Alternative Dispute Resolution (ADR)

1. Alternative DisputeResolution (ADR) We can work it out! Presented by: Keith Gagnon, MBA, VCO Procurement Management Account Executive Department of General Services Division of Purchases & Supply DGS: Division of Purchases and Supply

2. Session Agenda • What is ADR • ADR Law and Policy in the Commonwealth • Types of ADR • Neutrals • Advantages/disadvantages of ADR • Interagency Dispute Resolution Advisory Council • DPS ADR in procurement survey • Other resources DGS: Division of Purchases and Supply

3. What is ADR? • Alternative Dispute Resolution • Any method of settling a dispute outside of adjudication (i.e. outside of court) • Dispute Resolution Proceeding • means any structured process in which a neutralassistsparties to a dispute in reaching avoluntarysettlement by means of dispute resolution processes such as mediation, conciliation, facilitation, partnering, fact-finding, neutral evaluation, use of ombudsmen or any other proceeding leading to avoluntary settlement. For the purposes of this chapter, the term "dispute resolution proceeding"does not include arbitration. • Code of Virginia §2.2-4115 DGS: Division of Purchases and Supply

4. Avoidance Dispute Resolution Spectrum No dispute AdministrativeProcess ADR Litigation Violence DGS: Division of Purchases and Supply

5. What is ADR? • Essential Elements of ADR (O’Leary and Raines, 2001) • The parties must agree to participate in the process. • The parties, or their representatives, must directly participate in the process. • A neutral third party may facilitate the process, but cannot impose a solution (i.e. does not include binding arbitration.) • The parties must agree on any outcome or any solution to the dispute. • Any party may withdraw from the process at any time and seek resolution of the dispute through other means. DGS: Division of Purchases and Supply

6. ADR and the Code of Virginia • VADRA – Virginia Administrative Dispute Resolution Act (§2.2-4115 through 4119) • Encourages the use of ADR by local governments and state agencies across a broad range of governmental functions • Requires each executive branch agency to appoint a Dispute Resolution Coordinator • Creates an Interagency Dispute Resolution Advisory Council • Requires each agency to develop ADR policies • Excludes binding arbitration (§2.2-4115, §2.2-4116) DGS: Division of Purchases and Supply

7. ADR and Our Manuals • APSPM 11.4 • Hand out contains section 11.4 • DPS allows ADR for contractual disputes (post award) only • Note: VITA allows ADR for pre award and post award disputes • General Term and Condition B • Hand out contains General T&C B • Vendor’s Manual 9.17 • Same language as APSPM 11.4 DGS: Division of Purchases and Supply

8. Types of ADR • Partnering • No third party • Preventative technique • “Workshop” held shortly after a contract is signed to: • Engage in teambuilding before any issues arise • Develop relationships to avoid conflict • Identify potential future disputes • Tailor resolution methods for each potential dispute • Proactive DGS: Division of Purchases and Supply

9. Types of ADR Interest-Based Problem Solving • No third party • Separate the person from the problem • Parties agree to use an interest based model: • Set communication & decision ground rules • Define identify issues, criteria for success • Brainstorm • Proactive DGS: Division of Purchases and Supply

10. Types of ADR Fact-Finding • Expert Neutral used to investigate/resolve disputed facts • Used to resolve technical/factual issues • May be a precursor to additional ADR DGS: Division of Purchases and Supply

11. Types of ADR Early Neutral Evaluation • Neutral evaluates merits of each party’s position on a dispute when it first arises • Neutral is a subject matter expert • Neutral presents opinion • Parties negotiate a solution after hearing the Neutral’s opinion DGS: Division of Purchases and Supply

12. Types of ADR Mediation • Mediator (neutral) facilitates a structured process in which parties negotiate resolution • Mediator is an impartial facilitator and does not decide anything • Self-determination is an integral to the process • Goals of mediation: • Help parties see each other’s perspective • Clear up misunderstandings • Determine underlying interests • Help parties create their own solution based on overlapping interests DGS: Division of Purchases and Supply

13. Types of ADR Arbitration • Adjudication using a private judge • Can be binding or non-binding • Arbitrator (or arbitration panel) agreed to by parties • Arbitrator, not the parties, make the decision Arbitration is expressly excluded from VADRA DGS: Division of Purchases and Supply

14. Types of ADR Other Types of ADR • Many other methods • You may use (or develop) any that is appropriate • As long as both parties agree to the method • As long as costs of the ADR proceeding are shared equally • As long as the process is non-binding • As long as you get approval of your legal representative DGS: Division of Purchases and Supply

15. Neutrals • Neutral means an individual who is trained or experienced in conducting dispute resolution proceedings and in providing dispute resolution services • The Interagency Advisory Council on ADR is in the process of creating a shared pool of neutrals • Types: • Ombuds, Facilitator, Mediator, Arbitrator, etc. DGS: Division of Purchases and Supply

16. Advantages of ADR • Avoids litigation • Avoids setting precedents • Faster than litigation • Cheaper than litigation • Easier, less formal • Less adversarial/confrontational • Creative process tailored to the specific conflict • Parties retain control through consensual process • Can be more confidential (see § 2.2-4119) • Relationship can be preserved • Either party can stop process at any time DGS: Division of Purchases and Supply

17. Disadvantages of ADR • Avoids litigation (when it is desired/needed) • Avoids setting precedents (when one is needed) • Requires commitment/buy-in from both parties • Can create imbalance of power/two-tier justice • It is not a completely public process (when public proceeding is desired) DGS: Division of Purchases and Supply

18. Interagency DisputeResolution Advisory Council • Created by VADRA • Chaired by the Secretary of Administration • Powers and duties: • Create training seminars and education programs • Publish educational materials • Report on ADR activities • http://www.vadra.virginia.gov DGS: Division of Purchases and Supply

19. DP&S ADR Survey • Survey of agencies under DPS procurement purview regarding ADR utilization • Utilization of ADR for procurement/contracting down in FY07 from previous years for agencies under DPS purview • Encourage agencies to use ADR for preventing and resolving disputes DGS: Division of Purchases and Supply

20. Additional Resources • Interagency Dispute Resolution Advisory Council www.vadra.virginia.gov • Your agency’s Dispute Resolution Coordinator • Your OAG representative • American Bar Association - Section of Public Contract Law • NIGP • DGS/DPS DGS: Division of Purchases and Supply

21. References • O’Leary, R., & Raines (2001). Lessons from Two Decades of Alternative Dispute Resolution at the Environmental Protection Agency. Public Administration Review, 61(6), 683. • Virginia's Interagency Advisory Council on ADR. VADRA website, www.vadra.virginia.gov DGS: Division of Purchases and Supply

22. QuestionsandDiscussion DGS: Division of Purchases and Supply