Contracted Neutral Services

The broad definitions of neutral, along with other parts of the FAR and ADRA of 1996, ensure that parties can use a neutral of their choice, whether from an established forum, other agencies, other levels of government (state, local, and tribal), and the private sector.  The FAR and ADRA of 1996 address two common concerns that agency contracting personnel may have when obtaining the services of a neutral:

  • Unauthorized Augmentation of an Appropriation.  Sometimes a violation of the Anti-deficiency Act (31 USC 1342) occurs when an agency accepts donations, goods, services, etc. that it would otherwise purchase.  This is called an unauthorized augmentation of an appropriation because it increases the resources available to the agency beyond that authorized by Congress in an appropriations act.  Fortunately, the ADRA of 1996 expressly allows agencies to accept "voluntary and uncompensated services for purposes of this subchapter without regard to the provisions of section 1342 of title 31."  5 USC 583.

  • Competition Requirements.  Where the agency wants to purchase neutral services using a contract, the agency is not required to use competitive acquisition techniques.  Section 7 of the ADRA of 1996 specifically amended the Competition in Contracting Act to recognize this exception.  See also FAR 6.302-3(b)(3)(ii).  A sole source justification, however, must be supported in writing and approved.  Id. at 6.302-3(c).  

  • Price.  The ADRA of 1996 states, "The parties in a dispute resolution proceeding shall agree on compensation for the neutral that is fair and reasonable to the Government."  5 USC 573(e).

Beyond these points, the authorities do not prescribe or limit the contracting procedures needed for the acquisition of neutral services.  Contracting specialists obtaining such services, therefore, should follow the business-as-usual practices of their agency regardless of whether the selected vehicle is a purchase order, a time and materials contract, an Economy Act order, etc.