During collective-bargaining negotiations, respondent National Treasury Employees Union (NTEU) proposed that contractual grievance and arbitration provisions be designated as the "internal appeals procedure" required for employee complaints by an Office of Management and Budget (OMB) Circular relating to the "contracting out" of work. Petitioner Internal Revenue Service (IRS) refused to bargain over the proposal, claiming that its subject matter was nonnegotiable under Title VII of the Civil Service Reform Act of 1978 (Act), 5 U.S.C. 7101 et seq. The Federal Labor Relations Authority (FLRA), which is charged with administering the Act, held that the IRS was required to negotiate over the NTEU proposal by 7114, which requires agency management and employee unions to bargain in good faith to reach an agreement, and by 7121, which specifies that such agreements must contain grievance-settlement procedures.

Held:

The FLRA erred in holding that the Act requires the IRS to bargain over the NTEU proposal. Pp. 926-934.

(a) The plain text of 7106(a)(2)(B) - which pro