RESOLVING AND AVOIDING PROCUREMENT DISPUTES AT THE FAA

1. ADR and Adjudication at the Office of Dispute Resolution for Acquisition, AGC-70 September 2016 RESOLVING AND AVOIDING PROCUREMENT DISPUTES AT THE FAA

2. TOPICS • The Office of Dispute Resolution for Acquisition • Authorities • Operations • The Dispute Resolution Process • Alternative Dispute Resolution (ADR) • Pre disputes • ODRA Adjudication Process • New Developments • Best Practices and Discussion Questions

3. ODRA AUTHORITIES • 49 U.S.C. § 40110 (d) • 14 CFR Part 17 – Procedural Regulations • Delegations by the FAA Administrator • AMS Policy § 3.9.1

4. ODRA OPERATIONS • Staffed by a Director and three Dispute Resolution Officers (DROs), all of whom have been designated as Administrative Judges by the FAA Administrator • Impartial and independent of program offices and their counsel • Mandated to use ADR: “To the maximum extent practicable”

5. ODRA DISPUTE RESOLUTION PROCESS • ADR AS PRIMARY METHOD • PRE-DISPUTE PROCESS • STREAMLINED ADJUDICATION

6. ODRA ADR PROCESS FOR BID PROTESTS AND CONTRACT DISPUTES • ADR emphasized & explored in all cases • ODRA initiated • Early intervention efforts • Entirely voluntary • Parties retain choice on ADR & neutral • Forms of ADR employed • Neutral evaluation • Facilitative mediation • Binding arbitration

7. ODRA ADR STATISTICS • Cases completed from 6/96 through 12/14 • 547 Protests • 213 Contract Disputes • 125 Pre-disputes • Settled in ADR • 66% of all Protests • 90% of all Contract Disputes • 97% of all Pre-disputes

8. ADR Techniques • Mediation • Determine needs and interests of the parties • Facilitate discussions • Bridge gaps • Joint fact finding and problem solving • Early Neutral Evaluation • Candid assessment • Litigation Risks • Provide “second opinion”

9. ADR Agreements • Confidentiality of ADR Communications • ADR is firewalled from adjudication • ADR Neutral does not decide the case • ADR communications not part of Administrative Record • Parties jointly craft terms of ADR Agreement • Tailor agreement and process to meet needs of the parties • Establish structure and set a positive tone

10. ADR Settlements • Executed ADR Agreement is a public document • Upon execution of the settlement agreement, the pending matter either will be dismissed or place on an inactive status pending fulfillment of the settlement terms • ODRA review of a challenge to ADR settlement limited to whether the CO had a reasonable perception of litigative risk.

11. SETTLEMENT EXAMPLES • Bid protests: • Protester Withdrawals • Based on early neutral evaluations • After enhanced debriefings • Capability demonstrations • Agency voluntary action • Re-compete, immediately or after base year • Permit revised offers or revise specifications • Re-evaluate in whole or in part • Compete in lieu of sole source • Address past performance issues • Payment of B&P costs

12. SETTLEMENT EXAMPLES • Contract disputes • Negotiated dollar settlements • Within scope contract modifications • Setoffs of claims and counterclaims • Conversions of terminations • Revisions to delivery schedules

13. ODRA Pre Dispute Process14 C.F.R. Part 17 Subpart G • Initiated by FAA or private party • Only by agreement of both parties • Completely non-binding • Can be used for Grants, Other Transactions, and non-AMS Contract Disputes

14. Pre Dispute Advantages • High resolution rate • Economy • Maintains focus on project • Preserves business relationship • Avoids formal dispute

15. 14 C.F.R. §§ 17.11 - 17.23 Adjudicative Process for Protests 14 C.F.R. §§ 17.25 - 17.33 Adjudicative Process for Contract Disputes Odraadjudication PROCEDURES

16. INTRODUCTION TO THEODRA ADJUDICATION PROCESS • Begins upon written notice to the ODRA Director by a party or the ADR Neutral that adjudication is necessary to achieve a complete resolution • The ODRA Director appoints an Administrative Judge for adjudication • A full administrative record is developed in accordance with the Administrative Procedure Act • Administrative Judge prepares findings of fact and a recommendation for a Final Order

17. INTRODUCTION TO THE ODRA ADJUDICATION PROCESS continued • Adjudication of a bid protest or contract dispute ends with an Administrator’s Final Order adopting Findings and Recommendations of the ODRA. • A Final Order is signed by the Administrator unless authority is delegated to another FAA official. • The Director of the ODRA has been delegated Final Order authority up to $10 million: • Protests where the contract is valued at $20 million. • Contract Disputes where the dispute is valued at $10 million. • Final Orders may be appealed by the private party to the DC Circuit or other circuit wherein the party has its principal place of business. • To date, no Administrator’s Final Orders have been overturned on appeal.

18. Adjudicative Process for Protests14 C.F.R. §§ 17.11 - 17.23

19. ODRA ADJUDICATION PROCESS FOR BID PROTESTSINITIAL PROCEDURES • Filing deadlines are strictly enforced • Protest against solicitation or amendment must be filed prior to bid opening or receipt of proposals • Other protests must be filed • Not later than seven (7) business days after the date protester knew or should have known of the grounds for the protest • If the protester has requested a post-award debriefing, not later than five (5) business days after the debriefing • A copy of the protest must be served on the CO on the same day as it is filed with the ODRA • Notification requirements • Upon receipt of the protest (not after the initial status conference), the CO notifies the awardee of the protest . • If there is no awardee, there is no requirement to notify offerors • ODRA Initial Status Conference • Scheduled within 5 business days of the ODRA’s receipt of the protest • Establish initial schedule and address preliminary issues • Opportunity to exchange information and encourage use of ADR

20. ODRA ADJUDICATION PROCESS FOR BID PROTESTSSUSPENSION REQUESTS14 C.F.R. § 17.15(d) • If a suspension is requested, the FAA’s Response is usually due no later than the date of the scheduling conference. • Requester has to show compelling reasons for a suspension. • Product Team identifies the facts demonstrating that the relative hardships on the parties do not favor a suspension and that suspension is not in the public interest (submits affidavit or declaration). • Contracting officials assume the risk of continuing contract performance.

21. ODRA ADJUDICATION PROCESS FOR BID PROTESTSPROTECTIVE ORDERS14 C.F.R § 17.9 • Frequently requested in the protest filing • Limits access to protected materials to counsel admitted under protective order • Documents subject to protective order must be clearly marked

22. ODRA ADJUDICATION PROCESS FOR BID PROTESTSDEVELOPING THE ADMINISTRATIVE RECORD • Product Team Response • Due date is scheduled upon notice that adjudication is necessary to achieve a complete resolution • Typically filed within 10 business days, or as scheduled by the ODRA • Contains relevant documents – chronological, indexed, and individually tabbed • CO certification as to completeness and authenticity of the documents • Protester / Intervener Comments • Filed within five (5) business days of filing of the Product Team Response with the ODRA; • or filed within five (5) business days of the party’s receipt of the Product Team response, whichever is longer; or as scheduled by ODRA • The ODRA prepares Findings and Recommendation and a proposed Final Order for the Administrator or delegee

23. Adjudicative Process for Contract Disputes14 C.F.R. §§ 17.25 - 17.33

24. ODRA ADJUDICATION PROCESS FOR CONTRACT DISPUTESINITIAL PROCEDURES • Either the contractor or the CO may file a contract dispute • File within 2 years of accrual; or • Before the contractor’s acceptance of final payment, if earlier • If fraud or latent defect claim, must file within 2 years of date FAA knew or should have known • If warranty claim, must file within time limitation in contract’s warranty provision • Informal Communications Period • 20 business day informal resolution period after initial filing • Parties may conduct direct settlement negotiations or explore ADR options with assigned neutral • Upon notification that ADR will not be used or is not likely to resolve all the issues in controversy, an Administrative Judge is assigned to schedule further proceedings

25. ADJUDICATION PROCESS FOR CONTRACT DISPUTESDEVELOPING THE ADMINISTRATIVE RECORD • Dispute File is submitted by the opposing party • Contains substantive response to the claim • Includes chronologically arranged and indexed exhibits of relevant documents • Filed within twenty (20) business days of the commencement of the adjudication, or as scheduled by the ODRA • Dispute File Supplementation • Submitted by the party that filed the dispute • Filed as scheduled by the ODRA

26. ADJUDICATION PROCESS FOR CONTRACT DISPUTESTHE ADMINISTRATIVE RECORD continued • Discovery • Exchanges of documents • Possible depositions • Hearing (if required by the Administrative Judge) • Final submissions containing legal analysis with citation to documents in the Dispute File and in the Administrative Record. • The ODRA prepares Findings and Recommendation and a proposed Final Order for the Administrator or delegee

27. New developments

28. NEW DEVELOPMENTSSmall Business Size Challenge • Standing Order 2013-2 (Small Business Size & Eligibility Protests) • Addresses protests challenging the size of an awardee under a small business set aside solicitation, or whether an awardee satisfies the ownership requirements for a set-aside for socially and economically disadvantaged business (SEDB)

29. NEW DEVELOPMENTSELECTRONIC FILING • Standing Order 2013-3 (Electronic Filing Program) • Establishes a convenient, optional method for parties to file initial pleadings and requests for ADR assistance • Initial filings may be submitted via email: 9-AGC-ODRA@faa.gov • In designated cases, parties also have the option to use the FAA’s KSN filing and service of documents in both ADR and adjudicative processes

30. NEW DEVELOPMENTSPre-Disputes Process under Subpart G • Non-binding, voluntary and confidential dispute resolution services that can be used in non-AMS disputes • Grants • Cooperative Agreements • Other transactions • Requested by any party, in writing, pursuant to 14 CFR §17.59 • ODRA contacts the opposing party to offer its services • If the opposing party agrees, the ODRA will provide Pre-dispute services • If the opposing party does not agree, the ODRA Pre-dispute file will be closed and no service will be provided

31. ODRA WEBSITEOn the Web at:http://odra.faa.gov • Guide to ODRA ADR process • Case search • Sample forms, orders & agreements • Links to additional resources