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27:0040(10)AR
The decision of the Authority follows:
27 FLRA No. 10
NATIONAL CENTER FOR TOXICOLOGICAL
RESEARCH
Activity
and
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 3393
Union
Case No. 0-AR-1261
DECISION
I. Statement of the Case
This matter is before the Authority on exceptions to the award of
Arbitrator Francis X. Quinn filed by the Department of Health and Human
Services (the Agency) under section 7122(a) of the Federal Service
Labor-Management Relations Statute (the Statute) and part 2425 of the
Authority's Rules and Regulations.
II. Background and Arbitrator's Award
A grievance was filed and submitted to arbitration claiming that
management's determination to contract out the Activity's maintenance
and operation functions violated applicable procurement laws, rules and
regulations. The Arbitrator first found that the grievance was
grievable and arbitrable. On the merits the Arbitrator made the
following findings. He found that the Activity "violated the intent and
spirit of Federal Acquistion Regulation, Chapter 1, 7.304 which deals
with integrity and confidentiality of cost estimates for government
performance." The Arbitrator further found that the Activity's "failure
to insert required notices of cost comparison in the solicitation when
conducting by negotiation violated Federal Acquisition Regulation,
Chapter 1, Subparts 7.305(b) and 52.207-2." He also found that, with
respect to OMB Circular A-76 which directs that the in-house cost
estimate be based on the most efficient and cost effective operation,
the Activity's in-house cost estimate was "a glaring violation of the
spirit and intent of OMB A-76." Regarding the Activity's failure to
render a decision on the Union's appeal within 30 calendar days, the
Arbitrator found that this was "more than a technical violation of OMB
Circular A-76 (Supplement), Part 1, Chapter 2, Paragraph I.3." In
conclusion, he found that "(a)ll these violations of applicable rules
and regulations materially affected the the final procurement decision
and brought harm to unit employees." Accordingly, as his award, the
Arbitrator sustained the grievance and ordered that the procurement
process be reconstructed.
III. First Exceptions
A. Contentions
The Agency contends that by finding the grievance to be arbitrable,
the award is deficient as contrary to law and regulation.
B. Analysis and Conclusions
This exception provides no basis for finding the award deficient. We
have consistently held that a grievance like the one in this case is
within the grievance procedure prescribed by the Statute and is not
precluded by law or regulation. For example, U.S. Army Engineer
District, St. Louis and American Federation of Government Employees,
Local No. 3838, 26 FLRA No. 49 (1987).
IV. Secon Exception
A. Contentions
The Agency contends that the Arbitrator's award ordering that the
procurement process be reconstructed is contrary to the standards
established by the Authority in Headquarters, 97th Combat Support Group
(SAC), Blytheville Air Force Base, Arkansas and American Federation of
Government Employees, AFL-CIO, Local 2840, 22 FLRA No. 72 (1986).
Specifically, the Agency argues that under Blytheville AFB, the
Arbitrator's finding as to the most efficient and cost effective
operation cannot support the ordered reconstruction because it is based
on the "spirit and intent" of Circular A-76 rather than a mandatory and
nondiscretionary provision of the Circular. As to the other violations
found by the Arbitrator, the Agency argues that the Arbitrator's
determinations that these violations both materially affected the
procurement decision and harmed unit employees cannot be supported.
B. Analysis and Conclusions
In Blytheville AFB we addressed for the first time the remedial
authority of an arbitrator in resolving grievances disputing
determinations by agencies to contract out agency work. We held that
under the Statute and procurement law and regulation, arbitrators are
authorized to sustain a grievance challenging a decision to contract out
and direct an agency to reconstruct the action only on the basis that
the agency failed to comply with mandatory and nondiscretionary
provisions of applicable procurement law or regulation and that the
noncompliance materially affected the final procurement decision and
harmed unit employees. We advised that these provisions of law or
regulation must be sufficiently specific to permit the arbitrator to
decide whether there has been compliance with such provisions.
Subsequently, in Naval Air Station, Whiting Field and American
Federation of Government Employees, Local Union No. 1954, 22 FLRA No.
102 (1986), we found that an arbitrator was not authorized to sustain a
grievance disputing a decision to contract out on the basis of an
obligation that the arbitrator concluded was "intended" by, but not
specifically provided by, applicable procurement law.
Applying those decisions in this case, we conclude that the
Arbitrator was not authorized to sustain the grievance and order the
procurement action reconstructed based on his findings of violations of
the "spirit and intent" of the cited regulations. See Naval Air
Station, Whiting Field, slip op. at 3. Specifically, he was not
authorized to order reconstruction based on a violation of "the intent
and spirit of Federal Acquisition Regulation, Chapter 1, 7.304" or based
on a "violation of the spirit and intent of OMB A-76" as it relates to
the most efficient and cost effective operation for in-house cost
estimates. Consequently, the award is deficient to this extent and must
be modified.
However, we disagree with the Agency that the Arbitrator was not
authorized to sustain the grievance and to order reconstruction on the
basis of the violation of Federal Acquisition Regulation, Chapter 1,
Subparts 7.305(b) and 52.207-2, pertaining to the notice of cost
comparison that is required to be inserted in requests for proposals,
and on the basis of the violation of OMB Circular A-76 Supplement, Part
1, Chapter 2, Paragraph I.3, directing that appeals procedures will
provide for a decision within 30 calendar days. The Agency's arguments
with respect to these findings do not dispute that these provisions are
mandatory and nondiscretionary. Instead, the Agency argues that the
Arbitrator's findings that those violations materially affected the
final procurement decision and harmed unit employees are unsupported.
We conclude that these arguments constitute nothing more than
disagreement with the Arbitrator's findings of fact in these respects,
and we have uniformly held that such disagreement provides no basis for
finding an arbitration award deficient. For example, U.S. Department of
Labor and National Council of Field Labor Locals, American Federation of
Government Employees, AFL-CIO, 19 FLRA 300 (1985). Accordingly, we will
modify the award to sustain the grievance and direct reconstruction of
the procurement action only to the extent of these violations.
V. Decision
For the above reasons, the Arbitrator's award is modified to provide
as follows:
The grievance is sustained to the extent the Activity violated
Federal Acquisition Regulation, Chapter 1, Subparts 7.305(b) and
52.207-2 and OMB Circular Supplement A-76, Part 1, Chapter 2,
Paragraph I.3. The Activity is directed to reconstruct the
disputed procurement action in accordance with those procurement
regulations and, consistent with the decision of the Authority in
Blytheville AFB, make a determination and take appropriate action
based on the results of such reconstruction.
Issued, Washington, D.C., May 19, 1987.
/s/ Jerry L. Calhoun
Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III
Henry B. Frazier III, Member
/s/ Jean McKee
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY