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Breakout Session # 706, 707 Elizabeth Grant, DLA David Fowler, Raytheon Chris Kopocis, DOD

THE EVOLUTION OF ADR: What’s New, What’s Hot. Breakout Session # 706, 707 Elizabeth Grant, DLA David Fowler, Raytheon Chris Kopocis, DOD Date: April 27, 2004 Time: 1:30 p.m. – 3:45 p.m. Overview of ADR in DOD. Decentralized programs meet the unique needs of a Component’s mission

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Breakout Session # 706, 707 Elizabeth Grant, DLA David Fowler, Raytheon Chris Kopocis, DOD

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  1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  2. THE EVOLUTION OF ADR: What’s New, What’s Hot Breakout Session # 706, 707 Elizabeth Grant, DLA David Fowler, Raytheon Chris Kopocis, DOD Date: April 27, 2004 Time: 1:30 p.m. – 3:45 p.m. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  3. Overview of ADR in DOD • Decentralized programs meet the unique needs of a Component’s mission • Coordination provided by DOD General Counsel • ADR successfully used in all types of acquisition disputes NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  4. Current Themes:General • Efforts to build a relationship with industry pay off • Regulations mandating ADR consideration emphasize commitment to resolution • The sooner ADR is used after a dispute arises, the better NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  5. Current Themes:Flexibility • An ADR coordinator can serve to encourage the flexible use of ADR tools and techniques • Parties should feel free to develop a case specific mediation process • Watch “bureaucracy creep” NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  6. Current Themes:Mediation-Specific • Customized mediation agreements can identify “log jamming” issues • Discovery for mediation is similar to discovery for trial • Preparing the client for mediation is similar to preparing the client for litigation • Those with authority to settle must be at the mediation NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  7. Moving ADR “To the Left” • Increasing emphasis on doing ADR as soon as possible, especially pre-litigation • Focus on “dispute avoidance” and “EDR”: early dispute resolution • More opportunities early, though traditionally less used. (More interest later in the process, with fewer opportunities) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  8. ABA Task Force on Early Dispute Resolution • Survey of existing mechanisms for dispute avoidance and EDR • Resulting monograph: “An Ounce of Prevention: Best Practices for Dispute Avoidance for Government Contracting” (2002) • Available techniques - partnering agreements - dispute review boards - issue escalation clauses NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  9. Issue Escalation Clauses • Clauses identifying a dispute resolution process of increasing seniority, culminating if necessary with ADR • Provides internal mechanism, independence, business decision • Inexpensive and flexible; well-suited to a wide variety of contracts NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  10. Think Broadly • Disputes/ADR not limited to docketed litigation or even certified claims • Examples: Congressional Inquiries - quick response offering ADR - avoids “dispute by correspondence” - meets all parties’ interests - avoids defensiveness NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  11. Institutionalizing ADR • Need process mechanisms to realize benefits of ADR, turn theory into practice • Examples: processes related to other parties (contract processes); internal processes NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  12. Contract Processes • Add dispute avoidance and EDR as part of post-award orientations; and follow up! • Add ADR in standard language inserted in claims, or agency CO final decisions • Create (and use!) ADR evaluation forms for protest and ASBCA litigation NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  13. Contract Processes, Continued • Adopt policies for use of ADR at GAO - outcome prediction ADR - negotiation assistance - other - process as well as substance • Provide ADR assessment/offer as part of ASBCA litigation (Air Force example) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  14. Internal Processes: Training • Training for lawyers: initial, follow up • Training for clients • Creative training - “second chair” approach - rotation programs (internal and external) - OJT NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  15. Internal Processes, Continued • Metrics: a challenge! - how many - what result - dollar savings - visibility/reporting NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  16. Internal Processes, Continued • Integrate ADR in Position Descriptions and Performance Standards • Management Expectations: require ADR as part of good staff work • Rewards or recognition (attorneys, contracting personnel, teams) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  17. ADR in Aerospace/Defense Industry • ADR accepted and ingrained in aerospace/defense industry • Most popular: - mediation - non-binding arbitration - arbitration • Satisfaction with ADR; use of ADR stabilizing NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  18. Current Status/Themes • “umbrella agreements” • increasing use of mediation and non- binding arbitration clauses in standard terms and conditions • exploration of use of ADR techniques in prime-sub disputes, even when not required by contract NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  19. Key Issues • ADR is faster and often cheaper, but not always • ADR as a two-way street: do parties, especially the Government, use ADR less when they are right? (e.g., contractor fraud/misfeasance) • Issues related to ADR in classified contracts - confidentiality concerns - exchange of information NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  20. “Dispute-Wise Companies”AAA Study, 2003 • Relationship of legal office to the company: - highly integrated into corporate planning - understand broader business issues - focus on complex/technical issues - involved in cross-border, international disputes - no aggressive litigation culture NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  21. “Dispute-Wise Companies” • Corporate views: - strong internal and external business relationships - appreciate value of ADR from business perspective - have lower cost legal dept. budgets - use legal resources effectively NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

  22. Selected ADR Resources • General: www.adr.gov • DLA: www.dscc.dla.mil/offices/legal/adr/adr.html • Air Force: www.adr.af.mil • Navy: adr.navy.mil • FAA: www.faa.gov/agc/odra NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

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