Overview
FAR 33.214 establishes the framework for using Alternative Dispute Resolution (ADR) as a voluntary, informal, and cost-effective means of resolving contract disputes outside of formal litigation. It outlines the essential elements for participation and sets procedural requirements for both the government and contractors when proposing or rejecting ADR.
Key Rules
- Essential Elements: For ADR to proceed, there must be an issue in controversy, voluntary election by both parties, agreement on procedures, and participation by officials with the authority to settle.
- Written Rejection Requirements: If a contracting officer or a contractor rejects a request for ADR, they must provide a written explanation stating the specific reasons for the refusal.
- Impact on Appeal Timelines: Using ADR after a contracting officer’s final decision does not suspend or "toll" the statutory time limits for filing an appeal with the Boards of Contract Appeals or the U.S. Court of Federal Claims.
- Arbitration Constraints: Solicitations cannot mandate arbitration as a condition of award. Agreements to use arbitration must be in writing, specify a maximum possible award, and follow specific agency guidelines regarding binding arbitration.
- Confidentiality: All ADR proceedings are protected by the confidentiality provisions of 5 U.S.C. 574.
Practical Implications
- Preservation of Rights: Contractors must be careful to file formal appeals within the required windows (e.g., 90 days for the Board or 12 months for Court) even if they are currently engaged in ADR, as the ADR process does not pause the legal clock.
- Accountability: The requirement for written justifications for rejecting ADR prevents parties from arbitrarily refusing settlement discussions, encouraging a more streamlined resolution process for complex claims.