Court Opinion

ID: 8952154
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:54:17.705922+00
Date Added: 2024-06-11T17:09:59.263685
License: Public Domain

WILKINSON, Circuit Judge,
dissenting:
OMB Circular A-76 states that it shall not “[ejstablish and shall not be construed to create any substantive or procedural basis for anyone to challenge any agency action or inaction ... except as specifically set forth” in the circular’s own appeals provision. The Civil Service Reform Act reserves to agency management the exclusive right “to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a)(2)(B). Although I applaud the acrobatics that the majority performs to avoid these provisions, I must nonetheless dissent.
Under the view enunciated by the majority, any written directives sent from the Office of Management and Budget to a federal agency, or indeed any directives sent from a superior to a subordinate within a single agency, would apparently form a basis for a labor grievance by federal employees. This result would follow even if the directive was explicitly stated not to create the basis for such a grievance, was concerned with an area reserved to agency management, and was not issued for the employees’ protection or benefit. Such an interpretation is plainly inconsistent with the text of the Act and its underlying purposes.
The majority’s disregard for the statute will hamper the operations of government. It will “divest management of the essence of its statutory authority to contract out” and lodge that authority in arbitrators. Defense Language Inst. v. FLRA, 767 F.2d 1398, 1401 (9th Cir.1985). It creates “a fertile source of weapons for obstructing or delaying contracting-out decisions, a situation Congress specifically sought to prevent.” EEOC v. FLRA, 744 F.2d 842, 860 (D.C.Cir.1984) (MacKinnon, J., dissenting). It will add expense and subtract accountability throughout the Executive Branch, as decisions of agency managers bow to the protracted and uncertain course of arbitral review.
*442The majority justifies its disregard for the statute by pointing to speeches of individual members of the House, who stated that the management rights clause should be construed “narrowly.” Evidently, the majority believes that Congress was thereby repudiating the broad language of the management rights clause that it was about to enact. As will be shown, the legislative history is equivocal at best. Even if one accepts the abstract canon of construction advanced by the majority, however, that still does not support its resolution of this particular case. By allowing third party review of agency decisions to contract out, the majority has not just construed the reserved rights in § 7106 narrowly — it has construed them away altogether.
I would not enforce the Authority’s order. The Authority itself has previously held that a union proposal to make violations of Circular A-76 grievable would intrude on management rights and hence is nonnegotiable. AFGE, Local 3403 and National Science Foundation, 6 F.L.R.A. 669, 674-75 (1981). The Authority based this decision on AFGE, Local 1968 and Department of Transportation, Saint Lawrence Seaway Development Corp., 5 F.L.R.A. 70 (1981), aff'd sub nom. AFGE, Local 1968 v. FLRA, 691 F.2d 565 (D.C.Cir.1982), cert. denied, 461 U.S. 926, 103 S.Ct. 2085, 77 L.Ed.2d 297 (1983). At some point, the Authority changed its position and was upheld by a divided panel of the District of Columbia Circuit in EEOC. The Ninth Circuit took a contrary view in Defense Language Institute.1
Part I of this dissent addresses the legal status of OMB circulars in general and of Circular A-76 in particular. Next, part II argues that the union’s proposal is nonnegotiable under the Act even if the circular has the legal status that the majority ascribes to it. Finally, part III looks to the limited appeals procedure enacted by Congress and administered by the General Accounting Office, as well as the limited appeals procedure set forth in the circular, to argue that prompt resolution of contracting out disputes is essential and that this imperative would be thwarted by making labor arbitration an additional forum for such disputes.
I.
The majority’s holding today relies on an important but unsupported premise regarding the legal status of Circular A-76. Contrary to the premise of the majority, Circular A-76 is not a “law” in the sense of imposing external constraints or obligations upon the Executive Branch. It is an internal policy instruction from the President’s managerial arm — the Office of Management and Budget — to the heads of federal departments.
We are told that the union’s proposal to incorporate Circular A-76 into a collective bargaining agreement infringes no management right because the circular is already one of the agency’s “existing legal and regulatory requirements.” Maj. op. at 434. We are further told that an erroneous decision to contract out can be grieved even if Circular A-76 is not incorporated into an agreement, in part because the circular is a “law, rule, or regulation” under § 7103(a)(9). Maj. op. at 437. Along the way, we are given the reassuring promise that arbitral decisions will be subject to review for compliance with “applicable laws.” Maj. op. at 435.
These statements by the majority are all wrong. An agency’s compliance with OMB Circular A-76 is adequate if and only if the President says it is. The circular explicitly *443commits its own enforcement to the Executive Branch, not to arbitrators or the judiciary. Moreover, enforcement of the circular is appropriately an internal function of the Executive Branch because applying the circular requires managerial discretion.2
A.
“In carrying out its responsibilities, the Office of Management and Budget issues policy guidelines to Federal agencies to promote efficiency and uniformity in Government activities. These guidelines are normally in the form of circulars.” 5 C.F.R. § 1310.1. The circulars issued by OMB cover a variety of topics related to the administration of federal programs. See 5 C.F.R. § 1310.5.
Circular A-76 is in the form of a letter from the director of OMB to “the heads of executive departments and establishments.” It is accompanied by a four-part supplement that elaborates on the requirements of the circular. Most of the language of the circular is mandatory, and the supplement directs that compliance with it is mandatory. This fact does not mean, however, that the circular creates rights and obligations enforceable by third parties. The Executive Branch is permitted to promulgate internal orders for its own managerial purposes without leading to third party review. Local 2855, AFGE v. United States, 602 F.2d 574, 582 n. 28 (3d Cir.1979); Michigan v. Thomas, 805 F.2d 176, 187 (6th Cir.1986); Independent Meat Packers Ass’n v. Butz, 526 F.2d 228, 236 (8th Cir.1975). Cf. Schweiker v. Hansen, 450 U.S. 785, 789-90, 101 S.Ct. 1468, 1471-72, 67 L.Ed.2d 685 (1981). Another OMB circular, number A-107, was held by the D.C. Circuit to be such an order. In re Surface Mining Litigation, 627 F.2d 1346, 1357 (D.C.Cir.1980).
The language of Circular A-76 makes clear that it, too, is such an order. As noted at the beginning of this dissent, Circular A-76 provides that agency compliance can be reviewed only through the circular’s own appeals procedure. OMB Circular A-76 at 4 (para. 7(c)(8)). The supplement, in setting out the appeals procedure, repeats the admonition from the circular: “The procedure does not authorize an appeal outside the agency or a judicial review.” OMB Circular A-76 Supp. at I-14. And again:
Since the appeal procedure is intended to protect the rights of all directly affect*444ed parties — Federal employees and their representative organizations, and bidders or offerors on the instant solicitation— the procedure and the decision on appeal may not be subject to negotiation, arbitration, or agreement.
Id. at 1-15 (emphasis added).
When the Executive Branch issued the circular, it was just telling heads of federal agencies what it wanted them to do. It was not creating a basis for grievances by federal employees. As one commentator has remarked:
To consider Circular A-76 an ‘applicable law’ will encourage the OMB and high-level agency management simply to stop providing policy guidance on contracting-out. If agency contracting officers at the lowest levels were merely delegated the authority to contract out in their sole discretion, no ‘applicable laws’ would exist to provide a basis for employee grievances. It is ludicrous to conclude that Congress intended ... to deny senior management officials that same discretion to determine uniform conditions for contracting out on an agency-wide basis.
Ketler, Federal Employee Challenges To Contracting Out: Is There A Viable Forum?, 111 Mil.L.Rev. 103, 139-40 (1986) (hereinafter cited as Challenges to Contracting Out).
B.
The present version of Circular A-76 was issued in 1983. A number of courts have considered whether the pre-1983 circular was amenable to third-party review. Every court addressing the question determined that the circular was not amenable to third-party review because it did not prescribe sufficiently detailed standards; it provided no “law” to apply. Rather, the steps prescribed by the circular required the exercise of managerial discretion. See AFGE, Local 2017 v. Brown, 680 F.2d 722, 726-27 (11th Cir.1982); Local 2855, AFGE v. United States, 602 F.2d 574, 581-83 (3d Cir.1979); AFGE v. Hoffmann, 427 F.Supp. 1048, 1073 (N.D.Ala.1976). The present circular, although more detailed than its predecessors, has essentially the same status. It provides few objective, nondiscretionary standards for review by third parties. It is above all a managerial document, and its enforcement is a matter for the Executive Branch.
In applying Circular A-76, a federal agency must begin by determining which of its activities are “governmental” and which are “commercial.” Governmental functions are not contracted out; commercial ones might or might not be. The circular necessarily defines these two categories in open-ended terms:
A Governmental function is a function which is so intimately related to the public interest as to mandate performance by Government employees. These functions include those activities which require either the exercise of discretion in applying Government authority or the use of value judgment in making decisions for the Government.
OMB Circular A-76 at 2 (para. 6(e)).
In attachment A to the circular, which provides examples of commercial activities, agency management is cautioned to “use informed judgment on a case-by-case basis in making these decisions.” Id. at 7. This reliance on agency discretion reappears, explicitly or implicitly, throughout the circular. For example, an agency can perform a commercial activity in-house if contracting out “would cause unacceptable delay or disruption of an essential program.” Id. at 4 (para. 8(a)). The Secretary of Defense can exclude a commercial activity from contracting out “for national defense reasons.” Id. (para. 8(b)). A government hospital can exclude an activity from contracting out “if the agency head, in consultation with the agency’s chief medical director, determines that in-house performance would be in the best interest of direct patient care.” Id. at 5 (para. 8(c)).
The supplement accompanying Circular A-76 also reflects this approach. Part I, “Policy Implementation,” provides general instructions and flowcharts on how to comply with the circular. Most of the steps prescribed, however, involve the open-ended inquiries discussed above: e.g., whether the activity is a governmental function, *445whether in-house performance is required for national defense, and so on.
Part II, “Writing and Administering Performance Work Statements,” explains how agency management will ascertain and describe just what the particular activity is— in other words, what must be done and what standards will be used to measure it. This inquiry, too, requires the exercise of agency discretion.
Part III, “Management Study Guide,” suggests ways for agency management to study its organization to get the most efficient in-house performance of the activity. It states that it “does not purport to replace the agencies [sic] own management techniques.” 0MB Circular A-76 Supp. at III — 1. It further states that
[s]pecific techniques used ... can range the entire spectrum of work measurement, value engineering, methods improvement, organizational analysis, position management and systems and procedures analysis____ The techniques chosen depend on the type of function involved and the data, time and analysts available.
Id. at III — 3.
Part IV, “Cost Comparison Handbook,” explains how to compare the cost of performing an activity in-house with the cost of contracting out. This part of the supplement does provide specific, detailed instructions for management to follow. Even here, however, managerial discretion is important. For example, to determine the in-house cost, the agency must prepare an “in-house staffing estimate” — that is, an estimate of the number and types of people needed for the activity. “A variety of tools may be used to determine the in-house staffing estimate. These tools include manpower standards, staffing guides, prior experience, similar operations at other locations, actual work measurement and informed judgment.” Id. at IV-7.
The majority apparently views the circular as somewhat akin to a mathematical formula which, when correctly followed, will yield one correct result. The circular itself belies this view. Much of the circular calls for managerial judgment. Further, as the above example suggests, the line between the discretionary and nondiscretionary aspects of the circular will often be shadowy. Thus, as with the pre-1983 versions of the circular, “decisions made ... under Circular A-76 are committed to agency discretion.” AFGE, Local 2017, 680 F.2d at 726.
C.
The Authority contends that arbitral review of contracting out will not infringe managerial prerogatives because arbitrators will be permitted to review only those grievances based on nondiscretionary parts of the circular. It refers to its earlier decision in Headquarters, 97th Combat Support Group (SAC), Blytheville AFB and AFGE, Local 2840, 22 F.L.R.A. No. 72 (1986) , in which it enunciated this limitation on arbitral review. The Authority’s actual order in that case, however, illustrates the difficulties in trying to segregate discretionary and nondiscretionary parts of the circular. Another recent decision of the Authority, U.S. Army Engineer District and AFGE, Local 3838, 26 F.L.R.A. No. 49 (1987) , also serves to underscore the point.
In Blytheville AFB, the Air Force decided to contract out the maintenance of some aircraft. The union filed a grievance and was upheld by an arbitrator. The Authority agreed and ordered the Air Force to reconstruct the procurement action. One of the grounds upheld by the arbitrator and the Authority was that the Air Force’s cost comparison provided for the upgrading of a job position. By upgrading the job position, the Air Force improperly increased the in-house cost estimate. Here, the arbitrator was applying the mandatory rule that in-house estimates be based on the most efficient organization, but at the same time the arbitrator was second-guessing a managerial decision. The arbitrator apparently ignored or disagreed with “the equally reasonable conclusion that, especially with regard to temporary work, a position staffed at a higher grade level might result in greater efficiency by attracting a higher quality employee than *446would a lower-graded position.” Challenges to Contracting Out at 147.
In U.S. Army Engineer District, the Army decided to contract out the operation of four sewage treatment plants. The Authority upheld the arbitrator’s decision in favor of the union and ordered the action reconstructed. The arbitrator found the Army in violation of the rule that the circular “shall not ... [b]e used to justify conversion to contract solely to avoid personnel ceilings or salary limitations.” OMB Circular A-76 at 3 (para. 7(c)(6)). According to the arbitrator, the Army had contracted out to avoid personnel ceilings. Here again, the arbitrator was applying a mandatory rule, but he could do so only by second-guessing management as to the real motives behind its decision.
Although I offer these examples to suggest the practical difficulties of the Authority’s position regarding Circular A-76, I want to emphasize that my objections do not center on practicality. Viewing Circular A-76 as a “law” that creates obligations enforceable by third parties is wrong in principle, both because Circular A-76 is explicitly an internal order committed to the Executive Branch for enforcement and because it requires the managerial discretion of the Executive Branch to be applied in the first place.
II.
Even if we assume that Circular A-76 is a requirement of law with which an agency already must comply, and that the circular provides adequate standards for decision by a court or an arbitrator, the majority’s position is still incorrect. The management rights clause of the Act reserves for management the exclusive right to decide whether work is to be contracted out. See 5 U.S.C. § 7106(a)(2)(B). Arbitral review of management’s compliance with the circular would contravene the Act’s strict rule that “nothing in this chapter shall affect the authority of any management official” to decide matters enumerated in the management rights clause.
I cannot accept the majority’s attempt to reconcile the union’s proposal with the Act’s seemingly unequivocal management rights clause. Nor do I subscribe to the majority’s contention that violations of the circular can be grieved even if the circular is not incorporated into a collective bargaining agreement.
A.
The majority contends that the union’s proposal is procedural, rather than substantive, so it is outside the prohibition of § 7106(a). Turning first to the Act’s language, the majority correctly notes that § 7106(a) is “subject to” § 7106(b)(2), which provides in turn that “[njothing in this section shall preclude any agency and any labor organization from negotiating ... procedures which management officials of the agency will observe in exercising any authority under this section.” The majority then states that the agency has conceded the union’s proposal to be procedural — a “concession” that appears nowhere in the agency’s briefs.
Judge MacKinnon, dissenting in EEOC, observed that “the Circular and its accompanying Supplement are designed to offer guidance to agencies in making the decision to contract out — i.e., to provide substantive policy-making criteria — not procedures for carrying out decisions already made.” 744 F.2d at 855. This is surely correct. A union and an agency might well negotiate about the procedures that will be followed, once a decision to contract out has been made, for the protection of affected employees. The actual decision to contract out, however, is inherently substantive and reserved to management. See Challenges to Contracting Out at 129-30.
Circular A-76 is unquestionably a “procedure” in the sense that it instructs management to do one thing, then another, then another. That does not make it negotiable as a procedure that management will observe in exercising its authority. To take this expansive view of § 7106(b)(2) would wipe out the management rights clause entirely, as every management decision-making process would become a negotiable procedure. Moreover, if Congress *447intended for § 7106(b)(2) to allow arbitration of managerial decisions such as the decision to contract out, then it was nonsensical for Congress in § 7106(b)(1) to allow negotiation “on the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty” to take place “at the election of the agency ” (emphasis supplied).
To support its interpretation, the majority quotes from speeches of two individual members of the House for the proposition that reserved management rights should be construed narrowly. In doing so, the majority perpetuates an unfortunate judicial custom: quoting snippets of legislative history to overcome disagreeable statutory language while ignoring any legislative history that goes the other way. For example, Representative Morris Udall — from whom the majority draws its “canon of construction” — stated that the bill “moves to meet some of the legitimate concerns of the Federal employee unions as an integral part of what is basically a bill to give management the power to manage and the flexibility that it needs.” (Emphasis added.) Representative Udall went on to explain:
We are saying to the federal employees that we are going to give management some broad new rights here in this legislation, we are going to enable them to move. And employee organizations are saying, in turn, that they are entitled to have a more independent, secure position from which to deal with management as it operates under this new freedom in the bill.
124 Cong.Rec. H9633 (Sept. 13, 1978), reprinted in Subcomm. on Postal Personnel and Modernization, Comm, on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978 (Comm. Print 1979) at 923. (Hereinafter cited as Legislative History.)
Incidentally, Congress is not a unicameral body. The majority entirely ignores the Senate. The conference report on the bill, which gives the joint explanatory statement of the House and Senate managers, does not call for a narrow construction of management rights. On the contrary, the conferees’ extended discussion of § 7106(b)(1) indicates that they were very much concerned about protecting managerial prerogatives from mandatory bargaining. “The conferees wish to emphasize ... that nothing in the bill is intended to require that an agency negotiate on the methods and means by which agency operations are to be conducted.” H.R.Rep. 95-1717, 95th Cong., 2d Sess. 153-54 (1978), reprinted in 1978 U.S. Code Cong. & Ad. News 2723, 2887-88 and in Legislative History at 793, 821-22. The concurrence seeks to dismiss this discussion in the conference report by suggesting that it was limited to § 7106(b)(1), but in fact the conferees stated that “nothing in the bill” was to allow intrusions on agency decision-making under the management rights clause.3
Moreover, Representative William D. Ford, another of the majority’s star witnesses, indicated that his “narrow” view of the respective roles of management rights and negotiated procedures was much like the view presented here:
It is our expectation and that of others supporting the substitute’s management rights clause that such a clause will adequately protect genuine managerial pre*448rogatives but that, construed strictly, such a clause will also allow the flexibility that is the hallmark of a successful labor-management program. Thus, although management has the right to direct the workforce, proposals aimed at lessening the adverse impact on employees of an exercise, perhaps arbitrary, of that right are fully negotiable.
124 Cong.Rec. 29199 (1978), reprinted in Legislative History at 956 (emphasis added).
After its foray into the legislative history of the Act, the majority offers several further arguments in support of its position. First, the proposal is not substantive because an arbitrator cannot rule on a matter reserved to management’s discretion. Second, even if arbitrators do make substantive decisions, the Executive Branch can override those decisions by amending the circular. Third, an erroneous decision by an arbitrator will be subject to judicial review.
These arguments disregard the inherently substantive and managerial nature of the decision to contract out; any ruling by an arbitrator in this area infringes management rights. They also disregard the fact that § 7123(a)(1) permits no judicial review of an arbitrator’s decision unless it involves an unfair labor practice. AFGE, Local 1923 v. FLRA, 675 F.2d 612 (4th Cir.1982). A violation of the circular would appear not to fall within the unfair labor practices listed in § 7116(a). Thus, despite the majority’s assurances, an arbitral decision that applied Circular A-76 erroneously would not be subject to judicial review.4
The majority’s suggestion that the Executive Branch amend the circular to correct erroneous arbitration decisions, raises a further question. Suppose the Authority has been permitting arbitrators to rule on a matter reserved to managerial discretion because the Authority understands the matter to be nondiscretionary and hence within the scope of arbitral authority. It is difficult to say what the Executive Branch could put in its circular to change the Authority’s decision. The label given a matter in the circular would presumably not govern. That is, it would, not be enough for the circular to state, “This matter is discretionary; arbitrators should quit deciding it.”
It appears that the majority would not allow the Executive Branch to limit the grievability of the circular in this way. The majority holds, in part III-C of its opinion, that it will not give effect to the statement already in the circular through which the Executive Branch tried to establish an exclusive appeals process. The majority holds that agencies cannot “limit by regulation the statutorily defined grievance procedure of section 7121.” Maj. op. at 439. I am therefore at a loss to see what the Executive Branch could write to keep a part of the circular off limits to arbitrators. At any rate, the majority’s view imposes a burden on the Executive Branch which it should not have and which it does not have under the Act.
B.
Perhaps the most curious aspect of this litigation is that the Authority is seeking to uphold the negotiability of a proposal that the Authority contends to be without any effect. According to the Authority, agency employees can seek review of an alleged violation of Circular A-76 even if the union’s proposal is not adopted. The majority upholds this view in part III-B of its opin*449ion, which apparently renders the rest of its opinion mere dicta. Contrary to the majority’s interpretation, the management rights clause bars such grievances whether they are based on a violation of a labor agreement or directly on a violation of the circular.
Under the majority’s interpretation, the management rights clause limits only the duty to bargain set forth in § 7117; it does not limit the grievance procedures set forth in § 7121. The majority acknowledges a difficulty with this interpretation — i.e., it contradicts the command of the management rights clause that “nothing in this chapter shall affect” the exercise of reserved rights. To avoid this difficulty, the majority purports to find a conflict between the management rights clause and § 7121. It notes that § 7121(a) requires labor agreements to provide grievance procedures “[ejxcept as provided in paragraph (2) of this subsection.” It then suggests that the failure of § 7121 in this passage to refer to § 7106, the management rights clause, implicitly removes § 7121 from the scope of § 7106.
This “conflict” is spurious on its face. A similar version of the quoted passage from § 7121(a) also appears in § 7117(a). Thus, if that language has the significance suggested by the majority, then the management rights clause limits neither grievance procedures nor the duty to bargain. In other words, it limits nothing. There is clearly something wrong here. The obvious solution is to read “nothing in this chapter” as meaning what it says — i.e., that nothing in 5 U.S.C. §§ 7101-35, including both the grievance procedures and the duty to bargain, can affect management’s exercise of its reserved rights. See Defense Language Institute, 767 F.2d at 1402; EEOC, 744 F.2d at 857 (MacKinnon, J., dissenting).
After drumming up a nonexistent ambiguity in the statute, the majority looks next to the legislative history. This history again relies principally on the statements of two members of the House. The quoted statement of Representative Ford was made on October 14, 1978, after the Act was signed into law. Not surprisingly, reliance on these post-enactment comments by Representative Ford has been rejected by the D.C. Circuit. AFGE, Local 225 v. FLRA, 712 F.2d 640, 647 & n. 29 (D.C.Cir.1983). In any event, the statements of the House members are fully consistent with the view of the management rights clause given in part II-A of this dissent; they note simply that the Act expressly provides for the negotiation of procedures by which management will exercise a reserved right. They are not saying that the management rights clause applies unequally to § 7117 and § 7121. The same is true of the Supreme Court case cited by the majority in footnote 15. Cornelius v. Nutt, 472 U.S. 648, 652, 105 S.Ct. 2882, 2885, 86 L.Ed.2d 515 (1985).
The majority also contends that the Act must be construed against the background of the previous labor policy under Executive Order 11491. On this score, the 1971 report of the Federal Labor Relations Council cited by the majority does not at all support the majority’s view of management rights under the Executive Order. Even if it did, however, it would provide no authoritative guidance in the construction of the 1978 Act. The Act is not to be construed as a reenactment of the Executive Order; it is “part of a comprehensive revision of the laws governing the rights and obligations of civil servants.” Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 91, 104 S.Ct. 439, 441, 78 L.Ed.2d 195 (1983). See also id. at 103 n. 13, 104 S.Ct. at 447 n. 13.
At various points, the majority states that the phrase “in accordance with applicable laws” in § 7106(a) encompasses Circular A-76 and at other points that it permits employees to file grievances about any decision reserved to management. I have argued that the phrase has neither effect. It may be helpful, at this point, to define the limitation that the phrase does impose on management rights. The scope of this limitation is evident from the structure of § 7106(a) itself. Of the two parts of § 7106(a), one is limited by “in accordance with applicable laws” and one is not. The first, § 7106(a)(1), concerns the “mis*450sion, budget, organization, number of employees, and internal security practices of the agency.” The second, § 7106(a)(2), concerns a large number of matters, most of them pertaining to the status of individual employees. These include managerial decisions to hire, suspend, discipline, and assign employees.
Congress presumably did not mean to imply that management was free to make § 7106(a)(1) decisions in a completely lawless fashion. What it evidently meant by the distinction is that, in the words of one commentator, “ ‘applicable laws’ in section 7106(a) refers to statutes prescribing employee rights and benefits — particularly procedural rights in conjunction with adverse personnel actions.” Challenges to Contracting Out at 138. In other words, an agency cannot invoke the management rights clause to bar § 7121 grievances concerning matters such as prohibited personnel practices (§ 2302), job performance ratings (§ 4303), and adverse personnel actions (§ 7512). The phrase “applicable laws” does not, however, permit federal employees to grieve unrelated violations of the law, such as an agency’s alleged violation of its budgetary limit, its statutory mission, or the environmental laws. It also does not permit federal employees to grieve violations of Circular A-76.
III.
The Act makes clear that Congress did not intend for labor arbitrators to review contracting out decisions. The majority has not just miscontrued the text of the Act, however; it has also disregarded the policies underlying it. For the government to operate efficiently, disputes about contracting out must be resolved by a body with expertise in the area. These policies are evident in the expedited contract appeals procedure created by Congress in the Competition in Contracting Act of 1984, 31 U.S.C. §§ 3551-56. They are also evident in the expedited appeals procedure set forth by the Executive Branch in Circular A-76 itself. Both the Competition in Contracting Act and Circular A-76 provide for swift, competent resolution of these disputes. The labor grievance process, while appropriate for resolving the disputes that Congress has entrusted to it, should not be extended to encompass contracting out decisions.
Under the procurement protest system established in the Competition in Contracting Act, the U.S. General Accounting Office (GAO) can resolve disputes about government procurements, including decisions to contract out. Within one working day after the GAO receives a protest, it must notify the federal agency involved. 31 U.S.C. § 3553(b)(1). The agency is then required to respond with a report about the matter within 25 days or to request permission for a longer period. 31 U.S.C. § 3553(b)(2). The GAO must normally issue a final decision regarding the protest within 90 days after receiving the protest. 31 U.S.C. § 3554(a)(1). Likewise, under the appeals procedure in the circular, a protest must be received by the agency within 15 working days after the agency releases the documents supporting its cost comparison; if the cost comparison is especially complex, the agency may extend this limit to 30 days. OMB Circular A-76 Supp. at 1-15. The circular requires that the appeals procedure provide a decision within 30 calendar days after receipt of the protest. Id. at 1-14.
In contrast, labor arbitration of contracting disputes can take years. See Challenges to Contracting Out at 141 n. 182. The Blytheville Air Force Base arbitration, discussed in part I-C of this dissent, is an example. Final bids in that case were submitted by March 11, 1982. Id. at 163. The Authority announced its decision reviewing the arbitrator’s award on July 23, 1986, over four years later.
It is thus no surprise that Congress and the Executive Branch wanted to avert labor arbitration of contracting out decisions. “Prompt resolution of government procurement appeals is imperative. Funds must be obligated, if at all, during the fiscal year for which they are appropriated, and undue delay in implementing either a contract award or in-house ... plan may, because of rapidly changing economic conditions, in*451validate the original cost comparison.” Id. at 117 (footnote omitted).
The delay and uncertainty of arbitral review may also cause some firms not to bid on government projects, while others will incorporate the cost of arbitral uncertainty into the contract price. Contractors must commit personnel and other resources to a government project when they receive a contract. Under the majority’s view, however, they face the possibility that the agency’s decision to contract out could be found infirm by a labor arbitrator years after the contract has been in effect. On the other hand, the circular’s appeals procedure merely requires a prospective contractor to extend the bid acceptance period for up to sixty days to cover the appeal period before a contract is finally awarded. OMB Circular A-76 Supp. at IV-3.
Even under the expedited conditions required by the Competition in Contracting Act, the GAO is given only the power to make recommendations and to report to Congress if its recommendations are not followed. 31 U.S.C. § 3554; Delta Data Systems Corp. v. Webster, 744 F.2d 197, 201 (D.C.Cir.1984); see also Ameron, Inc. v. U.S. Army Corps of Engineers, 809 F.2d 979, 994 (3d Cir.1986). Although its recommendations are no doubt given great deference by federal agencies, the GAO does not have the power under the Act to order reconstruction of a decision to contract out. A labor arbitrator’s decision, in contrast, would be binding.
Furthermore, the Supreme Court has recognized that “the specialized competence of arbitrators pertains primarily to the law of the shop.” Alexander v. Gardner-Denver Co., 415 U.S. 36, 57, 94 S.Ct. 1011, 1024, 39 L.Ed.2d 147 (1974). The specialized competence of arbitrators and the Authority does not extend to contracting out.
The GAO is uniquely qualified to make determinations regarding contracting out protests. Management-labor disputes over contracting out should be removed from the realm of collective bargaining agreements, arbitrations, FLRA decisions, and ‘conflicting’ federal court decisions. The latter approach has only produced chaos and inconsistent reasoning from a multitude of forums — none of which possess the GAO’s congressionally mandated authority and recognized expertise in settling government procurement-related protests.
Catania, Contracting Out: Management and Labor at War Under Section 7106 of the Civil Service Reform Act, 16 Public Contract L.J. 287, 295-96 (1986); see also Challenges to Contracting Out at 165.
It has been suggested that the Competition in Contracting Act should be amended by Congress to permit federal employees as well as prospective contractors to lodge procurement protests with the GAO. See Catania, supra, at 296; Challenges to Contracting Out at 164-66. That is for Congress to decide. Our judicial role does not empower us to effect a more drastic result by repealing the management rights clause of the Civil Service Reform Act.
I respectfully dissent.

. Although the issue in these cases is the negotiability of the union's proposal, the Act provides for bargaining impasses to be resolved by the Federal Service Impasses Panel, which can order the adoption of a negotiable bargaining proposal. 5 U.S.C. § 7119. Thus, even if the agency does not consent to incorporate Circular A-76 into a labor contract, the Panel can still order the union proposal to be adopted. In that event, employees would have the right to file grievances claiming that the bargaining agreement was breached on the ground that the circular was allegedly violated.
All this is in addition to the majority’s far-reaching holding, in part III-C of its opinion, that decisions to contract out can be grieved whether the circular is part of a labor agreement or not.

. The majority argues in part III-D of its opinion that we are barred from considering whether the circular is a law, rule, or regulation because the agency failed to raise this question before the Authority. It cites the Supreme Court’s dismissal of certiorari in EEOC to support this view. The application of EEOC is hardly so clear-cut as the majority indicates, however.
First, the agency did present the issue to the Authority in its motion for reconsideration. Although the motion was filed outside the ten day period prescribed by the Authority in 5 C.F.R. § 2429.17, the Authority could have waived the expired time limit pursuant to 5 C.F.R. § 2429.-23(b). For some reason, despite the fact that the grievability of violations of the circular had already been the subject of two conflicting opinions by the courts of appeals and a grant of certiorari by the Supreme Court, the Authority refused to waive the time limit.
Second, as the Court noted in EEOC, the procedural default rule reflects "an intent that the FLRA shall pass upon issues arising under the Act, thereby bringing its expertise to bear on *he resolution of those issues.” 106 S.Ct. at 1680. Here, although the agency failed to present the issue until its motion for reconsideration, the Authority was fully apprised of the issue by the previous litigation surrounding it. While the agency’s failure to raise the status of the circular in a timely manner is unfortunate, I have difficulty understanding why the Authority would not address it when the Supreme Court has already dismissed certiorari to await development of the Authority’s views.
Finally, the Court based its decision in EEOC partly on the fact that the question was raised before neither the Authority nor the court of appeals. 106 S.Ct. at 1681. Here, the agency has briefed the issue for us. That alone might not adequately distinguish EEOC, for the Court based its decision principally on the statutory bar of § 7123(c). This factor is still pertinent, however. The legal status of Circular A-76 is not strictly a matter within the special competence of the Authority to decide in the first instance. In today’s case, unlike EEOC, the issue has been properly and timely presented to the court of appeals, which is no less competent than the Authority to decide it. Cf. National Black Media Coalition v. FCC, 791 F.2d 1016, 1021 (2d Cir.1986); Railroad Yardmasters of America v. Harris, 721 F.2d 1332, 1337-38 (D.C.Cir.1983).

. An additional word about the concurring opinion may be in order. Although the concurrence purports to be construing §§ 7106(a) and 7106(b)(2), it diligently avoids quoting those provisions. Its reluctance to do so is understandable. Contrary to the majority’s and the concurrence’s view that management rights must be construed narrowly, the language of the management rights clause is sweeping.
Like the majority opinion, the concurrence mainly focuses on the “Udall compromise” in the House. The real question, of course, is just what effect that compromise had. Absolutely nothing in the House legislative history, including those portions cited by the majority and the concurrence, states that the compromise requires negotiation and arbitration of agency decisions to contract out. The Act itself — in which the compromise was embodied — compels the opposite conclusion.

. In fact, the courts of appeals have consistently held that an arbitrator’s decision is not subject to judicial review unless an unfair labor practice was a necessary ground for the decision. See U.S. Department of Justice v. FLRA, 792 F.2d 25 (2d Cir.1986); U.S. Marshals Service v. FLRA, 708 F.2d 1417 (9th Cir.1983); Tonetti v. FLRA, 776 F.2d 929 (11th Cir.1985). Even if a violation of Circular A-76 amounted to an unfair labor practice, then, no judicial review would be available. Under the majority’s view, an unfair labor practice would never be a necessary ground for an arbitrator’s decision concerning the circular, because the majority believes that a violation of the circular is always grievable as a violation of a law, rule, or regulation whether it amounts to an unfair labor practice or not.
The presence of a cross-appeal for enforcement under § 7123(b) apparently does not confer jurisdiction on the courts to review an arbitrator’s decision, either. See U.S. Department of Justice, supra.