[ v17 p429 ]
The decision of the Authority follows:
17 FLRA No. 69 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 1622 Union and THE DIRECTORATE FACILITIES AND ENGINEERING DEPARTMENT OF THE ARMY, FORT GEORGE G. MEADE, MARYLAND Agency Case No. 0-NG-853 DECISION AND ORDER ON NEGOTIABILITY ISSUE The petition for review in this case comes before the Authority pursuant to section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute) and concerns the negotiability of one Union proposal. Upon careful consideration of the entire record, including the parties' contentions, the Authority makes the following determinations. Union Proposal In the Cost Comparison Analysis of the Commercial Cost Study of any bargaining unit activity, the "fringe benefit" factors must be demonstrated to be fair and reasonable and will be derived from the Employer's actual local fringe benefit factors existing at the time of the cost study. This proposal conflicts with the Agency's right to "make determinations with respect to contracting out" pursuant to section 7106(a)(2)(B) of the Statute. In this regard, the Authority has previously determined that the right of management officials to make determinations with respect to contracting out encompasses not only the right to take such action but also the right to engage in preliminary discussion and deliberation concerning the relevant factors upon which such determinations will be made. National Federation of Federal Employees, Local 1167 and Department of the Air Force, Headquarters, 31st Combat Support Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574 (1981) (Union Proposal 1), affirmed sub nom. National Federation of Federal Employees, Local 1167 v. Federal Labor Relations Authority, 681 F.2d 886 (D.C. Cir. 1982). Thus, the Authority has found proposals which prescribe standards to be utilized by management to evaluate the factors upon which a decision to contract out could be based to be nonnegotiable because they interfere with the agency's deliberative process. American Federation of Government Employees, AFL-CIO, Local 2736 and Department of the Air Force, Headquarters 379th Combat Support Group (SAC), Wurtsmith Air Force Base, Michigan, 14 FLRA 302 (1984) (Proposals 1 and 2). Therefore, based on the reasons stated in Wurtsmith Air Force Base and Homestead Air Force Base, the disputed proposal herein, which specifically prescribes the standards to be used to calculate fringe benefit factors for the cost comparison analysis, i.e., some of the factors upon which a decision to contract out could be based, is not within the duty to bargain. In addition, contrary to the Union's contentions, the proposal is inconsistent with OMB Circular No. A-76 (hereinafter "the Circular"). Specifically, the proposal conflicts with Part 4, Chapter 2(D)(3)(g), of the 1983 Supplement of the Circular (hereinafter "the Supplement") which mandates that when making a cost comparison between in-house and potential contract performance an agency must use various formulas, called standard factors, which calculate the cost of various fringe benefits as a percentage of wages. /1/ For certain of these benefits, i.e., Medicare and FICA, the percentage formula represents the actual cost to the agency of providing the benefits. For others, most notably retirement contributions, the standards factors are only an estimate, based on Government-wide figures, of the cost of providing the benefit. The Union's proposal, however, would require the Agency to use actual costs in all cases to calculate fringe benefits rather than the standard factors mandated by the Circular. Since the proposal is inconsistent with the Circular and its Supplement, it would be outside the duty to bargain if the Circular constitutes a "Government-wide rule or regulation" within the meaning of section 7117(a)(1) of the Statute. In this connection, the Circular and its Supplement apply to all executive agencies with only limited exceptions as set forth in the Circular and not here relevant. /2/ Consequently, the Circular and its Supplement are generally applicable to the Federal civilian work force so as to be "Government-wide" within the meaning of section 7117(a)(1) of the Statute. See National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748 (1980). As to whether the provisions of the Circular and its Supplement constitute a "rule or regulation" within the meaning of section 7117(a)(1), the Authority has previously concluded that Congress intended that term to include "official declarations of policy of an agency which are binding on officials and agencies to which they apply." See National Federation of Federal Employees, Local 1497 and Department of the Air Force, Lowry Air Force Base, Colorado, 9 FLRA 151 (1982), at 154-55. The Circular and Supplement were promulgated pursuant to The Budget and Accounting Act of 1921, 31 U.S.C. 1 et seq. and the Office of Federal Procurement Policy Act Amendments of 1979, 41 U.S.C. 401 et seq. Paragraph 1 of the Circular states that its purpose is to establish "Federal Policy regarding the performance of commercial activities." Paragraph 7 of the Circular indicates that the Circular and Supplement are to "provide administrative direction to heads of executive agencies." Paragraph 9 of the Circular sets forth procedures to be followed to ensure that the provisions of the Circular and the Supplement are followed. Therefore, it must be concluded that the Circular and its Supplement establish official policy which is binding on agencies and officials in the executive branch of the Federal government and thus constitute a "rule or regulation" within the meaning of section 7117(a)(1). Consequently, since the proposal is inconsistent with provisions of a "Government-wide rule or regulation," it is outside the duty to bargain under section 7117(a)(1) of the Statute. Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED that the Union's petition for review be, and it hereby is, dismissed. Issued, Washington, D.C., April 9, 1985 Henry B. Frazier III, Acting Chairman William J. McGinnis, Jr., Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ Part 4, Chapter 2(D)(3)(g) of the Supplement provides in relevant part: g. Fringe Benefits or FICA - (Column G). (1) Multiply the following Government-wide standard factors by the appropriate basic pay (column F). (a) The Government cost factor to be used for Federal employee retirement benefits, based on a dynamic normal cost projection for the Civil Service Retirement Fund, is 20.4 percent. (b) The Government cost factor to be used for Federal employee insurance (life and health) benefits, based on actual cost, is 3.7 percent, plus an additional 1.3 percent for Medicare up to annual salary limitations placed on employees covered under FICA. (c) The Government cost factor to be used for Federal employee workmen's compensation, bonuses and awards and unemployment programs is 1.9 percent. 2. The Federal Insurance Contributions Act (FICA) cost factor will be applied to applicable employees (normally intermittent employees). Be careful to apply the FICA rate only to wages and salaries subject to the tax; there is an annual salary limitation for FICA tax and new Federal employees will be affected by FICA taxes. /2/ See Paragraph 7 of the Circular. Scope.