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 16 FLRA No. 55
 
 FITZSIMONS ARMY MEDICAL CENTER
 Activity
 
 and
 
 AMERICAN FEDERATION OF GOVERNMENT
 EMPLOYEES, LOCAL 2214, AFL-CIO
 Union
 
                                            Case No. O-AR-353
 
                                 DECISION
 
    This matter is before the Authority on an exception to the award of
 Arbitrator George F. Bardwell filed by the Agency under section 7122(a)
 of the Federal Service Labor-Management Relations Statute and part 2425
 of the Authority's Rules and Regulations.
 
    The dispute in this matter concerns the grievance filed by the Union
 claiming that the Activity's decision to contract out certain laundry
 and linen functions was violative of section 502 of P.L. 96-342, 10
 U.S.C. 2304 note (which relates to contracting out in the Department of
 Defense).  The sole issue submitted by the parties to arbitration was
 whether the Union's grievance was arbitrable under the provisions of the
 parties' collective bargaining agreement.  The Arbitrator noted that the
 collective bargaining agreement restated the definition of "grievance"
 from section 7103(a)(9) of the Statute and acknowledged in particular
 that the definition included any complaint concerning any claimed
 violation, misinterpretation, or misapplication of any law, rule, or
 regulation affecting conditions of employment.  Concluding that the
 Union's grievance certainly was a complaint claiming such a violation,
 the Arbitrator as his award ruled that the grievance was arbitrable
 under the parties' collective bargaining agreement.
 
    In its exception the Agency contends that the award is contrary to
 section 7106(a)(2)(B) of the Statute /1/ by subjecting management's
 decision to contract out to arbitral review and that the award is
 inconsistent with OMB Circular A-76 (which prescribes general policies
 for contracting out) that assertedly precluded grievances over an
 agency's determination with respect to contracting out.  The Authority
 finds that the Agency's exception provides no basis for finding the
 award deficient.
 
    In American Federation of Government Employees, AFL-CIO, National
 Council of EEOC Locals and Equal Employment Opportunity Commission, 10
 FLRA 3 (1982) (proposal 1), enforces sub nom. EEOC v. FLRA No. 82-2310
 (D.C. Cir. Sept. 21, 1984), the Authority expressly addressed whether
 the disputed proposal (that the agency would comply with OMB Circular
 A-76 and other applicable laws and regulations governing contracting
 out) was within the duty to bargain.  In terms of this case, contentions
 essentially identical to those made by the Agency in its exception to
 the Arbitrator's award were specifically rejected by the Authority and
 the court.  In National Council of EEOC Locals the Authority expressly
 held the the requirement for management to exercise its right to make
 contracting-out determinations in accordance with whatever applicable
 laws and regulations exist at the time of the determination is not
 inconsistent with section 7106(a)(2)(B).  Furthermore, in enforcing this
 decision of the Authority, the court in EEOC specifically rejected the
 contention that the proposal was contrary to section 7106(a)(2)(B)
 because the proposal would subject any contracting-out decision to
 grievance procedures and ultimately arbitral review.  In this respect
 the court first rejected the assumption that absent such a proposal, a
 complaint asserting that a contracting-out determination was not made in
 accordance with applicable laws, including the Circular, would not be
 grievable.  The court noted that under the expansive definition of
 grievance in section 7103(a)(9) and with no exclusion of 7121(c) of the
 Statute applicable to the subject of contracting out, a complaint that
 an agency failed to comply with the OMB Circular or with any other law
 or rule governing contracting out plainly is a matter within the
 coverage of the grievance procedure prescribed by the Statute.  Id. at
 12-13.  After determining that such a matter was subject to grievance
 and arbitration, the court further concluded that "a grievance asserting
 that management failed to comply with its statutory or regulatory
 parameters in making a contracting-out decision is not precluded by the
 management rights clause." Id. at 15.  As to the contention that OMB
 Circular A-76 bars grievances and arbitration over contracting-out
 determinations, the Authority specifically held that the Circular cannot
 limit the coverage of the grievance procedure prescribed by the Statute.
  Therefore, the Authority concludes that the Agency has not established
 that the Arbitrator's award, which essentially finds that the grievance
 in this case is arbitrable as a grievance permitted by the Statute and
 not excluded by the agreement, is contrary to section 7106(a)(2)(B) of
 the Statute or OMB Circular A-76.
 
    Accordingly, the exception is denied.
 
    Issued, Washington, D.C., October 31, 1984
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       Ronald W. Haughton, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Section 7106(a)(2)(B) pertinently provides:
 
          (a) Subject to subsection (b) of this section, nothing in this
       chapter shall affect the authority of any management official of
       any agency--
 
                                  * * * *
 
          (2) in accordance with applicable laws--
 
                                  * * * *
 
          (B) . . . to make determinations with respect to contracting
       out(.) 
 
 
 

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