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Attachment M - Legal Memorandum: Vending Machine Contracts

LEGAL MEMORANDUM REGARDING VENDING MACHINE CONTRACTS

An opinion has been requested regarding the contracting for vending machines at state facilities. A field unit has asked for a contract which would allow a private vendor to provide vending machines at a state facility. The vending machine would be available for the general public and for employees of the agency.

FIRST QUESTION:

Whether the department may enter into a contract with a private vendor to provide vending machine services where the machine would be used by the general public and agency employees.

A second related question has been presented concerning the use of vending machines by offenders. The Canteen Board desires to contract with vendors to supply vending machines for offenders in community corrections settings in lieu of operating a full offender canteen. Since offenders at community corrections are allowed to possess cash, they would be allowed to pay for canteen items from machines. The Canteen Board would negotiate a contract which would allow the board to retain a portion of profits from the canteen.

SECOND QUESTION:

May the Canteen Board enter into a contract for vending machines for offender use where offenders are allowed to buy from the vending machines in lieu of usual canteen operations and the board is allowed to retain a portion of the profits?

ANALYSIS: QUESTION 1

Since the two questions both involve the operation of vending machines, they are analyzed together with respect to the applicable statutory provisions related to vending machine operations. The Oklahoma Legislature has answered the first question. Title 7, Section 72 of the Oklahoma Statutes, defines "vending facility" as follows:

1. "Vending facility" means automatic vending machines, cafeterias, snack bars, cart service, shelters, counters, and such other appropriate auxiliary equipment which may be operated by blind licensees and which is necessary for the sale of newspapers, periodicals, confections, tobacco products, food, beverages, and other articles or services dispensed automatically or manually and prepared on or off the premises in accordance with all applicable health laws;

The legislature has established a public policy which favors the granting of such vending contracts to the State Department of Rehabilitation Services (DRS). Title 7, Section 73 of the Oklahoma Statutes, creates a duty for state agencies to give priority to vending facilities operated by blind persons. The statute provides:

A. It shall be the duty of the board of county commissioners of each county and the governing boards of all state institutions, state agencies and state or county public trust authorities, with regard to the premises of county or state property under their respective jurisdictions or the premises of property leased by them in whole or in part, to give priority to vending facilities operated by licensed blind operators and established by the State Department of Rehabilitation Services. Governing boards shall observe such priority by entering into an agreement with the Department. Operators shall be licensed by the Department.

From reading the statute, it appears clear that the agency must first offer a contract to DRS when the vending machine is for the use of the general public or employees. The primary goal of statutory construction is to ascertain and follow the intent of the legislature, and, "if statute is plain and unambiguous and its meaning clear and no occasion exists for application of rules of construction statute will be accorded meaning expressed by language used." TRW/Reda Pump v. Brewington, 1992 OK 31, 829 P.2d15. The language of the statute appears plain and unambiguous and applied to vending machines for public and staff use. If DRS declines a contract, then the Department of Corrections has met the statutory obligation and may enter into a contract with a private vendor.

ANALYSIS: QUESTION 2

Further analysis is required to answer the second question regarding the Canteen Board, which is created by title 57, Section 537 of the Oklahoma Statutes. The language of the statute creating the board and its mission must be examined. "The fundamental rule of statutory construction is to ascertain and give effect to the legislative intent, and that intent is first sought in the language of a statute," Tulsa County Budget Bd. V. Tulsa County Excise Bd., 2003 OK 98, 81 P.3d 662.

The statute provides,

"A. There shall be established a Board of Directors for all canteen services within the Department of Corrections. The members of the Board shall be appointed by the Director of the Department of Corrections. All canteen operations shall be under the control of the Board and shall operate pursuant to written guidelines established by the Board. The overall canteen operation shall be self-supporting."

The provisions creating the preference for DRS contracts is applicable to boards of

"state institutions, state agencies and state or county public trust authorities, with regard to the premises of county or state property under their respective jurisdictions or the premises of property leased by them." (7 O.S. 73, supra.)

Examining the language of both statutes, it is clear the Canteen Board is not the governing entity of a state institution or agency. Further, the Canteen Board has no jurisdiction over the institutions or premises upon which the institutions operate. While governing boards over state institutions or agencies would operate without making a profit, the legislature clearly expects that the Canteen Board to have and retain profits. The statute provides,

"All profits from the canteen operations shall be used exclusively for the benefit of the inmates of the various institutions and personnel of the Department of Corrections as determined by the canteen Board of Directors pursuant to subsection A of this section." (57 O.S. 537.B)

"Legislative acts are to be construed in such a manner as to reconcile different provisions and render them consistent and harmonious and give intelligent effect to each." Eason Oil Co. v. Corporation Commission, 1975 OK 14, 535 P.2d 283. Giving effect to both provisions, it is clear the Canteen Board is not subject to the restrictions of 7 O.S. 73 and the mandate to give DRS priority when the machines are utilized by offenders at community corrections security facilities. Although the statutory provisions do no specifically address the use of vending machines, the legislature obviously intended for the Canteen Board to utilize the profits from the canteen.

CONCLUSION

The answer to question one is clearly provided by statutory language. The agency must give DRS priority before entering into a contract for vending machines on state owned premises or premises leased by the state when the machines are used by the public or staff.

The answer to question two is also provided by the language of the statute which creates the Canteen Board. The Canteen Board is not required to give priority to DRS in contracting for vending machines when the machines are utilized by offenders in lieu of regular canteen operations.