Priority for Establishing Vending Facilities

What is the legal basis for Tennessee Business Enterprises?
TBE has its roots in federal enabling legislation found at 20 U.S.C. 107d commonly referred to as the Randolph-Sheppard Act. On the state level, T.C.A. 71-4-501 et seq. provides the legal basis.

What constitutes a vending facility?
The word “vend” means to sell so basically a vending facility would be any operation that sells or vends products or services. This would include facilities that consist of automatic vending machines or require manual selling. Included would be cafeterias, snack bars, cart services, catering, concessions, vending machines, and inmate commissaries.

Exactly what does priority mean?
Simply put, it means first right of refusal.

What properties are covered by the state law?
Any building owned or leased by the State of Tennessee or any county, municipality, or any other entity created by the General Assembly.

Are there any exceptions to the priority?

Airports and elementary and secondary schools are exempt.

Do we have to do an RFP or bid?

No. It is like any other set aside program. You can come directly to TBE and negotiate for the service desired. If you want to develop an RFP that includes the specifications that you would like, that is okay but it doesn’t have to be sent to other potential bidders unless TBE waives its priority.

Is a contract required?
There is no statutory requirement for a contract. TBE prefers to have a written agreement executed which is referred to as an Occupancy Permit.

Does the priority apply to inmate commissaries that are operated off-site with products being delivered to the inmates?

Yes. Most commissaries operated by TBE in county jails are off-site operations.

What is TBE required to provide?

A trained licensed blind manager, all equipment, initial merchandise, any necessary alterations to the location, electrical and plumbing services, and ongoing supervision.

What about utilities?

With the exception of telephone service, ongoing utility costs are paid by property management.

What kind of equipment does TBE provide?

TBE will provide for use by its licensed manager all necessary equipment. When TBE goes into a location, only new equipment is used and it is of the highest quality.

What happens when equipment breaks or wears out?

TBE repairs all equipment on behalf of the licensed manager and also replaces equipment as needed.

In inmate commissary operations, does TBE provide computer hardware and inmate accounting software for use by the county?

Although not required by statute, TBE generally will provide both for use by the county.

Who actually runs the facility on a daily basis?
The licensed manager is totally in charge of the day-to-day operations. It is his/her business and they are responsible for all aspects of the business including hiring and firing employees, maintaining a sanitary operation, ordering product, setting prices, etc.

Do we have any say on who the licensed manager will be?
TBE has a system set up for promotions and transfers that includes an interview with a three-member selection panel. In some cases, a property management representative may participate in that interview and selection process. Additionally, property management can make certain requirements of the licensed manager and his/her employees such as requiring them to undergo fingerprinting and background checks.

Who sets prices?

The licensed blind vendor but prices must be competitive with those in the general area.

What if we are not happy with the service?
TBE thinks you will be but problems can always arise. If you experience such problems, you may contact the Business Enterprises Consultant responsible for supervising that facility. This Consultant is a State employee and (s)he is responsible for approximately 15 facilities.

Does the TBE manager pay a competitive commission to us?
State law forbids TBE from requiring its manager to pay any sort of commission to property management.

What if we are talking about a small operation with just a couple of vending machines?
Then TBE will arrange for vending through a third party.

What is meant by “legally blind”?
A person has vision of 20/200 in better eye with best correction or a field loss of less than 20 degrees.

How big is your operation?
TBE operates 120 vending facilities that generate over $20 million in annual sales.

How do I learn more about TBE?
Call 615-741-7681