Statutory Considerations

Guidance as to when to use--or not use--ADR may be found within the Administrative Dispute Resolution Act (ADRA) of 1990 itself.  Federal contracting personnel are required by the ADRA of 1996 to give consideration to specifically stated factors which, if present in a particular case, weigh against ADR use.  It must be emphasized that the ADRA of 1996 does not prohibit the use of ADR in cases where any or all the factors are present.  In every case, the presence or absence of the defined factors should be reviewed and taken into consideration by the contracting professional.  The ADRA factors are:

  1. Whether a decision by an adjudicating body is needed by the agency for precedential value
  2. Whether a significant issue of government policy requiring development in the law is present in the case
  3. Whether maintaining an established policy or avoiding variations in decisions is of special importance
  4. Whether the dispute involves parties that would not be parties to the ADR
  5. Whether it is important to develop a full public record in the case
  6. Whether the agency has a significant jurisdictional need to maintain control of the matter or to alter the ADR outcome

5 USC 572(b).  Another situation where ADR is inappropriate is when there may be issues relating to fraud.  A Contracting Officer lacks authority to settle issues related to fraud.  The Department of Justice (DOJ) has the authority to resolve fraud matters.  If a contract dispute involves elements or allegations of fraud, it must be referred to DOJ.