DEPARTMENT OF DEFENSE )

DEFENSE CONTRACT AUDIT AGENCY )

CENTRAL REGION )

IRVING, TEXAS )

and )

LOCAL 3529, AMERICAN FEDERATION )

OF GOVERNMENT EMPLOYEES, AFL-CIO )

)

Case No. 91 FSIP 278

The Department of Defense, Defense Contract Audit Agency, Central Region, Irving, Texas (Employer), filed a request for assistance with the Federal Service Impasses Panel to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and Local 3529, American Federation of Government Employees, AFL-CIO (Union).

After investigation of the request for assistance, the Panel directed the parties to meet informally with Staff Associate Gladys M. Hernandez for the purpose of resolving the impasse concerning official time for Union representatives, included in Article 5 of

the successor agreement.1/ The parties were advised that if no settlement were reached, Ms. Hernandez would report to the Panel on the status of the dispute, including the parties' final offers, and her recommendations for resolving the impasse. After considering this information, the Panel would take whatever action it deemed appropriate to resolve the impasse, including the issuance of a binding decision.

1/ The parties also accepted a Panel recommendation that they submit to private mediation-arbitration those sections of Article 5 related to Union representation as well as the other 11 contract articles in dispute, concerning, among other matters, overtime, compressed work schedules, and performance appraisals, following either a settlement or the issuance of a Panel decision on the official time article.

Ms. Hernandez met with the parties on March 17, 1992, at the Employer's offices in Irving, Texas, but the parties were unable to reach a settlement.2/ She reported to the Panel based on the record developed by the parties, and it has considered the entire record in the case.

BACKGROUND AND PRELIMINARY MATTER

The Employer, 1 of 5 regional offices within the Defense Contract Audit Agency (DCAA), consists of 29 major field audit offices and 46 suboffices in 18 states. Its mission is to: (1) perform all contract audits for the Department of Defense; (2) provide advice on accounting and financial matters to assist in the negotiation, administration, and settlement of contracts andsubcontracts; and (3) furnish contract audit service to other Federal agencies in accordance with OMB Circular A-73. The Union represents a bargaining unit of approximately 791 General Schedule employees, the majority (687) of whom are professional auditors; others are administrative personnel. Only the Union's 17 representatives (6 officers and 11 stewards as of March 26, 1992), however, would be affected by the outcome of this dispute. The parties' relationship is governed by the terms of the 1981 collective-bargaining agreement (CBA) between the Union and the DCAA Chicago Region, the Employer's predecessor3/, until a successor is implemented.

2/ Because a number of proposals were discussed during the informal meeting, at the conclusion thereof, Ms. Hernandez asked the parties to take a few days and prepare their final proposals and then meet to exchange and discuss them on March 20, 1992, for one last time. In fact, from March 20 through 26, 1992, the parties met on five separate occasions and resolved all but three sections of Article 5, that is, sections 4, 6B., and 6C. On March 26, 1992, during a teleconference with Ms. Hernandez, the parties jointly requested and were granted until April 2, 1992, to submit their final proposals and summary statements of position on the three remaining

disputed sections.

3/ In 1989, DCAA was reorganized into five regions, namely the Eastern, Northeastern, Mid-Atlantic, Central, and Western regions.

POSITIONS OF THE PARTIES

1. The Employer's Position

The Employer proposes that competitive areas for RIF purposes continue to be defined in terms of commuting areas such that Bath, Maine, and Boston, Massachusetts, remain separate competitive areas. Because of diminishing workload and finances and the wide geographic dispersion of its offices, its proposed definition would offer it more cost benefits and greater flexibility to both parties as well. Also, it is "consistent with Office of Personnel Management's [] regulations which state that competitive areas for RIF purposes should be the same as the commuting area for all grade levels."4/ In this regard, the competitive area for RIF purposes for the employees at the GM-13 and above grade levels is the same as the commuting area and, therefore, the same should be true for all bargaining-unit employees.

The Bath, Maine, employees are the most senior in the region. Consequently, under the Union's proposal, it would have to RIF employees in Boston for a workload reduction at Bath. This, in turn, would necessitate the relocation of Bath employees to the Boston area to correct the staffing imbalances between the two locations at a substantial cost.5/ If a RIF needs to be conducted because of reduced agency finances as well as workload, the added relocation expenditures would require it to RIF more employees than it originally intended, which would be "disruptive to the continuity of [a]gency operations." Clearly then, while the Union's proposal gives "complete deference to seniority at the expense of efficient and cost effective operations," its proposal "balance[s] the rights of senior employees with sound management principles to continue operations in an efficient and effective manner."

Also, Bath employees, specifically auditors, would not necessarily benefit from an expanded competitive area such as that proposed by the Union. In fact, the opposite may be true. In this regard, because they work under mobility agreements, if they refuse to relocate to the Boston area to correct RIF-related staffing imbalance, they would be dismissed. A dismissal, would not entitle

4/ 5 C.F.R. § 351.402(b) (1991).

5/ The Employer estimates that, based on the last 4/permanent-change-of-station (PCS) moves it conducted, they cost an average of $80,300 per employee with a home and 4 dependents, including 60 days temporary quarters and usage of relocation service. It also equates this cost figure to "3.3 times the annual GS-7, step 1, salary, 2.8 times the annual GS-9, step 1, salary, and 2.5 times the annual GS-11, step 2, salary."

them to severance pay, discontinued service retirement, and participation in the Department of Defense Priority Placement Program. Riffed employees, on the other hand, would be entitled to those benefits. Moreover, it would be unable to offer Bath employees early retirement in lieu of RIFs because before OPM

would grant such authority, it would require that 5 percent of employees within a competitive area be subject to separation by RIF. Bath would not meet the 5 percent criterion if combined with Boston, but would if it continues to remain separate.

No comparison should be made between the competitive area for RIFs and the area of consideration for promotions because "[t]he impact is significantly different." Moreover, though the area of consideration for promotion to GM-13 (supervisory) auditor positions is regionwide, in practice areas.Positions are regionwide to GM-13 each of such promotions outside their commuting areas

Finally, recent history indicates that, budget permitting, Bath employees would be afforded an opportunity to relocate to another DCAA office before a reduced-workload-related RIF ic implemented.6/ Should a RIF be availability reduced workload-related RIFs it should a RIF be necessary, however, thA such benefits.

2. The Union's Position

The Union proposes the following:

The competitive areas for reduction-in-force [] purposes shall be the commuting areas as determined unilaterally by the Region prior to the commencement of bargaining in February 1991, with the

exception of the Bath, Maine, office (Area 43) which shall be combined with the Boston, Massachusetts, commuting area (Area 40).

emphasis added.]

Bath auditors are aware of the "implications" of expanding the

competitive area to include Boston and, nonetheless, want such expansion because, in a RIF situation, they would be able to compete for job retention with the hundreds of Boston area employees, rather than just among themselves.

6/ In FY 1992, with Congressional supplemental funding, it offered employees in three over staffed competitive areas -Detroit, Michigan; Buffalo, New York; and Hartford, Connecticut -- temporary duty assignments at DCAA offices in other areas of the country, rather than conduct a RIF.

The Employer's "only real argument" against the adoption of the Union's proposal revolves around the cost it would incur in having to relocate Bath auditors. Its proposal, "at the absolute maximum, if the entire Bath office were closed, would require the Region to relocate 9 of its 1,042 employees." The relocation costs, therefore, would not be prohibitive. Nonetheless, it is as valid for the Employer to incur such costs to protect the jobs of senior employees as it is to rotate managers under the mandatory rotation policy. But the Employer seeks "never tto] be required to pay for PCS moves caused by downsizing of the workforce."

Since the Employer failed to disclose the data supporting its claim that the average relocation move costs t80,300, it is "highly suspect." That cost figure is probably "based on the cost of moving managers tunder the mandatory rotation policy] ... [and] the new Regional Director and his large family from California." Moving a senior auditor approximately 130 miles from Bath to Boston would not be that costly. The Employer's argument that "it must operate on a zero-sum basis," that is, that it would have to dismiss 2.5 GS-lls or 2.8 GS-7s to pay for each $80,300 relocation, should not be accepted as a "serious" one because it would require the "dissolution of the entire Agency if a single employee is RIFFED." Moreover, the Employer has somehow managed to pay for management rotation- and promotion-related moves without having to RIF employees to do so.

RIF-related dismissals also have costs associated therewith, for example, severance pay and the relocation of employees who accept positions under the DOD Priority Placement Program. The Employer has not proved that the RIF-related relocations of Bath auditors would cost more than dismissing them. But even if the cost were greater, "it [would] not be so onerous as to create a compelling need not to incur the cost."

CONCLUSIONS

Having considered the evidence and arguments presented on the disputed issue, we find that the Union's proposal should be adopted because it would protect the jobs of senior Bath employees over those of the junior Boston area employees. It is consistent with the general labor principle that senior employees should be retained during periods of reduced operations. The Employer has failed to persuade us that we should not adhere to this approach.

The Employer makes cost the principal determinant in e.g. to continue to define competitive and commuting areas as the same. It offers no empirical evidence, however, in support of the projected cost of relocating each of, at most, 14 employees, including supervisors, the approximately 130 miles from Bath to Boston. Neither does it provide cost comparisons between RIFing senior Bath employees, including, e.g. severance pay and unemployment compensation, and relocating them to the Boston area. Although it does offer a figure as to the average cost of previous PCS moves,

it failed to explain: (1) whether those moves involved long or short distances, such as from Bath to Boston and (2) how much of the average cost involved legally unavoidable expenses, if any. Also, it failed to submit evidence indicating that whatever costs are incurred would not be offset by benefits in retaining the more experienced senior employees. But even assuming that the costs and

administrative burden to the Employer of expanding the Bath competitive area beyond the commuting area would be slightly more than keeping them coextensive, in our view, that is outweighed by the greater number of job retention opportunities which would be created for the more senior employees. Finally, we believe it would be fundamentally unfair to deny the more senior Bath auditors the opportunity to relocate under a RIF situation in order to save their jobs when, at any other time, they may be required to relocate at the Employer's will or lose their jobs because they serve under mobility agreements.

ORDER

Pursuant to the authority vested in it under the Federal Service Labor-Management Relations Statute, 5 U.S.C. S 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted under the Panel's regulations, 5 C.F.R. § 2471.6(a)(2), the Federal Service Impasses Panel under 5 24711.11(a) of its regulations hereby orders the following:

The parties shall adopt the Union's proposal.

By direction of the Panel.

Linda A. Lafferty

Executive Director

August 12, 1992

Washington, D.C.