Meeting Minutes

Contracts & Procurement Section

Alternative Dispute Resolution Inter Agency Working Group

Meeting No. 4

19 May 99

Program & Process Design

The Contracts and Procurement Section session, AProgram Design,@ was held on 19 May 99 in the Crystal Gateway Marriott, Arlington, VA. Brig Gen Frank Anderson, Deputy Assistant Secretary of the Air Force (Contracting), chaired the meeting. The meeting convened at 9:00 a.m and closed at 12:00 p.m.

Opening Remarks - AMoving Forward: Program & Process Design@

Brig Gen Frank Anderson, Deputy Assistant Secretary of the Air Force (Contracting), welcomed all the participants to the fourth Contracting and Procurement Section Interagency Working Group (IAWG) meeting. Gen Anderson applauded the outstanding progress all agencies are making in the Contracting and Procurement area of ADR. He stated this progress is a direct reflection of the outstanding leadership exhibited by all agency members. Brig Gen Anderson reviewed the major upcoming milestones by highlighting the 16 Jun 99 Success Matrix Update, the 2 Jul 99 Agency Self-Evaluations, the 21 Jul 99 Agency Evaluations & Final Report Review, and the 1 Sep 99 due date for the Final Report to the Department of Justice (DOJ). He noted the two biggest products are the Acquisition ADR Guide for Federal Agencies and the Final Report to the DOJ. He stated there may be some flexibility in the schedule at the end if the Final Report due date is extended to 30 Dec, but he needs everyone=s continued support to complete this important document. He stated the draft guide (Internet and hard-copy version) is coming along well, and he is pleased with the effort to ensure this is a quality product. Another area Gen Anderson asked the group members to focus on is obtaining Agency Pledges signed by their senior leadership. He indicated the signature on that document reflects the first step in the pursuit of a culture change receptive to the use of ADR. He offered his time to visit personally with any agency leader to facilitate the execution of this crucial step. The added Agency Pledge will go on the website (http://www.financenet.gov/financenet/fed/iadrwg/contracts.htm) to download. He also encourage all members to update the ADR Success Matrix to reflect the outstanding process being made by their respective agency. Gen Anderson indicated everyone should take a look at the website; it is healthy and contains a wealth of information and documentation to assist them in establishing their programs. He re-emphasized his availability to meet with any agency lead to continue the outstanding momentum generated by this group.

Department of Justice Progress Review

Mr. Jeff Senger, Deputy Senior Counsel for Dispute Resolution, Department of Justice, indicated Alternative Disputes Resolution is one of the most significant initiatives currently in effect in the Federal Government today. He lauded Brig Gen Anderson=s leadership and commitment in the Contracts & Procurement Section. He indicated the Procurement ADR Electronic Federal Guide and the other unique initiatives of the Contracts & Procurement Section will be valuable tools for all members.

Mr. Senger described how the Administrative Dispute Resolution Act of 1996 and the May 1, 1998 Presidential Memorandum promoted the use of ADR and established the Working Group. He echoed Gen Anderson=s comments about the utility of the website as a very good source of ADR information. He indicated the website is currently one of the busiest with over 12,000 hits to date. He stated the website includes many significant documents such as the Policy Statement; the Presidential Memorandum; and the Administrative Dispute Resolution Act. He added there are section PowerPoint slides and meeting minutes, an internet mailing list, and the ability to send e-mail messages to members to ask ADR questions. Individuals can also participate in posting comments or questions in the Forum section of the website. Mr Senger also indicated the Office of Dispute Resolutions also makes house calls and they are available, upon request, to visit agencies to discuss ADR. He concluded by challenging the members to keep up the good work in institutionalizing the ADR concept within their respective agencies.

Program Design

Mr. Frank Carr, Chief Trial Attorney, U.S. Army Corps of Engineers, presented the Program Design concept. He stated this concept will be addressed in the Procurement ADR Electronic Federal Guide. Mr. Carr indicated to initiate a contract program design there must be a change in culture to support this type of resolution, an agency champion, and a design team. The change in culture must reflect a commitment to move from an adversarial, litigation environment to one that seeks to resolve disputes innovatively by alternative means. The agency champion, preferably the top agency official, must make a commitment to making ADR work and commit resources necessary for its implementation. The design team should not consist of attorneys only. Individuals, such as contracting officers, engineers and other stakeholders need to be a part of the process. Mr Carr continued and described the six step plan to program design; Needs Analysis, Program Design, Training and Education, Pilot Program, Program Implementation, and Program Evaluation.

An agency must define its interests and the value of an ADR program when conducting a needs analysis. Mr Carr added they should review the current dispute system, current resource costs, the various ADR techniques applicable, the available ADR resources, and any potential resistance to an ADR program. He added the design group must develop policy, procedures, goals and a purpose when designing a program. Additionally, he indicated agencies should consider drafting solicitation clauses expressing their interest in using ADR. Mr Carr revealed there are many sources available for the use of Neutrals, such as the Board of Contract Appeals, and contractors may have valuable input in this area. He strongly emphasized the criticality of training all key players from the top agency official, to the design team and users of the ADR process on the range of available techniques.

Mr Carr advised prior to full implementation of a ADR program, agencies should first conduct a pilot test program to collect lessons learned. Once an agency is ready to implement an ADR program, he re-emphasized the need for a senior official to advocate the program and to assign a program manager to manage and execute the program. Issues such as funding responsibilites should be addressed upfront. He added it is important to publicize your success stories. The final step in the design program is to evaluate your program to ensure continued effectiveness and efficiency.

Program Design Panel Discussion - Chaired by Ms Pat Sheridian, Department of Veteran Affairs

Panel Members: Colonel John Long - Defense Logistics Agency (DLA)

Mr Jeff Domber - GSA

Ms Mina Raskin - Bureau of Federal Prisons

Colonel Chip Reston - US Army

DLA Program

Col Long stated the DLA Program is one of the older programs. The formal program began in 1992 with the signing of a DLA instruction. The program is one of evolution and the IAWG initiatives are forcing it toward a more formal design. The DLA program began with a lawyer-driven process to a practice group. ADR has been effective in DLA, however because DLA is such a diverse organization it has been difficult for the practice group to influence the entire agency. DLA is currently in the process of finalizing a final design program and because the agency is a business-driven organization, the goal of the DLA General Counsel is for it to take the lead in the ADR process.

GSA

Mr Domper indicated like many civil service agencies, GSA has to convince customers they provide quality services. He added upper management is supportive in focusing on innovative efforts to prevent disputes. The GSA Administrator signed a policy statement establishing agency policy to utilize ADR to resolve disputes. Training was the key in GSA to change long-standing attitudes. Legal personnel, contracting officers, supervisors and other stakeholders were trained on the purpose and usefulness of ADR techniques. After training was well-received a roadmap for GSA clients was developed. One other key aspect to the GSA program is personnel appraisal criteria was changed to reflect the importance of using ADR techniques.

Bureau of Federal Prisons

Ms Raskin informed the members her agency has a large construction program and that is where most of the disputes occur. Her agency works diligently to resolve disputes before they happen. They realized by distributing information nothing really happens. Therefore, they established a design team to get ADR implemented and involved all stakeholders in the process. She stated she worked in construction in a non-legal capacity which facilitated her ability to identify the right stakeholders to ensure the success of their program.

U.S. Army

Col Reston described the Army=s three distinct types of acquisition and how ADR is used as a tool to bring the commanders back to look at business concerns. The Assistant Secretary of the Army (Research, Development & Acquisition) signed out a policy letter advocating the use of ADR techniques. He added Mr Frank Carr and Mr Joe McDade, Air Force Deputy Dispute Resolution Specialist, provided invaluable assistance training legal and senior acquisition personnel, and a lot of training has occurred at acquisition command conferences.

Open Discussion

Lively, productive discussions occurred throughout the panel discussion relative to the IAWG=s role in defining the ADR structure, when ADR begins, and ensuring there is flexibility in the ADR program for effectiveness and efficiency. Some members felt due to the diversity of individuals organizations, the IAWG should refrain from telling organizing how to structure their programs. Agencies should incorporate a program conducive to their organizations. Gen Anderson added, ADR is a growth process in all agencies and there should be room for growth with the infrastructure and resources available. Some individuals stated ADR is not meant to supplement negotiations, but could be used effectively when negotiations breakdown. Whether considered a tool or process, ADR techniques should be defined upfront and contractors should be included.

The ADR Process - Process Design - Mr Anthony Palladino,

Associate Chief of Counsel and Director FAA Office of Dispute Resolution for Acquisition

Prior to beginning his presentation, Mr Palladino informed the members all task forces have provided inputs to a portion of the ADR Guide. The projected schedule is to have the Guide available to all federal procurement personnel on the website by early Jul 99.

Mr Palladino revealed there are many different views on ADR usage and when deciding whether to use ADR one must consider the Administrative Dispute Resolution Act of 1996 and the DOJ Guidelines. He did add the DOJ Guidelines are not mandatory. When choosing a form of ADR you must decide if the decision will be binding or non-binding. For binding decisions, agencies must obtain prior approval from the DOJ. One also must consider the role of the legal counsel in ADR. The decision-making authority should remain with the Contract Manager or the IPT with the legal counsel providing advisory legal assistance. It is preferable to put ADR agreements in writing with specific procedures and information on selecting and compensating neutrals. Confidentiality in ADR is key, and when choosing an ADR Neutral one must consider his or her reputation, experience, and knowledge. Board or Contract Appeals Judges are good sources to consider. In preparing for an ADR, agencies should designate a principal, develop factual and legal issues, document exchanges and discoveries, and prepare position statement. When deciding to settle, it is important to evaluate all potential costs and benefits. When settlement is reached, Mr Palladino stressed they should be in writing, the signatories should have authority, and any preliminary settlement should be signed before leaving the ADR session.

Mr Palladino advised there are many methods to measure the success of a ADR program. Agencies could compare settlements to risk analysis or claims. Agencies can also compute savings as compared to further litigation costs or negative impacts to continue litigation on the current program or other work.

Personal Observations - Mr Bill Sheehan, FAA (title/name?)

Mr Sheehan stated ADR does not generate spontaneously; it must be aggressively pursued. He also added ADR is not free. Agencies must dedicate resources and knowledge personnel to make it work. If using agency attorneys as neutrals there must be a physical separation from the agency to maintain credibility. He stated it is preferable to meet with principals without attorneys present. It is important to attempt to resolve issues at the lowest level, but if protesters would like to meet with higher-level procurement personnel, allow them to do so to build trust and confidence.

Closing Remarks - Brig Gen Frank Anderson

Gen Anderson praised the group for such a great dialogue and exchange of information. He added it is important to discuss issues from different perspectives to gain a complete view of the ADR. He stated today all members learned a lot about activities occurring in various organizations, and encouraged everyone to update the ADR Success Matrix to reflect the work that has been accomplished. He added if anyone needs any information or documentation such as the Agency Pledge or Success Matrix, check the website or contact Lt Col Shelly Kalkowski at (703) 588-7080 (e-mail address: Kalkowsm@pentagon.af.mil).

Gen Anderson closed the session by thanking everyone for their outstanding participation.

Minutes taken by Major Ronnie L. Vinson, USAF, Air Force Secretariat Staff Officer, Deputy Assistant Secretary (Contracting), SAF/AQCS