Government Contracts Monitor

Government Contracts Alternative Dispute Resolution

May 19, 2009

By: Lindsay Simmons

Alternative dispute resolution (ADR) promises to play an increasingly critical role in government contracts litigation. 

In its broadest sense, ADR is any process that settles a dispute outside of the courtroom, for example, mediation and arbitration (read a full article on the concept, as applied to government contracts, here).  ADR has grown increasingly popular as litigation costs have risen, court backlogs have grown, and ADR has gained general acceptability. At a recent American Bar Association (ABA) forum, an esteemed panel – composed of judges from several specialized government contracts forums, including the Armed Services and Civilian Boards of Contract Appeals, the Court of Federal Claims, and the General Accountability Office (GAO) – explained that ADR is now the preferred and likely outcome of disputes brought before these judicial bodies. 

Courts and boards have endorsed a wide variety of ADR methods in the government contracts context. According to one judge, “anything goes” when it comes to choosing an ADR method. The ABA panel noted that parties are typically given notice early in the dispute that the judge is willing to work with the parties to determine a method that works best for both sides. For instance, some contractors may prefer binding arbitration over non-binding mediation; some parties may prefer to hire outside arbitrators instead of requesting that a judge perform that role. The options are limited only by “the parties’ creativity.”   An Armed Services Board of Contract Appeals (ASBCA) notice to parties states, “Any method which brings the parties together in settlement, or partial settlement, of their disputes is a good method.” Since ADR must be mutually agreed upon – and is not necessarily a legally binding process – parties are given the opportunity to explore a variety of methods that may resolve disputes.  

Judge Carol Park-Conroy of the ASBCA emphasized that flexibility and conciliation are the keys to successful ADR before her board. Judge Park-Conroy noted that for ADR to be successful, parties need to keep several points in mind:

• The parties’ themselves need to be involved in the ADR process. ADR cannot be lawyer-driven; the contractor needs to be involved as well.  Ideally, a principal of each of the parties will be present during discussions. 

• ADR is (almost always) a confidential process. Settlement discussions can be a time to explore the other side’s position without the possibility of statements being disclosed at trial.

• The court or board involved may seek private discussions with various combinations of participants’ principals and/or counsel. It is to the parties’ advantage to work with the court or board to facilitate settlement.

• It is advisable to memorialize the ADR. Even if the parties do not come to an agreement, a written record of the parties’ positions can be a starting point for additional ADR sessions or finalization of a settlement.

ADR is not always successful, and parties should be prepared to make concessions to reach a beneficial outcome, but ADR has the potential to mitigate litigation risk or avoid litigation entirely. Government contracts ADR requires familiarity with these specialized forums and a deep understanding of the issues underlying any government contracts dispute. If you have any questions about government contracts ADR, please contact Lindsay Simmons in Jackson Kelly’s Washington, DC-based government contracts practice group.