2001 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding the payment of arbitration and mediation services (collectively, “arbitration services”) acquired pursuant to a VA Collective Bargaining Agreement (CBA).

Key points covered in this chapter:

• In instances where a CBA has stipulated the requirements for use of arbitration services, VA Form 1358 (for users in VA’s legacy accounting system) or non-contractual obligation document type (for users in VA’s modern accounting system) may be used to record the obligation in VA’s accounting system; and
• The use of a miscellaneous vendor code is not permitted for arbitration obligations. Arbitrators must be individually vendorized.

2002 Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	New policy	OFP	New policy	July 2025

2003 Definitions

Arbitration – A dispute-resolution process in which the parties select a neutral third party to resolve their claims.

Collective Bargaining Agreement (CBA) – A legally binding agreement between a union representing employees and their employer that covers terms and conditions agreed upon for a variety of employment matters.

Obligation – A legally binding agreement that will result in outlays, immediately or in the future. An obligation is a legal liability of the Government against an available appropriation.

2004 Roles and Responsibilities

Administration and Staff Office Chief Financial Officers (CFOs) are responsible for ensuring the proper processing of arbitration service payments in accordance with the guidelines in this policy.

2005 Policies

200501 General Policies

1. In accordance with 5 U.S.C. 7101, some VA employees may organize, bargain collectively, and participate through labor organizations of their own choosing.
2. VA’s Collective Bargaining Agreements (CBA) must provide procedures for the settlement of grievances (i.e., negotiated grievance procedures) that will allow any grievance not satisfactorily settled under the negotiated grievance procedure to be subject to binding arbitration.
3. When arbitrator services are used as part of CBA related binding arbitration, VA and the labor union select an arbitrator pursuant to the procedures set forth in their CBA. Generally, this involves selection of an arbitrator from a roster of arbitrators provided by the Federal Mediation and Conciliation Service (FMCS). In addition to the selection process, the CBA will usually specify payment terms (e.g., VA and the labor union both pay half the total cost, or the losing party pays).        
4. Arbitrators are considered “learned professionals” as defined by 29 C.F.R. § 541.301, and, as such, shall be excepted from the requirements of the Service Contract Labor Standards (SCLS) act.
5. When an arbitrator is used in conformance with collective bargaining agreements, VA will record an obligation for the full amount that VA expects to pay the arbitrator.
6. The obligation will be recorded at the time VA enters into an agreement for arbitration services.
7. The amount of the obligation will be periodically (e.g., every 90 days) adjusted based on the actual cost of arbitration services provided.
8. Obligations pursuant to this policy must follow the requirements for all government obligations, established in Volume III, Chapter 2 – Obligations.
9. The government purchase card (GPC) is the preferred method of payment for arbitration services up to $50,000 per the Class Deviation to FAR 2.101 with Respect to Federal Acquisition Regulation (FAR) 13.301, Governmentwide Commercial Purchase Card. See Volume XVI, Chapter 2 – Government Purchase Card for Micro-Purchases for additional information.
10. Documentation required for arbitration obligations includes the arbitrator’s fee schedule at the time of selection and scheduling.
11. Arbitrators must be vendorized; the use of “Miscellaneous Vendor” is not permitted on obligation documents for arbitration services.

200502 Integrated Financial and Acquisition Management System (iFAMS)

1. When recording an arbitration obligation in iFAMS, an OSE document (Standard Obligation (non-acquisitions obligation)) or OPE document (Purchase Card Order) must be used.
2. Approved document types PAI (Invoice Payment and Processing System (IPPS) standard payment) or PAE (Payment Authorization) must be used when recording the payment in iFAMS.

200503 Financial Management System (FMS)

1. When recording an arbitration obligation in FMS, a miscellaneous obligation document (e.g., 1358), purchase card order, or standard procurement contract/obligation may be used.
2. When using the miscellaneous obligation, approved use / authority code “20” must be used when recording the obligation in FMS.
3. Payment will follow the standard process for submitting an invoice through the Invoice Payment and Processing System (IPPS).

2006 Authorities and References

• Public Law 80-101, Labor Management Relations Act of 1947
• 5 U.S.C. Chapter 71, Labor Management Relations
• Code of Federal Regulations (C.F.R.)
  • 29 C.F.R. Part 1404, Arbitration Services
  • 29 C.F.R. Part 541.301, Learned Professionals
• Memorandum: Federal Acquisition Regulation (FAR) Class Deviation to FAR 2.101 with Respect to FAR 13.301, Governmentwide Commercial Purchase Card
• VA Financial Policy
  • Volume III, Chapter 2 – Obligations
  • Volume XVI, Chapter 2 – Government Purchase Card for Micro-Purchases

2007 Rescissions

None