Electronic Guide to Federal Procurement ADR

Naval Facilities Engineering Command ADR Program

ALTERNATIVE DISPUTE RESOLUTION.

Over the past 20 years the Naval Facilities Engineering Command (NAVFAC) has actively pursued ADR procedures to resolve contractual disputes. Although exact numbers are unknown, it is estimated that NAVFAC has used over 400 ADR procedures since 1990, with a satisfactory resolution rate of approximately 80%. The ADR procedures used by NAVFAC include structured settlements, mini-trials, settlement judges, and non-binding arbitration. In addition, as part of the litigative process, NAVFAC has used summary binding Armed Services Board of Contract Appeals procedures. However, unique to NAVFAC, is the use of disputes resolution boards (DRBs).

NAVFAC currently uses four types of DRBs:

Chief's Board: The Command Award and Review Board, otherwise known as the "Chief's Board," is a Board at NAVFACHQ that reports directly to the Commander, NAVFACENGCOM. The Board is used for the purpose of selecting contractors and performing other contract actions. With regards to ADR, the Chief's Board is a three-person panel comprised of senior NAVFAC acquisition and legal personnel. The Board's chairman is the Commander, the Vice-Commander, or the Director of Acquisition. The purpose of the Chief's Board is to provide a means of dispute resolution on claims that exceed $1,000,000, prior to the issuance of a Contracting Officer's Final Decision (COFD). •

Modified Chief's Board: A three person panel that includes a NAVFAC decision-maker, usually a senior contracting officer, a Contractor decision-maker, usually the president of the company, and a neutral advisor, usually an ASBCA judge. If the claim exceeds $1,000,000, the senior contracting officer will be from NAVFACHQ. If the claim is less than $1,000,000, the senior contracting officer usually is the EFD/EFA/PWC Chief of the Contracts Office. The purpose of the Modified Chief's Board is to provide a method of dispute resolution on claims of any amount. The Board is usually convened at the EFD/EFA/PWC. It can be used both prior to and after the issuance of a COFD.

EFD/EFA/PWC Contracts Review Board: A three-person panel of senior EFD personnel, which includes a Level III Contracting Officer, Chief Counsel, and a senior CEC Officer. The Board is usually convened at the EFD/EFA/PWC. The purpose of the Board is to provide a method of dispute resolution on claims within the final decision authority of the activity, prior to the issuance of a COFD. In its traveling mode, usually known as a Disputes Review Board, the Board consists of a single contracting officer and usually is convened at the job site. •

EFD/EFA/PWC Claims Board: A three-person panel consisting of a contracting officer, counsel, and a technical representative. The Board is usually convened for each claim that is forwarded from the field office. The Board's purpose is to review the claim to determine entitlement. If entitlement is discovered the panel may convene an EFD Contracts Review Board or remand to the field for settlement. Generally, the contractor is not permitted to present its case to the Claims Board.

The key points of NAVFAC's DRBs are shown below:

  • The DRB is comprised of NAVFAC officials who come to the hearing without bias, with the intent to resolve the dispute, and have the authority to act.
  • The DRB is best suited to situations where there appears to be room for compromise, where there are debatable issues of fact and where an equitable solution is possible.
  • The DRB process is strictly voluntary. The contractor may withdraw participation at any time and resume the normal claims litigation process. Further, the recommendation of the DRB is non-binding on the contractor.
  • The DRB is intended to hear informal presentations from both the Administrative Contracting Officer and contractor personnel. The presentations will be limited to a reasonable amount of time.
  • The DRB is not a legal proceeding, which usually restricts the participation of attorneys for both parties in a counsel role; however, attorneys have participated in an advisory role. Further, usually no written transcripts will be made of the proceedings and there is a restriction on the use of the DRB proceedings in any future appeal.
  • The DRB procedures are flexible and the DRB agreement may be changed on a case by case basis to better serve the interests of both parties.

Points of Contact:

John F. McElhenny

Naval Facilities Engineering Command

(703) 325-7656

and/or

Audrey Van Dyke, Esq.

Naval Facilities Engineering Command (202) 685-1931

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