17:0429(69)NG - AFGE Local 1622 and The Directorate Facilities and Engineering Department of the Army, Fort George G. Meade, MD -- 1985 FLRAdec NG
[ v17 p429 ]
17:0429(69)NG
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.