The first meeting of the Contracts and Procurement Section was held Wednesday, 14 October 1998 in the Francis Scott Key Ballroom of the Key Bridge Marriott in Rosslyn, VA. Brig. Gen. Frank J. Anderson, Deputy Assistant Secretary of the Air Force (Contracting), chaired the meeting which was attended by 67 group members representing 35 federal agencies. The meeting convened at 9:10 AM and closed at 12:00 noon. Three sessions included a key note address, a multi-agency panel discussion, and a summary/wrap-up.

Session 1: The keynote address was jointly presented by Brig. Gen. Anderson and Judge Martin Harty of the Armed Services Board of Contract Appeals (ASBCA). Brig. Gen. Anderson's comments placed Contracts & Procurement ADR under the umbrella of Acquisition Reform, pointing out that it is in the Government's best interest to efficiently and effectively manage contractual conflicts and to work with our contractors to avoid, whenever appropriate, costly, drawn-out litigation. He presented a draft model of what he calls "Early Dispute Resolution" to encourage use of ADR techniques after impasse in contracting officer negotiations, but prior to pursuing resolution under the Contracts Disputes Act procedures. He called upon Section members to participate in future subsections and to be active in the sharing/development of guidance and training products.

Judge Harty discussed the Board's interest and role in ADR and shared data on the growing involvement of ASBCA judges in the use of ADR. He presented data showing that those ASBCA cases in which ADR was recently attempted resulted in settlement to 100 percent of the time. At the end of the meeting, Judge Harty volunteered to lead a project to coordinate judges from other Boards of Contract Appeals who are interested in serving as neutrals. This information will then be shared with all Section participants.

Session 2: The second session was a panel discussion focusing on ADR implementation by various agencies throughout the Federal procurement arena. The moderator was Mr. Joseph M. McDade, Office of the General Counsel, Department of the Air Force. Panel members included: Col. Charles Craw, System Program Director, AC-130U Gunship/Development System Manager, SOFSPO; Mr. Anthony Gamboa, Senior Associate General Counsel, General Accounting Office (GAO); Judge Allan Goodman, General Services Board of Contract Appeals (GSBCA); and Mr. John F. McElhenny III, Special Assistant for Dispute Resolution, Naval Facilities Engineering Command.

Mr. Gamboa presented statistics on the use of ADR in bid protests, pointing out that only seven out of 90 cases were unsuccessful. He added that even when ADR was unsuccessful, the process was helpful to the parties in identifying the real issues. GAO views bid protest ADR as a two-step process: (1) pre-protest procedures; and (2) ADR during protest. GAO's outcome prediction process, in which agencies are told of the likely outcome of a given protest and offered a chance to make timely corrections, was a popular option in the bid protest arena.

Judge Goodman described common dispute situations, such as defective pricing and cost entitlement. He stressed that GSBCA ADR assistance is available to any agency, does not require Contracting Officer Final Decisions, and allows the parties to request a specific judge. He then referenced the GSBCA Rule 204 Alternative Dispute Resolution handout included in the meeting package which describes the availability and conduct of an ADR at the GSBCA.

Mr. McElhenny described the Naval Facilities Engineering Command's dispute resolution process, including a review board approach which has proven very effective in the construction arena. He said the Review Board is comprised entirely of Navy members; the Navy is bound by the review board decision, but the contractor is not. Mr. McElhenny also announced a new Navy course on ADR in the Federal procurement arena, which includes a hard-bound book on the topic. He pointed out that the course is open to other agencies.

Col. Craw discussed his experience on a major weapon system in litigation at the Court of Federal Claims, which was recently settled through a structured negotiation ADR process. He emphasized the importance of focusing on the facts and open discussion of these facts as means of overcoming the long-term emotional buy-in of the parties. He also described an extensive support structure which was needed to sort through the nearly 11 million pages of information used in the above ADR. His Government team alone consisted of 150 people with an annual budget of $10 million. Other lessons learned shared by Col. Craw:

Business managers, responsible for cost and schedule, must be in control of the conflict management process while relying heavily on legal advice. Focus must still be on delivering products to the user.

Previous attempts at ADR on the program failed. Col. Craw beliees this attempt was successful because pricing was handled at a total cost level.

Mr. McDade summarized the panel discussion, advising agencies to manage expectations of the ADR process and outcome while they pursue agency-wide implementation.

Session 3: Mr. McDade, Brig. Gen. Anderson, and Mr. Peter Steenland, Senior Counsel for ADR, Department of Justice, ended the first Section meeting with a wrap-up on what Section members can expect in the future.

Brig. Gen. Anderson reviewed a tentative schedule for future Section activities, including a second meeting in early December to share/discuss/plan federal-wide ADR products/tools and to form Task Forces. He also mentioned the possibility of coordinating with the American Bar Association on an ADR conference in April 1999.

Mr. Steenland thanked the meeting participants on behalf of the Attorney General and DOJ, and reviewed the history of the current ADR Interagency Working Group program. He said ADR will be particularly valuable in managing resources in cases that really do not belong in court, freeing resources to address the right cases in court.

Mr. McDade reviewed the results of an ADR Needs and Resources Survey completed by meeting attendees earlier in the day. 26 surveys were returned, and of those, 19 respondents indicated that their agency already had an ADR program in place. Several different agencies have materials they would be willing to share with the rest of the group, including sample ADR agreements, lessons learned, and recent success stories. Overwhelmingly, agencies asked for more information; almost all of the surveys returned indicated an interest in seeing ADR guidance materials (especially ADR agreements) and training information developed by other federal agencies. Given these responses, the Contracts and Procurement Working Group hopes to be, among other things, a way for agencies to share information and experience.

Minutes taken by Maj. Rese Farrish, USAF, ADR Specialist for the National Reconnaissance Office

Edited by Lt. Col. Shelly Kalkowski, USAF, ADR Project Manager, SAF/AQC