United States, Department of the Air Force, Air Force Academy, Colorado Springs, Colorado (Respondent/Agency) and American Federation of Government Employees, Local 1867 (Charging Party/Union)
[ v59 p888 ]
59 FLRA No. 161
DEPARTMENT OF THE AIR FORCE,
AIR FORCE ACADEMY
COLORADO SPRINGS, COLORADO
OF GOVERNMENT EMPLOYEES,
DECISION AND ORDER
April 30, 2004
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 (Judge) filed by the Respondent. The General Counsel (GC) filed an opposition to the Respondent'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 data requested pursuant to § 7114(b)(4) of the Statute.
The Judge found that the Respondent violated the Statute, as alleged, and ordered the Respondent to furnish the data on request of the Union.
Upon consideration of the Judge's decision and the entire record, we conclude that disclosure of the requested data is prohibited by law. Accordingly, the Respondent did not commit the unfair labor practices alleged in the complaint and we dismiss the complaint.
II. Background and Judge's Decision
The facts are set forth fully in the Judge's decision and are only briefly summarized here.
As part of the Respondent's contracting-out study involving the Civil Engineering (CE) squadron, the Respondent developed the following material: a Performance Work Statement (PWS), describing the work to be performed under the contract; a Most Efficient Organization (MEO), describing how the Respondent would structure itself to submit a competitive in-house bid to perform the work described in the PWS; and a Technical Performance Plan (TPP), breaking down the PWS requirements and allocating costs for all tasks identified in the PWS and the MEO. In May 2001, the Respondent informed the Union that a tentative decision had been made to contract out certain activities within the CE squadron. At that time, the Respondent provided the Union with a copy of the MEO and an In-House Cost Estimate.
Subsequently, the Union decided to initiate an appeal of the Respondent's contracting-out decision, under the provisions of Office of Management and Budget (OMB) Circular A-76 (Revised 1999). [n2] The Union asked the Respondent to furnish it with a copy of the TPP for the following purposes:
to substantiate and validate that the costs associated with the Management Plan were reasonable, workable and accurate; to determine whether the costs associated with the agency plan were sufficient to overturn the decision to award the contract; and to file and justify an administrative appeal of the tentative decision to contract out the CE function.
Judge's Decision at 4.
The Respondent denied the Union's request. As relevant here, the Respondent indicated that the TPP was a procurement sensitive document and that it was not releasable under Air Force Instruction (AFI) 38-203.
The Judge stated that the only issues in dispute under § 7114(b)(4) were whether the TPP was "necessary" for the Union to discharge its representational [ v59 p889 ] functions under the Statute and, if so, whether release of the TPP was prohibited by law. Id. at 11.
Addressing the necessity of the TPP first, the Judge found that the Union had established a particularized need for the information. The Judge noted that the potential uses of the TPP articulated in the Union's information request "directly relate to the Union's representational responsibilities . . . [and] directly relate to the appeals criteria set forth in the OMB A-76 [H]andbook." Id.
Next, the Judge found that disclosure of the TPP was not prohibited by law. Recognizing that OMB Circular A-76 and the OMB Handbook are "regulations having the force and effect of law[,]" Judge's Decision at 12, the Judge noted that the Handbook provides that agencies "shall make all relevant documents available for review as a part of the administrative appeal process[,]" and expressly requires release of the Management Plan and In-House Cost Estimate, both of which were furnished to the Union. Id. (citing Jt. Ex. 12). While acknowledging that the TPP is not specifically discussed in the Circular or the Handbook, the Judge found that the documents that were furnished relate to and were based on the TPP, which is "much more detailed" than the Management Plan. Id.
The Judge further found that disclosure of the TPP was not prohibited by AFI 38-203. [n3] In reaching this result, and applying NTEU, 42 FLRA 377 (1991), enforcement denied on other grounds, 996 F.2d 1246 (D.C. Cir. 1993), the Judge found that the Respondent failed to establish how the regulation was promulgated and whether it was promulgated in accordance with applicable procedural requirements. On this basis, the Judge stated that she was "unwilling to determine" that AFI 38-203 has the force and effect of law. [n4] Judge's Decision at 13. Additionally, and noting that AFI 38-203 provides that the TPP "may be releasable to the public when final cost comparison decision is determined unless release of the TPP is likely to adversely impact the competitive position of a[n] in-house officer in a future acquisition[,]" the Judge found that AFI 38-203 did not prohibit release of the TPP in all circumtances. Judge's Decision at 12 (citing AFI 38-203 ¶ 17.2.3).
In sum, the Judge concluded that the TPP was necessary, reasonably available, normally maintained and not prohibited by law from disclosure. Therefore, the Judge found that the Respondent's refusal to furnish the TPP violated § 7116(a)(1), (5) and (8) of the Statute. As a remedy, the Judge ordered the Respondent to furnish the TPP on request of the Union.
III. Positions of the Parties
A. Respondent's Exceptions
The Respondent argues that AFI 38-203 is an implementing regulation of the FAIR Act and, as such, is a regulation having the force and effect of law. The Respondent also disputes the Judge's finding that there was no evidence presented with regard to how the regulation was promulgated. Exceptions at 21. The Respondent asserts that all of the laws and statutes it cites are "acts of Congress[,]" and that all of the cited regulations are "implementing regulations, implementing those laws and statutes." Id. The Respondent contends that since AFI 38-203 is an implementing regulation of OMB Circular A-76, the Respondent is not required to meet the notice and comment rulemaking procedures of the Administrative Procedure Act (APA). The Respondent also argues that the AFI is excepted from the rulemaking provisions of the APA because it is "an implementing regulation of a military department . . . that only applies to the mission of the military department and does not affect the public generally . . . ." Id.
The Respondent further argues that the Judge failed to recognize that in addition to AFI 38-203, the TPP is protected from release by an "entire chain" of authority which includes: the Federal Activities Inventory Reform Act (FAIR), 31 U.S.C. § 501 note; the Procurement Integrity Act, 41 U.S.C. § 423; the Federal Acquisition Regulations (FARs) that relate to acquisitions and appeals; and OMB Circular A-76. Id. at 11 (emphasis omitted). As such, the Respondent contends that this case does not turn solely on whether AFI 38-203 is a regulation with the force and effect of law, but whether the Agency properly determined that the TPP was a document that was protected by law from release.
Relying on these authorities, the Respondent asserts that in refusing to release the TPP it was concerned that the release of the TPP would: give the Union an unfair advantage in the current competition; allow other contract bidders to gain an unfair advantage in ongoing competitions at the expense of the MEOs under consideration at other locations; and place the [ v59 p890 ] Union and other government MEOs at an unfair disadvantage in any future similar competitions because the TPP would give contractors a baseline from which to construct their bids, which would limit the competitive nature of the process "by limiting the amount by which contractors would attempt to underbid any MEO and result in a higher contract price for the government." Id. at 15.
The Respondent also contends that the FAIR specifically mentions the TPP, supporting the Respondent's contention that "the TPP is a completely separate document and stands alone." Id. at 19. The Respondent further argues that the Judge should not have ordered the release of the TPP because a TPP is not always created and in situations where a TPP is not created, it could not be released. Under the framework for appeals outlined in Section K of OMB Circular A-76, the Respondent asserts that the Union's appeal was "improper and beyond the scope of the appeals procedure . . . ." Id. In this regard, the Respondent argues that the Union's reasons for requesting the TPP, as stated by the Judge, do not meet the appeals criteria in Section K.
B. GC's Opposition
The GC argues that the Respondent has failed to identify any statute or regulation which prohibits the release of the TPP to the Union. The GC also contends that the Respondent has ignored the Authority's framework in Dep't of Defense, United States Army Armor Ctr. & Fort Knox, Fort Knox, Ky., 43 FLRA 476, 493 (1991) (Fort Knox) for determining whether a regulation has the force and effect of law.
The GC further asserts that nothing in the Procurement Integrity Act, or the FAR which implements it, prohibits the release of the TPP to the Union. The GC contends that under the FAR, the Respondent has discretion to label documents as "source selection information." Opposition at 5. Since the FAR also grants the Respondent discretion to release source selection information, the GC argues that the release of the TPP is not prohibited by the FAR. While the GC does not dispute that OMB Circular A-76 and its Handbook are regulations having the force and effect of law, the GC argues that there is nothing in either which prohibits the release of the TPP.
The GC contends that under the Fort Knox framework, AFI 38-203 does not have the force and effect of law. First, the GC asserts that AFI 38-203 was not promulgated pursuant to a delegation of legislative authority from Congress. Second, the GC argues that the regulation does not affect individual rights and responsibilities because the AFI itself states that it "is not intended and should not be construed to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, the [Air Force], its officers or any person." Id. at 7. Lastly, the GC asserts that the Respondent failed to present evidence concerning what procedural safeguards were followed in issuing the AFI.
In this regard, the GC argues that the applicable procedural safeguards are those set forth in the APA, which require notice and the opportunity for comment. The GC further argues that the cases cited by the Respondent are inapplicable because they address the judicial standard of review applied to agency regulations, not whether a regulation has the force and effect of law. The GC also contends that even if issuance of an AFI does not require notice and comment, the Respondent must still establish that AFI 38-203 was "implemented in such a way as to meet the procedural requirements necessary to assure `fairness and mature consideration.'" Id. at 9.
The GC asserts that even if the Authority finds that AFI 38-203 has the force and effect of law, the provisions of the AFI cited by the Respondent do not prohibit disclosure of the TPP to the Union. The GC argues that the TPP can be released to the public after the tentative cost comparison decision is made unless someone in the Air Force determines that its release is likely to adversely affect the competitive position of the Air Force in a future contracting situation. The GC further argues that the Judge found that no competitive advantage would be conferred on anyone coming into possession of the TPP.
IV. Analysis and Conclusions
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." United States DOJ, Fed. Bureau of Prisons, Fed. Corr. Inst., Forrest City, Ark., 57 FLRA 808, 812 (2002). In this regard, the only factors disputed before the Judge were whether the TPP was "necessary" for the Union to carry out its representational duties and whether release of the TPP is "prohibited by law." Judge's Decision at 11.
The Respondent excepts to the Judge's finding that the release of the TPP is not prohibited by law. More [ v59 p891 ] specifically, the Respondent excepts to the Judge's finding that AFI 38-203 is not an agency regulation which has the "force and effect of law." For the reasons discussed below, we find that AFI 38-203 is a regulation with the force and effect of law, which prohibited the release of the TPP at the time of the Union's request.
A. AFI 38-203 is an agency regulation which has the "force and effect of law."
In an earlier case involving the release of an MEO, the Authority concluded that the term "law" in § 7114(b)(4) of the Statute includes "regulations having the force and effect of law." Ft. Knox, 43 FLRA at 493. Regulations have the force and effect of law if they: (1) affect individual rights and obligations; (2) were promulgated pursuant to an explicit or implicit delegation of legislative authority by Congress; and (3) were promulgated in conformance with any procedural requirements imposed by Congress. See United States Dep't of the Navy, Naval Undersea Warfare Ctr., Newport R.I., 55 FLRA 687, 690 (1999) (citing NTEU, 42 FLRA at 391-92) (Dep't of the Navy). We address each of these three requirements below. [n5]
1. AFI 38-203 affects individual rights and obligations.
In regard to the first requirement, the Authority has held that an agency's regulation affects individual rights and obligations where the regulation is mandatory and it establishes the obligations of the agency and the rights of employees. See Dep't of the Navy, 55 FLRA at 690; NTEU, 42 FLRA at 391. The AFI is a regulation that is mandatory throughout the Air Force for all contracting out studies. In this regard, the Respondent argues, and neither the GC nor the Union disputes, that the AFI "is an implementing regulation that is required to be implemented by the service secretaries and followed to the letter by the [Agency]." Exceptions at 24.
With respect to the TPP, AFI 38-203, ¶¶ 184.108.40.206 and 17.2.3 contain substantively identical language. Those provisions state, in mandatory terms, that the TPP "is not releasable to the public" until a final cost comparison decision has been reached and that the TPP "is not released for public review when a tentative cost comparison decision is determined." [n6] Joint Exhibit 13 at 101 (¶ 220.127.116.11), 176 (¶ 17.2.3). These paragraphs of the regulation go on to state that the TPP may be releasable after the final cost comparison at the time of the final study, if its release is not likely to adversely affect the competitive position of an in-house offer in a future competition. See id. These clauses do not detract from the mandatory nature of the regulation when, as in this case, a tentative -- not a final -- decision is made.
In addition, it is clear that the regulation establishes the obligations of the Agency and the rights of employees with regard to contracting out studies. In this regard, the regulation seeks to protect the TPP from release where release of the TPP would be "likely to adversely impact the competitive position of a[n] in-house offer in a future acquisition." Id. The regulation protects the individual rights of federal employees by maintaining the confidentiality of contracting out studies so that those employees will not be disadvantaged in future contracting out competitions, which could result in the loss of their jobs. In sum, we find that AFI 38-203 affects individual rights and obligations.
2. AFI 38-203 was promulgated pursuant to a delegation of legislative authority by Congress.
As to the second element, the Respondent argues that AFI 38-203 is based on two parallel lines of authority -- OMB Circular A-76 and the FAIR Act. For the reasons discussed below, we find that there is a sufficient nexus between the FAIR Act, that statute's delegation of authority to OMB to issue Circular A-76, and AFI 38-203 to establish the requisite delegation of legislative authority by Congress.
The purpose of the FAIR Act was "to provide a process for identifying the functions of the Federal Government that are not inherently governmental [ v59 p892 ] functions[.]" [n7] 31 U.S.C. § 501 note. The FAIR Act provides an explicit delegation of legislative authority for the Director of OMB to issue guidance for the competitive process required by the Act. See 31 U.S.C. § 501 note, Sec. 2(d) ("The Director of the Office of Management and Budget shall issue guidance for the administration of this subsection [entitled Competition Required]."). Accordingly, OMB Circular A-76 and its Handbook derive explicit legislative authority from and implement the FAIR Act. See OMB Circular A-76 ("3. Authority. Reorganization Plan No. 2 of 1970 (31 U.S.C. § 1111); Executive Order 11541; the Office of Federal Procurement Policy Act (41 U.S.C. § 405); and the Federal Activities Inventory Reform (FAIR) Act of 1998 (31 U.S.C. § 501 note).").
The Authority has held that the OMB Circular is a government-wide regulation having the force and effect of law. See, e.g., NTEU, 47 FLRA 304, 306 (1993); NTEU, 42 FLRA at 391. OMB Circular A-76 directs agencies to implement the Circular and its Supplement. See OMB Circular A-76 ¶ 9.c. ("each agency head shall . . . [i]mplement this Circular and its Supplement with a minimum of internal instructions."). [n8] Accordingly, OMB Circular A-76 represents an implicit delegation of legislative authority for the promulgation of AFI 38-203.
In Hamlet v. United States, 63 F.3d 1097 (Fed. Cir. 1995) (Hamlet), the court had to determine whether an agency's personnel manual had the force and effect of law. With regard to the requirement that the manual be "promulgated pursuant to an explicit or implicit delegation of legislative authority by Congress[,]" Dep't of the Navy, 55 FLRA at 690, the court found that this requirement had been satisfied where, as here, the legislative authority from which the manual was derived was regulatory. See Hamlet, 63 F.3d at 1105. [n9]
In our view, a similar connection exists between the FAIR Act, OMB Circular A-76 and AFI 38-203. In this regard, the FAIR Act authorizes OMB to issue Circular A-76, which in turn directs agencies to implement the Circular through "internal instructions." OMB Circular A-76 ¶ 9.c. Accordingly, we find that AFI 38-203 was promulgated pursuant to an implicit or explicit delegation of legislative authority by Congress.
3. AFI 38-203 was promulgated in conformance with the procedural requirements imposed by Congress.
With regard to the third element, the Respondent argues that as an implementing regulation of a military department, AFI 38-203 was not required to be promulgated in accordance with the notice and comment requirements of the APA. Exceptions at 21. In Dep't of the Navy, the Authority found that 5 U.S.C. § 553(b) excepts agency rulemaking from the notice and comment requirement to the extent that it involves "a matter relating to agency management or personnel[.]" [n10] 55 FLRA at 691. Section 553(a) also excepts from the notice and comment requirements "a matter relating to . . . contracts." 5 U.S.C. § 553(a). AFI 38-203 establishes the rules the Respondent must follow when conducting a contracting out study. As such, the regulation concerns matters relating to contracts [ v59 p893 ] and is excepted from the notice and comment requirements of the APA. [n11]
We find that AFI 38-203 is an agency regulation having the force and effect of law because it meets all three of the requirements set forth in Dep't of the Navy, 55 FLRA at 690.
B. AFI 38-203 prohibits release of the TPP.
The Union requested the TPP after the announcement of the tentative decision -- and prior to the determination of a final cost comparison decision -- in order to prepare its appeal. As stated above, AFI 38-203 states that the TPP "is not releasable to the public until a final cost comparison decision is determined" and "is not released for public review when a tentative cost comparison decision is determined." [n12] Joint Exhibit 13 at 101, 176. While the regulation goes on to state the circumstances when the TPP may be releasable after the final cost comparison decision, it is clear that the release of the TPP is always barred anytime prior to a final decision. In this connection, where, as here, the Union requested the TPP after the announcement of the tentative decision -- and prior to the determination of a final cost comparison decision -- the language of AFI 38-203 clearly prohibits the release of the TPP.
Having already concluded that AFI 38-203 is an agency regulation having the force and effect of law, we find that the release of the TPP is "prohibited by law," within the meaning of § 7114(b)(4) of the Statute. Accordingly, we dismiss the complaint. [n13]
The complaint is dismissed.
Member Carol Waller Pope, dissenting in part:
I agree with the majority that AFI 38-203 is a regulation having the force and effect of law. I do not agree, however, that AFI 38-203 prohibits disclosure of the TPP to the Union. Accordingly, as I agree with the Judge that the information is necessary for the Union to discharge its representational functions under the Statute, I would order the Respondent to disclose the TPP.
The majority's error here is similar to the error it made in United States Department of the Army, Headquarters, Ft. Monroe, Va., 57 FLRA 793 (2002) (Member Pope, dissenting) (Fort Monroe), where the majority held that the agency was not required to disclose to the union a Most Efficient Organization (MEO) statement, which provides the staffing pattern used to determine the in-house bid that is compared with contractor bids. In doing so, the majority erroneously equated the agency's interest in denying disclosure to outside contractors with an interest in denying disclosure to unions. Id. at 798. As pointed out in my dissent, unions are fundamentally different from outside contractors both because unions are integrally involved in the cost comparison process and because they operate under regulations which prohibit them from improperly disclosing confidential information, under penalty of adverse personnel actions. Id. at 798-99.
Like Fort Monroe, this case concerns a union's attempt to obtain a document connected to evaluating in-house and outside contractors bids. The document at issue here, the TPP, "represents the technical approach and resources to be expended by the Government in meeting the requirements of the PWS [performance work statement]. . . and depicts the requirements specified in the MEO." AFI 38-203 at 221. The TPP, which is part of the "Management Plan," is developed to compare the in-house proposal against proposals from contractors. Id., ¶ 11.2.1, ¶ 18.104.22.168.
The linchpin of the majority's reasoning is that two sections of AFI 38-203, which state that the TPP is not releasable to the public in certain circumstances, bars disclosure to the Union. See Majority Decision at 14-15. The majority finds, in this regard, "nothing in AFI 38-203 to suggest that the Union is excluded from `the public.'" Id. at 15 n.12.
The majority is wrong. Under AFI 38-203, unions, unlike members of the public, are intimately involved in the development of the documents that are based on the TPP: the PWS and MEO. In fact, the regulation provides that "it is essential that labor unions partner with management and the directly affected employees to [ v59 p894 ] ensure . . . a well-developed PWS and MEO are achieved." Id., ¶ 1.10.1 To this end, unions participate in an advisory capacity on the teams that create these documents and in their preparation and development. Id., ¶ 1.10.3. Nothing in the regulations, or logic, supports a conclusion that although unions participate in the development of these documents as partners, they may not have access to the information that forms the basis for them.
Unions differ from outside contractors in another significant way: unlike outside contractors, unions that participate in the cost comparison process must attend ethics training and "must ensure they are in compliance with the Joint Ethics Regulation (DoDD 5500.7-R)." AFI 38-203, ¶ 1.10.2. DoDD 5500.7-R, in turn, incorporates the Federal Acquisition Regulations (FAR) concerning "procurement integrity." Id., App. B., incorporating 48 C.F.R. § 3.104. The FAR prohibits any person from disclosing contractor bid and "source selection information" to any unauthorized person. Id., § 3.104-4(a). As the union representatives who participate in this process are prohibited from disclosing protected information, providing information to them cannot be considered disclosing the information to the public.
It is well-established that furnishing information under § 7114(b)(4) is "prohibited by law" only where there is a specific prohibition on disclosure. See, e.g., DOD, Fort Knox, 43 FLRA at 494. As neither the cited portions of AFI 38-203 nor any other law or regulation specifically prohibit the Respondent from providing the Union with the TPP, I would find that disclosure is not "prohibited by law" under § 7114(b)(4) of the Statute.
I agree with the Judge, for the reasons stated by the Judge, that the General Counsel established that the TPP is "necessary," within the meaning of § 7114(b)(4) of the Statute. Accordingly, as disclosure of the TPP is not prohibited by law, I would find that the Respondent violated the Statute by refusing to provide the Union the TPP and issue an Order requiring it to do so.
File 1: Authority's Decision in 59 FLRA No.
161 and Opinion of Member Pope
File 2: ALJ's Decision
Footnote # 1 for 59 FLRA No. 161 - Authority's Decision
Footnote # 2 for 59 FLRA No. 161 - Authority's Decision
On May 29, 2003, the OMB issued OMB Circular No. A-76, which supersedes the following OMB issuances: OMB Circular A-76 (Revised 1999), August 4, 1983; Circular No. A-76 Revised Supplemental Handbook (Revised 2000), March 1996; Office of Federal Procurement Policy Letter 92-1, "Inherently Governmental Functions," September 23, 1992; and OMB Transmittal Memoranda 1 through 25, Performance of Commercial Activities. The revised circular became effective upon publication in the Federal Register and applies to competitions initiated after the effective date. See OMB Circular A-76 (Revised 2003), May 29, 2003 at 3. As such, it does not apply to this case.
Footnote # 3 for 59 FLRA No. 161 - Authority's Decision
Footnote # 4 for 59 FLRA No. 161 - Authority's Decision
The Judge also held that the Respondent made "similar arguments" concerning the Federal Acquisition Regulations but failed to satisfy the criteria for determining whether the regulations have the force and effect of law. See Judge's Decision at 13.
Footnote # 5 for 5