[Federal Register Volume 63, Number 164 (Tuesday, August 25, 1998)]
[Proposed Rules]
[Pages 45372-45389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22386]
[[Page 45371]]
_______________________________________________________________________
Part V
Department of Transportation
_______________________________________________________________________
Federal Aviation Administration
_______________________________________________________________________
14 CFR Parts 14 and 17
Procedures for Protests and Contract Disputes; Amendment of Equal
Access to Justice Act Regulations; Proposed Rule
Federal Register / Vol. 63, No. 164 / Tuesday, August 25, 1998 /
Proposed Rules
[[Page 45372]]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 14 and 17
[Docket No. 29310; Notice No. 98-8]
RIN 2120-AG19
Procedures for Protests and Contract Disputes; Amendment of Equal
Access to Justice Act Regulations
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes regulations for the conduct of protests
and contract disputes under the Federal Aviation Administration
Acquisition Management System. The proposed regulations set forth
procedures for the efficient management of protests and contract
disputes within the Federal Aviation Administration procurement system.
The regulations would allow protesters and contractors a uniform,
economical means of pursuing protests and contract disputes with the
Federal Aviation Administration. Also, the Federal Aviation
Administration regulations governing the application for, and award of,
Equal Access to Justice Act fees are amended to include procedures
applicable to the resolution of protests and contract disputes under
the Acquisition Management System, and to conform to the current Equal
Access to Justice Act statute.
DATES: Comments must be received on or before October 26, 1998.
ADDRESSES: Comments on this notice may be delivered or mailed, in
triplicate, to: U.S. Department of Transportation Dockets, Docket No.:
FAA-98-29310, 400 Seventh Street, SW., Room 401, Washington, DC 20591.
Comments submitted must be marked: ``Docket No. 29310.'' Comments may
also be sent electronically to the following Internet address: 9-NPRM-
[email protected] Comments may be filed and examined in Room Plaza 401
between 10:00 a.m. and 5:00 p.m., weekdays except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Marie A. Collins, Staff Attorney and
Dispute Resolution Officer, FAA Office of Dispute Resolution for
Acquisition, AGC-70, Room 8332, Federal Aviation Administration, 400
7th Street, SW., Washington, DC 20590, telephone (202) 366-6400.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Comments relating to the environmental, energy,
federalism, or economic impact that might result from adopting the
proposals in this notice are also invited. Substantive comments should
be accompanied by cost estimates. Comments must identify the regulatory
docket or notice number and be submitted in triplicate to the Rules
Docket address specified above.
All comments received, as well as a report summarizing each
substantive public contact with FAA personnel on this rulemaking, will
be filed in the docket. The docket is available for public inspection
before and after the comment closing date.
All comments received on or before the closing date will be
considered by the Administrator before taking action on this proposed
rulemaking. Late-filed comments will be considered to the extent
practicable. The proposals contained in this notice may be changed in
light of the comments received.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must include a pre-addressed,
stamped postcard with those comments on which the following statement
is made: ``Comments to Docket No. 29310.'' The postcard will be date
stamped and mailed to the commenter.
Availability of NPRMs
An electronic copy of this document may be downloaded using a modem
and suitable communications software from the FAA regulations section
of the Fedworld electronic bulletin board service (telephone: 703-321-
3339), the Government Printing Office's electronic bulletin board
service (telephone: 202-512-1661), or the FAA's Aviation Rulemaking
Advisory Committee Bulletin Board service (telephone: (800) 322-2772 or
(202) 267-5948).
Internet users may reach the FAA's web page at http://www.faa.gov/
avr/arm/nprm/nprm.htm or the Government Printing Office's webpage at
http://www.access.gpo.gov/nara for access to recently published
rulemaking documents.
Any person may obtain a copy of this NPRM by submitting a request
to the Federal Aviation Administration, Office of Rulemaking, ARM-1,
800 Independence Avenue, SW., Washington, DC 20591, or by calling (202)
267-9680. Communications must identify the notice number or docket
number of this NPRM.
Persons interested in being placed on the mailing list for future
NPRM's should request from the above office a copy of Advisory Circular
No. 11-2A, Notice of Proposed Rulemaking Distribution System, that
describes the application procedure.
Background
Statement of the Problem
In accordance with Congressional mandate, the FAA procures,
acquires, and develops services as well as material in support of its
mission of safety in civil aviation. In recent years, the FAA
acquisition system was hampered both by the number of procurement and
acquisition laws and by the different forums that heard and decided
procurement protests and contract disputes. Both the Administration and
the Congress became concerned that the safety mission of the FAA might
suffer from the complexity of the existing acquisition system.
In the Fiscal Year 1996 Department of Transportation Appropriations
Act, Pub. L. 104-50, 109 Stat. 436 (November 15, 1995), the Congress
directed the FAA ``to develop and implement, not later than April 1,
1996, an acquisition management system that addressed the unique needs
of the agency and, at a minimum, provided for more timely and cost
effective acquisitions of equipment and materials.'' In that Act, the
Congress instructed the FAA to design the system notwithstanding
provisions of federal acquisition law, and specifically instructed the
FAA not to use certain provisions of federal acquisition law. In
response, the FAA developed the Acquisition Management System (AMS) for
the management of FAA procurement. The AMS is a system of policy
guidance that maximizes the use of agency discretion in the interest of
best business practice. As a part of the AMS, the FAA created the
Office of Dispute Resolution for Acquisition (ODRA) to facilitate the
Administrator's review of procurement protests and contract disputes.
Notice of establishment of the ODRA was published on May 14, 1996, in
the Federal Register (61 FR 24348). In that notice, the FAA stated it
would promulgate rules of procedure governing the dispute resolution
process. Currently, procedures and other provisions related to dispute
resolution are included or referenced in all FAA Screening Information
Requests (SIRs) and contracts, and are made available to offerors and
contractors upon request or through briefings. The FAA has determined
that it will be more
[[Page 45373]]
effective and efficient to establish by rulemaking the dispute
resolution procedures that apply to all protests concerning SIRs and
contract awards, and to all disputes arising from established
contracts. The proposed rule is designed to contain the minimum
procedures necessary for efficient and orderly resolution of protests
and contract disputes arising under the AMS.
The FAA Dispute Resolution Process, and the procedures implementing
that process, are based upon the powers Congress delegated to the
Administrator of the FAA under Title 49, United States Code, Subtitle
VII (49 U.S.C. 40101, et seq.). These delegated powers include the
Administrator's power to procure goods and services, and to investigate
and hold hearings regarding any matter placed under the Administrator's
authority. In the Federal Aviation Reauthorization Act of 1996, Pub. L.
104-264 (October 9, 1996), the Congress altered 49 U.S.C. 106(f) to
make the Administrator of the FAA the final authority over the FAA
procurement process.
These FAA dispute resolution procedures will encourage the parties
to protests and contract disputes to use Alternate Dispute Resolution
(ADR) as the primary means to resolve protests and contract disputes,
pursuant to the Administrative Dispute Resolution Act of 1996, Pub. L.
104-320, 5 U.S.C. 570-579, and in consonance with Department of
Transportation and FAA policies to utilize ADR to the maximum extent
practicable. Under these procedures, the ODRA would actively encourage
parties to consider ADR techniques such as case evaluation, mediation,
arbitration, or other types of ADR.
The procedures for protests and contract disputes anticipate that,
for a variety of reasons, certain disputes are not amenable to
resolution through ADR. In other cases, ADR may not result in full
resolution of a dispute. Thus, there is provision for a Default
Adjudicative Process in part 17. The EAJA, 5 U.S.C. 504, can apply in
instances where an eligible protester or contractor prevails over the
FAA in the Default Adjudicative Process. Title 14 of the Code of
Federal Regulations, Part 14 is amended to provide guidance for the
conduct of EAJA applications under the dispute resolution regulations
promulgated in 14 CFR part 17.
General Discussion of the Proposals
14 CFR Part 14
The dispute resolution procedures in part 17 can include adversary
adjudication, where the FAA program office responsible for the
procurement activity is represented by counsel. The FAA EAJA
regulations, 14 CFR part 14, would be amended to include procedures
applicable to part 17. Also, part 14 would be amended to conform to
changes made in the EAJA statute since the initial regulations were
issued.
14 CFR Part 17
The proposed procedures implement the FAA Dispute Resolution
Process under the direction of the Director of the ODRA. The procedures
are designed to promote resolution of protests and contract disputes
without formal adjudication. This process promotes informal resolution
prior to and during direct ODRA involvement. The procedures promote the
use of ADR, with the use of the Default Adjudicative Process available
if ADR cannot resolve a protest or contract dispute.
Under Title 49, the Administrator has final authority with respect
to the procurement of goods and services. That final authority is
exercised when the Administrator approves or rejects an ODRA
recommendation by a final order. Under Title 49, review of a final
order by the Administrator must be sought in the U.S. courts of
appeals.
Part 17 is organized along functional lines. Subpart A addresses
general matters such as protective orders, filing, computing time, and
the delegation of authority to the Director of the ODRA. Subpart B
addresses initial matters pertaining to protests, including procedures
for the use of ADR or for resort to the Default Adjudicative Process.
Subpart C addresses initial matters pertaining to contract disputes,
including procedures for use of ADR or for resort to the Default
Adjudicative Process. Subpart D addresses the initiation and conduct of
ADR. Subpart E addresses the Default Adjudicative Process. Subpart F
addresses when a final order has been issued by the Administrator, and
seeking review of a final order in a U.S. court of appeals.
Section-by-Section Discussion of the Proposals
14 CFR Part 14
Subpart A--General provisions
Section 14.02 Proceedings Covered
Section 14.02 would be amended to include adversary adjudication
under the AMS.
Section 14.03 Eligibility of Applicants
Section 14.03(a) would be amended to add notice of the eligibility
requirements set forth in 5 U.S.C. 504(b)(1)(B).
Section 14.03(f) would be amended to add the term ``adjudicative
officer'' to the term ``administrative law judge (ALJ)'' for
proceedings held under 14 CFR part 17 and the AMS.
Section 14.05 Allowance Fees and Expenses
Section 14.05(b) would be amended to alter the maximum hourly rate
awarded for attorney's fees from $75 per hour to $125 per hour in order
to conform to the revision of the EAJA statute in Pub. L. 104-121
(March 29, 1996).
Section 14.05(c) would be amended to add the term ``adjudicative
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Section 14.05(e) would be amended to reflect that the adversarial
portion of a proceeding under 14 CFR part 17 and the AMS commences with
the initiation of the adjudicative phase of the proceedings.
Subpart B--Information Required From Applicants
Section 14.11 Net Worth Exhibit
Section 14.11(c) would be amended to add the term ``adjudicative
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Subpart C--Procedures for Considering Applications
Section 14.20 When an Application May Be Filed
Section 14.20(a) would be amended to reflect that adversary
proceedings under 14 CFR part 17 and the AMS conclude with the service
of an order from the Administrator.
Section 14.20(c) would be amended to add a new paragraph (1) noting
that the date of service of an order from the Administrator is the date
of final disposition for proceedings under 14 CFR part 17 and the AMS;
previous paragraphs (1) through (4) are renumbered (2) through (5)
without change.
Section 14.21 Filing and Service of Documents
Section 14.21 would be amended to add the requirement that an
application for award or other filing for proceedings under 14 CFR part
17 and the AMS must be filed with the opposing FAA attorney and the
ODRA.
Section 14.22 Answer to Application
Section 14.22(b) would be amended to add the term ``adjudicative
officer'' for proceedings held under 14 CFR part 17 and the AMS.
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Section 14.24 Comments by Other Parties
Section 14.24(b) would be amended to add the term ``adjudicative
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Section 14.26 Further Proceedings
Section 14.26(a) would be amended to add the term ``adjudicative
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Section 14.27 Decision
Section 14.27 would be amended to add a new paragraph (b),
requiring the adjudicative officer to prepare findings and
recommendations concerning proceedings under 14 CFR part 17 and the AMS
for the ODRA. Paragraph (c) sets forth the content of the initial
decision of the ALJ in paragraph (a), and the findings and
recommendations for the ODRA in paragraph (b).
Section 14.28 Review by FAA Decisionmaker
Section 14.28 would be amended to distinguish between proceedings
under part 13 using an ALJ in paragraph (a), and proceedings under 14
CFR part 17 and the AMS in paragraph (b). A new paragraph (b) is added,
requiring that, in proceedings under 14 CFR part 17 and the AMS, the
adjudicative officer prepares findings and recommendations for the ODRA
with recommendations as to whether or not an award should be made, the
amount of the award, and the reasons therefor. The ODRA should submit a
recommended order to the Administrator within sixty (60) business days
after completion of all submissions related to the EAJA application.
Upon the Administrator's action, the order shall become final, and may
be reviewed under 49 U.S.C. Sec. 46110.
14 CFR Part 17
Subpart A--General
Section 17.1 Applicability and Purpose
Proposed Sec. 17.1 would apply part 17 to all protests or contract
disputes against the FAA arising from or relating to contracts entered
into under the AMS.
Section 17.3 Definitions
Proposed Sec. 17.3 would define certain terms used in this part. Of
special note is that the definition for ``interested party'' pertains
only to protests and to specific parties, and that a ``contract
dispute'' does not require a final Contracting Officer (CO) decision,
nor that the issue be in dispute. Part 17 defines the ``Program
Office'' as the party representing the FAA in a protest or a contract
dispute, and includes the responsible FAA procurement organization, the
CO, and the assigned FAA legal counsel.
Section 17.5 Delegation of Authority
Proposed Sec. 17.5(a) would set forth the delegation of the
Administrator's authority to the Director of the Office of Dispute
Resolution for Acquisition.
Proposed Sec. 17.5(b) would state that the authority which has been
delegated to the Director of the Office of Dispute Resolution for
Acquisition may be re-delegated by the Director, Office of Dispute
Resolution for Acquisition to a DRO or Special Master in order to
resolve issues pertaining to protests or contract disputes.
Section 17.7 Filing and Computation of Time
Proposed Sec. 17.7 would set forth the procedural requirements for
filing a protest or contract dispute with the ODRA.
Proposed Sec. 17.7(a) would set forth two important aspects of
filing a protest or contract dispute with the ODRA. First, in addition
to mail, overnight delivery, or hand delivery, a protest or contract
dispute may be filed by facsimile. Second, there is no ``mail box
rule.'' A filing must be received by the ODRA by the close of its
normal business hours `` 5:00 p.m. (EST or EDT, whichever is in use)--
on the last day of a given period, or the filing will be rejected as
untimely.
Proposed Sec. 17.7(b) would allow all submissions after the initial
filing to be performed by any means available in paragraph (a).
Proposed Sec. 17.7(c) would note that time limits stated in part 17
are calculated in business days only. The day of the event which starts
the running of a time period is not counted, but the last day is
counted, except where the last day falls on a weekend or federal
holiday.
Proposed Sec. 17.7(d) would inform the party wishing to seek
judicial review of a final order that the procedures set forth in 49
U.S.C. 46110 shall govern. Please note that, independently of 49 U.S.C.
46110, proposed Sec. 17.7(d) would require service of a copy of the
petition for review upon the ODRA and the FAA attorney of record when
the petition is filed with the court.
Section 17.9 Protective Orders
Proposed Sec. 17.9 would address the formulation and use of
protective orders. Many procurement protests or contract disputes
potentially involve the use of trade secrets or confidential commercial
information.
Proposed Sec. 17.9(a) would state that the ODRA may issue
protective orders upon the request of any party or on its own
initiative. Proposed Sec. 17.9(b) would set forth the requirements for
a protective order.
Proposed Sec. 17.9(c) would set forth the procedures for the access
of counsel or consultants to material protected under the terms of a
protective order. Persons participating in the protective order process
must apply for access, and attest to a professional relationship with
the party represented, and not be involved in competitive
decisionmaking, as discussed in U.S. Steel Corp. v. United States, 730
F.2d 1465 (Fed. Cir. 1984).
Proposed Sec. 17.9(d) would provide notice that sanctions are
available against a person who violates the terms of a protective order
agreement.
Proposed Sec. 17.9(e) would allow the parties to agree upon what
material may be covered by a protective order, subject to the approval
of the Director of the ODRA.
Subpart B--Protests
Section 17.11 Matters Not Subject to Protest
Proposed Sec. 17.11 would set forth those procurement actions that
are not subject to protest before the ODRA.
Section 17.13 Dispute Resolution Process for Protests
Proposed Sec. 17.13 would outline the FAA Dispute Resolution
Process for protests, emphasizing efficient and rapid resolution
consistent with sound case management.
Proposed Sec. 17.13(a) would require that all protests be conducted
under the FAA Dispute Resolution Process for Protests.
Proposed Sec. 17.13(b) would encourage the potential protester to
seek informal resolution with the Contracting Officer (CO) prior to
filing a protest with the ODRA.
Proposed Sec. 17.13(c) would allow a protest to be filed pursuant
to Sec. 17.15 if either informal resolution with the CO is not
successful, or the time limits set forth in proposed Sec. 17.17 are
about to expire. Attempts at informal resolution with the CO will not
extend the time limits in Sec. 17.17.
Proposed Sec. 17.13(d) would set forth the protest procedure that
would be followed. The initial process includes a status conference
being held by the ODRA, after which the parties will have five (5)
working days to determine whether they can use ADR pursuant to Subpart
D of this part, and if they are unable to do so, the parties will have
to state why they cannot. If the parties can
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use ADR, they are allowed five (5) working days in which to submit a
signed ADR agreement to the ODRA. The parties will have twenty (20)
working days within which to complete the ADR process. If the parties
cannot agree to ADR and must resort to the Default Adjudicative
Process, the Program Office will have ten (10) working days after the
status conference to submit an initial response to the protest, after
which the Default Adjudicative Process under Subpart E will commence.
If the ADR process is unsuccessful, the ODRA will assign a DRO or
Special Master for the Default Adjudicative Process under Subpart E of
this part.
Proposed Sec. 17.13(e) would allow the ODRA to modify any time
constraints for pending protests.
Proposed Sec. 17.13(f) would allow the ODRA to combine multiple
protests concerning the same SIR or contract award for efficient case
resolution.
Proposed Sec. 17.13(g) would state the presumption against
suspension of a procurement during the pendency of a protest. The
section states that procurement will continue unless compelling reasons
warrant suspension.
Section 17.15 Filing a Protest
Proposed Sec. 17.15 would govern the timing and content of a
protest. The protester is required to set forth all information that
will allow an early assessment of the protest by the ODRA.
Proposed Sec. 17.15(a) would state that only an interested party
may file a protest, and would set forth the times within which a
protest must be filed with the ODRA. Where a protest addresses an
alleged impropriety in the SIR, the protest must be filed prior to bid
opening or the time for initial offers. For protests other than those
involving solicitation improprieties, the protester must file a protest
within seven (7) business days of the time that the protester knew or
should have known of the grounds for protest. Where a debriefing was
offered, the protester must file within 5 business days of the date on
which the debriefing was held.
Proposed Sec. 17.15(b) would set forth the ODRA address for filing
purposes, including the ODRA's telephone and facsimile numbers.
Proposed Sec. 17.15(c) would set forth the information that must be
included in a protest. Of special note are the following:
The protester must identify a Protester Designee, who
shall be the point of contact for the protest.
The protester must state its case for timeliness and
standing.
The protester must state its need for a protective order.
Proposed Sec. 17.15(d) would require the protester to set forth any
compelling reasons that would support a decision by the FAA
Administrator to suspend or delay the procurement. The protester is
required to supply detailed information concerning the protester's
position, and to clearly identify any adverse consequences that relate
to the requested suspension or delay.
Proposed Sec. 17.15(e) would require the protester to: (1) Serve a
copy of the protest on the CO so that the protest will be received by
the CO on the same day that it is received by the ODRA; and (2) certify
as to that service, by a signed statement to the ODRA.
Proposed Sec. 17.15(f) would require the CO to: (1) Provide the
ODRA with the names, addresses, telephone numbers and facsimile numbers
of the awardee and interested parties to a protest, and (2) notify
these parties of the existence of the protest. This proposed section
would require such interested parties to inform the ODRA within two (2)
business days of the notification of their interest in participating in
the protest.
Proposed Sec. 17.15(g) would note that the Director of the ODRA has
the discretion to designate those parties who may participate in a
protest as intervenors.
Section 17.17 Initial Protest Procedures
Proposed Sec. 17.17 would contain the initial protest procedures.
These procedures over an initial period of ten business days would
include assigning a DRO, holding a status conference, and determining
whether the protest is to be resolved by use of ADR or the Default
Adjudicative Process.
Proposed Sec. 17.17(a) would provide that the ODRA will assign a
DRO to a protest when one is filed.
Proposed Sec. 17.17(b) would require the FAA to respond within two
(2) business days to a protester's request made pursuant to
Sec. 17.15(d) that the procurement be suspended by the Administrator,
and would allow the ODRA, in its discretion, to recommend such
suspension.
Proposed Sec. 17.17(c) would require the ODRA to hold a status
conference with the parties as soon as practicable after the protest is
filed, and establishes the matters to be addressed during the status
conference. The subjects to be covered in a status conference would
include: a review of procedures; exploration of any issues relating to
summary dismissal of the protest or to suspension recommendations;
establishing a protective order, if needed; exploring the possibility
of using ADR; the conduct of early neutral evaluation, if appropriate;
and other appropriate matters.
Proposed Sec. 17.17(d) would require the parties to file a joint
statement with the ODRA on the fifth business day following the status
conference indicating: (1) That the parties will use ADR to resolve the
protest; or (2) submit a written explanation of why ADR cannot be used
and why the parties will have to resort to use of the Default
Adjudicative Process.
Proposed Sec. 17.17(e) would require the parties to submit their
choice of an ADR neutral and ADR technique, together with an executed
ADR agreement within five (5) business days of the status conference.
Proposed Sec. 17.17(f) would require that, if the Default
Adjudicative Process must be used, the Program Office will have ten
business days from the status conference to file with the ODRA a
Program Office response to the protest. The Program Office response
shall consist of a statement of pertinent facts, and applicable legal
or other defenses, and shall be accompanied by all documents deemed
relevant to the Program Office actions, plus any affidavits or other
forms of support for the Program Office position. A copy of the
responses shall be furnished to the protester at the same time, and by
the same means, it is filed with the ODRA. At that point, the protester
would proceed under the Default Adjudicative Process, pursuant to
Sec. 17.37.
Proposed Sec. 17.17(g) would allow the ODRA the discretion to
extend time limitations for the process.
Section 17.19 Dismissal or Summary Decision of Protests
Proposed Sec. 17.19 would set forth the procedures for dismissal of
a protest or any portion of a protest, thereby promoting economy and
efficiency in dispute resolution.
Proposed Sec. 17.19(a) would state three bases for dismissal.
Proposed Sec. 17.19(a)(1) would allow dismissal for lack of standing or
for lack of timeliness. Proposed Sec. 17.19(a)(2) would allow dismissal
for failure to state a claim upon which relief can be granted. Proposed
Sec. 17.19(a)(3) would allow for summary decision, where no material
facts remain at issue and a protest, or portion thereof, can be decided
as a matter of FAA policy as stated in the AMS, or as a matter of
applicable law.
Proposed Sec. 17.19(b) would provide that the ODRA will consider
any material facts in dispute relating to the motion to dismiss or to a
motion for
[[Page 45376]]
summary decision in a light most favorable to the non-moving party.
Proposed Sec. 17.19(c) would allow the Director of the ODRA at any
time, to recommend to the Administrator either dismissal or the
issuance of a summary decision with respect to an entire protest, or
for the Director of the ODRA, to dismiss or issue a summary decision of
any portion of a protest.
Proposed Sec. 17.19(d) would state that where an ODRA
recommendation for dismissal or summary decision of an entire protest
is adopted by the Administrator, or where the ODRA dismisses or issues
a summary decision of an entire protest under a delegation of authority
from the Administrator, the dismissal would be a final agency order.
However, dismissal or summary decision of a count or portion of a
protest is not a final agency order, unless and until the dismissal or
decision is incorporated into a decision by the Administrator (or the
ODRA, by delegation) regarding the entire protest.
Section 17.21 Protest Remedies
Proposed Sec. 17.21 would list remedies that may be recommended by
the ODRA. These remedies are consistent with remedies available to
other agencies, with the addition of discretion to fashion a remedy
under the AMS that is appropriate under the circumstances of a
particular FAA procurement.
Proposed Sec. 17.21(a) would list the remedies available, and notes
that either a combination of the remedies, or a remedy appropriate to
the situation and consistent with the AMS may be acceptable.
Proposed Sec. 17.21(b) would set forth factors to be considered by
the ODRA when considering a remedy.
Proposed Sec. 17.21(c) would allow the award of attorney's fees to
a qualified prevailing protester under the EAJA, 5 U.S.C. 504(a)(1).
EAJA decisions or recommendations made under auspices of the ODRA would
weigh whether (1) the Program Office decision was substantially
justified or (2) special circumstances make an award unjust. The EAJA
applies to final adjudicative FAA orders pursuant to 49 U.S.C.
Sec. 46102.
Subpart C--Contract Disputes
Section 17.23 Dispute Resolution Process for Contract Disputes
Proposed Sec. 17.23 would describe the FAA Dispute Resolution
Process for Contract Disputes. The dispute resolution process
contemplates that many contract disputes can be solved by cooperative
action between the contractor, the CO, and the project team.
The filing of a contract dispute under this section requires the
contractor to define the nature of the problem, and to request a
remedy. In view of the goal of informal resolution through the use of
ADR, there is no need for a ``final decision'' by the CO. The process
contemplates an attempt at informal resolution between the contractor
and the CO, with assistance from the ODRA if requested, prior to any
formal action. Once formal ODRA action is initiated, the emphasis will
be upon the use of ADR techniques, unless the contract dispute cannot
be resolved except through the Default Adjudicative Process.
Proposed Sec. 17.23(a) would require that all contract disputes
pertaining to contracts entered into pursuant to the AMS be resolved
under the FAA Dispute Resolution Process.
Proposed Sec. 17.23(b) would require the contractor to file a
contract dispute with the ODRA and with the CO.
Proposed Sec. 17.23(c) contemplates that the contractor will seek
informal resolution with the CO. The CO has full authority and
discretion, with the aid of FAA legal counsel, to settle the contract
dispute. The parties will have up to thirty (30) business days in which
to reach an informal resolution of the dispute, and may seek the
informal assistance of the ODRA during that time. If no informal
resolution is foreseeable within the thirty (30) business day period,
the parties must file a joint statement regarding whether or not ADR
will be employed, in accordance with Sec. 17.27.
Proposed Sec. 17.23(d) would allow the parties to make one joint
request to the ODRA for an extension of time beyond the original thirty
(30) business day period, to file the joint statement under Sec. 17.27.
Proposed Sec. 17.23(e) would provide that a status conference be
scheduled within ten (10) business days after receipt by the ODRA of
the joint statement required by Sec. 17.27, in order to establish the
procedures that will be used to resolve the contract dispute.
Proposed Sec. 17.23(f) would require continued performance in
accordance with the provisions of the contract, pending resolution of a
contract dispute arising under or related to that contract.
Section 17.25 Filing a Contract Dispute
Proposed Sec. 17.25 would set forth the requirements for filing a
contract dispute with the ODRA. A contract dispute is filed with the
ODRA prior to the commencement of the thirty (30) business day informal
resolution period.
Proposed Sec. 17.25(a) would require that the contract dispute be
in writing and contain the following information when it is filed:
The contractor's name, address, telephone, and fax number;
The contract number and the name of the Contracting
Officer;
A detailed statement of the legal and factual basis of the
contract dispute, or of each element or count of the contract dispute,
including copies of relevant documents;
All information establishing that the contract dispute was
timely filed; a request for a specific remedy or the specification of a
monetary request in a sum certain; and the signature of a duly
authorized representative.
Proposed Sec. 17.25(b) would state the ODRA address where a
contract dispute is to be filed.
Proposed Sec. 17.25(c) would require a contractor with a contract
dispute against the FAA to file that contract dispute with the ODRA
within six months of the date that the contract dispute accrues. A
contract dispute by the FAA against a contractor (other than those
alleging warranty issues, fraud or latent defects) likewise must be
filed within six months of the accrual of the contract dispute. If a
contract clause provides for different time limitations, such
limitations will apply. With limited exceptions, neither party will be
permitted to file a contract dispute with the ODRA after the
contractor's acceptance of final contract payment.
Proposed Sec. 17.25(d) would state that a party who files a
contract dispute with the ODRA shall serve a copy of the contract
dispute with the other party.
Section 17.27 Submission of Joint Statement
Proposed Sec. 17.27(a) would require parties to submit a joint
statement to the ODRA by no later than the end of the thirty (30)
business day informal resolution period of proposed Sec. 17.23, where
the dispute has not been resolved during that period.
Proposed Sec. 17.27(b) would set forth the information required for
that joint statement, namely, either a request for ADR--together with
an executed ADR agreement, pursuant to Sec. 17.33(d)--or, in the event
ADR will not be utilized, a written explanation as to why ADR will not
be utilized and why the parties must resort to the Default Adjudicative
Process.
Proposed Sec. 17.27(c) would state the ODRA address to which the
statement of the case is to be filed, including the ODRA telephone and
facsimile numbers.
[[Page 45377]]
Section 17.29 Dismissal of Contract Disputes
Proposed Sec. 17.29 would address the procedures to be followed for
dismissal of a contract dispute, or individual portions of a contract
dispute. Dismissal is appropriate where the contract dispute is not
filed within time, or is filed by a subcontractor, or fails to state a
claim upon which relief can be granted. The dismissal of a contract
dispute, or the striking of an individual portion of a contract
dispute, is allowed in the interest of economy and efficiency.
Proposed Sec. 17.29(a) would allow dismissal of a contract dispute,
or the striking of an individual portion of a contract dispute: (1) On
timeliness grounds; (2) if filed by a subcontractor; (3) where there is
a failure to state a claim upon which relief can be granted; and (4) if
the dispute involves a matter not subject to the jurisdiction of the
ODRA.
Proposed Sec. 17.29(b) would provide that the ODRA, when weighing a
motion to dismiss or to strike, should consider disputed facts in a
light most favorable to the party against whom the motion to dismiss or
strike is made.
Proposed Sec. 17.29(c) would allow the ODRA to dismiss or strike
any portion of a contract dispute upon its own initiative at any time.
This section also provides for the dismissal of an entire contract
dispute, either by the Administrator, upon recommendation by the ODRA,
or directly by the ODRA, when such authority is delegated by the
Administrator.
Proposed Sec. 17.29(d) would state that an order dismissing an
entire contract dispute, issued either by the Administrator, or by the
ODRA, upon delegation of authority from the Administrator, will
constitute a final agency order. It further provides that an ODRA order
dismissing or striking an individual count or portion of a dispute
would not constitute a final agency order.
Subpart D--Alternative Dispute Resolution
Section 17.31 Use of Alternate Dispute Resolution
Proposed Sec. 17.31(a), (b), and (c) would set forth the basic
requirements for both the ODRA and the parties respecting the use of
ADR. Pursuant to the Alternative Dispute Resolution Act of 1996, Pub.
L. 104-320 and Department of Transportation and FAA policies, the ODRA
will be required to utilize ADR to the maximum extent practicable, that
the ODRA encourage the parties to utilize ADR to resolve protests and
contract disputes as their primary means of dispute resolution. The
section clarifies that the Default Adjudicative Process is to be used
only when the parties cannot achieve agreement on the use of ADR or
when the ODRA concludes that ADR will not provide an expeditious means
of dispute resolution in a particular case.
Section 17.33 Election of Alternative Dispute Resolution Process
Proposed Sec. 17.33 would set forth procedures for initiating the
use of ADR.
Proposed Sec. 17.33(a) would state that the ODRA makes its
personnel available to serve as Neutrals in ADR proceedings and
attempts to make qualified non-FAA personnel available, if requested by
the parties, through neutral sharing arrangements. The section also
permits the parties to select a mutually acceptable Compensated Neutral
at their shared expense.
Proposed Sec. 17.33(b) would require the parties to a protest who
use ADR to submit an executed ADR agreement containing the information
required in paragraph (d) of this section to the ODRA within five (5)
business days from the time the ODRA holds the status conference
pursuant to Sec. 17.17(c).
Proposed Sec. 17.33(c) would require the parties to a contract
dispute who use ADR to submit to the ODRA an executed ADR agreement
containing the information required in paragraph (d) of this section,
as part of the joint statement specified under Sec. 17.27.
Proposed Sec. 17.33(d) would require the parties who use an ADR
process, to prepare and submit to the ODRA an executed ADR agreement
detailing: the type of ADR they wish to use; the manner that they will
use ADR; the Neutral or Compensated Neutral to be used; and sharing
equally the cost of any Compensated Neutral they choose.
Proposed Sec. 17.33(e) would permit the use of various non-binding
ADR techniques in combination with each other, provided that the
techniques are agreed upon and specified in the ADR agreement; and
would allow the parties to consider the use of any ADR technique that
is fair and reasonable and designed to achieve a prompt resolution of
the matters in dispute.
Proposed Sec. 17.33(f) would allow binding arbitration only on a
case-by-case basis, subject to the provisions of 5 U.S.C. Sec. 575 (a),
(b) and (c), and applicable law or where the Administrator's non-concur
with the arbitrator's decision is preserved by agreement.
Proposed Sec. 17.33(g) would provide that the ADR process for
protests will be completed within twenty (20) business days from the
filing of an ADR agreement with the ODRA, unless the parties obtain an
extension of time from the ODRA.
Proposed Sec. 17.33(h) would provide that the ADR process for
contract disputes will be completed within forty (40) business days
from the filing with the ODRA of an executed agreement with the ODRA,
unless the parties obtain an extension of time from the ODRA.
Proposed Sec. 17.33(i) would require the parties to submit to the
ODRA an agreed-upon protective order, if one is necessary, in
accordance with the requirements of Sec. 17.9.
Section 17.35 Selection of Neutrals for the Administrative Dispute
Resolution Process
Proposed Sec. 17.35 would address the selection of Neutrals for the
ADR process, whether for protests or for contract disputes.
Proposed Sec. 17.35(a) would allow the parties to select a
Compensated Neutral acceptable to both, or to request the ODRA for the
services of a DRO, or a Neutral who is not an employee of the FAA.
Proposed Sec. 17.35(b) would allow the parties who select a
Compensated Neutral, acceptable to both, to request the services of a
DRO to advise on matters of ODRA procedure, if the Compensated Neutral
is not familiar with ODRA procedural matters.
Proposed Sec. 17.35(c) would allow the ODRA to assign a DRO to be
the Neutral in ADR for appropriate protests or contract disputes,
unless the parties agree otherwise.
Subpart E--Default Adjudicative Process
Section 17.37 Default Adjudicative Procedures for Protests
Proposed Sec. 17.37 would address the Default Adjudicative Process
for protests, lasting thirty (30) business days. The Default
Adjudicative Process is available if there is no resolution at the CO
level, the parties cannot agree to ADR, or are unsuccessful in
resolving the protest fully. Under the Default Adjudicative Process,
the parties present their positions with supporting evidence. The
question to be resolved is whether the protested FAA decision had a
rational basis, or was not arbitrary, capricious or an abuse of
discretion under the AMS.
Proposed Sec. 17.37(a) would state that the process begins when
either the initial Program Office response to the protest is submitted
pursuant to Sec. 17.17(f) ten (10) business days
[[Page 45378]]
following the status conference held pursuant to Sec. 17.17(d), or the
parties notify the ODRA that the ADR process has failed, or that the
twenty (20) business days allotted for resolution through ADR have
expired or will expire with no reasonable probability of their
achieving a resolution.
Proposed Sec. 17.37(b) would provide that the ODRA may select
either a DRO or a qualified person not employed by the FAA to serve as
a Special Master to conduct fact-finding proceedings and to provide
findings of fact and recommendations concerning some or all of the
matters in controversy.
Proposed Sec. 17.37(c) would allow the DRO or Special Master to
prepare any necessary procedural orders for the proceedings and would
allow the DRO or Special Master to require additional submissions, as
appropriate.
Proposed Sec. 17.37(d) would allow the DRO or Special Master to
convene the parties or their representatives as necessary to conduct
the Default Adjudicative Process.
Proposed Sec. 17.37(e) would allow the DRO or Special Master the
discretion to decide the protest on the record if the written material
submitted by the parties is sufficient for that purpose.
Proposed Sec. 17.37(f) would allow the DRO or Special Master the
discretion to manage the discovery process, including limiting its
length and availability, to assure that the discovery schedule is
consistent with the time limitations established in this part.
Proposed Sec. 17.37(g) would allow the DRO or Special Master the
discretion to permit or request oral presentations, and to limit them
to specific witnesses or issues.
Proposed Sec. 17.37(h) would allow the ODRA to review the status of
the Default Adjudicative Process with the DRO or Special Master during
the pendency of the protest.
Proposed Sec. 17.37(i) would require the DRO or Special Master to
submit the findings of fact and recommendations to the ODRA within
thirty (30) business days of the commencement of the Default
Adjudicative Process, unless a shorter or longer period of time is
permitted at the discretion of the ODRA. The findings of fact and
recommendations shall contain findings of fact, application of the
principles of the AMS, or any law or authority applicable to the
findings of fact, a recommendation for a final order, and, if
appropriate, suggestions for future agency action.
Proposed Sec. 17.37(j) would instruct the DRO or Special Master to
base the findings of fact and recommendations specifically upon whether
the FAA actions complained of had a rational basis, or whether or not
the FAA decision was arbitrary, capricious or an abuse of discretion,
and to assure that any findings of fact underlying a recommendation be
supported by substantial evidence.
Proposed Sec. 17.37(k) would allow the DRO or Special Master to
exercise broad discretion to recommend a remedy for a successful
protest that is consistent with Sec. 17.21.
Proposed Sec. 17.37(l) would require the Special Master or DRO to
submit the findings of fact and recommendations only to the Director of
the ODRA.
Proposed Sec. 17.37(m) would state that the Administrator, or the
Administrator's delegee, issues the final agency decision and order of
the Administrator.
Section 17.39 Default Adjudicative Process for Contract Disputes
Proposed Sec. 17.39 would address the Default Adjudicative Process
for contract disputes. Under this Default Adjudicative Process, the
parties present their respective positions on the issues underlying the
contract dispute, and present evidence supporting those positions.
Proposed Sec. 17.39(a) would call for the Default Adjudicative
Process to commence on the latter of the parties' submission of a joint
statement under Sec. 17.27, indicating that the ADR will not be
utilized, or their submission of joint notification regarding the
inability of ADR to achieve a resolution of the contract dispute.
Proposed Sec. 17.39(b) would require the Program Office to prepare
and file a Dispute File, consisting of relevant documents
chronologically arranged and indexed. The contractor would be permitted
to supplement such a Dispute File.
Proposed Sec. 17.39(c) would provide that the Director of the ODRA
assign a DRO or Special Master to conduct fact-finding and provide
findings and recommendations on some or all of the issues in the
dispute.
Proposed Sec. 17.39(d) would require the DRO or Special Master to
convene a Status Conference within ten (10) business days of
commencement of the Default Adjudicative Process and would permit the
DRO or Special Master to issue such orders and directives as are
necessary to carry out the Default Adjudicative Process.
Proposed Sec. 17.39 (e) would set forth the basic subject matter of
the Status Conference. First, it directs that the issues be analyzed by
the DRO or Special Master and the parties, in order to: (1) Prepare a
discovery plan sufficient to prepare any remaining issues for
resolution; (2) review the need for a protective order, and if one is
needed, issue a protective order, agreed upon by the parties; (3)
determine whether any issue can be stricken; and (4) prepare and issue
a procedural order for the proceedings.
Proposed Sec. 17.39(f) would require that the parties prepare final
submissions to the DRO or Special Master in advance of the decision.
The submissions are to include: a joint statement of the issues; a
joint statement of undisputed facts related to each issue; separate
statements of disputed facts related to each issue, with appropriate
citations to the record; and separate legal analyses in support of each
party's respective position on the disputed issues.
Proposed Sec. 17.39(g) would require the parties to provide copies
of their final submissions to one another, so that such copies are
received on the same date they are received by the ODRA.
Proposed Sec. 17.39(h) would allow the DRO or Special Master either
to decide the contract dispute on the record, or to allow the parties
to make further presentations in person and in writing.
Proposed Sec. 17.39(i) would require the DRO or Special Master to
prepare and submit findings of fact and recommendations to the ODRA
within thirty (30) business days of the final submissions of the
parties, unless that time is extended by the ODRA for good cause. The
findings of fact and recommendations shall contain findings of fact,
application of the principles of the AMS and other law or authority
applicable to the findings of fact, a recommendation for a final order,
and, if appropriate, suggestions for future agency action.
Proposed Sec. 17.39(j) would instruct the DRO or Special Master to
review the disputed issue or issues in the context of the contract,
applicable law and the AMS, and to support any findings of fact with
substantial evidence.
Proposed Sec. 17.39(k) would require the Special Master or DRO to
submit a findings of fact and recommendations only to the Director of
the ODRA.
Proposed Sec. 17.39(l) would state that the Administrator, or the
Administrator's delegee, would issue the final FAA order concerning the
contract dispute.
Proposed Sec. 17.39(m) would state that attorneys' fees of a
prevailing contractor are allowable to the extent permitted by the
EAJA, 5 U.S.C. Sec. 504(a)(1); and that if required by contract or
applicable law, the FAA will pay interest on the amount found due the
contractor, if any.
[[Page 45379]]
Subpart F--Finality and Review
Section 17.41 Final Orders
Proposed Sec. 17.41 would state that a final agency order shall be
issued only after the protester or contractor has exhausted all
available administrative remedies under this FAA dispute resolution
process. Exhaustion of administrative remedies occurs when the
Administrator, or a person who has been delegated by the Administrator
to act in circumstances where such delegation applies, has issued a
final order accepting or modifying a recommendation from the ODRA.
Section 17.43 Judicial Review
Proposed Sec. 17.43(a) would direct the parties to seek review of a
final FAA order in the manner allowed by law.
Proposed Sec. 17.43(b) would require that a petition for review
also be filed with the ODRA and the FAA attorney involved, at the time
the petition for review is filed.
Paperwork Reduction Act
This proposal contains information collections which are subject to
review by the Office of Management and Budget (OMB) under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d)). The title, description,
respondent description and annual burden are shown below.
Title: Procedures for Protests and Contract Disputes--Equal Access
to Justice Act (EAJA) Regulations.
Description: The FAA proposes to publish procedural requirements
for the conduct of protests and contract disputes before the Office of
Dispute Resolution for Acquisition. These procedures are designed to
reduce the paperwork requirement ordinarily associated with such
actions in other forums. The emphasis in the procedures is the
resolution of a case as soon as is practicable, but also to provide for
resolution through adjudication should the resolution require such.
Description of Respondents: Businesses or other organizations or
persons who do business with the FAA.
This proposal generates a paperwork requirement upon only those
respondents who pursue protests or contract disputes. The actual
paperwork burden and cost for an individual case would vary with the
complexity of the subject matter, and whether the protester or
contractor and the FAA are able to reach an early resolution of the
issues in the case. The following estimate is based upon cases filed
with the ODRA in the first year, but assumes a higher annual caseload
of 100 protests or contract disputes. In this analysis, the annual
paperwork burden for all respondents would be approximately 3385 hours.
This figure is derived from estimates based on cases processed in the
first year of ODRA operation. At 2 hours per pleading, the total
pleading burden for all cases is 200 hours (100 x 2). Fifty percent
of all cases filed with the ODRA are settled or withdrawn after the
initial pleadings are made. That means that for 50 of the cases filed
with ODRA, there is no additional paperwork burden (50 x 0).
Only Of the 50 remaining cases requiring additional paperwork, 34
cases filed with ODRA go through the full adjudicative procedure. Of
those cases, only 90% (31/34) can be described as average. One such
case, based on an EAJA submission, involved 55 hours of paperwork
burden. Using this figure yields a total of 1705 hour burden for the
average cases (31 x 55). This estimate further assumes that of the 34
cases that go through full adjudicative procedure, 3 of them will be
complex and contentious, requiring an above average number of hours.
For purposes of this analysis, the FAA will use the estimate of 200
hours per complex/contentious case. Accordingly, for the above average
cases, the total paperwork burden is 600 hours (3 x 200). There still
remain the 16 cases that are settled/withdrawn after the pleadings are
filed but that require some additional paperwork. Assuming that each of
these cases incur an additional burden of 55 hours to achieve
settlement/withdrawal, the total burden for these cases increases by
880 hours (16 x 55). The sum of all the hours described above is 3385
and is depicted graphically in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Total hourly
Description of effort cases Hours incurred burden
----------------------------------------------------------------------------------------------------------------
Filing of Pleadings............................................. 100 2 200
Cases Settled/Withdrawn After Initial Pleadings Filed........... 50 0 0
Cases Requiring Average Number of Hours......................... 31 55 1705
Cases Requiring Above Average Number of Hours................... 3 200 600
Cases Requiring Below Average Number of Hours................... 16 55 880
-----------------------------------------------
Total..................................................... .............. .............. 3,385
----------------------------------------------------------------------------------------------------------------
It is important to note that these numbers are merely estimates and
the hourly cost for preparation of pleadings and responses to
procedural requirements varies upon whether a respondent hires a law
firm, or pursues the matter with in-house counsel, or chooses to
proceed pro se, without the services of a lawyer.
Individuals and organizations may submit comments on the
information collection requirement by October 26, 1998, and should
direct them to the address listed in the ADDRESSES section of this
document. Comments also should be submitted to the Office of
Information and Regulatory Affairs, OMB, New Executive Office Building,
Room 10202, 725 17th Street NW., Washington, DC 20503, Attn: Desk
Officer for FAA.
Persons are not required to respond to a collection of information
unless it displays a currently valid OMB control number. The burden
associated with this proposal has been submitted to OMB for review. The
FAA will publish a notice in the Federal Register notifying the public
of the approval numbers and expiration date.
Regulatory Evaluation Summary
Four principal requirements pertain to the economic impacts of
changes to the Federal Regulations. First, Executive Order 12866
directs Federal agencies to promulgate new regulations or modify
existing regulations after consideration of the expected benefits to
society and the expected costs. The order also requires federal
agencies to assess whether a proposed rule is considered a
``significant regulatory action.'' Second, the Regulatory Flexibility
Act of 1980 requires agencies to analyze the economic impact of
regulatory changes on small entities. Third, the Office of Management
and Budget directs agencies to assess the effect of regulatory changes
on international trade. Finally, Public Law 104-4 requires federal
agencies to assess the impact of any federal mandates on state,
[[Page 45380]]
local, tribal governments, and the private sector.
In conducting these analyses, the FAA has determined that this rule
would generate cost-savings that would exceed any costs, and is not
``significant'' as defined under section 3(f) of Executive Order 12866
and Department of Transportation's (DOT) policies and procedures (44 FR
11034, February 26, 1979). In addition, under the Regulatory
Flexibility Determination, the FAA certifies that this proposal would
not have a significant impact on a substantial number of small
entities. Furthermore, this proposal would not impose restraints on
international trade. Finally, the FAA has determined that the proposal
would not impose a federal mandate on state, local, or tribal
governments, or the private sector of $100 million per year. These
analyses, available in the docket, are summarized below.
Executive Order 12866 and DOT's Policies and Procedures
Under Executive Order 12866, each federal agency shall assess both
the costs and the benefits of the proposed regulations while
recognizing that some costs and benefits are difficult to quantify. A
proposed rule is promulgated only upon a reasoned determination that
the benefits of the proposed rule justify its costs.
In this proposed rule, the establishment of the Office of Dispute
Resolution for Acquisition (ODRA) under the FAA's new Acquisition
Management System would provide a cost savings to the private sector
(protesters and contractors). To resolve protests and contract disputes
with the FAA, offerors and contractors would realize a cost savings of
$1,000 to $1,000,000 per case, and the FAA would realize an average
cost savings of $2,200 per protest case and $4,200 per contract
dispute. Costs for this proposed rule are estimated to be about $1,000
or less per case for the private sector to abide by the procedures of
the ODRA, and no additional costs would be attributed to the FAA for
implementing such procedures. Therefore the FAA concludes that not only
do the benefits justify the costs, but that they actually exceed the
costs.
The proposed rule would also not be considered a significant
regulatory action because (1) it does not have an annual effect of $100
million or more or adversely affect in a material way the economy or a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local or tribal
governments or communities; (2) it does not create a serious
inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) it does not materially alter the budgetary impact
of entitlements, grants, user fees, or loan programs or the rights and
obligations of recipients; and (4) it does not raise novel legal or
policy issues arising out of legal mandates, the President's priorities
or principles set forth in the Executive Order. Because the proposed
rule was not considered significant under these criteria, it was not
reviewed by the Office of Management and Budget (OMB) for consistency
with applicable law, the President's priorities, and the principles set
forth in this Executive Order nor was OMB involved in deconflicting
this proposed rule with ones from other agencies.
Initial Regulatory Flexibility Determination
The Regulatory Flexibility Act of 1980 establishes ``as principle
of regulatory issuance that agencies shall endeavor, consistent with
the objective of the rule and of applicable statues, to fit regulatory
and informational requirements to the scale of the business,
organizations, and governmental jurisdictions subject to regulation.''
To achieve that and to explain the rationale for their actions, the Act
covers a wide-range of small entities, including small businesses, not-
for-profit organizations and small governmental jurisdictions.
Agencies must perform a review to determine whether a proposed or
final rule would have a significant economic impact on a substantial
number of small entities. If the determination is that it will, the
agency must prepare a regulatory flexibility analysis (RFA) as
described in the Act.
However, if an agency determines that a proposed rule is not
expected to have a significant economic impact on a substantial number
of small entities, section 605(b) of the 1980 act provides that the
head of the agency may so certify and an RFA is not required. The
certification must include a statement providing the factual basis for
this determination, and the reasoning should be clear.
The FAA conducted the required review of this proposal and
determined that it would not have a significant economic impact on a
substantial number of small entities (protesters and contractors).
Accordingly, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605
(b), the FAA certifies that this rule would not have a significant
economic impact on a substantial number of small entities for the
following reason: The proposed rule would provide an estimated cost
savings of $1,000 to $1 million per case in resolving its differences
with the FAA, while requiring about $1,000 or less per case per entity
to resolve the issue. For small entities, the FAA estimates that cost
savings per case would be closer to $1,000 than $1 million and
concludes there would be no significant economic impact on small
entities. The FAA solicits comments from affected entities with respect
to this finding and determination.
International Trade Impact Assessment
The FAA has determined that the proposed rule would neither affect
the sale of aviation products and services in the United States nor the
sale of U.S. products and services in foreign countries.
Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (the Act),
enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal
agency, to the extent permitted by law, to prepare a written assessment
of the effects of any Federal mandate in a proposed or final agency
rule that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year.
Section 204(a) of the Act, 2 U.S.C. 1534(a), requires the Federal
agency to develop an effective process to permit timely input by
elected officers (or their designees) of State, local, and tribal
governments on a proposed ``significant intergovernmental mandate.'' A
``significant intergovernmental mandate'' under the Act is any
provision in a Federal agency regulation that would impose an
enforceable duty upon State, local, and tribal governments, in the
aggregate, of $100 million (adjusted annually for inflation) in any one
year. Section 203 of the Act, 2 U.S.C. 1533, which supplements section
204(a), provides that before establishing any regulatory requirements
that might significantly or uniquely affect small governments, the
agency shall have developed a plan that, among other things, provides
for notice to potentially affected small governments, if any, and for a
meaningful and timely opportunity to provide input in the development
of regulatory proposals.
This rule does not contain a Federal intergovernmental or private
sector mandate that exceeds $100 million a year, therefore the
requirements of the act do not apply.
[[Page 45381]]
International Compatibility
The FAA has determined that a review of the Convention on
International Civil Aviation Standards and Recommended Practices is not
warranted because there is not a compatible rule under ICAO standards.
Federalism Implications
The regulations proposed herein will not have substantial direct
effects on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
List of Subjects
14 CFR Part 14
Claims, Equal access to justice, Lawyers, Reporting and
recordkeeping requirements.
14 CFR Part 17
Administrative practice and procedure, Alternative Dispute
Resolution (ADR), Authority delegations (Government agencies),
Government contracts, Government procurement.
The Proposed Amendments
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend chapter I of title 14 of the Code of
Federal Regulations as follows:
PART 14--RULES IMPLEMENTING THE EQUAL ACCESS TO JUSTICE ACT OF 1980
1. The authority citation for part 14 is revised to read as
follows:
Authority: 5 U.S.C. 504; 49 U.S.C. 106(f), 40113, 46104 and
47122.
2. Section 14.02 is amended by revising paragraph (a) to read as
follows:
Sec. 14.02 Proceedings covered.
(a) The Act applies to certain adversary adjudications conducted by
the FAA under 49 CFR part 17 and the Acquisition Management System
(AMS). These are adjudications under 5 U.S.C. 554, in which the
position of the FAA is represented by an attorney or other
representative who enters an appearance and participates in the
proceeding. This subpart applies to proceedings under 49 U.S.C. 46301,
46302, and 46303 and to the Default Adjudicative Process under 14 CFR
part 17 and the AMS.
* * * * *
3. Section 14.03 is amended by revising paragraphs (a) and (f) to
read as follows:
Sec. 14.03 Eligibility of applicants.
(a) To be eligible for an award of attorney fees and other expenses
under the Act, the applicant must be a party to the adversary
adjudication for which it seeks an award. The term ``party'' is defined
in 5 U.S.C. 504(b)(1)(B) and 5 U.S.C. 551(3). The applicant must show
that it meets all conditions or eligibility set out in this subpart.
* * * * *
(f) The net worth and number of employees of the applicant and all
of its affiliates shall be aggregated to determine eligibility. Any
individual, corporation, or other entity that directly or indirectly
controls or owns a majority of the voting shares or other interest of
the applicant, or any corporation or other entity of which the
applicant directly or indirectly owns or controls a majority of the
voting shares or other interest, will be considered an affiliate for
purposes of this part, unless the administrative law judge (ALJ) or
adjudicative officer determines that such treatment would be unjust and
contrary to the purposes of the Act in light of the actual relationship
between the affiliated entities. In addition, the administrative law
judge or adjudicative officer may determine that financial
relationships of the applicant, other than those described in this
paragraph, constitute special circumstances that would make an award
unjust.
* * * * *
4. Section 14.05 is amended by revising paragraphs (b), (c), and
(e) to read as follows:
Sec. 14.05 Allowance fees and expenses.
* * * * *
(b) No award for the fee of an attorney or agent under this part
may exceed $125 per hour. No award to compensate an expert witness may
exceed the highest rate at which the agency pays expert witnesses.
However, an award may also include the reasonable expenses of the
attorney, agent, or witness as a separate item, if the attorney, agent,
or witness ordinarily charges clients separately for such expenses.
(c) In determining the reasonableness of the fee sought for an
attorney, agent, or expert witness, the administrative law judge or
adjudicative officer shall consider the following:
(1) If the attorney, agent, or witness is in private practice, his
or her customary fee for similar services, or if an employee of the
applicant, the fully allocated cost of the services;
(2) The prevailing rate for similar services in the community in
which the attorney, agent, or witness ordinarily performs services;
(3) The time actually spent in the representation of the applicant;
(4) The time reasonably spent in light of the difficulty or
complexity of the issues in the proceeding; and
(5) Such other factors as may bear on the value of the services
provided.
* * * * *
(e) Fees may be awarded only for work performed after the issuance
of a complaint, or the initiation of the adjudicative phase of a
protest or contract dispute under 14 CFR part 17 and the AMS.
5. Section 14.11 is amended by revising paragraph (c) to read as
follows:
Sec. 14.11 Net worth exhibit.
* * * * *
(c) Ordinarily, the net worth exhibit will be included in the
public record of the proceeding. However, an applicant that objects to
public disclosure of the net worth exhibit, or any part of it, may
submit that portion of the exhibit directly to the administrative law
judge or adjudicative officer in a sealed envelope labeled
``Confidential Financial Information,'' accompanied by a motion to
withhold the information.
(1) The motion shall describe the information sought to be withheld
and explain, in detail, why it should be exempt under applicable law or
regulation, why public disclosure would adversely affect the applicant,
and why disclosure is not required in the public interest.
(2) The net worth exhibit shall be served on the FAA counsel, but
need not be served on any other party to the proceeding.
(3) If the administrative law judge or adjudicative officer finds
that the net worth exhibit, or any part of it, should not be withheld
from disclosure, it shall be placed in the public record of the
proceeding. Otherwise, any request to inspect or copy the exhibit shall
be disposed of in accordance with the FAA's established procedures.
6. Section 14.20 is amended by revising paragraphs (a) and (c) to
read as follows:
Sec. 14.20 When an application may be filed.
(a) An application may be filed whenever the applicant has
prevailed in the proceeding, but in no case later than 30 days after
the FAA Decisionmaker's final disposition of the proceeding, or
[[Page 45382]]
service of the order of the Administrator in a proceeding under the
AMS.
* * * * *
(c) For purposes of this part, final disposition means the later
of:
(1) Under 14 CFR part 17 and the AMS, the date on which the order
of the Administrator is served;
(2) The date on which an unappealed initial decision becomes
administratively final;
(3) Issuance of an order disposing of any petitions for
reconsideration of the FAA Decisionmaker's final order in the
proceeding;
(4) If no petition for reconsideration is filed, the last date on
which such a petition could have been filed; or
(5) Issuance of a final order or any other final resolution of a
proceeding, such as a settlement or voluntary dismissal, which is not
subject to a petition for reconsideration.
7. Section 14.21 is revised to read as follows:
Sec. 14.21 Filing and service of documents.
Any application for an award or other pleading or document related
to an application shall be filed and served on all parties to the
proceeding in the same manner as other pleadings in the proceeding,
except as provided in Sec. 14.11(b) for confidential financial
information. Where the proceeding was held under 14 CFR part 17 and the
AMS, the application shall be filed with the FAA's attorney and with
the Office of Dispute Resolution for Acquisition (ODRA).
8. Section 14.22 is amended by revising paragraph (b) to read as
follows:
Sec. 14.22 Answer to application.
* * * * *
(b) If the FAA's counsel and the applicant believe that the issues
in the fee application can be settled, they may jointly file a
statement of their intent to negotiate a settlement. The filing of this
statement shall extend the time for filing an answer for an additional
30 days, and further extensions may be granted by the administrative
law judge or adjudicative officer upon request by the FAA's counsel and
the applicant.
* * * * *
9. Section 14.24 is revised to read as follows:
Sec. 14.24 Comments by other parties.
Any party to a proceeding other than the applicant and the FAA's
counsel may file comments on an application within 30 days after it is
served, or on an answer within 15 days after it is served. A commenting
party may not participate further in proceedings on the application
unless the administrative law judge or adjudicative officer determines
that the public interest requires such participation in order to permit
full exploration of matters raised in the comments.
10. Section 14.26 is amended by revising paragraph (a) to read as
follows:
Sec. 14.26 Further proceedings.
(a) Ordinarily the determination of an award will be made on the
basis of the written record; however, on request of either the
applicant or agency counsel, or on his or her own initiative, the
administrative law judge or adjudicative officer assigned to the matter
may order further proceedings, such as an informal conference, oral
argument, additional written submissions, or an evidentiary hearing.
Such further proceedings shall be held only when necessary for full and
fair resolution of the issues arising from the application and shall be
conducted as promptly as possible.
* * * * *
11. Section 14.27 is revised to read as follows:
Sec. 14.27 Decision.
(a) The administrative law judge shall issue an initial decision on
the application within 60 days after completion of proceedings on the
application.
(b) An adjudicative officer in a proceeding under 14 CFR part 17
and the AMS shall prepare a findings and recommendations for the ODRA.
(c) A decision under paragraph (a) or (b) of this section shall
include written findings and conclusions on the applicant's eligibility
and status as a prevailing party and an explanation of the reasons for
any difference between the amount requested and the amount awarded. The
decision shall also include, if at issue, findings on whether the FAA's
position was substantially justified, or whether special circumstances
make an award unjust.
12. Section 14.28 is revised to read as follows:
Sec. 14.28 Review by FAA decisionmaker.
(a) In proceedings other than those under 14 CFR part 17 and the
AMS, either the applicant or the FAA counsel may seek review of the
initial decision on the fee application. Additionally, the FAA
Decisionmaker may decide to review the decision on his/her own
initiative. If neither the applicant nor the FAA's counsel seeks review
within 30 days after the decision is issued, it shall become final.
Whether to review a decision is a matter within the discretion of the
FAA Decisionmaker. If review is taken, the FAA Decisionmaker will issue
a final decision on the application or remand the application to the
administrative law judge who issued the initial fee award determination
for further proceedings.
(b) In proceedings under 14 CFR part 17 and the AMS, the
adjudicative officer shall prepare a findings and recommendations for
the ODRA with recommendations as to whether or not an award should be
made, the amount of the award, and the reasons therefor. The ODRA shall
submit a recommended order to the Administrator after the completion of
all submissions related to the EAJA application. Upon the
Administrator's action, the order shall become final, and may be
reviewed under 49 U.S.C. 46110.
13. A new part 17 is added to 14 CFR chapter I, subchapter B, to
read as follows:
PART 17--PROCEDURES FOR PROTESTS AND CONTRACT DISPUTES
Subpart A--General
Sec.
17.1 Applicability.
17.3 Definitions.
17.5 Delegation of authority.
17.7 Filing and computation of time.
17.9 Protective orders.
Subpart B--Protests
17.11 Matters not subject to protest.
17.13 Dispute resolution process for protests.
17.15 Filing a protest.
17.17 Initial protest procedures.
17.19 Dismissal or summary decision of protests.
17.21 Protest remedies.
Subpart C--Contract Disputes
17.23 Dispute resolution process for contract disputes.
17.25 Filing a contract dispute.
17.27 Submission of joint statement.
17.29 Dismissal or summary decision of contract disputes.
Subpart D--Alternative Dispute Resolution
17.31 Use of alternative dispute resolution.
17.33 Election of alternative dispute resolution process.
17.35 Selection of neutrals for the alternative dispute resolution
(ADR) process.
Subpart E--Default Adjudicative Process
17.37 Default adjudicative process procedures for protests.
17.39 Default adjudicative process procedures for contract
disputes.
Subpart F--Finality and Review
17.41 Final orders.
17.43 Judicial review.
[[Page 45383]]
Appendix A To Part 17--Alternative Dispute Resolution (ADR)
Authority: 5 U.S.C. 570-581; 49 U.S.C. 106(f)(2), 40110, 40111,
40112, 46102, 46014, 46105, 46109, and 46110.
Subpart A--General
Sec. 17.1 Applicability.
This part applies to all protests or contract disputes against the
FAA.
Sec. 17.3 Definitions.
(a) Accrual means to come into existence as a legally enforceable
claim.
(b) Accrual of a contract dispute occurs on the date when all
events underlying the dispute were known or should have been known.
(c) Acquisition Management System (AMS) establishes the policies,
guiding principles, and internal procedures for the FAA's acquisition
system.
(d) Administrator means the Administrator of the Federal Aviation
Administration.
(e) Alternative Dispute Resolution (ADR) is the primary means of
dispute resolution that would be employed by the FAA's Office of
Dispute Resolution for Acquisition (ODRA). See Appendix A of this part.
(f) Compensated Neutral refers to an impartial third party chosen
by the parties to act as a facilitator, mediator, or arbitrator
functioning to resolve the protest or contract dispute under the
auspices of the ODRA. The parties pay equally for the services of a
Compensated Neutral. A Dispute Resolution officer (DRO) or Neutral
cannot be a Compensated Neutral.
(g) Contract Dispute, as used in this part, means a written request
to the ODRA seeking as a matter of right, the payment of money in a sum
certain, the adjustment or interpretation of contract terms, or other
relief arising under, relating to or involving an alleged breach of
contract, entered into pursuant to the AMS. A contract dispute does not
require, as a prerequisite, the issuance of a Contracting Officer final
decision.
(h) Default Adjudicative Process is an adjudicative process used to
resolve protests or contract disputes where the parties cannot achieve
resolution through informal communication or the use of ADR. The
Default Adjudicative Process is conducted by a DRO or Special Master
selected by the ODRA to serve as ``adjudicative officers,'' as that
term is used in 14 CFR part 14.
(i) Discovery in the Default Adjudicative Process is the procedure
where opposing parties in a protest or contract dispute may, when
allowed, obtain testimony from, or documents and information held by,
other parties or non-parties.
(j) Dispute Resolution Officer (DRO) is a licensed attorney
reporting to the ODRA. The term DRO can include the Director of the
ODRA, ODRA staff attorneys or other FAA attorneys assigned to the ODRA.
(k) An interested party is designated as such at the discretion of
the ODRA, and in the context of a bid protest is one who: Prior to the
closing date for responding to a Screening Information Request (SIR),
is an actual or prospective participant in the procurement, excluding
prospective subcontractors; or after the closing date for responding to
a SIR, is an actual participant who would be next in line for award
under the SIR's selection criteria if the protest is successful, or is
an actual participant who is not next in line for award under the SIR's
selection criteria but who alleges specific improper actions or
inactions by the Program Office that caused the party to be other than
next in line for award. Proposed subcontractors are not eligible to
protest. The awardee of the contract may be allowed to participate in
the protest as an intervenor.
(l) An intervenor is an interested party other than the protester
whose participation in a protest is allowed by the ODRA.
(m) Neutral refers to an impartial third party in the ADR process
chosen by the ODRA to act as a facilitator, mediator, arbitrator, or
otherwise to resolve the protest or contract dispute. A Neutral can be
a DRO or a person not an employee of the FAA who serves on behalf of
the ODRA.
(n) The Office of Dispute Resolution for Acquisition (ODRA), under
the direction of the Director, acts on behalf of the Administrator to
manage the FAA Dispute Resolution Process, and to recommend action to
the Administrator on matters concerning protests or contract disputes.
(o) Parties include a protester or a contractor, the FAA, and any
intervenor.
(p) Program Office, as used in these rules, refers to the FAA
organization responsible for the procurement activity and includes the
Contracting Officer (CO) and assigned FAA legal counsel, when that FAA
organization represents the FAA as a party to a protest or contract
dispute before the ODRA.
(q) Screening Information Request (SIR) means a request by the FAA
for information concerning an approach to meeting a requirement
established by the FAA.
(r) A Special Master is a legal professional, usually with
extensive adjudicative experience, who has been assigned by the ODRA to
act as its finder of fact, and to make findings and recommendations
based upon AMS policy and applicable law and authorities in the Default
Adjudicative Process.
Sec. 17.5 Delegation of authority.
(a) The authority of the Administrator to conduct dispute
resolution proceedings concerning acquisition matters, is delegated to
the Director of the Office of Dispute Resolution for Acquisition.
(b) The Director of the Office of Dispute Resolution for
Acquisition may redelegate to Special Masters and DROs such delegated
authority in paragraph (a) of this section as is deemed necessary by
the Director for efficient resolution of an assigned protest or
contract dispute.
Sec. 17.7 Filing and computation of time.
(a) Filing of a protest or contract dispute may be accomplished by
mail, overnight delivery, hand delivery, or by facsimile. A protest or
contract dispute is considered to be filed on the date it is received
by the ODRA during normal business hours. The ODRA's normal business
hours are from 8:30 a.m. to 5:00 p.m. EST or EDT, whichever is in use.
A protest or contract dispute received via mail, after the time period
prescribed for filing, shall not be considered timely filed even though
it may be postmarked within the time period prescribed for filing.
(b) Submissions to the ODRA after the initial filing of the protest
or contract dispute may be accomplished by any means available in
paragraph (a) of this section.
(c) The time limits stated in this part are calculated in business
days, which exclude weekends and Federal holidays. In computing time,
the day of the event beginning a period of time shall not be included.
If the last day of a period falls on a weekend or a Federal holiday,
the first business day following the weekend or holiday shall be
considered the last day of the period.
(d) A petition for review shall be filed pursuant to 49 U.S.C.
46110, and a copy of the petition shall be served upon the ODRA and the
Program Office attorney of record on the day the petition is filed with
the court.
Sec. 17.9 Protective orders.
(a) The ODRA may issue protective orders addressing the treatment
of protected information, either at the request of a party or upon its
own initiative. Such information may include proprietary, confidential,
or source-selection-sensitive material, or
[[Page 45384]]
other information the release of which could result in a competitive
advantage to one or more firms.
(b) The terms of protective orders can be negotiated by the
parties, subject to the approval of the ODRA. The protective order
shall establish procedures for application for access to protected
information, identification and safeguarding of that information, and
submission of redacted copies of documents omitting protected
information.
(c) After a protective order has been issued, counsel or
consultants retained by counsel appearing on behalf of a party may
apply for access to the material under the order by submitting an
application to the ODRA, with copies furnished simultaneously to all
parties. The application shall establish that the applicant is not
involved in competitive decisionmaking for any firm that could gain a
competitive advantage from access to the protected information and that
the applicant will diligently protect any protected information
received from inadvertent disclosure. Objections to an applicant's
admission shall be raised within two (2) days of the application,
although the ODRA may consider objections raised after that time for
good cause.
(d) Any violation of the terms of a protective order may result in
the imposition of sanctions or the taking of the actions as the ODRA
deems appropriate.
(e) The parties are permitted to agree upon what material is to be
covered by a protective order, subject to approval by the ODRA.
Subpart B--Protests
Sec. 17.11 Matters not subject to protest.
The following matters may not be protested:
(a) FAA purchases from or through federal, state, local, and tribal
governments and public authorities;
(b) Grants;
(c) Cooperative agreements;
(d) Other transactions which do not fall into the category of
procurement contracts subject to the AMS.
Sec. 17.13 Dispute resolution process for protests.
(a) Protests concerning FAA SIRs or contract awards shall be
resolved pursuant to this part.
(b) The offeror initially should attempt to resolve any issues
concerning potential protests with the CO. The CO, in coordination with
FAA legal counsel, will make reasonable efforts to answer questions
promptly and completely, and, where possible, to resolve concerns or
controversies.
(c) Offerors or prospective offerors shall file a protest with the
ODRA in accordance with Sec. 17.15. The time limitations set forth in
Sec. 17.17 will not be extended by attempts to resolve a potential
protest with the CO.
(d) A status conference may be called by the ODRA after the protest
is filed to attempt resolution of the protest through a combination of
informal communication and early neutral evaluation. If a conference is
called, the parties will have five (5) business days after the status
conference to inform the ODRA whether the parties agree to use ADR
pursuant to Subpart D of this part; or to state why they cannot use ADR
and must resort to the Default Adjudicative Process, pursuant to
Subpart E of this part.
(1) Should the parties decide to utilize ADR, they will have five
(5) business days after the status conference within which to agree
upon the use of an ODRA-approved Neutral or a Compensated Neutral, in
accordance with Sec. 17.33(c), as well as upon the ADR technique to be
employed. Within those five (5) business days, the parties are required
to execute and file with the ODRA a written ADR agreement, pursuant to
Sec. 17.33(h). The parties will have up to twenty (20) business days to
complete the ADR process.
(2) If the parties do not agree to use ADR, the Program Office will
have ten (10) business days after the status conference within which to
submit a Program Office response to the protest, after which the
protest will proceed under the Default Adjudicative Process. If the ADR
process is undertaken, but subsequently proves to be unsuccessful, a
DRO or Special Master will be assigned to oversee the Default
Adjudicative Process, pursuant to Subpart E of this part.
(e) The ODRA retains the discretion to modify any time constraints
for pending protests.
(f) Multiple protests concerning the same SIR, solicitation, or
contract award may be consolidated at the discretion of the ODRA, and
assigned to a single DRO.
(g) Procurement activities, and, where applicable, contractor
performance pending resolution of a protest shall continue during the
pendency of a protest, unless there is a compelling reason to suspend
or delay all or part of the procurement activities. Pursuant to
Secs. 17.15(d) and 17.17(b), the ODRA may recommend suspension of
contract performance for a compelling reason. A decision to suspend or
delay procurement activities or contractor performance would be made in
writing by the FAA Administrator or the Administrator's delegee for
that purpose.
Sec. 17.15 Filing a protest.
(a) Only an interested party may file a protest, and shall initiate
a protest by filing a written protest with the ODRA within the times
set forth below, or the protest shall be dismissed as untimely:
(1) Protests based upon alleged improprieties in a solicitation or
a SIR that are apparent prior to bid opening or the time set for
receipt of initial proposals shall be filed prior to bid opening or the
time set for the receipt of initial proposals;
(2) In procurements where proposals are requested, alleged
improprieties that do not exist in the initial solicitation, but which
are subsequently incorporated into the solicitation, must be protested
not later than the next closing time for receipt of proposals following
the incorporation;
(3) For protests other than those related to alleged solicitation
improprieties, the protest must be filed within seven (7) business days
of the time that the protester knew or should have known of the grounds
for the protest;
(4) If the protester has requested a post-award debriefing from the
FAA, then any protest other than one related to solicitation
improprieties shall be filed not later than five (5) business days
after the date on which the FAA holds that debriefing.
(b) Protests shall be filed at:
(1) Office of Dispute Resolution for Acquisition, AGC-70, Federal
Aviation Administration, 400 7th Street, S.W., Room 8332, Washington,
DC 20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
(2) Other address as shall be published from time to time in the
Federal Register.
(c) A protest shall be in writing, and set forth:
(1) The protester's name, address, telephone number, and facsimile
(FAX) number;
(2) The name, address, telephone number, and FAX number of a person
designated by the protester (Protester Designee), and who shall be duly
authorized to represent the protester, to be the point of contact;
(3) The SIR number or, if available, the contract number and the
name of the CO;
(4) The basis for the protester's status as an interested party;
(5) The facts supporting the timeliness of the protest;
(6) Whether the protester requests a protective order, the material
to be protected, and attach a redacted copy of that material;
[[Page 45385]]
(7) A detailed statement of both the legal and factual grounds of
the protest, and attach one (1) copy of each relevant document;
(8) The remedy or remedies sought by the protester, as set forth in
Sec. 17.21;
(9) The signature of the Protester Designee, or another person duly
authorized to represent the protester.
(d) If the protester wishes to request a suspension or delay of the
procurement and believes there are compelling reasons that, if known to
the FAA, would cause the FAA to suspend or delay the procurement
because of the protested action, the protester shall:
(1) Set forth each such compelling reason, supply all facts
supporting the protester's position, identify each person with
knowledge of the facts supporting each compelling reason, and identify
all documents that support each compelling reason.
(2) Clearly identify any adverse consequences to the protester, the
FAA, or any interested party, should the FAA not suspend or delay the
procurement.
(e) At the same time as filing the protest with the ODRA, the
protester shall serve a copy of the protest on the CO and any other
official designated in the SIR for receipt of protests by means
reasonably calculated to be received by the CO on the same day as it is
to be received by the ODRA. The protest shall include a signed
statement from the protester, certifying to the ODRA the manner of
service, date, and time when a copy of the protest was served on the CO
and other designated official(s).
(f) Upon receipt of the protest, the CO shall inform the ODRA of
the names, addresses, and telephone and facsimile numbers of the
awardee and/or other interested parties. The CO shall also immediately
notify the awardee and/or interested parties in writing of the
existence of the protest. The awardee and/or interested parties shall
notify the ODRA in writing, of their interest in participating in the
protest as intervenors within two (2) business days of receipt of the
CO's notification, and shall, in such notice, designate a person as the
point of contact for the ODRA. Such notice may be submitted to the ODRA
by facsimile.
(g) The ODRA has discretion to designate the parties who shall
participate in the protest as intervenors.
Sec. 17.17 Initial protest procedures.
(a) When a protest is filed with the ODRA, a DRO will be assigned
to the protest.
(b) If the protester requests a suspension or delay of procurement
pursuant to Sec. 17.15(d), the Program Office shall submit a response
to the request to the ODRA within two (2) business days of receipt of
the protest. The ODRA, in its discretion, may recommend such suspension
or delay to the Administrator or the Administrator's designee.
(c) The ODRA may convene a status conference to--
(1) Review procedures;
(2) Identify and develop issues related to summary dismissal and
suspension recommendations;
(3) Handle issues related to protected information and the issuance
of any needed protective order;
(4) Encourage the parties to use ADR;
(5) Conduct early neutral evaluation of the protest by the DRO, at
the discretion of the ODRA; and
(6) For any other reason deemed appropriate by the DRO or by the
ODRA.
(d) On the fifth business day following a status conference, the
parties will file with the ODRA--
(1) A joint statement that they have decided to pursue ADR to
resolve the protest; or
(2) A written explanation as to why ADR cannot be used and why the
parties will have to resort to the use of the Default Adjudicative
Process.
(e) Should the parties elect to utilize ADR to resolve the protest,
they will agree upon the neutral to conduct the ADR proceedings (either
an ODRA-designated Neutral or a Compensated Neutral of their own
choosing) pursuant to Sec. 17.33(c), and shall execute and file with
the ODRA a written ADR agreement within five (5) business days after
the status conference.
(f) Should the parties indicate at the status conference that ADR
will not be used, then within ten (10) business days following the
status conference, the Program Office will file with the ODRA a Program
Office response to the protest. The Program Office response shall
consist of a statement of pertinent facts, applicable legal or other
defenses, and shall be accompanied by all documents deemed relevant by
the Program Office, position. A copy of the response shall be furnished
to the protester at the same time, and by the same means, as it is
filed with the ODRA. At that point the protest will proceed under the
Default Adjudicative Process pursuant to Sec. 17.37.
(g) The time limitations of this section may be extended by the
ODRA for good cause.
Sec. 17.19 Dismissal or summary decision of protests.
(a) At any time during the protest, any party may request, by
motion to the ODRA, that--
(1) The protest, or any count or portion of a protest, be dismissed
for lack of jurisdiction, if the protester fails to establish that the
protest is timely, or that the protester has no standing to pursue the
protest;
(2) The protest, or any count or portion of a protest, be dismissed
for failure to state a claim, if the protester fails to state a matter
upon which relief may be had;
(3) A summary decision be issued with respect to the protest, or
any count or portion of a protest, if:
(i) The undisputed material facts demonstrate a rational basis for
the Program Office action or inaction in question, and there are no
other material facts in dispute that would overcome a finding of such a
rational basis; or
(ii) The undisputed material facts demonstrate, that no rational
basis exists for the Program Office action or inaction in question, and
there are no material facts in dispute that would overcome a finding of
the lack of such a rational basis.
(b) In connection with any request for dismissal or summary
decision, the ODRA shall consider any material facts in dispute, in a
light most favorable to the party against whom the request is made.
(c) Either upon motion by a party or on its own initiative, the
ODRA may, at any time, exercise its discretion to:
(1) Recommend to the Administrator dismissal or the issuance of a
summary decision with respect to the entire protest;
(2) Dismiss the entire protest or issue a summary decision with
respect to the entire protest, if delegated that authority by the
Administrator; or
(3) Dismiss or issue a summary decision with respect to any count
or portion of a protest.
(d) A dismissal or summary decision regarding the entire protest by
either the Administrator, or the ODRA by delegation, shall be construed
as a final agency order. A dismissal or summary decision that does not
resolve all counts or portions of a protest shall not constitute a
final agency order, unless and until such dismissal or decision is
incorporated or otherwise adopted in a decision by the Administrator
(or the ODRA, by delegation) regarding the entire protest.
Sec. 17.21 Protest remedies.
(a) The ODRA may recommend one or more, or a combination of, the
following remedies--
(1) Amend the SIR;
(2) Refrain from exercising options under the contract;
(3) Issue a new SIR;
[[Page 45386]]
(4) Terminate an existing contract for the FAA's convenience, and
require recompetition;
(5) Direct an award to the protester;
(6) Award bid and proposal costs; or
(7) Any combination of the above remedies, or any other action
consistent with the AMS that is appropriate under the circumstances.
(b) In determining the appropriate recommendation, the ODRA should
consider the circumstances surrounding the procurement or proposed
procurement including, but not limited to: the nature of the
procurement deficiency; the degree of prejudice to other parties or to
the integrity of the procurement system; the good faith of the parties;
the extent of performance completed; the cost of any proposed remedy to
the FAA; the urgency of the procurement; and the impact of the
recommendation on the FAA.
(c) Attorney's fees of a prevailing protester are allowable to the
extent permitted by the Equal Access to Justice Act, 5 U.S.C.
504(a)(1)(EAJA).
Subpart C--Contract Disputes
Sec. 17.23 Dispute resolution process for contract disputes.
(a) All contract disputes arising under contracts entered into
pursuant to the AMS shall be resolved under this part.
(b) Contractors shall file contract disputes with the ODRA and the
CO pursuant to Sec. 17.25.
(c) After filing the contract dispute, the contractor should seek
informal resolution with the CO:
(1) The CO, with the advice of FAA legal counsel, has full
discretion to settle contract disputes, except where the matter
involves fraud;
(2) The parties shall have up to thirty (30) business days within
which to resolve the dispute informally, and may contact the ODRA for
assistance in facilitating such a resolution; and
(3) If no informal resolution is achieved during the thirty (30)
business day period, the parties shall file a joint statement with the
ODRA pursuant to Sec. 17.27.
(d) If informal resolution of the contract dispute appears probable
during the informal resolution period, the contractor and the CO may
jointly request one extension of time from the ODRA to resolve the
matter before filing the joint statement under Sec. 17.27.
(e) The ODRA may hold a status conference with the parties within
ten (10) business days after receipt of the joint statement required by
Sec. 17.27, in order to establish the procedures to be utilized to
resolve the contract dispute.
(f) The FAA will require continued performance in accordance with
the provisions of a contract, pending resolution of a contract dispute
arising under or related to that contract.
Sec. 17.25 Filing a contract dispute.
(a) Contract disputes are to be in writing and shall contain:
(1) The contractor's name, address, telephone, and fax number;
(2) The contract number and the name of the Contracting Officer;
(3) A detailed statement of the legal and factual basis of the
contract dispute or of each element or count of the contract dispute,
including copies of relevant documents;
(4) All information establishing that the contract dispute was
timely filed;
(5) A request for a specific remedy, and if a monetary remedy is
requested, a sum certain must be specified; and
(6) The signature of a duly authorized representative of the
initiating party.
(b) Contract disputes shall be filed by mail, in person, by
overnight delivery or by facsimile at the following address:
(1) Office of Dispute Resolution for Acquisition, AGC-70, Federal
Aviation Administration, 400 7th Street, SW., Room 8332, Washington, DC
20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
(2) Other address as shall be published from time to time in the
Federal Register.
(c) A contract dispute against the FAA shall be filed with the ODRA
within six months of the accrual of the contract dispute. A contract
dispute by the FAA against a contractor (excluding contract disputes
alleging warranty issues, fraud or latent defects) likewise may be
filed within six months after the accrual of the contract dispute. If
the contract underlying provides for time limitations for filing of
contract disputes with the ODRA, the limitation periods in the contract
shall control over the limitation period of this section. In no event
will either party be permitted to file with the ODRA a contract dispute
seeking an equitable adjustment or other damages after the contractor
has accepted final contract payment, with the exception of FAA claims
related to warranty issues, fraud or latent defects.
(d) A party shall serve a copy of the contract dispute upon the
other party, by means reasonably calculated to be received on the same
day as the filing is to be received by the ODRA.
Sec. 17.27 Submission of joint statement.
(a) If the matter has not been resolved informally, the parties
shall file a joint statement with the ODRA no later than thirty (30)
business days after the filing of the contract dispute. The ODRA may
extend this time for good cause.
(b) The joint statement of the case shall include either--
(1) A request for ADR, and an executed ADR agreement, pursuant to
Sec. 17.33(d), specifying which ADR techniques will be employed; or
(2) A written explanation as to why ADR will not be utilized and
why the parties must resort to the Default Adjudicative Process.
(c) Such joint statements shall be directed to the following
address:
(1) Office of Dispute Resolution for Acquisition, AGC-70, Federal
Aviation Administration, 400 7th Street, SW., Room 8332, Washington, DC
20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
(2) Other address as shall be published from time to time in the
Federal Register.
Sec. 17.29 Dismissal or summary decision of contract disputes.
(a) Any party may request, by motion to the ODRA, that a contract
dispute be dismissed, or that a count or portion of a contract dispute
be stricken, if: (1) It was not timely filed with the ODRA; (2) It was
filed by a subcontractor; (3) It fails to state a matter upon which
relief may be had; or (4) It involves a matter not subject to the
jurisdiction of the ODRA.
(b) In connection with any request for dismissal of a contract
dispute, or to strike a count or portion thereof, the ODRA should
consider any material facts in dispute in a light most favorable to the
party against whom the request for dismissal is made.
(c) At any time, whether pursuant to a motion or request or on its
own initiative and at its discretion, the ODRA may--
(1) Dismiss or strike a count or portion of a contract dispute;
(2) Recommend to the Administrator that the entire contract dispute
be dismissed; or
(3) With delegation from the Administrator, dismiss the entire
contract dispute.
(d) An order of dismissal of the entire contract dispute, issued
either by the Administrator or by the ODRA where delegation exists, on
the grounds set forth in this section, shall constitute a final agency
order. An ODRA order dismissing or striking a count or portion of a
contract dispute shall not constitute a final agency order, unless and
until such ODRA order is incorporated or otherwise adopted in a
decision of the Administrator.
[[Page 45387]]
Subpart D--Alternative Dispute Resolution
Sec. 17.31 Use of alternative dispute resolution.
(a) The ODRA shall encourage the parties to utilize ADR as their
primary means to resolve protests and contract disputes.
(b) The parties shall make a good faith effort to employ ADR in
every appropriate case. The ODRA will encourage use of ADR techniques
such as mediation, neutral evaluation, or minitrials, or variations of
these techniques as agreed by the parties and approved by the ODRA.
(c) The Default Adjudicative Process will be used where the parties
cannot achieve agreement on the use of ADR; or where ADR has been
employed but has not resolved all pending issues in dispute; or when
ODRA concludes that ADR will not provide an expeditious means of
resolving a particular dispute.
Sec. 17.33 Election of alternative dispute resolution process.
(a) The ODRA makes its personnel available to serve as Neutrals in
ADR proceedings and, upon request by the parties, attempts to make
qualified non-FAA personnel available to serve as Neutrals through
neutral-sharing programs and other similar arrangements. The parties
may elect to employ a mutually acceptable Compensated Neutral, and
shall share equally the costs of any such Compensated Neutral.
(b) The parties using an ADR process to resolve a protest shall
submit an executed ADR agreement containing the information outlined in
paragraph (d) of this section to the ODRA within five (5) business days
after the ODRA conducts a status conference pursuant to Sec. 17.17(c).
The ODRA may extend this time for good cause.
(c) The parties using an ADR process to resolve a contract dispute
shall submit an executed ADR agreement containing the information
outlined in paragraph (d) of this section to the ODRA as part of the
joint statement specified under Sec. 17.27.
(d) The parties to a protest or contract dispute who use ADR shall
agree to submit to the ODRA an ADR agreement setting forth:
(1) The type of ADR technique(s) to be used;
(2) The agreed-upon manner of using the ADR process; and
(3) Whether the parties agree to use a Neutral through the ODRA or
to use a Compensated Neutral of their choosing, and, if a Compensated
Neutral is to be used, that the cost of the Compensated Neutral's
services shall be shared equally.
(e) Non-binding ADR techniques are not mutually exclusive, and may
be used in combination if the parties agree that a combination is most
appropriate to the dispute. The techniques to be employed must be
determined in advance by the parties and shall be expressly described
in their ADR agreement. The agreement may provide for the use of any
fair and reasonable ADR technique that is designed to achieve a prompt
resolution of the matter.
(f) Binding arbitration may be permitted on a case-by-case basis;
and shall be subject to the provisions of 5 U.S.C. 575(a), (b), and
(c), and applicable law. Arbitration that is binding on the parties,
subject to the Administrator's right to approve or disapprove the
arbitrator's decision, may also be permitted.
(g) For protests, the ADR process shall be completed within twenty
(20) business days from the filing of an executed ADR agreement with
the ODRA unless the parties request, and are granted an extension of
time from the ODRA.
(h) For contract disputes, the ADR process shall be completed
within forty (40) business days from the filing of an executed ADR
agreement with the ODRA, unless the parties request, and are granted an
extension of time from the ODRA.
(i) The parties shall submit to the ODRA an agreed-upon protective
order, if necessary, in accordance with the requirements of Sec. 17.9.
Sec. 17.35 Selection of neutrals for the alternative dispute
resolution (ADR) process.
(a) In connection with the ADR process, the parties may select a
Compensated Neutral acceptable to both, or may request the ODRA to
provide the services of a DRO or Neutral.
(b) In cases where the parties select a Compensated Neutral who is
not familiar with ODRA procedural matters, the parties or Compensated
Neutral may request the ODRA for the services of a DRO to advise on
such matters.
(c) The ODRA may appoint a DRO to serve as the Neutral for small
dollar value and/or simplified acquisitions, unless the parties agree
otherwise.
Subpart E--Default Adjudicative Process
Sec. 17.37 Default adjudicative procedures for protests.
(a) The Default Adjudicative Process for protests will commence on
the latter of:
(1) Submission of the Program Office response to the ODRA pursuant
to Sec. 17.17(f) ten (10) business days following the status conference
held pursuant to Sec. 17.17(c); or
(2) The parties submission of joint written notification to the
ODRA that the ADR process has not resolved all outstanding issues, or
that the twenty (20) business-day period allotted for ADR for protests
has either expired or will expire with no reasonable probability of the
parties achieving a resolution.
(b) The Director of the ODRA may select a DRO or a Special Master
to conduct fact-finding proceedings and to provide findings and
recommendations concerning some or all of the matters in controversy.
(c) The DRO or Special Master may prepare procedural orders for the
proceedings as deemed appropriate; and may require additional
submissions from the parties.
(d) The DRO or Special Master may convene the parties and/or their
representatives, as needed, to pursue the Default Adjudicative Process.
(e) If, in the sole judgment of the DRO or Special Master, the
parties have presented written material sufficient to allow the protest
to be decided on the record presented, the DRO or Special Master shall
have the discretion to decide the protest on that basis.
(f) Discovery may be permitted within the discretion of the DRO or
Special Master. The DRO or Special Master shall manage the discovery
process, including limiting its length and availability, and shall
establish schedules and deadlines for discovery consistent with time
frames established in this part.
(g) The DRO or Special Master may permit or request oral
presentations, and may limit the presentations to specific witnesses
and/or issues.
(h) The Director of the ODRA may review the status of any protest
in the Default Adjudicative Process with the DRO or Special Master
during the pendency of the process.
(i) Within thirty (30) business days of the commencement of the
Default Adjudicative Process, or at the discretion of the ODRA, the DRO
or Special Master will submit findings and recommendations for the ODRA
that shall contain the following:
(1) Findings of fact;
[[Page 45388]]
(2) Application of the principles of the AMS, and any applicable
law or authority to the findings of fact;
(3) A recommendation for a final FAA order; and
(4) If appropriate, suggestions for future FAA action.
(j) In the findings and recommendations, the DRO or Special Master
shall state whether or not the Program Office actions in question had a
rational basis, and whether or not the Program Office decision under
question was arbitrary, capricious or an abuse of discretion. Findings
of fact underlying the recommendations must be supported by substantial
evidence.
(k) The DRO or Special Master, where appropriate, has broad
discretion to recommend a remedy that is consistent with Sec. 17.21.
(l) A DRO or Special Master shall submit findings and
recommendations only to the Associate Chief Counsel and Director of the
ODRA. The findings and recommendations will be released to the parties,
subject to any protective order, upon issuance of the Administrator's
final order in the case.
(m) The FAA Administrator or the Administrator's delegee issues the
final agency decision.
Sec. 17.39 Default adjudicative process procedures for contract
disputes.
(a) The Default Adjudicative Process for contract disputes will
commence on the latter of:
(1) The parties' submission to the ODRA of a joint statement
pursuant to Sec. 17.27 which indicates that ADR will not be utilized;
or
(2) The parties' submission to the ODRA of joint notification that
the parties have not settled some or all of the dispute issues, and it
is unlikely that they can do so within the time period allotted and/or
any reasonable extension.
(b) Within twenty (20) business days of the commencement of the
Default Adjudicative Process, the Program Office shall prepare and
submit to the ODRA, with a copy to the contractor, a chronologically
arranged and indexed Dispute File, containing all documents which are
relevant to the facts and issues in dispute. The contractor will be
entitled to supplement such a Dispute File with additional documents.
(c) The Director of the ODRA shall assign a DRO or a Special Master
to conduct fact-finding proceedings and provide findings and
recommendations concerning the issues in dispute.
(d) The Director of the ODRA may delegate discretion to the DRO or
Special Master to conduct a Status Conference within ten (10) business
days of the commencement of the Default Adjudicative Process, and,
within the scope of the delegation, either at such a conference, or at
any time during the Default Adjudicative Process, to issue such orders
or decisions as are considered necessary in the discretion of the DRO
or Special Master to promote the efficient resolution of the contract
dispute.
(e) At any such Status Conference, or as necessary during the
Default Adjudicative Process, the DRO or Special Master will:
(1) Determine the minimum amount of discovery required to resolve
the dispute;
(2) Review the need for a protective order, and if one is needed,
prepare a protective order pursuant to Sec. 17.9;
(3) Determine whether any issue can be stricken; and
(4) Prepare necessary procedural orders for the proceedings.
(f) At a time or at times determined by the DRO or Special Master,
and in advance of the decision of the case, the parties shall make
final submissions to the ODRA and to the DRO or Special Master, which
submissions shall include the following:
(1) A joint statement of the issues;
(2) A joint statement of undisputed facts related to each issue;
(3) Separate statements of dispute facts related to each issue,
with appropriate citations to documents in the Dispute File, to pages
of transcripts of any hearing or deposition, or to any affidavit or
exhibit which a party may wish to submit with its statement;
(4) Separate legal analyses in support of the parties' respective
positions on disputed issues.
(g) Each party shall serve a copy of its final submission on the
other party by means reasonably calculated so that such submission is
received by the other party on the same date it is received by the
ODRA.
(h) The DRO or Special Master may decide the contract dispute on
the basis of the submissions referenced in this section and the record,
or may, in the DRO or Special Master's discretion, allow the parties to
make additional presentations at a hearing, and/or in writing.
(i) The DRO or Special Master shall prepare findings and
recommendations within thirty (30) business days from receipt of the
final submissions of the parties, unless that time is extended by the
ODRA for good cause. The findings and recommendations shall contain
findings of fact, application of the principles of the AMS and other
law or authority applicable to the findings of fact, a recommendation
for a final FAA order, and, if appropriate, suggestions for future FAA
action.
(j) As a part of the findings and recommendations, the DRO or
Special Master shall review the disputed issue or issues in the context
of the contract, any applicable law and the AMS. Any finding of fact
set forth in the findings and recommendations must be supported by
substantial evidence.
(k) A DRO or Special Master's findings and recommendations shall be
submitted only to the Director of the ODRA, and shall be released to
the parties upon issuance of the final agency order for the contract
dispute.
(l) The FAA Administrator or the Administrator's delegee issues the
final agency order on the contract dispute.
(m) Attorneys' fees of a qualified, prevailing contractor are
allowable to the extent permitted by the EAJA, 5 U.S.C. 504(a)(1). If
required by contract or applicable law, the FAA will pay interest on
the amount found due the contractor, if any.
Subpart F--Finality and Review
Sec. 17.41 Final orders.
A final FAA order is issued by the FAA Administrator or by a
delegee of the Administrator. The order would be issued only when the
offeror, potential offeror, or contractor exhausts its administrative
remedies under, this FAA dispute resolution process.
Sec. 17.43 Judicial review.
(a) A protester or contractor may seek review of a final FAA order
in the manner otherwise prescribed by law.
(b) A copy of the petition for review shall be filed with the ODRA
and the Program Office attorney on the date that the petition for
review is filed with the appropriate circuit court of appeals.
Appendix A to Part 17--Alternative Dispute Resolution (ADR)
A. The FAA dispute resolution procedures encourage the parties
to protests and contract disputes to use ADR as the primary means to
resolve protests and contract disputes, pursuant to the
Administrative Dispute Resolution Act of 1996, Pub. L. 104-320, 5
U.S.C. 570-579, and Department of Transportation and FAA policies to
utilize ADR to the maximum extent practicable. Under the procedures
presented in this part 17, the ODRA would encourage parties to
consider ADR techniques such as case evaluation, mediation, or
arbitration.
B. ADR encompasses a number of processes and techniques for
resolving protests or contract disputes. The most commonly used
types include:
(1) Mediation. The Neutral or Compensated Neutral ascertains the
needs and interests of both parties and facilitates discussions
between or among the parties and an
[[Page 45389]]
amicable resolution of their differences, seeking approaches to
bridge the gaps between the parties' respective positions. The
Neutral or Compensated Neutral can meet with the parties separately,
conduct joint meetings with the parties' representatives, or employ
both methods in appropriate cases.
(2) Neutral Evaluation. At any stage during the ADR process, as
the parties may agree, the Neutral or Compensated Neutral will
provide a candid assessment and opinion of the strengths and
weaknesses of the parties' positions as to the facts and law, so as
to facilitate further discussion and resolution.
(3) Minitrial. The minitrial resembles adjudication, but is less
formal. It is used to provide an efficient process for airing and
resolving more complex, fact-intensive disputes. The parties select
principal representatives who should be senior officials of their
respective organizations, having authority to negotiate a complete
settlement. It is preferable that the principals be individuals who
were not directly involved in the events leading to the dispute and
who, thus, may be able to maintain a degree of impartiality during
the proceeding. In order to maintain such impartiality, the
principals typically serve as ``judges'' over the mini-trial
proceeding together with the Neutral or Compensated Neutral. The
proceeding is aimed at informing the principal representatives and
the Neutral or Compensated Neutral of the underlying bases of the
parties' positions. Each party is given the opportunity and
responsibility to present its position. The presentations may be
made through the parties' counsel and/or through some limited
testimony of fact witnesses or experts, which may be subject to
cross-examination or rebuttal. Normally, witnesses are not sworn in
and transcripts are not made of the proceedings. Similarly, rules of
evidence are not directly applicable, though it is recommended that
the Neutral or Compensated Neutral be provided authority by the
parties' ADR agreement to exclude evidence which is not relevant to
the issues in dispute, for efficiency in the proceeding
expeditiously. Frequently, minitrials are followed either by direct
one-on-one negotiations by the parties' principals or by meetings
between the Neutral/Compensated Neutral and the parties' principals,
at which the Neutral/Compensated Neutral may offer his or her views
on the parties' positions (i.e., Neutral Evaluation) and/or
facilitate negotiations and ultimate resolution via Mediation.
Issued in Washington, DC, on August 14, 1998.
James W. Whitlow,
Deputy Chief Counsel.
[FR Doc. 98-22386 Filed 8-24-98; 8:45 am]
BILLING CODE 4910-13-P
