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



[ v27 p40 ]
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. F