Implementation of the Randolph-Sheppard Act Amendments of 1974

Under the Randolph-Sheppard Act Amendments of 1974, income from vending machines on Federal property must be shared with blind vendors or State blind vendor agencies. The regulations of the Department of Health, Education, and Welfare (HEW) are not being properly implemented by the Department of Defense (DOD). DOD contends that all exchange system vending machines are excluded from the income-sharing provisions of the Act. Adopting a narrower interpretation of the Act than DOD, HEW regulations state that net income from vending machines within "operatedted" retail sales outlets of the military exchanges is exempt from the income-sharing provisions. The DOD position is that net income from vending machines operated by or for the exchange is exempt. GAO concluded that the HEW regulations most accurately interpret the law.