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 26 FLRA No. 25
 
 INTERNATIONAL BROTHERHOOD OF 
 ELECTRICAL WORKERS, AFL-CIO
 Union
 
 and
 
 WESTERN AREA POWER ADMINISTRATION 
 DEPARTMENT OF ENERGY
 Agency
 
                                            Case No. 0-NG-1185
 
                 DECISION AND ORDER ON NEGOTIABILITY ISSUE
 
                         I.  Statement of the Case
 
    This case is before the Authority because of a negotiability appeal
 filed under section 7105(a)(2)(E) of the Federal Service
 Labor-Management Relations Statute (the Statute) and concerns the
 negotiability of one proposal.  For the reasons set forth below, we find
 that the petition must be dismissed.
 
                               II.  Proposal
 
          (T)he union propose(s) a 4% general wage increase for all
       classifications listed in Supplemental Labor Agreement #3, such
       wage increase to be effective October 13, 1985 as provided for in
       the Basic Agreement, Section 17.5.
 
                      III.  Positions of the Parties
 
    In responding to the Union's initial request to bargain, the Agency
 declared the proposal nonnegotiable, contending that it was contrary to
 the announced pay freeze for fiscal year 1986.  The Union contends that
 the "lock-step" provision of the parties' Supplemental Labor Agreement
 #3 (SLA #3) excepts the Agency from the bargaining prohibition imposed
 by law.  Further, citing language from the Energy and Water Development
 Appropriation Act, 1985, Public Law No. 99-141, 99 Stat. 564, 575
 (1985), the Union claims that the salary wage increase granted by the
 Agency to its power system dispatcher employees under that law supports
 the Union's position that its proposal is negotiable because the
 language contained in SLA #3 is virtually identical to the language
 relied on by the Agency to grant that wage increase.  /1/
 
                       IV.  Analysis and Conclusion
 
    It is undisputed that the employees to whom this proposal would apply
 are prevailing rate employees who are covered by section 9(b) of Public
 Law No. 92-392.  As we discussed in International Brotherhood of
 Electrical Workers, AFL-CIO, Local Union 1245 and Department of the
 Interior, Bureau of Reclamation, 25 FLRA No. 15 (1987), under section
 704 of the Civil Service Reform Act of 1978, Public Law No. 95-454, 92
 Stat. 1111, 1218, matters pertaining to pay and pay practices of these
 "section 9(b)" employees are subject to negotiation.  See Columbia Power
 Trades Council and United States Department of Energy, Bonneville Power
 Administration, 22 FLRA No. 100 (1986) for a discussion of this
 provision.
 
    Public Law No. 99-190, 99 Stat. 1185 (1985), which made continuing
 appropriations for fiscal year 1986, extended pay restrictions placed on
 General Schedule employees to the pay of section 9(b) employees.  /2/ It
 is undisputed that the wage increase set forth in the Union's proposal
 exceeds that "pay cap." However, certain exceptions were allowed to this
 "pay cap" for section 9(b) employees. Specifically, the "pay cap" did
 not apply where an adjustment to wage rates was "required by the terms
 of a contract" entered into before October 1, 1985.  Federal Personnel
 Manual (FPM) Bulletin 532-68 (April 2, 1986).
 
    The Office of Personnel Management (OPM) is charged by Congress with
 administering the statutory "pay cap" concerning prevailing rate
 employees who are covered under section 9(b).  See, for example, Public
 Law No. 99-190, Section 101(h), which incorporated among other things
 section 613 of Title VI of H.R. 3036;  Public Law No. 99-591, section
 613 of Title VI of the Act making appropriations for the Treasury
 Department and other agencies;  and FPM Bulletin 532-60.  As interpreted
 by OPM in FPM Bulletins 532-60 and 532-68, the condition for being
 excepted from the "pay cap" is met when either of the following criteria
 is met:
 
          (a) the contract dictates specific rates of pay, or specific
       monetary or percentage increases;  or
 
          (b) the contract dictates a fixed pay-setting procedure which
       results in a specific increase;  however, none of the elements of
       the pay-setting procedure may be subject to further negotiation by
       the parties ("elements" are defined as, but not limited to,
       formulas, names of companies, wage data to be used, etc.).  Thus,
       the pay-setting procedure must automatically result in specific
       rates of pay, or specific monetary or percentage increases.
 
    In order to rule on the negotiability of the proposal, it is
 necessary to determine whether the parties' contract fulfills either of
 these criteria.  The Union essentially asserts that the parties' SLA #3
 excepts the Agency from the statutorily imposed "pay cap" on wage
 increases for prevailing rate employees.  The Union did not submit a
 copy of the parties' contract or SLA #3 in this case.  However, it did
 submit a provision from SLA #3 in International Brotherhood of
 Electrical Workers, AFL-CIO and Western Area Power Administration,
 Department of Energy, 26 FLRA No. 27 (1987), which involved the same
 parties and a similar issue.  We note that by its terms, the SLA #3
 provision submitted in that case would apply to the instant dispute and
 we therefore take official notice of the provision here.
 
                                  SLA #3
 
                           Three-Year Agreement
 
          This Agreement has a three-year duration period, from October
       1, 1984 to October 1, 1987.  Salary adjustments reflected by the
       enclosed pay schedule will be implemented effective September 16,
       1984, and January 20, 1985.  For the scheduled October 1985 salary
       adjustment, the parties will conduct a joint telephone survey to
       update the job match information in the 1984 Wage Survey which
       will be used to negotiate a new pay schedule.  Only wage rates
       will be open for negotiation for the duration of this agreement.
       An additional wage adjustment will be due in October 1986.  At the
       expiration of this three-year agreement, October 1987, the entire
       agreement may be reopened as provided in the Basic Agreement,
       Article 19.  (Modified October 1, 1984)
 
    We disagree with the Union's assertion that SLA #3 excepts the Agency
 from the statutorily imposed "pay cap." The provision from SLA #3 refers
 to a specific pay schedule for salary adjustments to be implemented on
 September 16, 1984 and January 20, 1985.  For the October 1985 (fiscal
 year 1986) salary adjustment, the provision requires the parties jointly
 to conduct a job wage survey and to use the results of the survey to
 negotiate a new pay schedule.  Thus, with respect to fiscal year 1986,
 SLA #3 does not dictate a specific rate of pay, or specific monetary or
 percentage increase, but rather requires that wage rates for October
 1985 (fiscal year 1986) be negotiated.
 
    Our conclusion in this regard is supported by other material in the
 record.  In particular, the attachments to the Union's petition for
 review, dated September 11 and September 20, 1985, show that:  (1) The
 wage increase for prevailing rate employees was to be effective October
 13, 1985;  (2) the 4% wage figure was arrived at through a joint union
 and management wage survey conducted pursuant to SLA #3;  (3) the Union
 considered the "4% wage figure (as) a specific proposal, a matter to be
 bargained;" (4) the Union "requested that the parties open bargaining
 for wages;" and (5) the Agency, recognizing that the parties'
 "collective bargaining agreement provide(d) for fiscal year 1986
 negotiations," declared the proposal nonnegotiable because in its view
 the proposal was contrary to the fiscal year 1986 pay freeze.
 
    From a review of this material, it is apparent that the Union was
 seeking to negotiate a wage increase for fiscal year 1986 as provided by
 the parties' contract.  The contractual requirement for negotiation of a
 wage increase is contrary to section (b) of FPM Bulletin 532.68, which
 specifically states that "none of the elements of the pay-setting
 procedure may be subject to further negotiation by the parties
 ('elements' are defined as, but not limited to, formulas, names of
 companies, wage data to be used, etc.)." The proposal explicitly seeks
 negotiations on the amount of the wage increase.  Consequently, we
 conclude that the contract dictates neither a wage rate nor a
 pay-setting procedure which will automatically result in a specific
 rate.  Thus, we cannot conclude that the wage increase contained in the
 proposal is one which is "required" by the contract within the meaning
 of FPM Bulletin 532-68 so as to be excepted from the "pay cap." The
 proposal is therefore inconsistent with Federal law and is
 nonnegotiable.
 
    Further, as to the Union's contention concerning Public Law No.
 99-141, that law specifically applied to a single occupation (power
 system dispatcher).  There is nothing in the record to show that the
 employees in this case are employed in that occupation.
 
                                 V.  Order
 
    The Union's petition for review is dismissed.
 
    Issued, Washington, D.C., March 16, 1987.
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
                ---------------  FOOTNOTES$ ---------------
 
 
 
    (1) The Union claims that the Agency's Statement of Position was not
 timely filed and should not be considered by the Authority.  The Agency
 acknowledges that its statement was filed after the time allotted by
 section 2426.6(a) of our Rules and Regulations.  We find that the
 statement of position was untimely filed, and therefore we have not
 considered it.  The Agency's declaration of nonnegotiability, as
 mentioned above, was submitted by the Union as an attachment to its
 Petition for Review.
 
    (2) The appropriations for Federal agencies for fiscal year 1986 were
 made available under Pub. L. No. 99-103, 99 Stat. 471 (approved
 September 30, 1985);  Pub. L. No. 99-154, 99 Stat. 813 (approved
 November 14, 1985), which extended Pub. L. No. 99-103;  and Pub. L. No.
 99-190, mentioned above. 
 
 
 

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