DEPARTMENT OF THE NAVY MARE ISLAND NAVAL SHIPYARD VALLEJO, CALIFORNIA and LOCAL 25, INTERNATIONAL FEDERATION OF PROFESSIONAL AND TECHNICAL ENGINEERS, AFL-CIO
In the Matter of )
DEPARTMENT OF THE NAVY )
MARE ISLAND NAVAL SHIPYARD )
VALLEJO, CALIFORNIA )
and ) Case No. 91 FSIP 269
LOCAL 25, INTERNATIONAL )
FEDERATION OF PROFESSIONAL )
AND TECHNICAL )
ENGINEERS, AFL-CIO )
Local 25, International Federation of Professional and Technical Engineers, AFL-CIO (Union), filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. S 7119, between it and the Department of the Navy, Mare Island Naval Shipyard, Vallejo, California (Employer).
Following investigation of the request for assistance, the Panel determined that the impasse, concerning a "finder's fee" for
employees who are responsible for bringing nontraditional work to
the Shipyard, should be resolved on the basis of a single written
submission from the parties, with the Panel to take whatever action
it deemed appropriate to resolve the dispute. Written submissions
were made pursuant to this procedure and the Panel has now considered the entire record.1/
1/ Following their receipt, a teleconference was conducted with the parties during which a procedural issue involving an allegation by the Union of a defect in the Employer's submission was resolved. The parties also agreed to continue voluntary efforts to settle the case. This was followed by another teleconference in which the parties reported that although a settlement had not been reached, their disagreement had been refined. As their positions now were significantly different from those presented in their initial submissions, they were given the opportunity to submit new final offers with brief supporting statements.
The Employer is an industrial-funded activity whose primary mission is to repair Naval vessels, mainly submarines. The Union represents approximately 550 professional employees, most of whom are engineers. The parties' collective-bargaining agreement expires on February 18, 1993. The dispute arose after the Employer opened a business office in 1990 at the Shipyard prior to the completion of negotiations with the Union, which then filed an unfair labor practice (ULP) charge against the Employer. The idea behind this new organization was to seek out nontraditional work for the Shipyard to help keep their workforce employed during low periods in the normal work load. The parties subsequently entered into a ULP settlement agreement whereby the Employer agreed to bargain with the Union over the finder's fee issue.
ISSUE AT IMPASSE
The parties basically disagree over whether there should be a cap on the total amount of money the Employer should be required to pay as a finder's fee.
1. The Union's Position
The Union proposes that "the amount of finder's fee will be between  and  percent of work package initial value. Finders' fee[s] exceeding $5,000 will be paid in annual amounts of $5,000 or fraction thereof." Although the finder's fee is something completely separate from the Employer's incentive awards program, the Union nevertheless has modified its previous position to meet the Employer's "self-imposed limits" by permitting employees to be "paid in annual installments of $5,000 until the finder's fee is paid in full." The Employer's characterization of the finder's fee as an incentive award, on the other hand, is unsupported by the parties' ULP settlement agreement, which "clearly separates finder[']s fee from incentive award." Moreover, the Employer has "failed to produce any law or Governmentwide rule or regulation as[a] bar to the Union proposal."
2. The Employer's Position
The Employer proposes the following wording:
The amount of the finder's fee will be between 1 percent and 3 percent of the value of the initial work package. If the amount of the finder's fee exceeds $5,000 for an individual or $10,000 for a
group, the Shipyard will pay the $5,000 for the individual or the
$10,000 for the group and the Shipyard will request the appropriate
higher authority to approve the additional amount. The higher authority is not bound by this Memorandum of Understanding and will make its decision freely. That decision will be final and is not grievable.
Its proposal, unlike the Union's, would reward employees for their efforts in connection with the newly-created business office consistent with the Employer's legal responsibilities. It should be adopted because "within the law, there exist[s] no provision that would authorize payment of any 'finder's fee' or commission." In this regard, the Employer has based its proposal on "the only statutory provision that could remotely be considered to allow such a payment.2/'' Under that provision, its ability to award superior
accomplishments for a single work package is limited to no more than $10,000. To award anything more, "whether in a lump sum or successive payments for the same contribution would be a violation of law." Moreover, the Navy's Civilian Personnel Instruction 451, whose purpose is to maintain consistency among groups of employees, also restricts the Shipyard Commander's authority to granting awards of $5,000 for individuals and $10,000 for groups. While the Employer recognizes its limitations in granting awards, its final offer nonetheless shows its willingness "to seek greater awards from higher authority when warranted."
Having examined the evidence and arguments presented by the parties in this case, we conclude that, on balance, the Union's proposal would provide the more reasonable basis for settlement. At the outset, we note that the parties agree about the appropriateness of rewarding employees for their efforts in connection with the acquisition of nontraditional work for the Shipyard. Their dispute arises only in the narrow circumstances where a finder's fee of between 1 and 3 percent of the value of the initial work package, as unilaterally determined by the Employer, would result in a payment to an individual employee in excess of $5,000. The Employer argues that in such cases, payments must be limited to the maximum amount allowable under its existing incentive awards program, which is the only authority it can find to authorize them. The implication is that, except for this alleged lack of authority, payments to individual employees of over $5,000 would be warranted.
The record indicates that the Union's proposal arose in response to what appears to be a novel Employer initiative, i.e., its decision to establish a business office for the specific purpose of acquiring supplementary work for the Shipyard. As explained by the Union, under its proposal the party contracting for the Shipyard's services "would pay the finder's fee as part of the contract." Given these circumstances, the Employer has failed
2/ See 5 U.S.C. Chapter 45, Subchapter I, "Awards for Superior
Accomplishments," and implementing regulations at 5 C.F.R. Part 451, Subpart A. to persuade us either that the payment of a, finder's fee: (1) requires specific statutory authorization, or (2) must or should be conceived of as part of the Shi