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The decision of the Authority follows:
22 FLRA No. 102 NAVAL AIR STATION, WHITING FIELD Activity and AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL UNION NO. 1954 Union Case No. 0-AR-562 DECISION I. STATEMENT OF THE CASE This matter is before the Authority on exceptions to the award of Arbitrator James E. Fulford filed by the Department of the Navy (the Agency) under section 7122(a) of the Federal Service Labor-Management Relations Statute and part 2425 of the Authority's Rules and Regulations. II. BACKGROUND AND ARBITRATOR'S AWARD The dispute before the Arbitrator concerned the Activity's determination to contract out certain maintenance and firefighting functions. After the contract had been awarded but before performance had begun, the Defense Authorization Act of 1983, Pub. L. No. 97-252, Section 1111, 96 Stat. 718, 747 (1982) was enacted and signed into law prohibiting the contracting out of firefighting functions at any military installation or facility. Consequently, the contract was modified to delete firefighting functions. The Activity determined that a new cost comparison study was not required because the modification was still within the scope of the initial contract. The grievance alleged that the Activity's action was not in accordance with applicable law as required by the parties' collective bargaining agreement. Specifically, the Union alleged that the procurement action, as modified, was not in accordance with section 502 of Public Law No. 96-432, which pertinently requires that no commercial or industrial type function of the Department of Defense (DOD) may be converted to performance by a private contractor unless the Secretary of Defense provides Congress with a detailed cost comparison which demonstrates that performance by the contractor will result in cost savings to the Government. The Union argued that under that provision the Activity was required to conduct a new cost comparison before the maintenance functions could be contracted out. The Arbitrator agreed with the Union's position, finding that the Activity was required to recertify the modified contract to Congress or at least to conduct a new study to prove that contracting out the maintenance functions would be more cost effective then in-house performance. The Arbitrator therefore sustained the grievance and, as his award, directed the Activity to terminate the procurement action and to reinstate the employees involved with appropriate backpay. III. EXCEPTIONS A. Contentions In its exceptions the Agency contends that the award is contrary to management's right under section 7106(a)(2)(B) of the Statute to make determinations with respect to contracting out. The Agency also contends that the direction to reinstate affected employees with backpay is contrary to the Back Pay Act. B. Analysis and Conclusions In Headquarters, 97th Combat Support Group (SAC), Blytheville Air Force Base, Arkansas and American Federation of Government Employees, AFL-CIO, Local 2840, 22 FLRA No. 72 (1986), the Authority addressed for the first time the remedial authority of an arbitrator in resolving grievances disputing determinations by agencies to contract out agency work. In sum, the Authority held that under the Statute and procurement law and regulation, arbitrators are not authorized to cancel a procurement action and are authorized to sustain grievances challenging a decision to contract out only on the basis that the agency failed to comply with mandatory and nondiscretionary provisions of applicable procurement law or regulation. The Authority advised that these provisions of law or regulation must be sufficiently specific to permit the arbitrator to adjudicate whether there has been compliance with such provisions. In this case we conclude that the Arbitrator was not authorized either to sustain the grievance or to cancel the procurement action. In accordance with our decision in Blytheville Air Force Base, the Arbitrator's direction that the Activity cancel the procurement action is clearly deficient. In addition, we find that under Blytheville Air Force Base the Arbitrator was not authorized to sustain the grievance. As noted, the Union essentially claimed in its grievance that under Pub. L. No. 96-342, in order to have contracted out the maintenance functions, alone, the Activity was required to conduct a new cost comparison after it modified the procurement contract to delete firefighting functions. At arbitration the Activity had argued that although the provisions of that law require a cost comparison and a certification to Congress before a contract is awarded, there is nothing in the law requiring another cost comparison and a recertification when the contract is modified prior to its effective date. In rejecting the Activity's argument, the Arbitrator reasoned that if there were no obligation imposed to recertify after a contract has been substantially modified, the provisions of Pub. L. No. 96-342 could be entirely negated. Thus, the Arbitrator decided to impose such an obligation based on his "feel(ing) that Congress intended that substantially modified contracts would be recertified or that at least a new study would prove that in this case, contracting would be more cost effective than in-house performance." We decided in Blytheville Air Force Base, slip op. at 6, that an arbitrator can sustain a challenge to a procurement action only on the basis that the agency failed to comply with mandatory and nondiscretionary provisions of applicable procurement law or regulation. In this case we find that the Arbitrator was not authorized to sustain the grievance on the basis of an obligation that the Arbitrator felt Congress intended in Pub. L. No. 96-342, but did not specifically provide. Therefore, the Arbitrator's award sustaining the grievance and directing the Activity to terminate the procurement action is contrary to section 7106(a)(2)(B) of the Statute. In view of this conclusion, the Arbitrator's direction to reinstate the affected employees with backpay is likewise deficient. IV. DECISION Accodingly, for the above reasons, the Arbitrator's award is set aside. /*/ Issued, Washington, D.C., July 31, 1986. /s/ Jerry L. Calhoun, Chairman /s/ Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- (*) In view of this decision, it is not necessary that the Authority address contentions of the Agency in its other exceptions to the award.