FEDERAL PROCUREMENT ADR OVERVIEW Presented byHonorable Candida SteelChair, Department of InteriorBoard of Contract Appeals Mr. David Emmerson Department of the Interior, Office of Collaborative Action and Dispute Resolution April 1, 2003
TOPICS • ADR – Relevant Statutes and Regulations • Federal Interagency ADR Working Group • DOI Policy and Role of CADR office • Bid Protest ADR • Contract Dispute ADR • ADR Processes • DOI plans for the future – your role
ADR Statutes and Regulations • Administrative Dispute Resolution Act of 1996 (“ADRA”) - Requires each Federal agency to: -Adopt a policy on the use of alternative means of dispute resolution (DOI policy since 1994) -Designate a senior official to be the agency’s dispute resolution specialist, responsible for implementation of the Act and the agency’s policy (Elena Gonzalez, Director of CADR, is DOI’s Dispute Resolution Specialist) -review each standard agreement for contracts, grants and other assistance to determine whether to amend such standard agreements to authorize and encourage the use of alternative means of dispute resolution
ADR Statutes and Regulations • ADRA of 1996 - Authorizes use of either federal (internal) or private (outside) compensated neutrals - Specifies factors to consider for not using ADR - Authorized use of binding arbitration based on agency guidance formulated with Justice Department input - Called for President to establish an “interagency committee” to facilitate ADR use - Set forth ADR confidentiality requirements for parties as well as for ADR neutrals
ADR – Statutes and Regulations • Contract Disputes Act (“CDA”) (41 U.S.C. §605) • Expressly permits use of voluntary ADR for dispute resolution under the CDA • Requires the Government to provide written justification for rejecting a contractor request for ADR
ADR – Statutes and Regulations • Federal Acquisition Regulation (“FAR”) • Section 33.204 sets forth as Government policy the encouragement of ADR use “to the maximum extent practicable” • Section 33.214 implements the ADRA as well as the requirement of CDA Section 605 for written justification for rejection of a contractor request for ADR
Interagency ADR Working Group • President’s Memorandum to Agency Heads dated May 1, 1998 • Established the Interagency ADR Working Group under the Attorney General pursuant to the ADRA’s requirement for an “interagency committee” • Authorized establishment of “subgroups” for “subject areas”
Interagency ADR Working Group • President’s Memorandum to Agency Heads dated May 1, 1998 • Called for Interagency ADR Working Group to facilitate • development of agency ADR programs • ADR awareness and skills training • development of procedures for expedited procurement of ADR neutrals services • evaluation of ADR benefits
Interagency ADR Working Group • DOI has a member of the Interagency ADR Working Group Steering Committee since 1999 and the Secretary designated Elena Gonzalez to represent DOI • Items developed by the Interagency ADR Working Group Steering Committee under the auspices of the Federal ADR Council and posted on the Working Group website (http://www.adr.gov) include: • ADR Confidentiality Guidelines • Core Principles for Federal Workplace ADR • Handbook entitled “Developing Guidance for Binding Arbitration”
Interagency ADR Working Group • 4 Sections established by Interagency ADR Working Group by subject matter: 1. Contracts and Procurement 2. Workplace 3. Civil Enforcement and Regulatory 4. Claims Against the Government -DOI’s application of ADR processes is broader than these sections and that is recognized by the Interagency ADR Working Group Steering Committee – e.g. collaborative decision-making on natural resource issues
Interagency ADR Working Group • Contracts and Procurement Section of Interagency ADR Working Group: • Co-Sponsors Procurement ADR Seminar Series with the American Bar Association • Initiation and Coordination of the Office of Federal Procurement Policy (OFPP) Procurement ADR Awards Program • Development and Maintenance of the “Electronic Guide to Federal Procurement ADR” – http://www.adr.af.mil.iadrwg
Interagency ADR Working Group • Contract and Procurements Section • “Electronic Guide to Federal Procurement ADR” includes sections on • ADR Program Design • Administering the ADR Process • ADR Training • ADR Neutrals • Agency ADR Profiles • List of ADR Mentors • Sample ADR Forms • Links to Federal ADR Websites
DOI’s ADR Policy • DOI published a final policy on the use of ADR in August of 1996 – it is currently being updated to reflect developments since 1996, such as establishment of CADR office and the Interior Dispute Resolution Council • DOI’s policy encourages the broadest possible use of ADR processes, consensus-building techniques and negotiated rulemaking to prevent and resolve disputes whenever practicable and consistent with existing law and the missions and resources of the Department
Goal of DOI’s ADR policy • The goal of the Department’s ADR policy is to: • improve the efficiency and effectiveness of our operations, • improve communication internally and externally, • and strengthen working relationships with our customers and constituents, industry, private organizations, local communities, and the other Federal, State, Tribal, and local government entities with which we interact in our work.
DOI Policy and CADR office • The Department’s policy encourages use of these tools to manage conflicts that arise in all areas of the Department’s work, including: - workplace/employment concerns - programmatic issues related to bureau and office missions (wide range of applications, such as land management, water disputes, and civil enforcement) - negotiated rulemaking and public policy dialogues - procurement ( this will be our focus today)
CADR office • During 2001, the Acting Assistant Secretary for Policy, Management and Budget, requested a Department-wide review of ADR use since establishment of the DOI policy in 1994. • A cross-functional team was established to conduct an internal review across all areas of the Department and to benchmark 26 other Federal agencies. • A Report was issued in July of 2001, on “ADR at a Crossroad at DOI”, with findings and next step recommendations. The report is available at www.doi.gov/cadr.
CADR office • As a result of this review, the Secretary established the Office of Collaborative Action and Dispute Resolution within the Office of the Assistant Secretary for Policy, Management and Budget in October of 2001. • This goal of this office is to foster a culture and a climate where the use of collaborative processes and alternative means of dispute resolution become standard business practice throughout the Department, and conflicts are prevented or resolved at the earliest opportunity and the lowest possible level in all areas of the Department’s work.
Objectives • The appropriate and effective use of ADR and collaborative and consensual approaches to planning, problem-solving and decision-making can: • save time associated with conflict • Reduce direct and indirect cost associated with conflict • Produce more equitable and durable solutions and policies • Improve communication and strengthen relationships
CADR office • For more information on the work of the CADR office and the Interior Dispute Resolution Council, please visit our website at www.doi.gov/cadr. The site is undergoing a major overhaul and we welcome your suggestions and input.
Bid Protest ADR • At the GAO • “Outcome Prediction” • Negotiation Assistance (Facilitative Mediation) • At the U.S. Court of Federal Claims • Agency Based Protest Procedures • Contemplated by the FAR • The FAA ODRA (not governed by the FAR) • Uses ADR as its primary means of dispute resolution and resolves 58% of all bid protests filed by means of ADR within 25 calendar days • Unlike GAO, the FAA ODRA itself initiates the idea of voluntary ADR and uses ADR neutrals who do not participate in the adjudication of protests
Contract Dispute ADR • At the U.S. Court of Federal Claims – Pilot Program • At the IBCA • Types of ADR currently offered: Mediation; Early Neutral Evaluation/Settlement Judge; Summary Trial with Binding Decision • Available Neutrals • IBCA Judges as ADR Neutrals • Other BCA Judges as ADR Neutrals (BCA ADR Sharing Arrangement) • Outside Compensated Neutrals (CADR office maintains information on qualified neutrals and provides guidance on how to select and procure the services of an outside neutral) • Stipulated Judgments and access to the Judgment Fund • Pre-”Dispute” ADR/Dispute Avoidance
The ADR Process • Deciding on ADR Use – parties must jointly determine whether an ADR process is appropriate and which process will meet their needs • ADR Players and Roles • The ADR Agreement • Preparing for ADR • Deciding to Settle • Memorializing the Settlement Agreement
The ADR Process • Deciding on ADR Use • ADRA of 1996 • DOI Policy and Guidelines • DOJ Guidelines
The ADR Process • ADR Players and Roles • Contracting Officer: retains authority to negotiate/settle • Legal counsel: • Provides advice on legality • Provides assessment of litigation risk • Helps determine whether ADR is appropriate • Helps present issues and facts • Helps prepare settlement agreements
The ADR Process • ADR Players and Roles • The ADR Neutral: • Assists parties with formulation of ADR process/procedures • Counsels parties on efficient use of fact-finding and discovery in advance of ADR proceedings • May provide evaluation of merits if desired by parties – including views on strengths and weaknesses of parties’ respective positions, should the matter be litigated • Focuses the parties’ attention on the issues requiring resolution and may narrow the scope of litigation • Facilitates and maintains discussion/negotiation • May recommend settlement scenarios with agreement of the parties
The ADR Process • The ADR Agreement – Parties’ agreement to use ADR process • Written agreement highly desirable • Identifies ADR Neutral, his/her role, and how Neutral is compensated (not applicable to IBCA Judges) • Spells out process/procedures to be used • Sets timetable for submissions and proceedings • Provides for termination of ADR process • Provides for bounds of ADR confidentiality and how materials may be used if matter ultimately requires litigation
The ADR Process • Preparation for ADR • Fact-finding/discovery – ADR Neutral’s assistance in helping the parties to streamline the process • Defining issues to be resolved – ADR Neutral can play an important role in helping the parties • Designation of negotiation principals with settlement authority – critical for successful negotiation process • Prepare/submit brief position statements in advance of ADR proceedings – crystallize the reasons for positions taken; incorporate “key” documents
The ADR Process • Deciding to Settle • Risk assessment is essential – roles of legal counsel and ADR Neutral • Evaluation of Costs & Benefits – Consider: • Relative strengths and weaknesses of positions, both on specific claims and overall • Costs of litigation in terms of dollars, time and diverted resources (impact on the Agency’s program) • Benefits of settlement in terms of maintaining cordial business relationships, particularly where contract is ongoing
The ADR Process • Memorializing the Settlement • Require a written settlement agreement • Have parties sign a preliminary agreement (Memorandum of Understanding) before leaving the ADR session • Adapt available form agreements (see “Electronic Guide”) • Make sure signatories have authority • Funding – Contract Modifications and/or Use of Stipulated Judgments and the Judgment Fund
Where do we go from here? • The Office of Collaborative Action and Dispute Resolution will be working with the Interior Board of Contract Appeals and the Office of Acquisition and Property Management to design a flexible and effective conflict management system to promote the appropriate use of ADR processes to address conflicts that arise in the Department’s procurement and grants work. • We will need your input and assistance to be successful. Dee Emmerich in the PAM office represents your interests on the Interior Dispute Resolution Council. Please feel free to communicate with her or with either of us.