location, staffing needs, lack of expertise, or other requirements. Subcontracting allows the SLA to maintain the permit despite the blind vendor not being able to directly fulfill the needs of the food service facility or government property management. The SLA and the government agency should work with the private vendor to include the Food Service Guidelines for Federal Facilities in the subcontract. 

Licensing agreements

The state licensing agency (SLA) can enter directly into an operating or licensing agreement with the blind vendor, so this is another opportunity to include the Food Service Guidelines for Federal Facilities into a legal agreement.

Not all facilities are affected by the Randolph-Sheppard Act. Government agencies should confer with the appropriate procurement or legal office to determine whether blind vendors must be given priority to bid for services for a given facility. But even when the Randolph-Sheppard Act does not apply, state licensing agencies can participate in an open bid process, just like any other vendor.

Important principles for healthy food service guidelines in the Randolph-Sheppard vending facility program

Work with the State Licensing Agency and Blind Vendors

In order to be successful, the government agency must actively engage the state licensing agency and the Committee of Blind Vendors when incorporating the Food Service Guidelines for Federal Facilities into permits, contracts, and other legal agreements. The Committee of Blind Vendors is a peer-elected body of blind vendors that represent the interests of blind vendors in a state and advocate on their behalf.

The government agency should make the business case for healthy food service guidelines, using appropriate data when available. The government agency should seek to find common ground on nutrition requirements and this may include understanding what is feasible and how to maintain profits, core interests of the State Licensing Agency and blind vendors. Understanding building sales patterns may also be important (eg, Is the customer base shifting? How would this affect demand for healthier food?).

Once the Food Service Guidelines for Federal Facilities have been incorporated into a legal agreement, there should be a plan for implementation. The government contracting officer and other staff should meet with the vendor on a regular basis to discuss operational and financial results specific to the implementation of the Food Service Guidelines for Federal Facilities and other requirements of the contract. The government agency should work with the vendor to develop a performance improvement plan to resolve significant issues. The plan should include time frames and steps for remediation of the issues. 

Include the Food Service Guidelines for Federal Facilities in Legal Agreements    

In order to be effective, legal agreements—such as permits, contracts, subcontracts, and licensing agreements—should provide sufficient detail on how to implement the Food Service Guidelines for Federal Facilities. The Important Considerations for RFPs and Important Considerations for Contracts sections of Exceed provide language that can be included in legal agreements to implement the Food Service Guidelines for Federal Facilities

Detailed agreements help all parties get on the same page with regard to goals and expectations. The agency should insert the Food Service Guidelines for Federal Facilities into the permit itself or attach them through an addendum or exhibit.