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45 FLRA No. 122

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

NATIONAL FEDERATION OF FEDERAL EMPLOYEES

LOCAL 1214

(Union)

and

U.S. DEPARTMENT OF THE ARMY

HEADQUARTERS, UNITED STATES ARMY TRAINING CENTER

AND

FORT JACKSON

FORT JACKSON, SOUTH CAROLINA

(Agency)

0-NG-2035

_____

DECISION AND ORDER ON A NEGOTIABILITY ISSUE

September 23, 1992

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). The appeal concerns the negotiability of one proposal which provides that, when feasible, the Agency will contract out only when it would be economically efficient, effective to the Agency's mission, or in the best interests of the Government. For the following reasons, we find that the proposal is nonnegotiable.

II. Proposal

The Employer agrees that, when feasible, contracting out of its functions and/or missions should only occur when it is demonstrated that such contracting out would be economically efficient, effective to the mission, or in the best interest of the Federal Government.

III. Positions of the Parties

A. Agency

The Agency contends that the proposal directly and excessively interferes with its right under section 7106(a)(2)(B) to contract out. The Agency argues that the proposal does not merely require the Agency to comply with Office of Management and Budget (OMB) Circular A-76 but that the proposal "would remain in effect even if the OMB Circular is modified." Statement of Position at 3. According to the Agency, inclusion of the term "when feasible" does not render the proposal negotiable because, in the Agency's view, every contracting out decision "must comply with the proposal's requirement[s] . . . ." Id.

The Agency also contends that the proposal is not intended as an arrangement "to lessen the adverse affects" of a decision to contract out. Id. at 4. According to the Agency, the proposal "negates management's right to contract out and does not concern any arrangements for employees affected by the implementation of that right." Id. Moreover, the Agency argues that the proposal excessively interferes with management's right to contract out because it would "completely prohibit[] the [Agency] from contracting out work unless i[t] can be shown that doing so meets the restrictions contained in the proposal." Id.

B. Union

The Union contends that the Agency's right to contract out is restricted by applicable law and regulation, including OMB Circular A-76, and that, based on the Authority's decision in National Treasury Employees Union and U.S. Department of the Treasury, Internal Revenue Service, 42 FLRA 377 (1991)(IRS), petition for review filed sub nom. Department of the Treasury, Internal Revenue Service v. FLRA, No. 91-1573 (D.C. Cir. Nov. 25, 1991), such law and regulation may be enforced through arbitration. The Union claims that as OMB Circular A-76 requires that "all contracting-out . . . must be in the public interest[,] . . . efforts of this nature cannot be in the public interest when contracting-out is not found to be economically efficient, effective, or in the best interest of the Federal Government." Petition for Review at 2. According to the Union, "the proposal [does] not introduce or impose any limitation or restriction that is not already imposed upon the [A]gency through [applicable regulations] . . . ." Reply Brief at 3.

Finally, the Union states that the proposal is "not intended to address the specific or adverse impact associated with contracting out decisions[.]" Id. at 4. Rather, the Union states that it "possesses a number of options that have been negotiated, and are presently under negotiation, that are designed to address specific or adverse impact, or redress adverse impact suffered by employees when management applies or executes its 7106 rights in a legal, extraordinary, or extralegal manner." Id.

IV. Analysis and Conclusions

Proposals that establish substantive criteria governing the exercise of a management right directly interfere with that right. See, for example, National Federation of Federal Employees, Local 2050 and Environmental Protection Agency, 36 FLRA 618, 625-27 (1990). However, insofar as management rights under section 7106(a)(2) are concerned, proposals that merely require compliance with applicable laws do not directly interfere with the exercise of such rights. IRS. The term "applicable laws" in section 7106(a)(2) includes, among other things, rules and regulations, including OMB Circular A-76, which have the force and effect of law. Id. Consequently, proposals merely requiring compliance with OMB Circular A-76 do not directly interfere with management's right to contract out. American Federation on Government Employees, AFL-CIO, Department of Education Council of AFGE Locals and Department of Education, 42 FLRA 1351, 1361-63 (1991)(Department of Education); AFSCME Local 3097 and Department of Justice, Justice Management Division, 42 FLRA 587 (1991), petition for review filed sub nom. Department of Justice, Justice Management Division v. FLRA, No. 91-1574 (D.C. Cir. Nov. 25, 1991).

In this case, the disputed proposal permits the Agency to contract out only if the Agency can demonstrate that such action "would be economically efficient, effective to the mission, or in the best interest of the Federal Government." In this regard, we reject the Union's contention that, based on IRS, the proposal does not directly interfere with the Agency's right to contract out because it merely implements OMB Circular A-76. Nothing in the wording of the disputed proposal refers to or cites OMB Circular A-76 and we have no basis on which to conclude that the proposal constitutes a restatement of any provisions in the Circular. Compare Department of Education, 42 FLRA at 1361-63 (a proposal which obligated the agency to conform to a particular requirement of OMB Circular A-76 found not to directly interfere with the agency's right to contract out in circumstances where the proposal merely restated the requirement of the Circular and where the union stated that the proposal would no longer have any effect if the Circular were modified to remove the requirement in question). We find the Union's explanation of the proposal inconsistent with its plain wording and, as a result, we do not adopt the Union's explanation. See, for example, National Association of Government Employees, Federal Union of Scientists and Engineers, Local R1-144 and U.S. Department of the Navy, Naval Underwater System Center, Newport, Rhode Island, 42 FLRA 730, 734 (1991).

We conclude that, by incorporating the standards of economic efficiency, mission effectiveness, and the best interests of the Government, the disputed proposal establishes substantive criteria governing the exercise of the Agency's right to contract out. Therefore, the proposal directly interferes with the Agency's right to contract out under section 7106(a)(2)(B) of the Statute. In reaching this conclusion we reject the Union's contention that inclusion of the phrase "when feasible" renders the proposal negotiable. The inclusion of such wording does not change the fact that management's discretion to contract out is restricted. For example, International Federation of Professional and Technical Engineers, Local 4 and Department of the Navy, Portsmouth Naval Shipyard, Portsmouth, New Hampshire, 35 FLRA 31, 37-38 (1990).

Finally, it is clear that the disputed proposal is not intended to be an appropriate arrangement under section 7106(b)(3) of the Statute. In this regard, the Union expressly states that its proposal is "not intended to address the specific or adverse impact associated with contracting out decisions[.]" Reply Brief at 4. According to the Union, it "possesses a number of options that have been negotiated, and are presently under negotiation, that are designed to address specific or adverse impact, or redress adverse impact suffered by employees when management applies or executes its 7106 rights in a legal, extraordinary, or extralegal manner." Id.

As the disputed proposal directly interferes with the Agency's right to contract out under section 7106(a)(2)(B) of the Statute, it is nonnegotiable. Accordingly, we will dismiss the Union's petition.

V. Order

The Union's petition for review is dismissed.

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FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

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