Government Contracting Database
Notice – Alternative Methods of Dispute Resolution
The Contract Disputes Act of 1978 states that boards of contract appeals “shall provide to the fullest extent practicable, informal, expeditious, and inexpensive resolution of disputes” (41 U.S.C. 607). Resolution of a dispute at the earliest stage feasible, by the fastest and least expensive method possible, benefits both parties to the dispute. To that end, the Board suggests that the parties consider Alternative Disputes Resolution (ADR) Procedures.
The ADR methods described in this Notice are intended to suggest techniques which have worked on the past. Any method which brings the parties together in settlement or partial settlement of their disputes is a good method. The listed ADR methods are not intended to preclude use by the parties of other standard, or ADR, techniques which do not require Board participation, such as settlement negotiations, fact-finding conferences or procedures, mediation, or mini-trials not involving the use of Board personnel. The ADR methods described below are designed to supplement existing “extrajudicial” settlement techniques and not to replace them. Any method or combination of methods, including one which will result in a binding decision, may be selected by the parties without regard to the dollar amount in dispute.
Requests to the Board to utilize ADR procedures must be made jointly by the parties. If an ADR method involving Board participation is jointly requested by the parties, the Presiding Administrative Judge will forward the request to the Board Chairman for consideration. No unilateral request or motion seeking ADR will be considered. The Presiding Administrative Judge also may schedule a conference to explore the desirability, and selection, or an ADR method. If a non-binding ADR method involving Board participation is requested and approved by the Chairman a Settlement Judge or a neutral advisor when the parties want such advisor, will be appointed. (Usually, the person appointed will be an Administrative Judge or Hearing Examiner employed by a Board).
If a non-binding ADR method fails to resolve the dispute in whole or in part, the appeal will be restored to the active docket for processing under the Board’s Rules. To facilitate full, frank, and open discussion and presentations, any Settlement Judge or neutral advisor who has participated in a non-binding ADR procedure which has failed to resolve the underlying dispute will ordinarily have no further participation in the restored appeal. Further, he will not discuss the merits of that appeal or substantive matters involved in the ADR proceedings with other Board personnel. Unless the parties explicitly request to the contrary and such request is approved by the Chairman, the assigned ADR neutral advisor or Settlement Judge will be reused from consideration of the restored appeal.
Written material prepared specifically for use in, and oral presentations made at, an ADR proceeding, and all discussions in connection with such proceeding among representatives of the parties, a Settlement Judge or a neutral advisor are confidential and, unless otherwise specifically agreed by the parties, inadmissible as evidence in any pending or future Board proceeding involving the parties or matter in dispute. However, evidence otherwise admissible before the Board is not rendered inadmissible because of its use in an ADR proceeding.
Guidelines, procedures, and requirements, implementing the ADR method selected, will be prescribed by agreement of the parties and the neutral advisor if utilized. ADR methods can be used successfully at any stage of the litigation. Adoption of an ADR method as early on the appeal process as feasible will eliminate substantial cost and delay. Generally, ADR proceedings will be concluded within 120 days following approval of their use by the Chairman.
The following ADR methods are consensual and voluntary. Both parties and the Board must agree to use of any of these methods. The summary trial method requires that the parties agree to be bound by the decision of the Board.
- Settlement Judge: A “Settlement Judge” is a Board Administrative Judge or hearing Examiner who will not hear or have any formal or informal decision-making authority in the appeal and who is appointed for the purpose of facilitating settlement. In many circumstances, settlement can be fostered by a frank, in-depth discussion of the strengths and weaknesses of each party’s position with the Settlement Judge. The agenda for meetings with the Settlement Judge will be flexible to accommodate the requirements of the individual appeal. The Settlement Judge may meet either jointly or individually with the parties to further the settlement effort. The Settlement Judge’s recommendations are not binding on the parties.
- Mini-Trial: The mini-trial is a highly flexible, expedited, but structured procedure where each party presents an abbreviated version of its position to principals of the parties with full contractual authority to conclude a settlement and to a Board-appointed neutral advisor if the parties utilize a neutral advisor. The parties determine the form of presentation without regard to customary judicial proceedings and rules of evidence. Participation by the principals and neutral advisor during the presentation of evidence is in accordance with their advance agreement on procedure. Upon conclusion of these presentations, settlement negotiations are conducted. The neutral advisor may assist the parties in negotiating a settlement. The procedures for each minitrial will be designed to meet the needs of the individual appeal. The neutral advisor’s recommendations are not binding.
- Summary Trial With Binding Decision: A summary trial with binding decision is a procedure whereby the scheduling of the appeal is expedited and the disputants try their appeal informally before an Administrative Judge or panel of judges. A summary, “bench” decision generally will be issued upon conclusion of the trial; or a summary written decision will be issued no later than ten days following the later of conclusion of the trial or receipt of trial transcript if ordered. The parties must agree that all decisions, rulings, and orders by the Board under this method, whether for or against the Government or the Appellant, shall be final, conclusive, not appealable, and may not be set aside, except for fraud. All such decisions, rulings, and orders will have no precedential value. The length of trial and the extent to which scheduling of the appeal is expedited will be tailored to the needs of each particular case. Pretrial, trial, and post-trial procedures and rules applicable to appeals generally will be modified or eliminated to expedite resolution of the appeal.
- Other Agreed Methods: The parties and the Board may agree upon other informal, ad hoc methods which are structured and tailored to suit the requirements of the individual appeal.
The above-listed ADR procedures are intended to shorten and simplify the Board’s more formalized procedures prescribed in the attached Rules. Generally, if the parties resolve their dispute by agreement between themselves, they benefit in terms of cost and time saving, speed of resolution, and maintenance or restoration of amicable relations. Participation in an ADR procedure anticipating settlement should not be viewed by the parties to the dispute, and will not be construed by the Board, as a sign of weakness. Very significantly, any method adopted for dispute resolution depends upon both parties having a firm, good faith commitment to resolve their differences. Absent such intention, the best-structured dispute resolution procedure is unlikely to be successful.
Updated: July 24, 2018