35:0809(85)AR - - Navy, Naval Surface Warfare Center, Dahlgren, Virginia and AFGE Local 2096 - - 1990 FLRAdec AR - - v35 p809
[ v35 p809 ]
The decision of the Authority follows:
35 FLRA No. 85
FEDERAL LABOR RELATIONS AUTHORITY
DEPARTMENT OF THE NAVY
NAVAL SURFACE WARFARE CENTER
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
April 27, 1990
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on an exception to the award of Arbitrator Renee E. Kamm. The Union filed a grievance claiming that the Activity violated mandatory provisions of applicable procurement law and regulation in contracting out supply functions at the Activity. The Arbitrator found that the Activity violated a mandatory provision of procurement regulations. However, she found that the Activity's violation did not materially affect the Activity's procurement decision. Consequently, the Arbitrator did not order a reconstruction of the procurement action and did not order a remedy for the violation.
The Union filed an exception under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Activity did not file an opposition to the Union's exception.
We conclude that the Union fails to establish that the award is deficient. Accordingly, we will deny the Union's exception.
In June 1986, the Activity requested proposals from civilian contractors to perform supply functions at the Activity. At the time of the request, these functions were being performed by Government employees, some of whom were represented by the Union. The request was governed by the provisions of the Service Contract Act, 41 U.S.C. §§ 351-358.
The Service Contract Act (the Act) applies to contracts entered into by the Federal Government in excess of $2,500 where the principal purpose of the contract is "to furnish services . . . through the use of service employees[.]" 41 U.S.C. § 351(a). A contract which is subject to the Act must contain provisions specifying the minimum wages and fringe benefits to be paid to the various classes of service employees covered by the Act who will be performing the contract. 41 U.S.C. § 351(a). These wages and fringe benefits, known as wage determinations, are determined by the Department of Labor (DOL). 41 U.S.C. § 358. Contract solicitations covered by the Act include the current wage determination. 29 C.F.R. § 4.5(a). Contractors responding to a solicitation must incorporate current wage determinations into their proposals. 41 U.S.C. § 351.
The wage determination included in the Activity's request was provided by the DOL in June 1986. The wage determination established a fringe benefit rate of $1.08 per hour for all classes of service employees covered by the Act.
On March 26, 1987, the Department of the Navy determined that contractor Tate Engineering was the low offerer. The Activity conducted a cost comparison of Tate's proposal with the cost of Government performance. Tate's proposal was lower and remained lower after the result of an appeal by the Activity's employees. Accordingly, the Activity awarded the contract to Tate Engineering on June 12, 1987.
Subsequently, the Activity's contracting officer discovered that on December 1, 1986, the DOL had issued a revised wage determination that raised the minimum fringe benefit rate for employees covered by the Act to $1.84 per hour. Tate Engineering revised its proposal to incorporate the new fringe benefit rate. Tate's revised proposal was $5,717 lower than the cost of Government performance. However, Tate applied the fringe benefit rate differently in its revised proposal than in its original proposal. In its revised proposal, Tate did not apply the minimum fringe benefit rate ($1.84) to seven employees whom it identified as "management." Arbitrator's Award at 4. In its original proposal, Tate had applied the minimum fringe benefit rate ($1.08) to these employees.
The Activity's contracting officer questioned whether the employees identified as management, including two quality control inspectors, were properly designated as exempt from the minimum fringe benefit rate. Consequently, she forwarded information detailing the duties and responsibilities of these employees to the DOL for review. The DOL advised that the employees, including the inspectors, qualified for an administrative exemption from the Act. The DOL indicated that the inspectors might revert to a nonexempt category in the final phase of the contract. If this reversion were to occur, Tate's proposal still would remain lower than the cost of Government performance. Accordingly, the Activity confirmed the award to Tate Engineering.
The Union filed a grievance alleging that the Activity violated mandatory provisions of applicable procurement law and regulation. The Activity denied the grievance as being nongrievable and nonarbitrable. The grievance was submitted to arbitration.
III. The Arbitrator's Award
The Arbitrator stated the threshold issue to be whether the grievance was grievable and arbitrable. If the grievance was found to be grievable and arbitrable, the Arbitrator stated the issues on the merits to be: (1) whether the Activity violated mandatory provisions of applicable procurement laws or regulations; (2) whether any failure to comply with these requirements materially affected the final procurement decision and harmed unit employees; and (3) what remedy is appropriate. Arbitrator's Award at 1.
The Arbitrator found that the grievance was grievable and arbitrable.(1) On the merits of the grievance, the Arbitrator determined that the Activity did not act improperly by allowing Tate Engineering to revise its proposal and apply the minimum fringe benefit rate of $1.84 only to those employees which Tate considered to be covered by the Service Contract Act. However, the Arbitrator determined that the Activity violated 29 C.F.R. § 4.4(g) by failing to confirm with the DOL that the wage determination included with the request for proposals was still current at the time the contract was to be awarded.
Although the Arbitrator determined that the Activity violated procurement regulations, she concluded that the violation did not materially affect the procurement decision. The Arbitrator stated that the effect of the violation depended on whether Tate Engineering properly classified its management employees as exempt from the provisions of the Service Contract Act. The Arbitrator noted the Union's argument that the management employees did not perform administrative or executive duties which would permit their exemption. However, the Arbitrator concluded that "[a]lthough the regulatory definitions and a Union exhibit charting the duties of the management positions are quite precise, the record does not contain sufficient information or detail about the nature of the positions to enable me to make an independent evaluation as to whether they fit into an exempt category." Arbitrator's Award at 22. The Arbitrator stated that there was no evidence on the degree of discretionary authority vested in the exempt employees and that the Union provided no testimony from an expert on employee classifications.
The Arbitrator found that the contracting officer acted properly by requesting the DOL to review the designation of the seven management employees as exempt from the Act. The Arbitrator stated that the DOL is responsible for determining the coverage of employees under the Act and that the Activity does not have authority to overrule determinations by the DOL. In addition, the Arbitrator stated that "there is nothing in the record which would cause [her] to question the DOL's findings on the propriety of Tate's exemptions." Id. at 23.
Accordingly, the Arbitrator ruled that the Activity correctly found that Tate Engineering's proposal was $2,549 lower than the cost of Government performance and that there was no basis for finding that the Activity's violation of 29 C.F.R. § 4.4(g) materially affected the procurement decision. The Arbitrator denied the Union's request that the Activity be directed to reconstruct the procurement action and awarded no remedy for the violation of 29 C.F.R. § 4.4(g).
IV. The Union's Exception
The Union contends that the award is deficient because "it is based upon a non-fact." Union's Exception at 1.
The Union states that the Arbitrator found that the DOL had determined that the seven management employees qualified for the administrative exemption from the Service Contract Act. The Union contends that this finding is "non- factual" because "[t]here is no documentation in the record at all regarding any of this." Id. at 2-3. The Union claims that the Activity's contracting officer testified at the arbitration hearing that the DOL's response to her was not an official determination and was only advisory. Id. at 3.
The Union further states that the Arbitrator's finding that there was nothing in the record to cause her to question the DOL's findings on the propriety of the exemptions "is a non-fact." Id. at 4. The Union points out that the "Register of Wage Determinations Under the Service Contract Act," which was a joint exhibit in the hearing before the Arbitrator, lists the job title of "Quality Control Inspector" as one of the job titles which is not exempt from the minimum fringe benefit rate. The Union argues that the Register constitutes the DOL's only official determination on whether quality control inspectors are exempt from the minimum fringe benefit rate.
V. Analysis and Conclusion
An arbitration award is deficient under the Statute when the central fact underlying the award is clearly erroneous and constitutes a gross mistake of fact, but for which the arbitrator would have reached a different result. For example, U.S. Department of Housing and Urban Development and American Federation of Government Employees, Local 1568, 33 FLRA 308 (1988). The Union has not established that a central fact underlying the award is clearly erroneous and constitutes a gross mistake of fact, but for which the Arbitrator would have reached a different result.
The Arbitrator referenced "the regulatory definitions and a Union exhibit charting the duties of the management positions[.]" Arbitrator's Award at 22. The Arbitrator stated that the record did not contain "sufficient information or detail about the nature of the positions" to enable her to "make an independent evaluation as to whether they fit into an exempt category." Id. The Arbitrator concluded that there was "nothing in the record" which would cause her to "question DOL's findings on the propriety of Tate's exemptions." Id. at 23.
The Union has not established that the Arbitrator's findings