U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Department of the Army, Headquarters, Fort Monroe, Virginia and National Association of Government Employees, Local R4-11, SEIU, AFL-CIO, WA-CA-00395, May 24, 2002, 57 FLRA No. 176.

The Authority, Member Pope dissenting, found that disclosure wasn't "necessary" within the meaning of § 7114(b)(4) because the activity's countervailing interests in not furnishing the MEO before the activity announced its contracting out decision outweighed any legitimate interests the union may have had in pre-decisional disclosure. Moreover, OMB Circular A-76 (a "law" within the meaning of § 7114(b)(4)) prohibited release of the MEO before the activity announced its decision on the work under study.

The activity was conducting a commercial activities (products or services that can be performed by a private source) study in accordance with OMB Circular A-76 and Army Regulation AR 5-20. As part of that study it developed a streamlined, in-house organization called the "Most Efficient Organization" (MEO), the staffing pattern of which was to serve as the baseline in-house cost estimate against which contractors had to compete to perform the commercial activities at issue.

In March 2000, during the course of the study, the union requested, pursuant to § 7114(b)(4), a copy of the MEO, claiming that it needed this information because of concerns over potential organizational changes, EEO issues, employee safety, and compliance with agreement provisions. The activity refused to furnish the MEO, claiming it could not be released at that point in the process. Subsequently, on May 16, 2000, the activity announced that it had completed the commercial activities study and had decided to contract out the services under study. On or shortly after that announcement it provided a copy of the MEO to the union.

In the ULP proceeding that followed, the ALJ found that the activity didn't commit a ULP when it didn't disclose the MEO. He found that disclosure of the MEO at the time the union requested it was prohibited by OMB Circular A-76 (a regulation FLRA previously held was a "law" within the meaning of § 7114(b)(4)), Army regulation AR 5-20 (which the ALJ determined had the force and effect of a law), and 41 U.S.C. § 423(b)(3). The ALJ went on to find that even if these "laws" didn't specifically prohibit disclosure of the requested information, the activity had articulated sufficient anti-disclosure interests to justify its refusal to release the MEO until the procurement process was completed.

In a split decision, Member Pope dissenting, the Authority agreed with the ALJ that the activity didn't commit a disclosure-of-information ULP when it didn't disclose the MEO to the union until after bids were received and dismissed this portion of the complaint. (The activity was found guilty of a ULP for not providing the union with copies of a Table of Distributions and Allowances (TDA), which the union had requested along with the MEO. In a footnote FLRA explained that inasmuch as the activity didn't except to the ALJ's finding a ULP regarding non-disclosure of the TDA, it adopted that finding and the ALJ's recommended remedy "without precedential significance," and would not further address that aspect of the case.) The majority found that "Circular A-76 prohibited the release of the MEO prior to the announcement of the tentative decision on contracting out the work under study." It noted that the Circular states that the MEO is considered a "procurement sensitive document[] until a tentative decision is reached, e.g., at bid opening and completion of the cost comparison form." It further noted that the Circular "requires that the MEO be delivered to the contracting officer as a sealed document prior to the due date for the receipt of bids. Taken together, these provisions dictate that the MEO remain sealed until the tentative decision on contracting out is announced." (Footnote omitted.) The majority also found that the activity "established sufficient countervailing interests warranting non-disclosure of the MEO at the time it was requested." It continued as follows:

[E]ven assuming, without deciding, that the Judge correctly found that the Union had established a particularized need for the information, we find that the countervailing anti-disclosure interests articulated by the Respondent outweigh the particularized need. As noted, the MEO is a sensitive document which is used to develop the Respondent's cost estimate. Release of the document prior to the bid opening could undermine the integrity of the commercial activities study and potentially increase costs for the Respondent.

In addition to the effect of disclosures on potential contractors, in terms of the competitive advantage they could gain in successfully securing a bid, undisputed testimony shows that disclosure of the MEO could lead to the cancellation of the contracting-out study in its entirety. . . . Possible misuse of information and disclosure at an inopportune time are valid anti-disclosure interests. . . .

Accordingly, we find that the Respondent's countervailing interests in not furnishing the MEO prior to May 16 outweighed any legitimate interests in disclosure that the Union may have had.

In Member Pope's dissent, she said the following in finding that the agency's countervailing interests didn't outweigh the union's particularized need.

While the MEO is clearly sensitive and the Respondent has a strong interest in preventing its untimely disclosure to a contractor, this does not establish an interest in refusing disclosure to the Charging Party. [Italics in original.] Absent an indication that the Charging Party posed a threat of disclosure to a contractor, the Respondent's interest is speculative.

She also concluded that the portions of OMB Circular A-76 relied on didn't address or prohibit disclosure of the MEO to the Charging Party. One portion merely describes the MEO as a "procurement sensitive document" and the other provides that the MEO must be delivered to the contracting officer as a "sealed" document and not opened until bids are opened. Nor did she find that Army regulations prohibited disclosure under the Statute. "Assuming without deciding that AR 5-20 has the force and effect of law, it relates only to the release of information under the [FOIA]. . . . While the FOIA permits agencies to withhold certain documents, it does not prohibit the disclosure of anything." Nor did she find that 41 U.S.C. 423 anywhere limited disclosure of information to a union official.

Given the importance of the decision and the fact that the Authority was divided in its key findings, it seems likely that the union will seek court review.

It should be noted that the majority based its decision solely on finding that (1) OMB Circular A-76 prohibited disclosure and (2) disclosure wasn't "necessary" within the meaning of section 7114(b)(4) because the activity's countervailing interests outweighed any legitimate interests the union may have had in pre-decisional disclosure. In footnote 9 they indicated that they didn't find it necessary to determine whether release of the MEO prior to May 16 was also prohibited by 41 U.S.C. § 423 (which, incidentally, was subsequently amended) and AR 5-20.