MVS Wins Important Ruling on Subcontracting

November 1, 2016

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(This article first appeared in the November-December 2016 issue of The American Postal Worker magazine.)

It’s no secret that the APWU has been frustrated over the Postal Service’s repeated violations of Article 32.2 of the Collective Bargaining Agreement, which governs subcontracting in the Motor Vehicle Service Craft. The membership as a whole has felt as though compliance with Article 32 was nonexistent. And while the APWU filed multiple grievances concerning the subcontracting of our work, it often seemed there was no light at the end of the tunnel.

The APWU’s concerns were not without cause. Years ago, Arbitrators Richard Mittenthal and Carlton Snow ruled that Article 32 is a procedural provision, requiring only that the employer give “due consideration” to five factors before subcontracting. In the eyes of these arbitrators, the Postal Service’s obligation related primarily to the decision-making process.

However, the 2010-2015 Collective Bargaining Agreement (CBA) and the “Contracting or Insourcing of Contracted Services” Memorandum of Understanding (MOU) made cost the primary factor.

Arbitrator Stephen Goldberg reinforced that principle in a 2013 ruling on a grievance protesting management’s attempt to contract out all Postal Vehicle Service operations in California. Arbitrator Goldberg wrote, “The Postal Service can no longer justify contracting out work that would be less expensive to keep in house on the ground that it has given due consideration.”

Despite the teeth that the language in the 2010 CBA gave the union, management’s failure to properly notify the union of subcontracting remained a source of conflict. The Postal Service has consistently found it difficult to follow a process, whether established through its own handbooks and manuals or through collective bargaining. The process outlined in Article 32 was no different; as far as management was concerned, Article 32 might as well not existed.

Finally Hits a Snag

On April 19, 2011, the APWU filed a dispute before Arbitrator Shyam Das alleging that the Postal Service had continuously violated the provisions of Article 15 and 32 by failing to notify the union of Highway Contract Route (HCR) renewals or by notifying the national union after the renewals had been let.

The union cited 212 violations in 2010 alone and asserted that this could not be considered “an isolated incident,” as the Postal Service had claimed in a well-known 2004 St. Petersburg case.

The union contended there was a systemic and pervasive failure by the Postal Service at the national level to provide the required notice in hundreds of cases. The Postal Service knowingly and repeatedly violated Article 32.2, blatantly abrogating the contract.

Light at the End of the Tunnel

After months of waiting for a decision on the case, on Aug. 18, Arbitrator Das ruled that the Postal Service violated the Collective Bargaining Agreement by notifying the union of subcontracting awards after they had been let. He ordered the Postal Service to cease and desist such violations and to comply with the notification and procedural provisions of Article 32.2.B before it awards HCR contracts. Arbitrator Das further directed the Postal Service to comply with the following remedy:

  1. Within six months of the date of this Award (unless otherwise agreed), the Postal Service shall convert the 110 (or whatever number there continue to be) disputed routes remaining in service (out of the original 212 cited violations) to PVS service for a four-year period.
  2. By agreement, the parties may substitute other route(s) to be converted to PVS service pursuant to this order based on particular circumstances.
  3. Arbitrator Das retained jurisdiction to resolve any matters relating to implementation of the remedy.

The MVS Division officers believe that this is a significant award for the craft.

The Fleecing of the VMFs

Waste, fraud and abuse have been running rampant recently in subcontracted vehicle maintenance repairs.

Union members have informed the MVS Division officers that work coming back from contractors has been shoddy, and, in some cases, contractors have charged the Postal Service for repairs that were not done. And work is being subcontracted without VMF managers first doing a fair comparison of all reasonable costs, in violation of the Collective Bargaining Agreement.

During contract negotiations, MVS Craft officers learned of a big-time subcontractor whose garages appeared to be involved in fraud and performing shoddy work. The contractor had repair shops along the eastern seaboard and in the Midwest, where he had taken over repairs for the VMFs.

APWU officers brought the allegations to the attention of Postal Service officials during negotiations, but the complaints seemed to fall on deaf ears.

Auto-Repair Mogul Accused of Running $30 Million Repair Scam

On Sept. 3, the New York Post published the following exposé about the very same contractor:

“A New York auto-repair magnate has been getting rich off taxpayers by billing for work on US Postal Service trucks that were returned with shoddy repairs or no repairs at all, Manhattan federal prosecutors said on Friday.

“Ibrahim ‘Tony’ Issa, who owns First Star Auto Repair in The Bronx and shops in Florida, Michigan and Texas, has been generating a steady flow of business by bribing USPS vehicle managers with fancy dinners, vacations and other gifts, prosecutors said.

“In exchange, Issa, of Poughkeepsie — who raked in $30 million from USPS in 2012 — billed for work that was not needed or not done, according to the complaint.

“Issa’s shoddy work led to complaints in 2013, prompting the Office of the Inspector General to send two vehicle managers to investigate undercover.

“Issa, 54, allegedly gave the cooperators a $650 steak-and-crab-legs dinner, a tablet computer, two bottles of Johnnie Walker Black and $2,000 tucked into a napkin at a restaurant in Chinatown. He faces up to 25 years in prison for bribery and theft.”

Please help. We are continuing to address fraud and corruption in both VMF and HCR subcontracting practices. If you see suspicious activity, don’t be silent: Say something!

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