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 21 FLRA No. 76
 
 NATIONAL WEATHER SERVICE 
 EMPLOYEES ORGANIZATION, 
 MEBA, AFL-CIO
 Union
 
 and
 
 DEPARTMENT OF COMMERCE, 
 NATIONAL WEATHER SERVICE, 
 NATIONAL OCEANIC AND ATMOSPHERIC 
 ADMINISTRATION
 Agency
 
                                            Case No. 0-NG-627
 
                 DECISION AND ORDER ON NEGOTIABILITY ISSUE
 
                         I.  Statement of the Case
 
    This case is before the Authority because of a negotiability appeal
 filed under section 71-5(a)(2)(E) of the Federal Service
 Labor-Management Relations Statute (the Statute) and concerns the
 negotiability of the following Union Proposal:
 
          Students at the (National Weather Service Training) Center
       shall be given the option of staying at housing of their choice in
       the Kansas City area.  In addition, each student who elects to
       stay at housing other then the Downtown Travelodge shall be given
       the $11.85 which would have been paid to the Downtown Travelodge
       (by the Agency) for their housing, to use in paying for whatever
       housing the student selects.  This $11.85 would be in addition for
       the $23.00 per diem given to each student for food and
       miscellaneous expenses.
 
                       II.  Positions of the Parties
 
    The Agency essentially contends that the proposal is nonnegotiable
 for the following reasons.  First it conflicts with management's right
 to determine its budget under section 7106(a)(1) of the Statute, because
 the increase in cost associated with the proposal is significant and is
 not offset by compensating benefits.  Second, the Agency asserts that
 the proposal is inconsistent with its right under 41 U.S.C. Section
 252(a) to contract for service.  Third, the Agency states that the
 proposal is inconsistent with a policy determination it made pursuant to
 its authority under 5 U.S.C. Section 5911(e) that employees may be
 required to use Government furnished quarters when they are students at
 the training center if the Agency head determines it is necessary.
 Finally, the Agency head determines it has a "requirements" contract
 with a private contractor which is consistent with 41 C.F.R. Section
 1-3.409(b).  According to the Agency, a "requirements" contract requires
 an employer to have all its needs supplied exclusively by the
 contractor.  In the Agency's view, its contract legally prevents it from
 purchasing its housing needs from anyone but the private contractor,
 thereby making it impossible for the Agency to agree to the terms of the
 proposal without risking a lawsuit.
 
    The Union contends that the proposal is not intended to cost the
 Agency any more than it has already determined to spend.  The Union also
 contends that the proposal would not violate law or regulation.  It
 argues that the contract the Agency has negotiated for housing its
 employees/students may be altered or terminated at its sole discretion,
 and that the contract does not force the Agency to compel its
 employees/students to lodge with the private contractor.
 
                              III.  Analysis
 
    The Union's proposal would allow employees who are students at the
 National Weather Service Training Center to arrange for their own
 housing instead of being required to stay in Agency-arranged housing.
 The Proposal further provides that the Agency would pay to employees who
 arrange their own housing the same amount of money as the Agency pays
 per employee for the housing it has arranged.  The housing allowance
 would be added to the regular per diem given to all students for food
 and other expenses.
 
            Right To Determine Budget Under Section 7106(a)(1)
 
    In support of its position that the proposal would infringe upon
 management's right to determine its budget, the Agency cites American
 Federation of Government Employees, AFL-CIO and Air Force Logistics
 Command, Wright Patterson Air Force Logistics Command, Wright-Patterson
 Air Force Base, Ohio, 2 FLRA 604 (1980), enforced sub nom. Department of
 Defense v. Federal Labor Relations Authority, 659 F.2d 1140 (D.C. Cir.
 1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S. 945 (1982).  In that
 decision the Authority determined the conditions under which an
 otherwise negotiable proposal could be found to violate an agency's
 right to determine its budget under section 7106(a)(1) of the Statute.
 The Authority stated, in relevant part, that such a determination will
 be made only where an agency makes a substantial demonstration that a
 proposal would require a significant and unavoidable increase in costs
 which is not offset by compensating benefits.  The Authority finds in
 this case that the Agency has failed to demonstrate that the proposal
 would require any increase in costs whatsoever.
 
        B.  Proposal's Consistency With 41 U.S.C. Section 252(a), 5
 
                U.S.C. Section 5911(e) and 41 C.F.R. section 1-3. 409(b)
 
    The Agency's contentions concerning the proposal's alleged
 inconsistency with law, and with the Agency's policy determinations made
 under the authority of law, are all without merit.  41 U.S.C. Section
 251(a) provides that "Executive agencies shall make purchases and
 contracts for property and services in accordance with the provisions of
 this chapter and implementing regulations of the Adminstrator." The
 proposal would not have prevented the Agency from contracting, as it
 did, with a private contractor, nor would it require the Agency to
 contract for any housing when the Agency had not already determined to
 do so.  The proposal would only provide employees/students with the
 option of arranging their own housing and being reimbursed up to the
 cost of Agency-furnished housing.
 
    5 U.S.C. Section 5911(e) states that "(t)he head of an agency may not
 require an employee. . . to occupy quarters on a rental basis, unless
 the agency head determines that the Government cannot adequately be
 protected, otherwise." The fact that the head of the Agency in this case
 made a previous policy determination consistent with the terms of 5
 U.S.C. Section 5911(e), does not settle the issue of whether the Agency
 is barred from negotiating over the proposal.  For the proposal to be
 outside the duty to bargain, it must be inconsistent with law (or
 Government-wide regulations or agency regulations for which there is a
 compelling need). The Agency does not contend, nor does it appear, that
 the proposal is inconsistent with 5 U.S.C. Section 5911(e), or that 5
 U.S.C. Section 5911 requires the Agency to find it necessary that its
 employees/students reside in Agency contracted housing.  The Agency
 argues only that the proposal is inconsistent with a policy
 determination it made pursuant to 5 U.S.C. Section 5911(e).  /1/ Since
 the policy determination was a matter strictly within the discretion of
 the Agency, and concerned conditions of employment affecting unit
 employees, the Agency's argument does not provide a basis for finding
 the proposal nonnegotiable.
 
    Finally, 41 C.F.R. Section 1-3.409(b) sets forth the description and
 application of "requirements" contracts.  /2/ Although the Agency
 asserts that its contract in this case is a "requirements" contract
 consistent with this regulatory provision, the proposal would have to be
 inconsistent with the Code of Federal Regulations in order to be barred
 from negotiations.  The Agency has not shown this.  Further, in
 agreement with the Union, the Authority finds that regardless of whether
 the contract it has negotiated is a "requirements" contract, the
 contract has provisions which specify that it may be altered or
 terminated at the will of the Agency.  Therefore, there is no
 inconsistency between the proposal and 41 C.F.R. Section 1-3.409(b), nor
 is there any other apparent reason why the proposal should be barred
 from negotiations.
 
                              IV.  Conclusion
 
    For the reasons stated in the foregoing analysis, the proposal is not
 inconsistent with the Agency's right to determine its budget, under
 section 7106(a)(1) of the Statute, nor is it inconsistent with Federal
 law or regulation.  /3/ Moreover, the Agency's view that the proposal
 conflicts with a policy determination made under the authority of law
 provides no basis for finding the proposal nonnegotiable.  Therefore,
 the Authority concludes that the proposal is within the duty to bargain.
 
                                 V.  Order
 
    Accordingly, pursuant to section 2424.10 of the Authority's Rules and
 Regulations, IT IS ORDERED that the Agency shall upon request (or as
 otherwise agreed to by the parties) bargain concerning the Union's
 proposal.  /4/
 
    Issued, Washington, D.C., April 30, 1986.
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier, III, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
                                 FOOTNOTES
 
    (1) Nor does a General Accounting Office (GAO) Memorandum
 (Certificate of Settlement, Claim No. 2-2624287 (March 30, 1978)
 referred to by the Agency support the Agency's conclusion that it is
 barred from negotiating the Union's proposal.  The GAO memorandum would
 at most indicate that the Agency has satisfied the finding of necessity
 required by 5 U.S.C. Section 5911(e), but cites to no law or regulation
 preventing the Agency from complying with the provisions of the
 proposal.
 
    (2) This section of the C.F.R. has been replaced by regulations found
 at 48 C.F.R. Chapter 1.  However, the new regulations do not apply to
 this case as they only govern contracts executed after April 1, 1984.
 
    (3) The Authority notes that the proposal is consistent with the
 applicable federal Travel Regulations.  In this regard, although the
 Agency has the discretion to bargain over the proposal, it may require
 proof that students who elect to stay in alternative housing are paying
 the negotiated amount.  The Agency may also adjust the per diem amount
 for food and miscellaneous expenses based on circumstances resulting
 from the use of other lodging, for example, when a student elects to
 stay with friends or relatives at no cost.
 
    (4) in deciding that the proposal is within the duty to bargain, the
 Authority makes no judgment as to its merits. 
 
 
 

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