American Federation of Government Employees, Department of Education Council of AFGE Locals and Department of Education (Authority decision, October 31, 1991)

Final FLRA decision. This is a final order of the Federal Labor Relations Authority resolving a negotiability appeal. An aggrieved person may seek judicial review by filing a petition in an appropriate United States court of appeals within 60 days after issuance under 5 U.S.C. § 7123(a). Filing a petition does not stay the Authority's order unless the court orders a stay under 5 U.S.C. § 7123(c).

Plain-English summary

An Education Department union appealed the agency's objections to three contract proposals. The Authority rejected a proposal that would send disputes over agency disapproval of local agreements to arbitration when they concerned negotiability. It found negotiable a proposal requiring notice to the union of contracting out bid solicitations and bid openings affecting unit employees. A third proposal concerning displaced employees' first refusal rights under OMB Circular A-76 was no longer disputed. The Authority directed bargaining on the notice proposal and dismissed the appeal on the other two.

Decision snapshot

• Authority: Negotiability under 5 U.S.C. § 7105(a)(2)(E); agency agreement review under § 7114(c).
• Outcome: Bargaining ordered on Proposal 2; appeal dismissed as to Proposals 1 and 3.
• Key point: A union can bargain for notice of relevant contracting bids, while statutory negotiability disputes cannot be routed to a contract arbitrator through this proposal.

Full text (FLRA public release)

[ v42 p1351 ]

42:1351(94)NG

The decision of the Authority follows:

42 FLRA No. 94

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

AFL-CIO

DEPARTMENT OF EDUCATION COUNCIL OF AFGE LOCALS

(Union)

and

DEPARTMENT OF EDUCATION

(Agency)

0-NG-1587

DECISION

October 31, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability
appeal filed under section 7105(a)(2)(E) of the Federal Service
Labor-Management Relations Statute (the Statute). It concerns
the negotiability of three proposals submitted by the Union
during negotiations for a new collective bargaining agreement.

Proposal 1 concerns the procedures to be followed by the
parties to resolve disputes over Agency disapprovals of local
supplemental agreements under section 7114(c) of the Statute.
Proposal 2 requires the Agency to notify the Union of: (1)
Agency solicitations of contracting out bids under the Office
of Management and Budget's (OMB) Circular A-76 and (2) bid
opening times and locations so that a Union official may
attend. Proposal 3 concerns the Agency's obligation under the
requirement of OMB Circular A-76 that all contracts awarded
include a provision requiring that Federal employees adversely
affected or separated as a result of contracting out be given
the "right of first refusal" for employment openings with the
contractor.

We conclude that Proposals 1 is inconsistent with law
and, thus, is nonnegotiable. We conclude that Proposal 2
is within the duty to bargain, for the reasons explained
below. We conclude that Proposal 3 is no longer in
dispute. Accordingly, we will dismiss the Union's appeal
with regard to Proposals 1 and 3.

II. Proposal 1

Article 9, Section 9.09

Any dispute as to whether a part of a local
supplemental agreement was properly disapproved
shall be referred to the negotiated grievance
procedure for resolution. Any portion found to
be improperly disapproved shall be effective
retroactively to no later than the thirty-first
day after it was agreed to at the local level.
[Only the underlined sentence is in dispute.]

A. Positions of the Parties

The Agency asserts that Proposal 1 is negotiable
only insofar as it applies to disputes over whether
supplemental agreements are consistent with the
parties' master agreement. It contends that Proposal
1 is nonnegotiable to the extent that it requires that
all Agency disapprovals of local supplemental
agreements be referred to the negotiated grievance
procedure for resolution. The Agency relies on Louis
A. Johnson Veterans Administration Medical Center,
Clarksburg, West Virginia and American Federation of
Government Employees, Local 2384, 15 FLRA 347 (1984)
(Louis A. Johnson VAMC), and other Authority decisions
stating that disputes over whether provisions are
consistent with law, rule, or regulation constitute
negotiability disputes that must be resolved by the
Authority. The Agency argues that the proposal is
nonnegotiable because it would allow arbitrators to
render negotiability decisions.

The Union asserts that Proposal 1 is negotiable
because it implements section 7114(c)(4) of the
Statute, which provides that local agreements subject
to a national or other controlling agreement at a
higher level shall be approved under the procedures of
the controlling agreement. The Union asserts that
"disputes relating to the meaning and application of
provisions of a negotiated agreement . . . [are]
subject to resolution under the negotiated grievance
procedure and [a negotiability] appeal is not the
proper forum in which to resolve such disputes[,]"
quoting Louis A Johnson VAMC, 15 FLRA at 350. The
Union argues that, therefore, an arbitrator may
properly resolve a dispute over whether a supplemental
agreement violates law, rule, or regulation by
applying Authority precedent. If the dispute cannot
be resolved by applying Authority precedent, the Union
argues that the arbitrator must refer the dispute back
to the parties, at which time the Union may bring the
matter to the Authority as a negotiability appeal.

B. Analysis and Conclusions

Proposal 1 provides a procedure to resolve
disputes over Agency disapprovals of local
supplemental agreements. The parties agree that a
grievance arbitrator properly may resolve a dispute
over an Agency disapproval that is based on an alleged
inconsistency between the local supplement and the
master agreement. The parties disagree over whether a
grievance arbitrator may properly resolve a dispute
that results from an Agency disapproval based on an
alleged inconsistency with law, rule, or regulation.

In Louis A. Johnson VAMC, the Authority held that
although arbitrators may consider collateral issues
regarding the obligation to bargain in the course of
resolving a grievance, they may do so only to the
extent those decisions are "consistent with the
Statute and relevant decisions of the Authority . . .
." 15 FLRA at 351. See also Panama Canal Commission
and International Organization of Masters, Mates and
Pilots, 27 FLRA 907, 910-11 (1987). The Authority
also held, however, that under section 7105(a)(2)(E)
of the Statute, a pure negotiability dispute "may not
be resolved by an arbitrator in the guise of a
grievance under the negotiated grievance procedure . .
. ." 15 FLRA at 350.

In Commander, Carswell Air Force Base, Texas and
American Federation of Government Employees, Local
1364, 31 FLRA 620 (1988) (Carswell), the Authority
addressed the authority of the Federal Service
Impasses Panel (Panel) and interest arbitrators to
resolve duty to bargain questions. The Authority
reiterated its previous holdings that "the resolution
of duty to bargain issues arising in the context of
specific proposals is a matter reserved to the
Authority under the Statute . . . ." Id. at 624. In
Carswell the Authority concluded that although
interest arbitrators may not make negotiability
rulings in order to resolve questions concerning the
duty to bargain, the Panel and interest arbitrators
could resolve negotiation impasses "which raise
substantively identical duty to bargain issues to
those already decided by the Authority." Id. See
also U.S. Department of the Interior, Bureau of
Reclamation, Lower Colorado Region, Yuma, Arizona and
National Federation of Federal Employees, Local 1487,
41 FLRA 3, 9 (1991).

Thus, the Authority has consistently held that
under section 7105(a)(2)(E) of the Statute only the
Authority may make negotiability rulings on issues
that have not previously been before the Authority.

Under the exact language of Proposal 1, the
parties must refer all disputes stemming from the
disapproval of a supplemental agreement to a
grievance arbitrator "for resolution." The Union
states that the proposal is intended to enable an
arbitrator to resolve negotiability disputes by
applying Authority precedent, but that it would not
enable an arbitrator to rule on negotiability issues
if the Authority had not ruled on a substantively
identical proposal. We conclude that the Union's
statement of intent is not consistent with the plain
wording of the proposal.

Under the proposal, the arbitrator is expected to
resolve all disputes, even though the Union
acknowledges that a large number of those disputes
(those involving issues on which there is no clear
Authority precedent) may not be subject to arbitral
determination. Although the Union asserts that those
matters will be referred back to the parties and can
then be brought to the Authority in a negotiability
appeal, we do not consider such a procedure to
constitute the "resolution" of such disputes,
especially in view of the fact that it is unlikely
that a timely appeal under section 7117(c)(2) of the
Statute would still be possible in such circumstances.
See, for example, American Federation of Government
Employees, Local 1923 and U.S. Department of Health
and Human Services, Social Security Administration,
Newport News, Virginia, 34 FLRA 3 (1989) (a petition
for review of negotiability issues in a disapproved
agreement must be filed with the Authority within 15
days after service on the Union of the agency head's
disapproval). We do not base a negotiability
determination on a statement of intent that is
inconsistent with a proposal's plain wording. For
example, American Federation of Government Employees,
Local 3013 and U.S. Department of Defense, National
Guard Bureau, Maine Air National Guard, Augusta,
Maine, 40 FLRA 203, 212 (1991).

The plain language of Proposal 1 requires that
grievance arbitrators must resolve all disputes as to
whether local supplemental agreements were properly
disapproved. Therefore, for the reasons stated in
Louis A. Johnson VAMC, Carswell, and their progeny,
the proposal would require arbitral resolution of
disputes that, under section 7105(a)(2)(E) of the
Statute, are within the exclusive jurisdiction of the
Authority. Therefore, it is inconsistent with that
statutory provision and is nonnegotiable for that
reason.

III. Proposals 2 and 3

Proposal 2

Article 11, Section 11.06(B)

B. The union will be notified when A-76 bids
pertaining to work performed by unit employees
are solicited. Further, they will be notified of
the bid opening time and location so they may
attend on official time.

Proposal 3

Article 11, Section 11.08

The Department recognizes the "right to first
refusal" required by OMB Circular A-76, which
provides that the contractor will grant those
federal employees displaced by direct result of
such contract, the right of first refusal of
employment openings created by the contractor.
This applies only to job openings for which such
displaced employees are qualified and does not
apply when such employees would otherwise be
prohibited from such employment by the government
post-employment conflict of interest standards.

A. Positions of the Parties

1. The Agency

The Agency contends that Proposals 2 and 3
directly and excessively interfere with management's
right under section 7106(a)(2)(B) of the Statute to
make determinations with respect to contracting out.
It argues that the proposals confer jurisdiction on
arbitrators to adjudicate grievances concerning Agency
decisions to contract out and to reverse and/or
significantly delay Agency decisions to contract out
based on findings of harmless procedural error or even
in the absence of error. The Agency argues that for
these reasons Proposals 2 and 3 conflict with sections
7106(a) and 7117(a)(1) of the Statute and the Federal
"common law of labor relations." Statement of
Position at 5. The Agency contends that, under that
common law, courts have held that arbitrators do not
have jurisdiction over matters concerning contracting
out. The Agency relies on court decisions in U.S.
Department of Health and Human Services v. FLRA, 844
F.2d 1087 (4th Cir. 1988) (en banc) (HHS v. FLRA);
Defense Language Institute, Presidio of Monterey,
California v. FLRA, 767 F.2d 1398 (9th Cir. 1985),
cert. denied, 106 S. Ct. 2004 (1986) (DLI v. FLRA);
and American Federation of Government Employees, Local
2017 v. Brown, 680 F.2d 722 (11th Cir. 1982), cert.
denied, 459 U.S. 1104 (1983) (AFGE v. Brown).

The Agency also contends that to the extent the
proposals would allow an arbitrator to set aside a
decision to contract out because of procedural error,
they interfere with management's rights under section
7106(a)(1) of the Statute to determine its
organizational structure and number of employees, as
well as various management rights under section
7106(a)(2)(A), 7106(a)(2)(B) and 7106(b)(1).

The Agency further asserts that Proposal 2 is not
a procedure under section 7106(b)(2) of the Statute.
It argues that Proposal 2 applies criteria to
solicitation of bids, which it asserts is, "by
definition, pre-decisional" and that it is a "standing
information request" that intrudes into management's
internal deliberative process for contracting out
decisions under section 7106(a)(2)(B). Statement of
Position at 8. The Agency also argues that Proposal 2
does not concern conditions of employment of
bargaining unit employees, because it is concerned
with Agency decisions to assign work outside the
bargaining unit.

The Agency asserts that Proposal 3 is not an
appropriate arrangement under section 7106(b)(3) of
the Statute. It contends that Proposal 3 does not
concern conditions of employment of bargaining unit
employees because it concerns the actions of
contractors not covered by the collective bargaining
agreement. The Agency states that it withdraws its
objection to this proposal if the proposal requires
the Agency only to apprise contractors of their
obligations concerning employees' first-refusal rights
under OMB Circular A-76. However, if the Agency is to
be held accountable for the acts or omissions of
contractors, the Agency asserts that Proposal 3
conflicts with the doctrine of "sovereign immunity"
and the "common law of arbitration." Statement of
Position at 9.

The Agency also argues that Proposal 3 is
nonnegotiable under section 7117 of the Statute
because it subjects disputes over the Agency's
compliance with OMB Circular A-76 to resolution under
the parties' negotiated grievance procedure and is,
therefore, contrary to law. Further, the Agency
asserts that Proposal 3 establishes an independent
contractual right of first refusal that would continue
for the life of the parties' collective bargaining
agreement, even if OMB Circular A-76 were amended.

Finally, the Agency contends that Proposal 3 is a
"job security/work preservation proposal" that
interferes with management's right to assign work
under section 7106(a)(2)(B). Id. at 10.

2. The Union

The Union contends that Proposals 2 and 3 are
negotiable. It asserts that Proposal 2 is a procedure
that merely requires the Agency to notify the Union
when bids will be solicited so that the Union may
attend. Therefore, it contends that the proposal
would not interfere with the Agency's decisions or
actions with respect to contracting out.

The Union states that Proposal 3 requires the
Agency only to "recognize" its obligations regarding
the right of first refusal for employment openings
granted to employees under OMB Circular A-76, and that
these obligations would not continue should there be a
"modification or cancellation" of OMB Circular A-76.
Union Petition at 2; Response at 8.

B. Analysis and Conclusions

1. The Possibility of Arbitral Review Does
   Not Affect the Negotiability of
   Proposals 2 and 3

The Agency contends that courts have determined
that management decisions regarding contracting out
are not subject to arbitration, and that, therefore,
both Proposal 2 and Proposal 3 are nonnegotiable
because they would confer jurisdiction on arbitrators
to adjudicate grievances concerning contracting out.
We reject this contention.

In National Treasury Employees Union and U.S.
Department of the Treasury, Internal Revenue Service,
42 FLRA 377 (1991) (NTEU and IRS), we held, among
other things, that OMB Circular A-76 contains numerous
mandatory procedures and standards with which agencies
must comply in determining whether to contract out
services. We concluded that OMB Circular A-76 is an
"applicable law" within the meaning of section
7106(a)(2) of the Statute and that, accordingly,
actions taken pursuant to Circular A-76 may be
subject to arbitral review. 42 FLRA at 399-403. See
also Diebold v. United States, No. 90-5373 (6th Cir.
October 15, 1991) (OMB Circular A-76 provides "law to
apply" and, therefore, an action taken pursuant to the
Circular is reviewable in a federal district court
under the Administrative Procedure Act). In
determining that Circular A-76 is an applicable law,
we discussed a number of the court decisions relied on
by the Agency herein. We found that AFGE, Local 2107
v. Brown was distinguishable because that case
involved an earlier version of OMB Circular A-76 that
did not provide meaningful criteria against which to
measure an agency's action on review. We concluded
that DLI v. FLRA did not determine the scope of the
term "applicable laws" in section 7106(a)(2), and,
therefore, was not inconsistent with our finding that
OMB Circular A-76 is an applicable law. Finally, we
stated our respectful disagreement with the decision
in HHS v. FLRA. For the reasons fully set forth in
our decision in NTEU and IRS, we conclude that the
fact that Proposals 2 and 3 could permit arbitral
review of certain Agency actions taken pursuant to OMB
Circular A-76 does not render the proposals
nonnegotiable.

To the extent the Agency argues that submission
of contracting out determinations to arbitral review
could result in an award that would constitute direct
interference with management's rights under section
7106(a)(1), 7106(a)(2)(A) and (B), and 7106(b)(1) of
the Statute, the Authority has held that it will not
find that a proposal is nonnegotiable merely because
it could subject management's actions to arbitral
review. For example, American Federation of
Government Employees, National Border Patrol Council
and National Immigration and Naturalization Service
Council and U.S. Department of Justice, Immigration
and Naturalization Service, 40 FLRA 521, 527-28 (1991)
petition for review filed as to other matters sub nom.
U.S. Department of Justice, Immigration and
Naturalization Service v. FLRA, No. 91-4525 (5th Cir.
June 25, 1991). See also NTEU and IRS, 42 FLRA at

403. Further, the Agency's argument that Proposals 2
     and 3 would subject contracting out decisions to
     reversal by arbitrators based on harmless procedural
     error or even in the absence of any error is
     misplaced. See Headquarters, 97th Combat Support
     Group (SAC), Blytheville Air Force Base, Arkansas and
     American Federation of Government Employees, AFL-CIO,
     Local 2840, 22 FLRA 656, 659 (1986) (Authority noted
     that the scope of review of procurement actions by
     administrative bodies and the courts has been "narrow
     and limited"). We will decide the negotiability of
     each proposal before us on its own merits. If an
     arbitrator acting pursuant to these proposals issues an award that the Agency views as infringing on
     its authority to contract out under law or regulation,
     the Agency can file exceptions to the award with the
     Authority under section 7122 of the Statute.

404. The Agency's Other Arguments

a. Proposal 2

Proposal 2 concerns the process used by the
Agency to exercise its right to contract out work
performed by bargaining unit employees. The proposal
requires the Agency to notify the Union: (1) when
bids are solicited; and (2) when and where bids will
be opened so that the Union will have an opportunity
to be present.(1)

We disagree with the Agency's argument that
Proposal 2 does not concern the conditions of
employment of unit employees. Proposal 2 clearly
concerns conditions of employment. The Authority has
long held that the potential loss by bargaining unit
employees of their employment due to a decision by the
Agency to contract out bargaining unit functions
affects the conditions of employment of those
employees. AFSCME Local 3097 and Department of
Justice, Justice Management Division, 31 FLRA 322,
326-27 (1988), remanded sub nom. Department of
Justice, Justice Management Division v. FLRA, No.
88-1316 (D.C. Cir. July 27, 1990), decision on remand,
42 FLRA 587 (1991) (Department of Justice).

We conclude that the Agency has not shown how
Proposal 2 interferes with its right to make
determinations with respect to contracting out work.
The plain wording of Proposal 2 does not prescribe
criteria that the Agency must apply in making its
determinations of whether or not to contract out work.
Rather, Proposal 2 requires only notice of bid
solicitations and notice and an opportunity to attend
bid openings. Proposals requiring only that
management notify a union of exercises of its
management rights are negotiable as long as the
proposals concern conditions of employment and do not
require the release of information that otherwise is
protected. For example, American Federation of Government Employees, Local 3407 and
U.S. Department of Defense, Defense Mapping Agency,
Hydrographic-Topographic, Washington, D.C., 39 FLRA
557, 561 (1991) and cases cited therein.

Furthermore, we reject the Agency's argument that
Proposal 2 is not a procedure because it "applies to
the pre-decisional, deliberative process of
determining whether a particular function will . . .
be contracted out . . . ." Statement of Position at

8. Insofar as the proposal merely requires the Agency
   to notify the Union when bids under OMB Circular A-76
   are solicited, it in no way permits the Union to
   intrude on management's deliberations with regard to
   the bidding process. Compare National Treasury
   Employees Union and U.S. Department of the Treasury,
   Office of Chief Counsel, Internal Revenue Service, 39
   FLRA 27, 53-54 (1991) petition for review filed as to
   other matters sub nom. U.S. Department of the
   Treasury, Office of Chief Counsel, Internal Revenue
   Service v. FLRA, No. 91-1139 (D.C. Cir. March 25,
   1991) (union's receipt of information relating to an
   agency decision to exercise a management right does
   not constitute union participation in the deliberative
   process itself).

Insofar as the proposal requires notification of
the bid opening times and locations, the record does
not establish that bid openings constitute "'wholly
management related meetings at which the management
aspects of the contracting out issue are either
discussed or acted on.'" National Federation of
Federal Employees, Local 1263 and Defense Language
Institute, Presidio of Monterey, California, 14 FLRA
761, 762 (1984), enforcement denied as to other
matters sub nom. DLI v. FLRA, quoting 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, 577-78 (1981) (Homestead) aff'd
sub nom. NFFE v. FLRA, 681 F.2d 886 (D.C. Cir. 1982).
There is, therefore, no basis on which to conclude
that the requirement to notify the Union of the time
and place of bid solicitations and openings violates
management's right to contract out by enabling the
Union to intrude into management's internal
deliberative process with regard to contracting out
decisions, as argued by the Agency.

Proposal 2 concerns conditions of employment of
unit employees and does not directly interfere with
the Agency's right to contract out work. Accordingly,
we find that Proposal 2 is a negotiable procedure
under section 7106(b)(2) of the Statute.

b. Proposal 3

We reject the Agency's argument that Proposal 3
is nonnegotiable because it establishes an independent
contractual restriction on the Agency's right to
contract out work. Proposal 3 states that the Agency
"recognizes the 'right of first refusal' required by
OMB Circular A-76[.]" Under Proposal 3, the right of
"first refusal" applies only "to job openings for
which such displaced employees are qualified . . . ."
It does not apply "when such employees would otherwise
be prohibited from such employment by the government
post-employment conflict of interest standards."

Part I, Chapter 2, section F of the Supplement to
OMB Circular A-76 (revised Aug. 1983), states:

4. All contracts awarded . . . shall:

a. Include a provision, consistent with
Government post employment conflict of interest
standards, requiring that the contractor shall
give Federal employees adversely affected or
separated (as a result of the conversion to
contract) the right of first refusal for
employment openings under the contract in
positions for which they are qualified and shall
inform the agency within 90 days after the
contract effective date of all measures taken to
comply with this requirement and the specific
results[.]

Comparing the texts of Proposal 3 and the OMB
Circular A-76, we find that Proposal 3: (1) restates
the requirements of OMB Circular A-76; and (2)
requires the Agency to recognize only what is
"required by OMB Circular A-76[.]" The Union explains
that Proposal 3 is intended only to require adherence
to the requirement to grant a right of first refusal
established by OMB Circular A-76. The Union expressly
states that the proposal "does not 'fix' the terms of
A-76" and that if the Circular were modified to remove
the requirement regarding a right of first refusal,
"the clause would no longer have effect[.]" Union's
Petition at 2. The Union's explanation is consistent
with the plain wording of Proposal 3 and we adopt it
for the purposes of this decision.

Because the proposal is intended only to require
compliance with OMB Circular A-76, the proposal would
not establish a right of "first refusal" independent
of the Circular. Therefore, we reject the Agency's
contention that Proposal 3 would establish a
requirement under the parties' collective bargaining
agreement that could be enforced even if the right of
"first refusal" were deleted from OMB Circular A-76.

Under OMB Circular A-76, contracts awarded by an
agency to outside entities to perform agency functions
must provide agency employees with a "right of first
refusal" for positions with the contractor. Proposal
3 requires the Agency only to comply with that
requirement of the Circular when the Agency contracts
out work. Any grievances submitted for resolution
through the parties' negotiated grievance procedure
would concern the Agency's compliance with that
requirement. Therefore, Proposal 3 concerns the
Agency's, and not the contractor's, obligations under
the Circular.

It follows that we also reject the Agency's
interpretation that the intent of Proposal 3 could be
to hold the Agency accountable for the acts or
omissions of contractors who are not parties to the
collective bargaining agreement between the Agency and
the Union. The Agency states that if the Authority
were to interpret the proposal as merely intending
"that the Agency be responsible for ensuring that
contractors are apprised of their obligations
regarding rights of first refusal[,]" it would
"withdraw[ ] its objection to negotiability[.]"
Statement of Position at 9. As we state above, we do
interpret the proposal in this manner. Accordingly,
it does not appear that Proposal 3 is in dispute. We
will dismiss the Union's appeal with regard to
Proposal 3 on this basis.

Even if we were to find that the matter is still
in dispute, however, Proposal 3 would be negotiable
because it does not directly interfere with the
Agency's management rights. In Department of Justice,
42 FLRA at 590-91, we found that a proposal requiring
the agency to comply with OMB Circular A-76 was
negotiable, based on our conclusion in NTEU and IRS
that OMB Circular A-76 is an applicable law and that
proposals requiring compliance with applicable laws do
not directly interfere with the exercise of
management's rights. Proposal 3 in the instant case
obligates the Agency to conform only to one particular
requirement of OMB Circular A-76, the obligation to
include a provision in its contracts requiring that
the contractor give employees adversely affected by
the conversion to contract the "right of first
refusal." The applicable provision of OMB Circular
A-76 states that all contracts awarded "shall" include
such a provision. Thus, it is clear from the wording
of the provision that it is a mandatory and
nondiscretionary requirement placed on all agencies
that contract out work previously done by Federal
employees. Accordingly, as discussed above, it may
properly be the subject of arbitral review. We
reiterate, in this regard, that the proposal does not
impose this requirement as an independent contractual
limitation. Therefore, consistent with our decisions
in NTEU and IRS and Department of Justice, Proposal 3
does not directly interfere with management's right
under section 7106(a)(2)(B) to make determinations
with respect to contracting out or with other
management rights under section 7106. Thus, it is
unnecessary to rule on whether the proposal is an
appropriate arrangement under section 7106(b)(3).
American Federation of Government Employees, AFL-CIO,
Department of Education Council of AFGE Locals and
Department of Education, 34 FLRA 1078, 1087 (1990).

C. Conclusions

Proposal 2 requires the Agency to disclose
information that (1) concerns unit employees'
conditions of employment, and (2) does not conflict
with law or regulation. Proposal 2 does not interfere
with management's right to make determinations with
respect to contracting out under section 7106(a)(2)(B
or other management rights under section 7106.
Therefore, Proposal 2 is within the duty to bargain.

We will dismiss the Union's petition for review
with regard to Proposal 3, which is no longer in
dispute.

IV. Order

The Agency must upon request, or as otherwise
agreed to by the parties, bargain concerning Proposal

2. The petition for review is dismissed as to
   Proposals 1 and 3.(2)

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

1. The proposal also states that the Union
   representatives will attend bid openings on official
   time. The Agency has not addressed this requirement
   in its statement of position. Accordingly, we will
   not treat that portion of the proposal as being in
   dispute.

2. In finding Proposal 2 to be negotiable, we make no
   judgment as to its merits.