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43 FLRA No. 10

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 1662

(Union)

and

U.S. DEPARTMENT OF THE ARMY

FORT HUACHUCA, ARIZONA

(Agency)

0-AR-2074

DECISION

November 14, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on an exception to an award of Arbitrator Robert D. Steinberg filed by the Union 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 Agency did not file an opposition to the Union's exception.

The Arbitrator denied the Union's grievance over the Agency's contracting out certain service and maintenance work.

We conclude that the Union fails to establish that the award is deficient. Accordingly, we will deny the exception.

II. Background and Arbitrator's Award

The Agency contracted out certain service and maintenance work of its directorate of engineering and housing. The Union filed a grievance over the determination to contract out. The Union contended that the Agency violated OMB Circular A-76 and Army Regulation (AR) 5-20, which pertain to the contracting out of agency work, and the Davis-Bacon Act, 40 U.S.C. §§ 276a-276a-7. The grievance was not resolved and was submitted to arbitration.

Preliminarily, the Arbitrator determined that the grievance was not time-barred and that it was grievable and arbitrable on the issue of whether the Agency violated any material term or condition of the Davis-Bacon Act, OMB Circular A-76, or AR 5-20. On the merits, the Arbitrator determined that the Agency had not violated the Davis-Bacon Act, Circular A-76, or AR 5-20. In particular, the Arbitrator rejected the Union's claim that the Agency had improperly used representative in-step rates in calculating the personnel costs for the in-house bid, even though he found that this aspect of the calculations was "the most costly of the alleged errors of judgment" committed by the Agency. Award at 20-21. The Arbitrator found that AR 5-20 required that the Agency use this method of calculation. Although the Arbitrator questioned why AR 5-20 mandates the use of a representative in-step rate when that rate could "be prejudicial" to the in-house bid, he concluded that the Agency had not acted irrationally or abused its discretion. Id. at 21. In addition, the Arbitrator found that the Agency did not act in violation of Circular A-76 because Circular A-76 grants an agency an option of using representative in-step rates or, "if available and deemed accurate, an organizationally determined average step within each grade." Id. (quoting Circular A-76).

Accordingly, the Arbitrator denied the grievance.

III. Exception

The Union contends that the award is deficient because the Arbitrator's "reason" for rejecting its claim that the Agency improperly used representative in-step rates is "wrong." Exception at 1. The Union argues that Circular A-76 does not legally permit AR 5-20 to require the use of the Government-wide, representative in-step rate. The Union also argues that because the Arbitrator recognized that use of the representative rate could be prejudicial, the Arbitrator had the "duty" to rule that the procurement process was "arbitrary." Id.

IV. Analysis and Conclusions

We conclude that the Union fails to establish that the award is deficient on any ground set forth in section 7122(a) of the Statute.^(*)

The Arbitrator noted that under AR 5-20, use of the Government-wide representative in-step rate was mandated in calculating the personnel costs for the in-house bid. The Arbitrator rejected the Union's argument that use of the actual in-house average rate was the preferred course under Circular A-76. The Arbitrator determined that, at best, Circular A-76 is neutral in that it grants an agency the option of using the representative rate or an organizationally determined average step within each grade. Accordingly, the Arbitrator ruled that he could not hold that the Agency abused its discretion and acted irrationally by mandating the use of the Government-wide representative rate. By merely alleging that the mandated use of the representative rate by the Agency is arbitrary and illegal, the Union fails to establish otherwise. See U.S. Department of Defense Dependent Schools and Overseas Education Association, 37 FLRA 226 (1990) aff'd sub nom. Hartmann v. FLRA, No. 90-2699 (D.D.C. Apr. 10, 1991) (union provided no basis for finding that the arbitrator's interpretation of an agency regulation was erroneous).

We find that the exception constitutes mere disagreement with the findings and conclusions of the Arbitrator and provides no basis for finding the award deficient. See U.S. Department of Defense, Army and Air Force Exchange Service, Dallas, Texas and National Federation of Federal Employees, Local 977, 40 FLRA 1099 (1991) (exception constituted disagreement with the arbitrator's findings and provided no basis for finding the award to be contrary to an agency regulation). Accordingly, we will deny the exception.

V. Decision

The Union's exception is denied.

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FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

*/ Although the issue is not raised in this case, we note that in National Treasury Employees Union and U.S. Department of the Treasury, Internal Revenue Service, 42 FLRA 377 (1991), we recently determined that OMB Circular A-76 constitutes a regulation having the force and effect of law and that, consequently, Circular A-76 constitutes an applicable law within the meaning of section 7106(a)(2) of the Statute.

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