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U.S. Federal Labor Relations Authority

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22:1059(102)AR - Naval Air Station, Whiting Field and AFGE Local 1954 -- 1986 FLRAdec AR

[ v22 p1059 ]
The decision of the Authority follows:

 22 FLRA No. 102
                                            Case No. 0-AR-562
                         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
    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
    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.