[Congressional Record Volume 142, Number 80 (Tuesday, June 4, 1996)]
[House]
[Pages H5786-H5789]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1530
             ADMINISTRATIVE DISPUTE RESOLUTION ACT OF 1996

  Mr. GEKAS. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 2977) to reauthorize alternative means of dispute resolution in 
the Federal administrative process, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 2977

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Administrative Dispute 
     Resolution Act of 1996''.

     SEC. 2. AMENDMENT TO DEFINITIONS.

       Section 571 of title 5, United States Code, is amended--
       (1) in paragraph (3)--
       (A) by striking ``, in lieu of an adjudication as defined 
     in section 551(7) of this title,'';
       (B) by striking ``settlement negotiations,''; and
       (C) by striking ``and arbitration'' and inserting 
     ``arbitration, and use of ombudsmen''; and
       (2) in paragraph (8)--
       (A) in subparagraph (B) by striking ``decision,'' and 
     inserting ``decision;''; and
       (B) by striking the matter following subparagraph (B).

     SEC. 3. AMENDMENTS TO CONFIDENTIALITY PROVISIONS.

       (a) Limitation of Confidentiality Application to 
     Communication.--Section 574(a) of title, 5, United States 
     Code, is amended in the matter before paragraph (1) by 
     striking ``any information concerning''.
       (b) Alternative Confidentiality Procedures.--Section 574(d) 
     of title 5, United States Code, is amended--
       (1) by inserting ``(1)'' after ``(d)''; and
       (2) by adding at the end thereof the following new 
     paragraph:
       ``(2) To qualify for the exemption established under 
     subsection (j), an alternative confidential procedure under 
     this subsection may not provide for less disclosure than the 
     confidential procedures otherwise provided under this 
     section.''.
       (c) Exemption From Disclosure by Statute.--Section 574(j) 
     of title 5, United States Code, is amended by striking ``This 
     section'' and inserting ``This section (other than subsection 
     (a))''.

     SEC. 4. AMENDMENT TO REFLECT THE CLOSURE OF THE 
                   ADMINISTRATIVE CONFERENCE.

       (a) Promotion of Administrative Dispute Resolutions.--
     Section 3(a)(1) of the Administrative Dispute Resolution Act 
     (5 U.S.C. 581 note; Public Law 101-552; 104 Stat. 2736) is 
     amended by striking ``the Administrative Conference of the 
     United States and''.
       (b) Compilation of Information.--
       (1) In general.--Section 582 of title 5, United States 
     Code, is repealed.
       (2) Technical and conforming amendment.--The table of 
     sections for chapter 5 of title 5, United States Code, is 
     amended by striking the item relating to section 582.
       (c) Federal Mediation and Conciliation Service.--Section 
     203(f) of the Labor Management Relations Act, 1947 (29 U.S.C. 
     173(f)) is amended by striking ``the Administrative 
     Conference of the United States and''.

     SEC. 5. AMENDMENTS TO SUPPORT SERVICE PROVISION.

       Section 583 of title 5, United States Code, is amended by 
     inserting ``State, local, and tribal governments,'' after 
     ``other Federal agencies,''.

     SEC. 6. AMENDMENTS TO THE CONTRACT DISPUTES ACT.

       Section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 
     605) is amended--
       (1) in subsection (d) by striking the second sentence and 
     inserting: ``The contractor shall certify the claim when 
     required to do so as provided under subsection (c)(1) or as 
     otherwise required by law.''; and
       (2) in subsection (e) by striking the first sentence.

     SEC. 7. AMENDMENTS ON ACQUIRING NEUTRALS.

       (a) Expedited Hiring of Neutrals.--
       (1) Competitive requirements in defense agency contracts.--
     Section 2304(c)(3)(C) of title 10, United States Code, is 
     amended by striking ``agency, or'' and inserting ``agency, or 
     to procure the services of an expert or neutral for use''.
       (2) Competitive requirements in federal contracts.--Section 
     303(c)(3)(C) of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 253(c)(3)(C)), is amended by 
     striking ``agency, or'' and inserting ``agency, or to procure 
     the services of an expert or neutral for use''.
       (b) References to the Administrative Conference of the 
     United States.--Section 573 of title 5, United States Code, 
     is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) In consultation with other appropriate Federal 
     agencies and professional organizations experienced in 
     matters concerning dispute resolution, the Federal Mediation 
     and Conciliation Service shall--
       ``(1) encourage and facilitate agency use of alternative 
     means of dispute resolutions; and
       ``(2) develop procedures that permit agencies to obtain the 
     services of neutrals on an expedited basis.''; and
       (2) in subsection (e) by striking ``on a roster established 
     under subsection (c)(2) or a roster maintained by other 
     public or private organizations, or individual''.

     SEC. 8. PERMANENT AUTHORIZATION OF THE ALTERNATIVE DISPUTE 
                   RESOLUTION PROVISIONS OF TITLE 5, UNITED STATES 
                   CODE.

       The Administrative Dispute Resolution Act (Public Law 101-
     552; 104 Stat. 2747; 5 U.S.C. 581 note) is amended by 
     striking section 11.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.Subchapter IV of chapter 5 of title 5, 
     United States Code, is amended by adding at the end thereof 
     the following new section:

     ``Sec. 584. Authorization of appropriations

       ``There are authorized to be appropriated such sums as may 
     be necessary to carry out the purposes of this subchapter.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 5 of title 5, United States Code, is 
     amended by inserting after the item relating to section 583 
     the following:

     ``584. Authorization of appropriations.''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania [Mr. Gekas] and the gentleman from Rhode Island [Mr. Reed] 
will each be recognized for 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania [Mr. Gekas].
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 2977 and urge its adoption by 
the House. The Administrative Dispute Resolution Act was signed into 
law by President Bush back in 1990. From what we were able to discern 
over the 5 years of its operation, it did a world of good.
  This administrative resolution syndrome is one in which Federal 
agencies are given an additional tool to try to settle disputes that 
might arise between agencies or between an agency and a contractor, 
shall we say, a government contractor, or a private citizens group, or 
anyone who runs into and becomes embroiled in a dispute with a Federal 
agency. Hence, the administrative procedure that was set up

[[Page H5787]]

by the bill that we have referred to would set up a procedure for that 
purpose.
  Well, this authority ran out in October of last year. We in the 
Subcommittee on Commercial and Administrative Law held an oversight 
hearing in December 1995, and I speak for the gentleman from Rhode 
Island, both he and I were sufficiently impressed with the cost saving 
and efficiency displayed in the various mechanisms employed by the 
Administrative Dispute Resolution Act that we, almost on the spot, 
reendorsed the concept of having these agencies being able to filter 
out disputes of this type before they should reach a court 
jurisdiction. So we proceeded to work together, and the product that we 
have before us today is one in which we co-worked and co-authored, as 
it were.
  One of the phenomena that makes it even more important for us to pass 
this legislation was the phasing out of ACUS, the Administrative 
Conference of the United States, which had during its lifetime covered 
some of the mechanisms which now are more fully employed by what we 
propose to do here today.
  But I would mention some of the improvements that we have fashioned 
in H.R. 2977 for the purposes of the Record: For instance, we amend the 
Federal Property and Administrative Services Act to clarify that 
agencies may use expedited procurement procedures when hiring neutral 
third parties for some of these proceedings.
  It also amends the law to authorize agencies to use the services and 
facilities of State, local, and tribal governments in order to 
implement the ADR Act. That is enlarging the scope of the capacity to 
deal agency by agency in solving disputes before they reach a more 
hectic state.

  Also, it amends the Contract Disputes Act to require that contract 
claims only in excess of $100,000 be certified in order to facilitate 
the use of ADR, and also a provision that broadens the definition of 
``alternative means of dispute resolution'' to include the use of 
ombudsmen, while at the same time striking from that definition 
``settlement negotiations,'' which was not deemed particularly useful, 
and so on.
  It does some other improvements, and I will ask that these remarks be 
made a part of the Record so we will fully cover it, but I do wish to 
cover just one other little dispute that we resolved in a gentlemanly 
and bipartisan fashion.
  There was a dispute as to whether we should allow binding arbitration 
when, let us say, a Federal agency became involved with a Federal 
contractor. If we had a binding arbitration conclusion, it would mean 
that this would be binding on the Federal Government. Then the dispute 
arose, can the Federal Government constitutionally surrender its 
decisionmaking to a nonelected official, thus bringing in a whole gamut 
of constitutional questions.
  So what has been utilized over the past has been the opt-out 
provision, that if we do come to a kind of an arbitration conclusion, 
then government will have the right within a certain period of time to 
opt out, not to be bound by that decision, thus preserving the 
constitutionality of the agency representing the U.S. Government who 
could not delegate this kind of duty.
  The penalty for that would be, though, that some of the costs and 
other costs could be garnered by the disaffected other parties, but at 
least the governmental constitutional safeguard would remain in place. 
What we have done in this legislation is to preserve in some fashion 
the opt-out provision, thus not facing the constitutional problems that 
this issue raises.
  We also straightened out some items on confidentiality, and all-in-
all have improved the concept to a degree that we feel comfortable in 
presenting it to the floor and having the gentleman from Massachusetts 
hurry us up to complete the process.
  And so we offer our thanks to everyone who helped prepare the 
legislation.
  Mr. Speaker, I rise in support of H.R. 2977 and urge its adoption by 
the House.
  The Administrative Dispute Resolution Act [ADR] was signed into law 
by President George W. Bush on November 15, 1990, as Public Law 101-
552. It was intended to encourage the use of alternative techniques to 
resolve disputes involving Federal agencies in the discharge of their 
regulatory responsibilities. The law provided explicit authority for 
agencies to engage in ADR and developed a framework meant to foster it.
  The Subcommittee on Commercial and Administrative Law held an 
oversight hearing on December 13, 1995 on the ADR Act, which expired on 
October 1 of last year. The testimony that was presented before the 
subcommittee, I think, can be characterized as being uniformly 
favorable. Representatives of agencies, ADR practitioners and a 
corporate counsel all testified to savings attributable to the use of 
ADR techniques. Savings not only in time but also in considerable 
money, both to the Government and to private citizens and businesses. 
Not only I, but also the ranking minority member, were impressed and 
persuaded that a procedure that can facilitate such savings deserves to 
be reimplemented with whatever improvements have either been made 
necessary by time or will help effectuate even further savings.
  Therefore, the gentleman from Rhode Island and I introduced this bill 
in a bipartisan spirit of cooperation attempting to focus attention on 
the most important areas of agreement and calculated to encourage the 
most expeditious passage of this legislation.
  The bill makes a variety of changes to current law principally of a 
minor and technical nature to reflect things that have occurred since 
the ADR Act was first signed into law, for instance, the 
discontinuation of the Administrative Conference of the United States, 
which formerly had a primary role in promoting the act. But before ACUS 
went out of existence, it offered several recommended improvements to 
the act, some of which are included in H.R. 2977.
  Improvements to current law proposed by H.R. 2977, include:
  Amending the Federal Property and Administrative Services Act (41 
U.S.C. 253(c)(3)(C) and 10 U.S.C. 2304(c)(3)(C)) to clarify that 
agencies may use expedited procurement procedures when hiring neutral 
third parties for ADR proceedings.
  The bill amends 5 U.S.C. 583 to authorize agencies to use the 
services and facilities of State, local, and tribal governments in 
order to implement the ADR Act.
  The bill amends the Contract Disputes Act to require that contract 
claims only in excess of $100,000 be certified in order to facilitate 
the use of ADR.
  H.R. 2977 broadens the definition of ``alternative means of dispute 
resolution'' to include the use of ombudsmen, while at the same time 
striking from that definition ``settlement negotiations'' which was not 
deemed particularly useful.
  The bill strikes language in current law that requires an alternative 
means of dispute resolution must be a procedure that is ``in lieu of an 
adjudication as defined in section 551(7) [of the Act]''. This 
amendment would broaden the possibilities for and encourages the use of 
ADR.
  The bill deletes the exemption from ADR for the settlement of 
employee grievance proceedings specified under 5 U.S.C. 2302 and 
7121(c), thus allowing parties to voluntarily use ADR to resolve 
employment related disputes.
  It is perhaps appropriate to mention two things that are not in the 
bill and to explain briefly the committee's rationale for not including 
them. The first involves binding arbitration as it applies the 
Government and the second, which is in the bill to a lesser degree than 
proposed by some witnesses, concerns the confidentiality of ADR 
communications.
  With respect to binding arbitration, current law contains a so-called 
opt-out provision that permits the Government a period of time in 
which to vacate an arbiter's decision or award. This procedure was 
developed in order to avoid a constitutional problem involving the 
appointments clause of the U.S. Constitution identified by then 
Assistant Attorney General William Barr in testimony before this 
subcommittee in 1990.

  Mr. Barr expressed concern that straight binding arbitration would 
result in the delegation of significant executive authority to 
individuals not chosen in accordance with the aforementioned clause. 
The Congress responded by adopting the compromise procedure contained 
in current law which gives an agency a period of time in which to 
ratify or vacate the arbiter's award but also provides the assessment 
of costs against the Government in the event that the award is vacated 
by an agency--this to serve as a disincentive for such an action.
  Repeal of this provision was suggested during testimony by the 
witness from the Department of Justice and may ultimately be a part of 
legislation in the other body. However, concern was expressed by 
members at the subcommittee's hearing, which I chair, that this would 
too abruptly reverse a decision the Congress had made little more than 
5 years earlier and which had been motivated by constitutional concerns 
significant and persuasive enough to convince us to fashion a mechanism 
to allay them. There are also policy implications regarding 
accountability for the control of government spending inherent in 
binding arbitration that should be considered. I felt, and

[[Page H5788]]

the gentleman from Rhode Island does also, that this issue deserves 
more discrete consideration. Therefore, H.R. 2977 retains current law.
  With respect to confidentiality, several witnesses testified at the 
hearing that the confidentiality protections in the ADR Act should be 
broadened in order to facilitate and encourage its use. Both the 
gentleman from Rhode Island and I agree that reasonable steps should be 
taken to encourage resort to dispute resolution techniques which have 
been shown to be effective at saving money and avoiding litigation. 
Broadening confidentiality protections would foster an atmosphere in 
which parties to the ADR process could exchange views in a spirit of 
candor and would also encourage the use of Government neutrals where 
appropriate.
  The by-play between the ADR Act and the Freedom of Information Act 
[FOIA] has been of concern in this process, creating something of an 
anomaly, that is disclosure of information relating to ADR 
communications by both parties and neutrals is generally prohibited but 
is discoverable through FOIA. According to testimony, this has been a 
particular problem when the Government is a neutral and it often 
discourages the use of government neutrals.
  One solution might be to simply exempt ``dispute resolution 
communications'' which are ``generated by or provided to an agency or 
neutral'' from the disclosure requirements of FOIA if they may not be 
disclosed under the ADR Act. But the gentleman from Rhode Island and I 
are aware that there is legitimate concern that this may be too broad a 
solution and H.R. 2977 proposes instead an exemption from FOIA only to 
apply to the Government when it acts as a neutral. This doubtless will 
not please those who feel that the ADR proceeding would operate best if 
surrounded by confidentiality, but on the other hand I think it is best 
to proceed with caution in this area and I think the bill represents 
that cautious approach.
  As I noted, this legislation was developed in the best spirit of 
bipartisan cooperation which I hope bodes well for its expeditious 
consideration. I urge support from the Members.
   Mr. Speaker, I reserve the balance of my time.
  Mr. REED. Mr. Speaker, I yield myself such time as I may consume, and 
I rise in support of this legislation.
  Mr. Speaker, I just wanted to say how pleased I was to be able to 
work on this legislation with the subcommittee chairman, the 
distinguished gentleman from Pennsylvania, and I commend the chairman 
for his fine work here today.
  The legislation before us today will permanently reauthorize the 
Administrative Dispute Resolution Act.
  We are all concerned with reducing litigation. The use of alternative 
dispute resolution techniques--techniques designed to resolve conflicts 
consensually, generally with the assistance of a neutral third party--
can lower the tremendous costs and ease the delays of Government 
litigation. This benefits the Government, as well as business and 
private parties.
  The original ADR Act got agencies started on the road of using 
mediation, arbitration, negotiation, and other methods to resolve 
disputes. We heard excellent testimony at our hearing on the benefits 
and savings that accrue from the use of alternative dispute resolution.
  For example, Joseph McDade, a deputy dispute resolution specialist 
from the Air Force testified before the Subcommittee on Commercial and 
Administrative Law that the Air Force had used ADR to resolve more than 
1,000 civilian personnel disputes, with a settlement rate close to 80 
percent. Likewise, 53 Air Force contracting cases have gone through 
ADR, and all have been resolved. The Air Force has begun adding ADR 
clauses to contracts, to ensure that disputes do not drive up 
acquisition costs.
  According to a report of the Administrative Conference of the United 
States, the Department of Labor used mediation to resolve violations of 
labor or workplace standards in the Philadelphia region. Eighty-one 
percent of the cases were settled, usually in a single session, with a 
cost savings of 7 to 11 percent per case. The cases were resolved 
months faster than they would have been otherwise.
  The FDIC and RTC have mediated disputes among failed financial 
institutions and saved millions in legal fees--over $13 million in 
estimated legal costs for the FDIC, and over $115 million for the RTC. 
The Departments of Health and Human Services and Education have used 
ADR in grant audits and disputes. ADR is being used increasingly in 
enforcement disputes. The Attorney General recently directed all civil 
litigation components within the Department of Justice to develop ADR 
case selection criteria and is requiring ADR training for all civil 
litigation attorneys.
  While agencies inherently have the authority to use ADR techniques, 
testimony received by the subcommittee indicate that the expiration of 
the ADR Act has caused confusion and disruption in the field. The act 
provides a necessary framework for governmentwide ADR, as well as 
important incentives for promoting its use. The ADR Act sets uniform 
governmentwide standards for the use of ADR, provides the 
confidentiality protections that are necessary for a full and candid 
exchange between the parties, and provides the authority to hire 
neutrals as well as to use donated neutrals and space for ADR.
  This legislation permanently reauthorizes the act and makes several 
important improvements:
  It expands the range of cases that can be referred to ADR by 
eliminating the exemptions for certain types of workplace related 
disputes so employee grievances and discrimination cases under civil 
rights laws may, with the consent of the employee, be referred to ADR. 
The general provisions of section 572(b), which establishes criteria 
for identifying cases where ADR is not appropriate, would still apply.
  It makes the procedure more user friendly by streamlining the 
acquisition process for hiring mediators.
  It enhances the confidentiality provisions. Currently, section 574 of 
the act prohibits third-party neutrals and parties to the dispute from 
disclosing communications during an ADR proceeding, with limited 
exceptions. These communications are not necessarily exempt from 
disclosure under the Freedom of Information Act. In particular, the 
lack of an FOIA exemption may serve as an incentive to hire private 
neutrals who are not subject to FOIA, rather than Government neutrals. 
According to the testimony of the Federal Mediation Conciliation 
Service, this is a particular problem for Government agencies, like 
FMCS, that furnish employees as neutrals for proceedings involving 
other Federal agencies, since their neutrals notes, unlike the notes of 
private sector neutrals, may be subject to FOIA disclosure. The 
committee bill provides that the memoranda, notes, or work product of 
the neutral, are exempt from disclosure under FOIA. Exempting these 
communications from FOIA does not diminish the amount of information 
that would otherwise be available to the public if a neutral were not 
employed. A careful balance must be struck between the need for 
confidentiality in the ADR process and the basic purpose underlying 
FOIA, that openness in Government is essential to accountability. The 
committee was reluctant to expand the exemption from ADR Act should not 
be used as a shield to hide documents that otherwise would be available 
to the public. The principles of Government openness and accountability 
underlying FOIA are vital to the functioning of a democratic society.
  When the ADR Act was first enacted in 1990, the Federal Government 
lagged well behind the private sector and the courts in using 
alternative dispute resolutions. Since then, almost every agency has 
experimented with consensus based dispute resolution techniques. Now, 
the Federal Government has the opportunity to become a leader in making 
dispute resolution easier, cheaper, and more effective.
  Mr. Speaker, I urge an ``aye'' vote on this legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEKAS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Pennsylvania [Mr. Clinger].
  Mr. CLINGER. Mr. Speaker, I thank the gentleman for yielding time, 
and I would ask if he would engage in a colloquy with me.
  Mr. Chairman, am I correct that H.R. 2977 does not include any 
language to remove from the district courts the so-called Scanwell bid 
protest jurisdiction?
  Mr. GEKAS. Mr. Speaker, will the gentleman yield?
  Mr. CLINGER. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Speaker, the gentleman is correct. It was our intent

[[Page H5789]]

that this bill not include any language regarding removal of Scanwell 
jurisdiction from the district courts. We would hope and urge our 
colleagues in the other body not to use legislation reauthorizing the 
ADR Act for such a purpose.
  Mr. CLINGER. I thank the chairman, and I appreciate his intentions on 
this issue. As he knows, Congress recently made sweeping, extensive 
reforms to the Federal procurement system and the administrative bid 
protest forms. These reforms are only now really being implemented, and 
I am concerned that the system be given full opportunity to absorb the 
recently enacted changes before there is any further disruption in the 
system.
  Mr. GEKAS. I thank the gentleman for his comments. We too have these 
concerns and understand the need to review the Scanwell issue before 
moving forward on further changes. We intend to hold hearings in the 
future to review whether eliminating bid protest jurisdiction from the 
Federal district courts is appropriate.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. REED. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Upton). The question is on the motion 
offered by the gentleman from Pennsylvania [Mr. Gekas] that the House 
suspend the rules and pass the bill, H.R. 2977, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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