Blind vendors who operate snack bars and other businesses in government buildings here filed suit yesterday against the District government, claiming that D.C. officials have squandered the vendors' profits while failing to provide the services they need to continue operating.

The suit, filed in U.S. District Court, seeks nearly $1.2 million in damages from officials of the D.C. Rehabilitative Services Administration, which uses vending proceeds to maintain the vendors' equipment, insurance coverage, pension fund and other business necessities.

Members of a group representing the District's 63 licensed blind vendors told reporters they filed the suit after repeatedly complaining to city officials about poor upkeep on their equipment and facilities, shoddy training and a lack of accounting of program funds.

The city administers the blind vendor program under a 52-year-old federal statute, the Randolph-Sheppard Act, designed to increase business opportunities for the handicapped.

The law requires that most large federal and local government buildings accommodate at least one business operated by a blind entrepreneur. The District levies a fee of 21 percent of net sales against the blind vendors to finance administration of the program.

Calls to Rehabilitative Services Administration Director Katherine Williams were referred yesterday to the D.C. Corporation Counsel's Office, where spokesman Claude Bailey declined to comment.

According to the vendors, poor upkeep of equipment and inadequate training of vendors threatens the program's future here.

"In 10 years, we won't have a program to come home to if this continues," said Timothy Finan, who operates a snack bar at the State Department.

Vendors said breakdowns in machinery routinely go unattended for weeks or months. Finan complained that he had been losing business steadily for three years because the city failed to arrange a badly needed remodeling of his shop that would comply with new security requirements at the State Department.

Among other complaints, vendors said their liability insurance policy was nearly canceled last month after a private contractor hired by the city to manage the program fell behind in payments on the premiums.

"We had a fine program here in the District for 48 years," said Gale Conard, president of the Randolph-Sheppard Blind Vendors Association of D.C. Inc. "For the past three years, however, we have seen our program, our livelihood, deteriorate to the point of total collapse."

Relations between the vendors and Rehabilitative Services began to sour four years ago when the city ended its contract with a nonprofit group -- largely controlled by the vendors -- that had been managing the program since the 1970s.

City officials contended that the vendor-controlled group -- District Enterprises for the Blind -- was incapable of handling plans to expand the program that called for opening full-service cafeterias in government buildings.

Since then, Rehabilitative Services has hired two successive private contractors to manage the program, while increasing the program's budget nearly 80 percent. According to a D.C. auditor's report last year, though, services to the vendors did not improve even though administrative costs for the program nearly doubled. Under the first contractor, DAC Corp., vendors received no services at all for months, the auditor found.

The auditor also criticized Rehabilitative Services officials for failing to enforce regulations requiring that blind vendors receive a share of profits from vending machines operated by other businesses in government buildings and failing to keep that money in an account separate from general operating funds.

According to the report, the city has exerted little control over vending machine receipts, part of which are supposed to go into the blind vendors' $4 million pension fund. Vendors said yesterday they had no idea how much money had been lost, but said it could be millions of dollars.

Rehabilitative Services has reduced annual payments to the vendors' pension fund from $250,000 to $150,000, vendors said.