27:0040(10)AR - Nat'l Center for Toxicological Research and AFGE Local 3393 -- 1987 FLRAdec AR

[ v27 p40 ]
The decision of the Authority follows:

 27 FLRA No. 10
                                            Case No. 0-AR-1261
                         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 Blythevil