[ v57 p793 ]
57 FLRA No. 176
UNITED STATES DEPARTMENT OF THE ARMY
HEADQUARTERS, FORT MONROE, VIRGINIA
(Respondent)
and
NATIONAL ASSOCIATION OF GOVERNMENT
EMPLOYEES, LOCAL R4-11, SEIU, AFL-CIO
(Charging Party)
WA-CA-00395
_____
DECISION AND ORDER
May 24, 2002
_____
Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1]
I. Statement of the Case
This unfair labor practice case is before the Authority on exceptions to the attached decision of the Administrative Law Judge filed by the General Counsel. The Respondent filed an opposition to the General Counsel's exceptions.
The complaint alleges that the Respondent violated § 7116(a)(1), (5) and (8) of the Federal Service Labor-Management Relations Statute (the Statute) by refusing to furnish the Union with copies of a Table of Distributions and Allowances (TDA) and a Most Efficient Organization (MEO). The Judge found that the Respondent's refusal to provide the Union with a copy of the TDA violated the Statute, while the Respondent's failure to furnish a copy of the MEO to the Union did not. [n2]
Upon consideration of the Judge's decision and the entire record, we deny the General Counsel's exceptions and adopt the Judge's findings, conclusions, and recommended Order only to the extent consistent with this decision.
II. Background
This case concerns the Respondent's refusal to disclose certain information developed by the Respondent in connection with a commercial activities study. The study's purpose was to determine whether commercial activities performed by a component of the Respondent should continue to be performed in-house or whether it would be cost effective to have the services performed via contract by a private source.
The study was conducted pursuant to Office of Management and Budget (OMB) Circular No. A-76 (Circular A-76) and Army Regulation (AR 5-20), which require the Agency to develop a streamlined, in-house organization called the "Most Efficient Organization." Judge's Decision at 2. The staffing pattern in the MEO serves as the baseline in-house cost estimate, and thus determines the government's bid against which contractors compete to perform the commercial activities. Id. As such, the MEO is sealed and safeguarded as a sensitive document until the procurement process is completed-that is, until the Respondent receives and opens the bids of contractors, reviews the bids and makes cost comparisons, and reaches a tentative decision as to whether to contract out the commercial activity. Id.
In March 2000, during the course of the study, the Union requested, pursuant to § 7114(b)(4) of the Statute, a copy of the MEO from the Respondent. [n3] The Respondent refused to furnish the MEO, asserting that it could not be released at that point in the process.
Subsequently, on May 16, 2000, the Respondent announced that it had completed the commercial activities study and had decided to contract out the services under study. Also, on or shortly after the announcement concerning the study, the Respondent provided the MEO to the Union.
In determining whether the Agency violated § 7116(a)(1), (5) and (8) of the Statute by failing to provide the Union with the MEO at the time requested, the Judge first found that the Union had articulated a particularized [ v57 p794 ] need for the MEO under § 7114(b)(4) of the Statute. The Judge noted that the Union had informed the Respondent that it needed the information because of concerns over potential organizational changes, equal employment opportunity issues, employee safety, and compliance with applicable provisions of the parties' collective bargaining agreement. The Judge further concluded that the MEO was also reasonably available and normally maintained within the meaning of § 7114(b)(4).
The Judge then addressed the Respondent's argument that, under § 7114(b)(4), release of the MEO prior to May 16 was prohibited by Circular A-76, AR 5-20, and provisions of 41 U.S.C. § 423. [n4] The Judge first noted that the term "law" in § 7114(b)(4) includes regulations having the force and effect of law, and that the Authority had previously found that Circular A-76 is a law under this test. The Judge next found that AR 5-20 also qualified as a law under that test.
In agreement with the Respondent, the Judge found that, prior to the May 16 announcement, release of the MEO was prohibited by law. With respect to AR 5-20 and Circular A-76, the Judge stated:
Specifically, AR 5-20, para. 4-6b.(2) provides that in response to information requests, the agency `will not release any information that reveals the in-house cost estimate or from which the in-house estimate could be readily derived before the cost comparison. . . . This includes . . . the MEO.' Circular A-76, Chapter 3, para. F.1., in a section titled `Safeguarding the MEO,' provides that `[t]he Management Plan and the MEO are considered procurement sensitive documents until a tentative decision is reached, e.g., at bid opening and completion of the cost comparison form.'
Judge's Decision at 10. [n5]
Furthermore, the Judge found that even if the above-cited provisions did not specifically prohibit the disclosure of the requested information, the Respondent had articulated sufficient countervailing anti-disclosure interests to justify its refusal to release the MEO until the procurement process was completed. In reaching that conclusion, he considered the sensitive nature of the MEO and concerns over the integrity of the procurement process.
Accordingly, the Judge found that the Respondent's failure to provide the MEO to the Union prior to May 16 did not violate the Statute.
III. Positions of the Parties
A. General Counsel's Exceptions
The General Counsel asserts that Circular A-76 did not prohibit the release of the MEO to the Union prior to May 16. While the General Counsel concedes that Circular A-76 is a law within the meaning of § 7114(b)(4) of the Statute, it argues that nothing in the cited provision prohibited the disclosure of the MEO to the Union prior to May 16. In the General Counsel's view, that provision merely describes the MEO during a certain time period and does not prohibit its disclosure.
The General Counsel also claims that the Judge improperly considered the Respondent's anti-disclosure interests after finding that the Union had established a particularized need for the MEO. The General Counsel argues that the Judge may only balance the competing interests in disclosure and anti-disclosure in determining whether the Union had articulated a particularized need for the information. In the General Counsel's view, once the Judge found that the Union had articulated a particularized need for the information, he was not permitted to consider the Respondent's anti-disclosure interests.
Even assuming that the Judge properly considered the Respondent's anti-disclosure interests, the General Counsel asserts that those interests are insufficient to justify denying the Union's request for information. The General Counsel maintains that the Union's interests in this case were to protect the rights of employees under applicable law and regulations, while the Respondent's interest was to preserve the integrity of the commercial activities study. The General Counsel contends that the Respondent's interest rests on the faulty and speculative assumption that the Union would provide the information to a contractor prematurely. Therefore, the General Counsel maintains that the Union's interests in disclosure predominate.
Finally, the General Counsel also asserts that 41 U.S.C. § 423 and AR 5-20 did not prohibit the release of the MEO to the Union prior to May 16. [ v57 p795 ]
B. Respondent's Opposition
The Respondent asserts that the Judge correctly concluded that Circular A-76 prohibited the release of the MEO to the Union prior to May 16. The Respondent argues that documents described as "procurement sensitive" must, by their very nature, be safeguarded and protected from release. In the Respondent's view, the MEO must be protected from release because of the possibility that the release of those documents could compromise the integrity of the commercial activities study.
The Respondent also argues that its interest in non-disclosure of the MEO outweighs the Union's interests in the disclosure of that document. The Respondent asserts that the disclosure of the MEO prior to the opening of the contractor's bids could compromise the integrity of the commercial activities study. In this regard, the Respondent claims that if a contractor were to learn the contents of the MEO during the bidding process, the contractor could modify its bid accordingly to prevail at a higher cost, thereby increasing the cost of delivering services to taxpayers. Furthermore, the Respondent asserts that the release of information to the Union during the bidding process could result in a successful protest from the contractors who submitted unsuccessful bids to perform the work under study. In balancing these interests against the Union's interest of ensuring equitable and safe working conditions for employees, the Respondent also urges the Authority to consider that the Union can further its interests by providing input to the Respondent, as provided for in Circular A-76 and AR 5-20, throughout the commercial activities study process. Based on these considerations, the Respondent argues that its anti-disclosure interests should predominate over the Union's interests in disclosure.
Finally, the Respondent also asserts that 41 U.S.C. § 423 and AR 5-20 prohibited the release of the MEO to the Union prior to May 16.
IV. Analysis and Conclusions [n6]
Under § 7114(b)(4) of the Statute, an agency must furnish information to a union, upon request and "to the extent not prohibited by law," if that information is: (1) normally maintained by the agency; (2) reasonably available; (3) necessary for full and proper discussion, understanding, and negotiation of subjects within the scope of collective bargaining; and (4) not guidance, advice, counsel or training.
A. Circular A-76
In agreement with the Judge, we find that disclosure of the MEO prior to May 16 was contrary to Circular A-76. As noted by the Judge, Circular A-76, Supplemental Handbook, Part 1, Chapter 3, ¶ F.1 states that the MEO is considered a "procurement sensitive document[] until a tentative decision is reached, e.g., at bid opening and completion of the cost comparison form." [n7] Furthermore, ¶ F.2 of that same section requires that the MEO be delivered to the contracting officer as a sealed document prior to the due date for the receipt of bids. [n8] Taken together, these provisions dictate that the MEO remain sealed until the tentative decision on contracting out is announced. Circular A-76 and the Supplemental Handbook do not contain any exceptions for the release of that document to the Union pursuant to a request for information made under the Statute.
We recognize that labor organizations represent the interests of bargaining unit employees during contracting out proceedings. The Supplemental Handbook provides affected parties, including labor organizations, with an opportunity to participate in the development of supporting documents and proposals, including performance standards, performance work statements, management [ v57 p796 ] plans and in-house and contract cost estimates, and to review the solicitation used in the conduct of a cost comparison. Cir. A-76, Part I, Chapter 1, ¶¶ G.1.a and G.1.b. As defined in the Circular, "[d]irectly affected parties" includes "[f]ederal employees and their representative organizations." Cir. A-76, ¶ 6.g. However, the Circular also defines directly affected parties to include bidders and offerors. Id. Yet, there is no doubt that bidders and offerors would not be entitled to receive a copy of the MEO during the bid solicitation process because of the obvious advantage these competitors could gain. As we stated above, Circular A-76 and the Supplemental Handbook do not contain any exceptions for the release of the MEO to the Union and, in this respect, there is no basis on which to conclude that the Circular and the Supplemental Handbook treat the Union differently from other "directly affected parties."
In sum, we find, in agreement with the Judge, that Circular A-76 prohibited the release of the MEO prior to the announcement of the tentative decision on contacting out the work under study. Therefore, also in agreement with the Judge, the Respondent's reliance on Circular A-76 was a proper basis for denying the Union's information request.
B. Countervailing Interests
We further find that the Respondent established sufficient countervailing interests warranting non-disclosure of the MEO at the time it was requested. In determining whether requested information is necessary under § 7114(b)(4) of the Statute, the Authority first examines whether or not the union has articulated a particularized need for that information. Internal Rev. Serv., Washington D.C. and Internal Rev. Serv., Kansas City Serv. Ctr., Kansas City, Mo., 50 FLRA 661, 669 (1995). Here, the Judge found that such a particularized need for the MEO existed. The General Counsel asserts that the Judge then improperly considered the Respondent's interest in non-disclosure.
Such an inquiry, however, is mandated by Authority precedent. In this regard, the Authority has stated that "an unfair labor practice will be found if a union has established a particularized need . . . for the requested information and either: (1) the agency has not established a countervailing interest; or (2) the agency has established such an interest but it does not outweigh the union's demonstration of particularized need." Id. at 671. Therefore, the Judge properly considered the Respondent's countervailing anti-disclosure interests after determining that the Union had a particularized need for the information.
Moreover, even assuming, without deciding, that the Judge correctly found that the Union had established a particularized need for the information, we find that the countervailing anti-disclosure interests articulated by the Respondent outweigh that particularized need. As noted, the MEO is a sensitive document which is used to develop the Respondent's cost estimate. Release of the document prior to the bid opening could undermine the integrity of the commercial activities study and potentially increase costs for the Respondent.
In addition to the effect of disclosure on potential contractors, in terms of the competitive advantage they could gain in successfully securing a bid, undisputed testimony shows that disclosure of the MEO could lead to the cancellation of the contracting-out study in its entirety. Tr. at 130 ("[I]f the information, the MEO . . . is released or exposed to a competitor, that could be used as a reason for cancelling the study."). As the parties explained, the process of determining whether to contract out, from the initial assessment to the awarding of a contract, can take place over the course of several years. Termination of the process because of an improper disclosure would undercut the purposes for which Circular A-76 was promulgated and would not promote an effective and efficient government. Possible misuse of information and disclosure at an inopportune time are valid anti-disclosure interests. See United States Dep't of Justice v. FLRA, 988 F.2d 1267, 1271 (D.C. Cir. 1993) (possibility of union misuse of information); Dep't of the Air Force v. FLRA, 956 F.2d 1223 (D.C. Cir. 1992) (per curiam) (agency's interest in postponing disclosure).
Accordingly, we find that the Respondent's countervailing interests in not furnishing the MEO prior to May 16 outweighed any legitimate interests in disclosure that the Union may have had.
C. Summary
For the foregoing reasons, we find that the Respondent did not violate the Statute by failing to furnish the Union with the MEO prior to May 16. Accordingly, we will dismiss this aspect of the complaint. [n9] [ v57 p797 ]
V. Order
Pursuant to section 2423.41 of our Regulations and section 7118 of the Federal Service Labor-Management Relations Statute, the United States Department of the Army, Headquarters, Fort Monroe, Virginia, shall:
1. Cease and desist from:
(a) Failing and refusing to provide the National Association of Government Employees, Local R4-11, SEIU, AFL-CIO, with the Table of Distributions and Allowances for the Directorate of Public Works/Directorate of Logistics requested by the Union on March 13 and March 24, 2000.
(b) In any like or related manner, interfering with, restraining, or coercing bargaining unit employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.
2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute:
(a) Post at its facilities in Fort Monroe, Virginia, where bargaining unit employees represented by the National Association of Government Employees, Local R4-11, SEIU, AFL-CIO, are located, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Post Commander of Fort Monroe, and they shall be posted and maintained for 60 consecutive days thereafter in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted. Reasonable steps shall be taken to ensure that such Notices are not altered, defaced, or covered by any other material.
(b) Pursuant to section 2423.41(e) of the Authority's Regulations, notify the Regional Director, Washington Regional Office, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply.
NOTICE TO ALL EMPLOYEES
POSTED BY ORDER OF THE
FEDERAL LABOR RELATIONS AUTHORITY
The Federal Labor Relations Authority has found that the United States Department of the Army, Headquarters, Fort Monroe, Virginia, violated the Federal Service Labor-Management Relations Statute, and has ordered us to post and abide by this Notice.
We hereby notify employees that:
WE WILL NOT fail and refuse to furnish the National Association of Government Employees, Local R4-11, SEIU, AFL-CIO, exclusive representative of our employees, with the Table of Distributions and Allowances for the Directorate of Public Works/Directorate of Logistics requested by the Union on March 13 and March 24, 2000.
WE WILL NOT in any like or related manner, interfere with, restrain or coerce employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.
________________________
(Respondent)
Dated: ___________ By: _______________________
(Signature) (Title)
This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.
If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director for the Federal Labor Relations Authority, Washington Regional Office, whose address is: 800 K Street, N.W., Suite 910N, Washington, D.C. 20001, and whose telephone number is: (202) 482- 6700. [ v57 p798 ]
APPENDIX
Circular A-76, Chapter 3, Paragraph F.1 provides:
The Management Plan and the MEO are considered procurement sensitive documents until a tentative decision is reached, e.g., at bid opening and completion of the cost comparison form.
AR 5-20, Paragraph 4-6(b) provides, in pertinent part:
Information Requests and Freedom of Information Act (FOIA). The FOIA (Exemption 5), DODD 5400.7-R, and AR 25-55 exempt from disclosure the cost competition study information listed below before cost comparison bid opening. The commander will appoint an installation official to receive information requests and release information related to the cost comparison study. That official is normally the contracting officer. The releasing official will follow the guidelines in the FOIA, DODD 5400.7-R, and AR 25-55 when responding to all information requests.
. . . .
(2) The releasing official will not release any information that reveals the in-house cost estimate or from which the in-house estimate could be readily derived before the cost comparison. Such information is exempt from release under the FOIA. This includes:
(a) The in-house cost-estimate.
(b) The proposed TDA for the MEO.
(c) The management study report.
(d) Preliminary management studies and products of manpower requirements determination processes if they reveal the in-house staffing estimates.
(e) Budgets for the activity if they show the projected operating costs or personnel resources of the MEO.
As amended, 41 U.S.C. § 423(b) currently provides:
A person shall not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.
41 U.S.C. § 423(b)(3) formerly provided, in pertinent part:
(b) Prohibited conduct by procurement officials. During the conduct of any Federal agency procurement of property or services, no procurement official of such agency shall knowingly--
(3) disclose any proprietary or source selection information regarding such procurement directly or indirectly to any person other than a person authorized by the head of such agency or the contracting officer to receive such information.
File 1: Authority's Decision in 57 FLRA No.
176
File 2: Member Pope's Opinion
File 3: ALJ's Decision
Footnote # 1 for 57 FLRA No. 176 - Authority's Decision
Member Pope's opinion, dissenting in part, is set forth at the end of the decision.
Footnote # 2 for 57 FLRA No. 176 - Authority's Decision
The Respondent has not excepted to the Judge's finding that its failure to provide the Union with the TDA violated the Statute. Therefore, we adopt that finding and the Judge's recommended remedy as to that violation without precedential significance, and will not further address that aspect of the case. See 5 C.F.R. § 2423.41(a).
Footnote # 3 for 57 FLRA No. 176 - Authority's Decision
Section 7114(b)(4) of the Statute requires an agency to furnish to the exclusive representative, upon request, and to the extent not prohibited by law, data-
(A) which is normally maintained by the agency in the regular course of business;
(B) which is reasonably available and necessary for full and proper discussion, understanding, and negotiation of subjects within the scope of collective bargaining; and
(C) which does not constitute guidance, advice, counsel, or training provided for management officials or supervisors, relating to collective bargaining . . . .
Footnote # 4 for 57 FLRA No. 176 - Authority's Decision
All relevant regulatory and statutory provisions are set forth in the Appendix.
Footnote # 5 for 57 FLRA No. 176 - Authority's Decision
The Judge also found that disclosure of the MEO prior to May 16 was prohibited by 41 U.S.C. § 423(b)(3), which has since been amended.
Footnote # 6 for 57 FLRA No. 176 - Authority's Decision
Member Pope dissents as to the conclusions in this section.
Footnote # 7 for 57 FLRA No. 176 - Authority's Decision
The contracting officer, after reviewing the bids submitted and the in-house cost estimate (which is developed from the MEO and the Management Plan), is to complete the cost comparison form denoting the lowest offer. Following the completion of that form, the contracting officer announces the tentative decision on contracting the work under study. Circular A-76, Supplemental Handbook, Part 1, Chapter 3, ¶ J.1.
Footnote # 8 for 57 FLRA No. 176 - Authority's Decision
Circular A-76, Supplemental Handbook, Part 1, Chapter 3, ¶ F.2 provides:
The Management Plan, MEO and in-house cost estimate are delivered as sealed documents to the contracting officer prior to the due date for the receipt of bids or technical proposals. The period available to deliver contract offers will be extended until the MEO and the in-house cost estimates are sealed. No private sector offer is opened or otherwise reviewed prior to the sealing of the Government's in-house cost estimate.
Footnote # 9 for 57 FLRA No. 176 - Authority's Decision
Having so found, we find it unnecessary to determine whether the release of the MEO prior to May 16 was also prohibited by 41 U.S.C. § 423 and AR 5-20.