U.S. Army Engineer District, St. Louis and American Federation of Government Employees, Local 3838 (Authority decision, March 27, 1987)

Final FLRA decision. The Authority resolves exceptions to an arbitral award under 5 U.S.C. § 7122(a). Under 5 U.S.C. § 7123(a)(1), an order involving an arbitral award generally is excluded from judicial review unless it involves an unfair labor practice under § 7116. This decision does not state that it involves an unfair labor practice.

Plain-English summary

The Army Engineer District in St. Louis contracted out operation and maintenance at four sewage treatment plants. An arbitrator found that the Army had done so solely to avoid personnel ceilings, contrary to OMB Circular A-76, and ordered the procurement canceled and six affected employees restored to their positions. The Authority upheld the finding that the grievance was arbitrable and that the contracting decision violated the circular. It removed the cancellation and restoration remedies because an arbitrator could not cancel a procurement action. Instead, it ordered the Army to reconstruct the procurement decision under the circular and take appropriate action based on the result.

Decision snapshot

• Authority: Arbitration exceptions under 5 U.S.C. § 7122(a) and procurement rules in OMB Circular A-76.
• Outcome: Award modified; procurement action must be reconstructed instead of canceled.
• Key point: A defective contracting decision can require reconstruction, but an arbitrator cannot cancel the procurement action outright.

Full text (FLRA public release)

[ v26 p398 ]

26:0398(49)AR

The decision of the Authority follows:

26 FLRA No. 49

U.S. ARMY ENGINEER DISTRICT,
ST. LOUIS
Activity

and

AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL NO. 3838
Union

Case No. 0-AR-1247

DECISION

I. STATEMENT OF THE CASE

This matter is before the Authority on exceptions to the award of Arbitrator James M. O'Reilly filed by the Department of the Army (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

A grievance was filed and submitted to arbitration contending that management's determination to contract out the operation and maintenance functions at four sewage treatment plants violated applicable procurement law and OMB Circular A-76. The Arbitrator first ruled that the grievance was grievable and arbitrable. On the merits, the Arbitrator found that the Activity had contracted out solely to avoid personnel ceilings. Specifically, he found that the Activity had had contracted out in order to abolish six positions and had subjected the incumbents of those positions to a reduction-in-force (RIF). Noting that OMB Circular A-76 and its Supplement specifically prohibit contracting out solely to avoid personnel ceilings, the Arbitrator accordingly ruled that the Activity had failed to comply with the Circular in its determination to contract out, and he sustained the grievance. However, he expressly sustained the grievance only to the extent of the six employees whose positions had been abolished because he found that they were the only employees specifically affected by the Activity's failure to comply with the Circular. As a remedy, the Arbitrator in paragraph 1.B. of the award ordered the procurement action cancelled and the six employees restored to their former positions.

III. FIRST EXCEPTIONS

A. Contentions

The Agency contends that by finding the grievance to be arbitrable, the award is deficient as contrary to law and regulation.

B. Analysis and Conclusions

This exception provides no basis for finding the award deficient. We have consistently held that a grievance like the one in this case is within the grievance procedure prescribed by the Statute and is not precluded by law or regulation. For example, American Federation of Government Employees, Local 1513 and Naval Air Station, Whidbey Island, 26 FLRA No. 36 (1987). Accordingly, this exception is denied.

IV. SECOND EXCEPTION

A. Contentions

The Agency contends that under 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 Arbitrator's award ordering cancellation of the procurement action and restoring the six employees to their former positions is contrary to section 7106(a)(2)(B) of the Statute. The Agency also argues that under Blytheville AFB, there is no basis for ordering the procurement action reconstructed.

B. Analysis and Conclusions

We agree with the Agency that the award ordering the cancellation of the procurement action and restoring the six employees to their former positions is deficient. We expressly held in Blytheville AFB that under the Statute and procurement law and regulation, arbitrators are not authorized to cancel a procurement action. Slip op. at 6. Thus, the Arbitrator's order that the Activity cease contracting out the sewage treatment functions is clearly deficient. The award directing the Activity to restore the six employees affected by the procurement action to their former positions is also deficient because it follows directly from the cancellation. For example, United States Army Communications Command, Fort McClellen and Local No. 1941, American Federation of Government Employees, AFL-CIO, 23 FLRA No. 23 (1986), slip op. at 4.

However, we disagree with the Agency that there is no basis to order the procurement action reconstructed.

We decided in Blytheville AFB 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. We also decided that in sustaining the grievance, the arbitrator as a remedy may properly order a reconstruction of the procurement action when the arbitrator finds that an agency's noncompliance materially affected the final procurement decision and harmed unit employees. Applying that test in this case, we conclude, contrary to the argument of the Agency, that the Arbitrator's award establishes a sufficient basis for directing the Activity to reconstruct the procurement action. The Arbitrator specifically found that contrary to the express prohibition of OMB Circular A-76, the Activity contracted out solely to avoid personnel ceilings. He also expressly found that six employees were specifically affected by this defective procurement action in that they were subjected to a RIF and displaced from their positions. In these circumstances, we conclude, as we concluded under similar circumstances in Blytheville AFB, slip op. at 7, that the Arbitrator effectively found that the Activity's violation harmed the employees involved and that the violation materially affected the Activity's final procurement decision. Accordingly, we will order reconstruction in accordance with the guidance provided in Blytheville AFB. Slip op. at 7.

V. DECISION

The Arbitrator's award is modified to substitute the following for paragraph 1.B. of the award:

The Activity is directed to reconstruct the disputed procurement action in accordance with the requirements of OMB Circular A-76 and to take appropriate action in accordance with the decisions of the Authority based upon the results of such reconstruction.

Issued, Washington, D.C., March 27, 1987.
/s/ Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III, Member
/s/ Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY