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The decision of the Authority follows:

28 FLRA NO. 29






Case No. O-NG-1007


I. Statement of the Case

This case is before the Authority because of a negotiability appeal filed under section 7105(a)(2)(D) and (E) of the Federal Service Labor - Management Relations Statute (the Statute) and concerns the negotiability of the following proposal which we find to be negotiable.

II. Proposal

The (Fort Knox Teachers Association) proposes that reading improvement teachers receive placement on the Extra Duty Pay Schedule of point 0.5 for school year 1984-85.

A. Positions of the Parties

The Agency contends that because the proposal concerns pay and fringe benefits it does not concern "conditions of employment" as defined in section 7103(a)(14) of the Statute and therefore is not negotiable under section 7117. The proposal, according to the Agency, also interferes with the right to determine its budget under section 7106(a)(1). The Agency also asserts that the proposal violates Federal statutes, Agency regulations having the force and effect of law, and an Agency regulation for which a compelling need exists. 

The Union argues the proposal is negotiable under Fort Bragg Unit of North Carolina Association of Educators, National Education Association and Fort Bragg Dependents Schools, Fort Bragg, North Carolina, 12 FLRA 519 (1983).

B. Analysis and Conclusion

1. The Proposal Concerns a Condition of Employment

According to the Agency, while the employees in this case already receive an additional stipend of $300 per school year for serving as reading improvement teachers, the proposal would entitle these employees to a stipend ranging from $1,570.30 to $1,883.70. Statement of Position at 1. Thus, the Agency contends that, as the proposal is integrally related to the salaries of certain bargaining unit employees, it is nonnegotiable because Congress did not intend to permit bargaining over pay and fringe benefits.

This contention cannot be sustained. In this respect, we previously held in American Federation of Government Employees, AFL - CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986) that nothing in the Statute, or its legislative history, bars negotiation of proposals relating to pay and fringe benefits insofar as (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency and (2) the proposals are not otherwise inconsistent with law, Government-wide rule or regulation or an agency regulation for which a compelling need exists.

In this case, the employees involved are employed under 20 U.S.C. 241. As to such employees, we have previously held that there is nothing in 20 U.S.C. 241, or in its legislative history relied upon by the Agency, which indicates that Congress intended to restrict the Agency's discretion as to the particular employment practices relating to pay and to fringe benefits not specifically provided for by law which could be adopted. Fort Knox Teachers Association and Fort Knox Dependent Schools, 26 FLRA No. 108 (1987), petition for review filed sub nom. Fort Knox Dependent Schools v. FLRA, No. 87-3593 (6th Cir. June 25, 1987). Thus, the Agency has not established that this proposal concerns a matter specifically provided for by law or a matter outside the Agency's discretion to adopt.

Accordingly, we find that this proposal concerns a condition of employment of bargaining unit employees and is  within the Agency's duty to bargain unless it is otherwise inconsistent with law rule or regulation.

2. The Proposal does not Violate the Agency's Right under Section 7106(a)(1) to Determine its Budget

In order to determine whether a proposal directly interferes with an agency's right to determine its budget under section 7106(a)(1) of the Statute an agency must make a substantial showing that the proposal requires inclusion of a particular program or amount in its budget or that the proposal will result in significant and unavoidable increases in costs not affected by compensating benefits. American Federation of Government Employees, AFL - CIO and Air Force Logistics Command, Wright - Patterson Air Force B se, Ohio, 2 FLRA 604 (1980), enforced as to other matters sub nom. Department of the Air Force 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).

The Agency in this case contends that finding this proposal negotiable would result in a significant increase in costs for the entire dependents school system. Specifically, it states that there are seven additional bargaining units in the dependents school system involving 626 employees with a total salary expenditure of $11.3 million. It reasons that a finding of negotiability in this case would cause other bargaining units to seek negotiations on similar proposals. Thus, it claims that increased costs would be substantial and unavoidable. Statement of Position at 7.

In our view, the information provided by the Agency does not support its claim that cost increases would be significant and unavoidable and not offset by compensating benefits. That is, while the Agency discloses the number of bargaining units, the number of employees in those units and the total salary of those employees, it does not indicate how many of those employees actually would be affected by the proposal or the monetary increases expected to be directly attributable to implementation of the proposal. Rather, the Agency's claim is simply based on an assumption that negotiations in each of the other bargaining units would result in provisions that would entail the most cost. Thus, in our opinion, the Agency has not established what increased costs could be expected or even that increased costs would be unavoidable.  

Further, the Agency has not demonstrated that any increased costs, which it hypothesizes are unavoidable, will not be offset in other ways. Instead, the Agency simply contends that Congress' action in exempting teachers from statutes governing pay and certain benefits for Government employees constitutes a finding that increases in teachers' pay are not offset by compensating benefits. Statement of Position at 7-8. In addition, the Agency refers to the requirement in 20 U.S.C. 241 that the total per pupil cost of educating dependents not exceed the total per pupil cost of free public education in comparable communities in the appropriate state, here, Kentucky.

We disagree. As we previously stated in section B.1 above, there is nothing in 20 U.S.C. 241 or in its legislative history relied upon by the Agency, which indicates that Congress sought to restrict the Agency's discretion as to the particular employment practice relating to pay and fringe benefits which could be adopted. Further, and as to the requirement concerning per pupil costs in dependents schools, the Authority has specifically addressed this requirement and held that employee compensation is only one aspect of total cost. See Fort Bragg, North Carolina, 12 FLRA 519 (1983).

Consequently, we find that the Agency has not supported its contention that the proposal violates the Agency's right to determine its budget.

3. Procurement Law and Regulations Do Not Bar Negotiation of the Proposal

The Agency contends that the proposal violates law, namely 10 U.S.C. 2304, which concerns the solicitation of contract bids in the procurement process. The Agency also alleges that the proposal violates Agency procurement regulations, governing the negotiation and administration of procurement contracts, which have the force and effect of law. The Agency cites the Armed Services Procurement Regulation (ASPR) and the Defense Acquisition Regulation (DAR).

In essence, the Agency is arguing that "personal services contracts" under which teachers are employed at Fort Knox Dependent Schools, must be awarded in accordance with procurement law and Agency procurement regulations.  

We find this claim to be without merit. Essentially the same claim was raised and rejected in Fort Knox Teachers Association and Board of Education of the Fort Knox Dependents Schools, 27 FLRA No. 34 (1987). In that case we found that it was well established that teachers employed under 20 U.S.C. 241 were not independent contractors subject to procurement law and regulations but rather, employees of the Federal Government subject to all statutes pertaining to Government employment unless specifically exempted. We also determined that the agency in that case had failed to establish that procurement regulations in any manner applied to or governed the employment relationship of teachers involved there. Similarly, the Agency here has also failed to establish that procurement law or procurement regulations govern bargaining unit working conditions. Thus, we find that the cited procurement law and regulations do not bar negotiation of the proposal.

4. The Proposal Does Not Violate the Antideficiency Act

The Agency contends that as the proposal would obligate the Government for the expenditure of funds for salaries and expenses of employees in a succeeding fiscal year it violates provisions of the Antideficiency Act, 31 U.S.C. 1341.

In Fort Knox Dependents Schools we examined a similar argument in response to a provision concerning both paid and unpaid leave. In rejecting the Agency's argument that Provision 4 in that case violated the Antideficiency Act, we noted that the Comptroller General in interpreting the Antideficiency Act held that "salaries of Government employees, as well as related items that flow from the those salaries such as retirement fund contributions, are obligations of the Government at the time they are earned, that is, when the services are provided." In this case, the record indicates that the employees in question earn the prescribed stipend because they work an additional 30 minutes each day. Therefore, the obligation to pay the stipend would arise when the additional one half hour was worked and not when the agreement