[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[House]
[Pages H11446-H11452]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             ADMINISTRATIVE DISPUTE RESOLUTION ACT OF 1996

  Mr. GEKAS. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 4194) to reauthorize alternative means of dispute resolution in 
the Federal administrative process, and for other purposes.
  The Clerk read as follows:

                               H.R. 4194

       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 ombuds''; 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.--Subsections (a) and (b) of section 574 of 
     title 5, United States Code, are each amended in the matter 
     before paragraph (1) by striking ``any information 
     concerning''.
       (b) Dispute Resolution Communication.--Section 574(b)(7) of 
     title 5, United States Code, is amended to read as follows:
       ``(7) except for dispute resolution communications 
     generated by the neutral, the dispute resolution 
     communication was provided to or was available to all parties 
     to the dispute resolution proceeding.''.
       (c) 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.''.
       (d) Exemption From Disclosure by Statute.--Section 574 of 
     title 5, United States Code, is amended by amending 
     subsection (j) to read as follows:
       ``(j) A dispute resolution communication which is between a 
     neutral and a party and which may not be disclosed under this 
     section shall also be exempt from disclosure under section 
     552(b)(3).''.

     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. 571 note; Public Law 101-552; 104 Stat. 2736) is 
     amended to read as follows:
       ``(1) consult with the agency designated by, or the 
     interagency committee designated or established by, the 
     President under section 573 of title 5, United States Code, 
     to facilitate and encourage agency use of alternative dispute 
     resolution under subchapter IV of chapter 5 of such title; 
     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.

[[Page H11447]]

       (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 other agencies'' and 
     inserting ``the agency designated by, or the interagency 
     committee designated or established by, the President under 
     section 573 of title 5, United States Code,''.

     SEC. 5. AMENDMENTS TO SUPPORT SERVICES 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) The President shall designate an agency or designate 
     or establish an interagency committee to facilitate and 
     encourage agency use of dispute resolution under this 
     subchapter. Such agency or interagency committee, in 
     consultation with other appropriate Federal agencies and 
     professional organizations experienced in matters concerning 
     dispute resolution, shall--
       ``(1) encourage and facilitate agency use of alternative 
     means of dispute resolution; 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. ARBITRATION AWARDS AND JUDICIAL REVIEW.

       (a) Arbitration Awards.--Section 580 of title 5, United 
     States Code, is amended--
       (1) by striking subsections (c), (f), and (g); and
       (2) by redesignating subsections (d) and (e) as subsections 
     (c) and (d), respectively.
       (b) Judicial Awards.--Section 581(d) of title 5, United 
     States Code, is amended--
       (1) by striking ``(1)'' after ``(b)''; and
       (2) by striking paragraph (2).
       (c) Authorization of Arbitration.--Section 575 of title 5, 
     United States Code, is amended--
       (1) in subsection (a)(2), by striking ``Any'' and inserting 
     ``The'';
       (2) in subsection (a)(2), by adding at the end the 
     following: ``Each such arbitration agreement shall specify a 
     maximum award that may be issued by the arbitrator and may 
     specify other conditions limiting the range of possible 
     outcomes.'';
       (3) in subsection (b)--
       (A) by striking ``may offer to use arbitration for the 
     resolution of issues in controversy, if'' and inserting 
     ``shall not offer to use arbitration for the resolution of 
     issues in controversy unless''; and
       (B) by striking in paragraph (1) ``has authority'' and 
     inserting ``would otherwise have authority''; and
       (4) by adding at the end the following:
       ``(c) Prior to using binding arbitration under this 
     subchapter, the head of an agency, in consultation with the 
     Attorney General and after taking into account the factors in 
     section 572(b), shall issue guidance on the appropriate use 
     of binding arbitration and when an officer or employee of the 
     agency has authority to settle an issue in controversy 
     through binding arbitration.''.

     SEC. 9. 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. 571 note) is amended by 
     striking section 11.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Subchapter IV 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.''.

     SEC. 11. REAUTHORIZATION OF NEGOTIATED RULEMAKING ACT OF 
                   1990.

       (a) Permanent Reauthorization.--Section 5 of the Negotiated 
     Rulemaking Act of 1990 (Public Law 101-648; 5 U.S.C. 561 
     note) is repealed.
       (b) Closure of Administrative Conference.--
       (1) In general.--Section 569 of title 5, United States 
     Code, is amended--
       (A) by amending the section heading to read as follows:

     ``Sec. 569. Encouraging negotiated rulemaking''; and

       (B) by striking subsections (a) through (g) and inserting 
     the following:
       ``(a) The President shall designate an agency or designate 
     or establish an interagency committee to facilitate and 
     encourage agency use of negotiated rulemaking. An agency that 
     is considering, planning, or conducting a negotiated 
     rulemaking may consult with such agency or committee for 
     information and assistance.
       ``(b) To carry out the purposes of this subchapter, an 
     agency planning or conducting a negotiated rulemaking may 
     accept, hold, administer, and utilize gifts, devises, and 
     bequests of property, both real and personal if that agency's 
     acceptance and use of such gifts, devises, or bequests do not 
     create a conflict of interest. Gifts and bequests of money 
     and proceeds from sales of other property received as gifts, 
     devises, or bequests shall be deposited in the Treasury and 
     shall be disbursed upon the order of the head of such agency. 
     Property accepted pursuant to this section, and the proceeds 
     thereof, shall be used as nearly as possible in accordance 
     with the terms of the gifts, devises, or bequests.''.
       (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 569 and 
     inserting the following:

``569. Encouraging negotiated rulemaking.''.

       (c) Expedited Hiring of Convenors and Facilitators.--
       (1) Defense agency contracts.--Section 2304(c)(3)(C) of 
     title 10, United States Code, is amended by inserting ``or 
     negotiated rulemaking'' after ``alternative dispute 
     resolution''.
       (2) 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 inserting ``or negotiated 
     rulemaking'' after ``alternative dispute resolution''.
       (d) Authorization of Appropriations.--
       (1) In general.--Subchapter III of title 5, United States 
     Code, is amended by adding at the end thereof the following 
     new section:

     ``Sec. 570a. Authorization of appropriations

       ``There are authorized to be appropriated such sums as may 
     be necessary to carry out the purposes of this subchapter.''.
       (2) 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 570 
     the following:

``570a. Authorization of appropriations.''.

       (e) Negotiated Rulemaking Committees.--The Director of the 
     Office of Management and Budget shall--
       (1) within 180 days of the date of the enactment of this 
     Act, take appropriate action to expedite the establishment of 
     negotiated rulemaking committees and committees established 
     to resolve disputes under the Administrative Dispute 
     Resolution Act, including, with respect to negotiated 
     rulemaking committees, eliminating any redundant 
     administrative requirements related to filing a committee 
     charter under section 9 of the Federal Advisory Committee Act 
     (5 U.S.C. App.) and providing public notice of such committee 
     under section 564 of title 5, United States Code; and
       (2) within one year of the date of the enactment of this 
     Act, submit recommendations to Congress for any necessary 
     legislative changes.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania [Mr. Gekas] and the gentleman from Rhode Island [Mr. Reed] 
each will control 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. 4194 and urge its adoption by 
the House.
  Back in 1990, Mr. Speaker, the then-President of the United States, 
George Bush, signed into law the Administrative Dispute Resolution Act, 
which brings us to this moment in the history of this type of 
legislation. What we are about to do, if the House should agree and if 
the Senate, of course, is to reauthorize that first attempt at, and 
successful attempt, I might add, at bringing a new mechanism into play 
for the solution of problems that arise between agencies and people who 
deal with the agencies in the private sector most especially.
  We ought to set the stage, Mr. Speaker, by saying assume that we have 
a contractor, and we have testimony in

[[Page H11448]]

hearings that buttress the example that I am about to render, a 
contractor deals with an agency and they come to a stalemate on an 
important issue in which there is no alternative left for the 
contractor except to bring the matter to court.
  What happens then is a protracted period. As we all know, a 
protracted period is part of the court system these days, during which 
the contractor is not going to be doing any work and which the agency 
may find itself frozen in its tracks in attempting to do the mandate 
while the court proceeds to handle a case that may take years to reach 
final docket stage.
  The purpose then of the Administrative Dispute Resolution Act is to 
allow a mechanism where an interim kind of cooperative measure can be 
taken where both parties go before a mechanism which allows them an 
alternative way to solve their dispute.
  What this does for the contractor is save enormous amounts of money, 
of course. No. 2, it, more importantly, saves important time segments 
for both the agency and the contractor and, in the long run, brings 
about for the public a swift answer to the vexing problems that may 
have arisen. So by itself it is an excellent cost saver and time saver, 
and we want to make sure that the House and the Senate fully complement 
our efforts here by passing this legislation.
  What more we can say about it is that on June 12, 1996, the Senate 
approved a predecessor to this bill with an amendment that included 
several substantive additions. First, several provisions in the Senate 
passed bill relating to ADR were different, notably with respect to the 
issues of confidentiality of ADR communications and the authority of 
the Government to engage in binding arbitration.
  Second, the Senate added a permanent reauthorization of the 
Negotiated Rulemaking Act, a law designed to improve the development of 
agency rules by encouraging the formation of committees composed of 
representatives from the regulated public to work together with agency 
representatives.
  Third, the Senate added a provision dealing with the jurisdiction of 
the Federal district courts to entertain bid protests in procurement 
cases, something which is commonly referred to as Scanwell 
jurisdiction, after the name of the case that wended its way through 
the court system.
  The conferees of the House and Senate negotiated over a period of 
several months to arrive at an agreement that would enable two 
important provisions to be reauthorized, two provisions which our 
subcommittee had heard testimony that indicated that considerable 
taxpayer dollars were being saved, as I indicated in my hypothetical, 
because of their existence.

                              {time}  1145

  Both the ADR Act and the Negotiated Rulemaking Act have reduced the 
cost of government to the taxpayer by, in the instance of the former, 
reducing resort to litigation, which is what I have been trying to 
emphasize, and in the case of the latter, by ensuring the promulgation 
of agency rules that make sense and which do not overburden the 
regulated public.
  The question of changing Scanwell jurisdiction. This added feature 
that I mentioned had not been raised in the House but was supported by 
the administration and insisted upon by the Senate, thereby causing the 
delays that caused us to wait until almost the last day to make sure 
that this can be passed. The conference adopted a course of compromise 
with respect to Scanwell, but it is obvious that since efforts to 
change Scanwell jurisdiction have never been the subjects of hearings 
in the House, they cannot be successful at this point without discrete 
consideration in this body. Thus H.R. 4194 embodies the conference 
agreement with the exception of Scanwell, dropping off Scanwell, which 
is left for consideration as we see it in the next Congress.
  With respect to ADR, the House receded to the Senate language on 
confidentiality with an amendment that brought it closer to the House 
position. The same course was taken with respect to the issue of 
arbitration. The conference report provided, and so does the current 
bill, H.R. 4194, that ADR communications between the neutral and the 
parties are exempted from disclosure under the Freedom of Information 
Act. It did so in order to promote honest and candid discussions in the 
process which will lead to the settlement of issues in dispute and a 
resulting savings in time and money to every party to a particular 
dispute. ADR communications between the parties themselves are not so 
exempted in recognition that the public does in fact have a right to 
know something about the process and how it is operating.
  Now, with respect to arbitration, the conference report and H.R. 4194 
authorize agencies to engage in binding arbitration but with certain 
limitations and guidelines designed to foster discretion and 
accountability. This bill, as did the conference report, clarifies that 
an agency cannot exceed its otherwise applicable settlement authority 
in ADR proceedings and it requires an agency, in consultation with the 
Attorney General, to issue guidelines on the use and limitations of 
binding arbitration.
  Mr. Speaker, I think it is an important accomplishment of this body 
to reauthorize two very significant statutes that have been extremely 
useful in saving the taxpayers money and in helping agencies and the 
regulated public develop a better working relationship that makes 
government work better. I wish to commend my colleague, the 
distinguished gentleman from Rhode Island, Mr. Reed, and thank him for 
his efforts and his cooperation and that of his staff in promoting the 
final result in this overextended controversy. We also wish to extend 
our personal wishes of good luck to the gentleman who is embarking on a 
new career that if he would be successful would result, of course, in 
the elevating of the IQ of both the House and the Senate and in doing 
so we wish him the best.
  In the meantime, Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I rise in support of this important, 
bipartisan legislation.
  The original Alternative Dispute Resolution Act [ADRA] was signed 
into law in 1990 in order to encourage the use of alternative dispute 
resolution techniques--such as mediation, arbitration, and 
negotiation--to resolve disputes involving Federal agencies. The 
authorization for this program expired in October 1995, and this 
legislation would permanently reauthorize the program. Although 
agencies can engage in ADR without authorizing legislation, the ADRA 
provided a governmentwide framework for ADR and its expiration has 
caused unnecessary disruption in the field.
  I favor innovative programs such as ADRA which can lower the costs of 
litigation without diminishing access to justice. This benefits both 
sides to the litigation equation--Government as well as business and 
private parties--and is the type of civil justice reform we can all 
support.
  In addition to permanently reauthorizing ADRA, H.R. 4194 makes 
several other changes to the law. It expands the range of cases which 
are subject to referral to ADR by eliminating exemptions for certain 
types of workplace grievances and discrimination cases, so long as the 
employee so consents. I believe the program has been sufficiently 
tested so that it can be used for these very sensitive cases. H.R. 4194 
also makes the ADR procedure more user friendly by streamlining the 
acquisition process for neutrals.
  The bill also creates a limited exemption from the Freedom of 
Information Act [FOIA] for certain documents disclosed to an arbitrator 
or other neutral in the course of a dispute resolution proceeding. As 
with all other exemptions to FOIA, this new exemption is to be 
construed in the narrowest possible manner.
  For example, it is important to note that the parties are not 
permitted to use this exemption as a mere sham to exempt sensitive 
information from FOIA. Thus, as noted in the statement of managers on 
the predecessor legislation to this bill (H.R. 2977), litigants may not 
resort to ADR principally as a means of taking advantage of the new 
exemption--in such a case the new FOIA exemption should not be held to 
apply. There are few policies which are more important than openness in 
Government and release of Government documents to the people.
  Finally, I would like to note that this bill does not authorize an 
agency or any other employer to require its employees to submit to 
binding arbitration as a condition of employment or to relinquish any 
rights they may have under title VII of the Civil Rights Act of 1964 or 
any other statute. The decision to engage in binding arbitration 
concerning such disputes must be voluntary by all parties. No one 
should be required to relinquish his or her statutory rights as a 
condition of obtaining employment with the Federal Government. Under no 
condition could I support this legislation if this were not the case.

[[Page H11449]]

  I urge my colleagues to join me in supporting this worthwhile, 
bipartisan legislation.
  Mr. REED. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. REED asked and was given permission to revise and extend his 
remarks.)
  Mr. REED. Mr. Speaker, first I want to thank the gentleman from 
Pennsylvania, Mr. GEKAS, for his hard work on this legislation. It was 
a pleasure working with him and his staff, and I commend him on the 
excellent job he has done this year as chairman of the Subcommittee on 
Commercial and Administrative Law. I thank him for his kind words and 
his accurate assessment of my intelligence.
  The original House version of this legislation, H.R. 2977, passed the 
House by voice vote on June 4 of this year. The bill before us today is 
identical to the conference report on H.R. 2977 minus a controversial 
procurement reform provision added by the Senate. That provision would 
have repealed Federal district court jurisdiction over bid protests 
otherwise known as the Scanwell jurisdiction, as has been explained by 
Chairman GEKAS. Removing this provision will give the House the 
opportunity to hold hearings on this issue and examine it more closely. 
In particular, close scrutiny should be given to the impact on small 
contractors of this provision.
  The remaining provisions of this legislation permanently authorize 
the Administrative Dispute Resolution Act and the Negotiated Rulemaking 
Act.
  Mr. Speaker, I include my full statement for the Record:
  First, I want thank Chairman Gekas for his hard work on this 
legislation. It was a pleasure working with him and his staff and I 
commend him on the excellent job he has done this year as the chairman 
of the Subcommittee on Commercial and Administrative Law.
  The original House version of this legislation, H.R. 2977, passed the 
House by voice vote on June 4 of this year. The bill before us today is 
identical to the conference report on H.R. 2977, minus a controversial 
procurement reform provision added by the Senate. That provision would 
have repealed Federal district court jurisdiction over bid protests, 
otherwise known as Scanwell jurisdiction. Removing this provision will 
give the House the opportunity to hold hearings on this issue and 
examine it more closely. In particular, close scrutiny should be given 
to the impact on small contractors.
  The remaining provisions of this legislation permanently reauthorize 
the Administrative Dispute Resolution Act and the Negotiated Rulemaking 
Act.
  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 resolution. 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.
  H.R. 4194 makes several changes to the existing ADR Act:
  It removes a procedural impediment to the use of binding arbitration 
by Government agencies while at the same time imposing safeguards to 
ensure binding arbitration is used only where appropriate.
  It expands the range of cases that can be referred to ADR by 
eliminating the exemptions for certain types of workplace related 
disputes so they may, with the consent of the employee, be referred to 
ADR. The general provisions of section 572(b), which establish criteria 
for identifying cases where ADR is not appropriate, would still apply.
  I would like to take a moment to address a concern that was recently 
brought to my attention by the gentlelady from Colorado [Mrs. 
Schroeder]. She wanted to make clear that this bill does not authorize 
an agency or any other employer to require its employees to submit to 
binding arbitration as a condition of employment or to require 
employees to relinquish rights they may have under title VII of the 
Civil Rights Act of 1964 or any other statute.
  I wanted to assure her that she has no reason to worry about this 
bill. The decision to engage in binding arbitration must be voluntary 
by all parties, as provided by sections 572 (a) and (c) of the ADR Act. 
Also, 5 U.S.C. 2302(b)(9)(A) makes it a prohibited personnel practice 
to take any action against an employee because of the ``exercise of any 
appeal, complaint or grievance right granted by any law, rule, or 
regulation.'' A party cannot be required to enter into binding 
arbitration as a condition of initial or continued employment. I wanted 
to make sure that point is absolutely clear. We have been assured of 
this by the Department of Justice, the EEOC, and OPM. Both the Ranking 
Member, Mr. Conyers, and I signed the conference report with this 
understanding and would not have signed it otherwise, nor would we be 
supporting this legislation today.
  H.R. 4194 makes ADR easier for agencies to use by streaming the 
acquisition process for neutrals.
  H.R. 4104 also enhances the confidentially provisions of the ADR 
statute. The bill provides that a document generated by a neutral and 
provided to all parties is exempt from discovery under section 
574(b)(7), as well as from disclosure pursuant to FOIA. This change 
will facilitate the use of early neutral evaluation and similar ADR 
processes that provide an outcome prediction to both sides. Parties are 
understandably reluctant to subject themselves to the risk of the 
neutral's opinion, which is not based on full discovery, being used 
against them at trial later. This is a change from the House passed 
version of H.R. 2977.
  Another change from the House passed version of H.R. 2977 concerns 
the interaction between the confidentiality protections in the ADR Act 
and the Freedom of Information Act. As passed by the House, H.R. 2977 
provided that the memoranda, notes, or work product of the neutral 
would be exempt from disclosure under the Freedom of Information Act. 
According to the testimony of the Federal Mediation and Conciliation 
Service, the lack of a FOIA exemption has served as an incentive to 
hire private neutrals who are not subject to FOIA, rather than 
Government neutrals. 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 conference was reluctant to go as far as the Senate bill and 
exempt all ADR communication from FOIA. Under prevailing law, documents 
exchanged by the Government and its litigation adversaries in the 
course of settlement are not withholdable under FOIA, and key documents 
have been made public that shed light on why the Government settled 
important enforcement actions.
  But the House conferees were persuaded to go slightly farther than 
the original House proposal to cover the situation where a neutral asks 
an agency to prepare a statement outlying the strengths and weakness of 
its case. Under the House passed H.R. 2977, such a document in the 
hands of the mediator would be protected against disclosure pursuant to 
FOIA, yet that same document in the hands of an agency party would not 
be, unless it fit one of the existing FOIA exemptions. The overall 
purpose of the confidentiality provision is to encourage a candid 
exchange between a party and the neutral to the end of facilitating an 
agreement. Thus, the conference agreed that dispute resolution 
communications between a party and a neutral are to be protected 
against disclosure under FOIA. It is not the intent of the conferees, 
as is made clear by the statement of managers, that this provision be 
read to permit parties to evade FOIA by passing documents through the 
neutral to another party. It only exempts a document generated by an 
agency during a dispute resolution proceeding that is provided to the 
neutral alone. If a party provides a document to the neutral and the 
neutral provides it to another party, that document would be regarded 
as being exchanged between the parties, and hence outside the revised 
section 474(j). It would therefore, be subject to FOIA. In fact, under 
ADRA section 574(b)(7), if the document is provided to or available to 
all parties, it is also not protected against disclosure through 
discovery.
  H.R. 4194 also narrows the definition of documents accorded 
confidentiality. They are limited to communications prepared for a 
dispute resolution proceeding. Preexisting documents are not protected. 
Section 574(f) already states that the ADR Act does not prevent the 
discovery or admissibility of any evidence that is otherwise 
discoverable.
  When the Department of Justice drops antitrust charges against a 
software company pursuant to a settlement agreement or the FDIC settles 
a case with the directors of a failed savings and loan, the public 
should be able to find out why the Government acted as it did. The 
public interest in disclosure does not disappear simply because of a 
shift in venue from a trial court or an unassisted settlement setting 
to an alternative dispute resolution proceeding.
  At the same time, ADR is qualitatively different from unassisted 
settlement negotiations and litigation. Working with a neutral, 
participants share information and concede weaknesses that otherwise 
would be more advantageous to withhold. Exempting from FOIA disclosure 
documents shared with the neutral, along with the work product of the 
neutral, will encourage ADR without sacrificing accountability and 
openness.
  The conference report also permanently reauthorizes the Negotiated 
Rulemaking Act.

[[Page H11450]]

The Negotiated Rulemaking Act was passed in 1990 to provide an 
alternative to traditional notice and comment rulemaking. Instead, of 
formulating a rule on its own, publishing it, and waiting for 
interested parties to comment, under negotiated rulemaking an agency 
brings together representatives of the parties that will be affected by 
the rule to develop that rule by consensus. Our subcommittee held a 
very informative hearing this year where we heard from the participants 
of a negotiated rulemaking involving OSHA, the construction industry, 
and labor, that succeeded where a decade of traditional rulemaking had 
failed.
  Agencies have used negotiated rulemaking in a variety of 
circumstances, from fall protection in the steel industry to headlight 
aiming. Vice President Gore's National Performance Review encouraged 
its use, citing the reduction in compliance costs, greater ease in 
implementation, and more cooperative relationships between the agency 
and regulated parties that result. President Clinton by Executive order 
has required executive departments and selected agencies to do at least 
one negotiated rulemaking this year.
  The Negotiated Rulemaking Act would expire at the end of November. 
This conference report would permanently reauthorize it, and make some 
primarily technical improvements. For example, the process for 
acquiring neutrals and facilitators is streamlined. Likewise, OMB is 
directed to expedite the procedures for forming a negotiated rulemaking 
committee.
  H.R. 4194 also authorizes the President to designate an agency or 
interagency panel to coordinate and facilitate agency use of ADR and 
negotiated rulemaking, to make up for the loss of ACUS, the 
Administrative Conference of the United States, which lost its funding 
last year.
  Finally, I insert into the Record a copy of the statement of managers 
as part of the legislative history of this bill.
  It is important that we reauthorize both the Administrative Dispute 
Resolution Act and the Negotiated Rulemaking Act. This bill has the 
support of the administration and I urge my colleagues to vote for H.R. 
4194.
  Mr. Speaker, I include for the Record a copy of the statement of 
managers as part of the legislative history of the bill:

       The conferees incorporate by reference in this Statement of 
     Managers the legislative history reflected in both House 
     Report 104-597 and Senate Report 104-245. To the extent not 
     otherwise inconsistent with the conference agreement, those 
     reports give expression to the intent of the conferees.
       Section 3--House recedes to Senate amendment with 
     modifications. This section clarifies that, under 5 U.S.C. 
     section 574, a dispute resolution communication between a 
     party and a neutral or a neutral and a party that meets the 
     requirements for confidentiality in section 574 is also 
     exempt from disclosure under FOIA. In addition, a dispute 
     resolution communication originating from a neutral and 
     provided to all of the parties, such as Early Neutral 
     Evaluation, is protected from discovery under 574(b)(7) and 
     from disclosure under FOIA. A dispute resolution 
     communication originating from a party to a party or parties 
     is not protected from disclosure by the ADR Act.
       The Managers recognize that the intent of the Conference 
     Agreement not to exempt from disclosure under FOIA a dispute 
     resolution communication given by one party to another party 
     could be easily thwarted if a neutral in receipt of a dispute 
     resolution communication agrees with a party to in turn pass 
     the communication on to another party. It is the intent of 
     the Managers that if the neutral attempts to circumvent the 
     prohibitions of the ADR Act in this manner, the exemption 
     from FOIA would not apply.
       As with all other FOIA exemptions, the exemption created by 
     section 574(j) is to be construed narrowly. The Managers 
     would not expect the parties to use the new exemption as a 
     mere sham to exempt information from FOIA. Thus, for example, 
     we would not expect litigants to resort to ADR principally as 
     a means of taking advantage of the new exemption. In such a 
     case the new exemption would not apply.
       Section 7--Senate recedes to House with a modification. 
     This section requires the President to designate an agency or 
     to designate or establish an interagency committee to 
     facilitate and encourage the use of alternative dispute 
     resolution. The Managers encourage the President to designate 
     the same entity under this provision as is designated under 
     section 11 (regarding Negotiated Rulemaking). This would 
     promote the coordination of policies, enhance institutional 
     memory on the relevant issues, and make more efficient the 
     use of ADR and Negotiated Rulemaking.
       Section 8--House recedes to Senate amendment with 
     modifications. This section permits the use of binding 
     arbitration under certain conditions, and clarifies that an 
     agency cannot exceed its otherwise applicable settlement 
     authority in alternative dispute resolution proceedings.
       The head of an agency that is a party to an arbitration 
     proceeding will no longer have the authority to terminate the 
     proceeding or vacate any award under 5 U.S.C. section 580. 
     However, it is the Managers' intent that an arbitrator shall 
     not grant an award that is inconsistent with law. In 
     addition, prior to the use of binding arbitration, the head 
     of each agency, in consultation with the Attorney General, 
     must issue guidelines on the use and limitations of binding 
     arbitration.
       Section 11--House recedes to Senate amendment with 
     modifications. This section permanently reauthorizes the 
     Negotiated Rulemaking Act of 1990. The President is required 
     to designate an agency or interagency committee to facilitate 
     and encourage the use of negotiated rulemaking.
       In addition, this section requires the Director of the 
     Office of Management and Budget to take action to expedite 
     the establishment of negotiated rulemaking committees and 
     committees to resolve disputes under the Administrative 
     Dispute Resolution Act. It is the understanding of the 
     Managers that the Federal Advisory Committee Act (FACA) 
     applies to proceedings under the Negotiated Rulemaking Act, 
     but does not apply to proceedings under the Administrative 
     Dispute Resolution Act. The Director also is required to 
     submit recommendations to Congress for any necessary 
     legislative changes within one year after enactment.
       The Managers deleted language in paragraph (b)(1)(B) 
     determining that property accepted under this section shall 
     be considered a gift to the United States for federal tax 
     purposes because the Managers determined that the language 
     merely repeated current law.
       Section 12--House recedes to Senate amendment with 
     modifications. This section consolidates federal court 
     jurisdiction for procurement protest cases in the Court of 
     Federal Claims. Previously, in addition to the jurisdiction 
     exercised by the Court of Federal Claims, certain procurement 
     protest cases were subject to review in the federal district 
     courts. The grant of exclusive federal court jurisdiction to 
     the Court of Federal Claims does not affect in any way the 
     authority of the Comptroller General to review procurement 
     protests pursuant to Chapter 35 of Title 31, U.S. Code.
       This section also applies the Administrative Procedure Act 
     Standard of review previously applied by the district courts 
     (5 U.S.C. sec. 706) to all procurement protest cases in the 
     Court of Federal Claims. It is the intention of the Managers 
     to give the Court of Federal Claims exclusive jurisdiction 
     over the full range of procurement protest cases previously 
     subject to review in the federal district courts and the 
     Court of Federal Claims. This section is not intended to 
     affect the jurisdiction or standards applied by the Court of 
     Federal Claims in any other area of the law.

  Mr. Speaker, it is important that we reauthorize both the 
Administrative Dispute Resolution Act and the Negotiated Rulemaking 
Act. This bill has the support of the administration and I urge my 
colleagues to vote for H.R. 4194.
  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 Illinois [Mr. Hyde].
  (Mr. HYDE asked and was given permission to revise and extend his 
remarks.)
  Mr. HYDE. Mr. Speaker, the cost and length of traditional litigation 
is increasingly leading to the settlement of claims through alternative 
means. Many different techniques, such as mediation, arbitration, 
minitrials, and partnering have been found effective in reaching 
expeditious and consensual resolutions to matters which would have 
otherwise been adjudicated through our courts. The benefits of these 
alternative dispute resolution techniques are equally apparent where 
one or more of the parties to the dispute is a governmental entity. In 
order to promote their use by agencies, we are today considering H.R. 
4194, the Alternative Dispute Resolution Act of 1996, which will 
reauthorize that act.
  In addition to providing a permanent authorization for the act, H.R. 
4194 contains several provisions which will improve procedures 
governing alternative dispute resolution, and give parties incentives 
to use these techniques. First, it eliminates the provision of current 
law which gives the Government 30 days to vacate the award of an 
arbitrator. The practical effect of this provision was that no private 
party would agree to arbitration with the Government. This change is 
anticipated to dramatically increase the use of binding arbitration.
  Under the bill, an agency cannot use binding arbitration if doing so 
would exceed its otherwise applicable settlement authority in 
alternative dispute resolution proceedings. An arbitrator would not be 
permitted to grant an award that is inconsistent with law. In addition, 
prior to the use of binding arbitration, the head of each agency, in 
consultation with the Attorney General, must issue guidelines on the 
use and limitations of binding arbitration.
  Second, H.R. 4194 increases the confidentiality of dispute resolution 
communications between a party and a neutral. While current law sets 
out in great detail what communications

[[Page H11451]]

in an alternative dispute resolution may be disclosed by the neutral 
and the parties, and under what conditions, it fails to ensure that 
such documents are also protected from disclosure under the Freedom of 
Information Act [FOIA]. If either a party or the neutral is a 
Government agency, a dispute resolution communication would be 
potentially available to the public through FOIA dispute the intent of 
the ADR Act that it be kept confidential. This confidentiality is of 
vital importance to reaching a voluntary agreement, because it 
encourages a candid exchange between a party and a neutral. H.R. 4194 
provides an exemption from FOIA disclosure for communications between a 
party and a neutral, so long as they would also be confidential 
according to the terms of the ADR Act.
  The bill clarifies that, under 5 U.S.C. section 574, a dispute 
resolution communication between a party and a neutral or a neutral and 
a party that meets the requirements for confidentiality in section 574 
is also exempt from disclosure under FOIA. In addition, a dispute 
resolution communication originating from a neutral and provided to all 
of the parties, such as early neutral evaluation, is protected from 
discovery under 574(b)(7) and from disclosure under FOIA. A dispute 
resolution communication originating from a party to a party or parties 
is not protected from disclosure by the ADR Act.
  The intent of this provision not to exempt from disclosure under FOIA 
a dispute resolution communication given by one party to another party 
could be easily thwarted if a neutral in receipt of a dispute 
resolution communication agrees with a party to in turn pass the 
communication on to another party. If the neutral attempts to 
circumvent the prohibitions of the ADR Act in this manner, the FOIA 
exemption would not apply.
  As with all other FOIA exemptions, the exemption created by section 
574(j) is to be construed narrowly. Parties should not be allowed to 
use the new exemption as a mere sham to exempt information from FOIA. 
Thus, for example, litigants should not resort to ADR principally as a 
means of taking advantage of the new exemption. In such case the new 
exemption would not apply.
  Mr. Speaker, H.R. 4194 also reauthorizes the Negotiated Rulemaking 
Act, which encourages agencies to use negotiated rulemaking when its 
use would enhance the informal rulemaking process. The bill requires 
the President to designate an agency or to designate or establish an 
interagency committee to facilitate and encourage the use of negotiated 
rulemaking, and to do the same to facilitate the use of alternative 
dispute resolution. Hopefully, the President will designate the same 
entity for both purposes. This would promote the coordination of 
policies, enhance institutional memory on the relevant issues, and make 
more efficient the use of ADR and negotiated rulemaking. In addition, 
the bill requires the Director of the Office of Management and Budget 
to take action to expedite the establishment of negotiated rulemaking 
committees and committees to resolve disputes under the Administrative 
Dispute Resolution Act. The Federal Advisory Committee Act [FACA] would 
apply to proceedings under the Negotiated Rulemaking Act, but not to 
proceedings under the Administrative Dispute Resolution Act.
  Mr. Speaker, I strongly support H.R. 4194 and urge its swift 
adoption.
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, when we engaged in hearings on this bill, I want to 
spread on the record the thought that I have that the quality of the 
testimony was what spurred this Member in attempting to bring about a 
final solution to the resolution of administrative disputes. 
Particularly I want to pay tribute to the gentlemen from TRW, who in 
their testimony outlined how in effect money could be saved and, more 
importantly, time and energy of the various agencies and the private 
entities involved in an enterprise and very forcefully convinced this 
Member, along with the testimony of others, that this type of mechanism 
indeed should be and is now on the verge of being reauthorized.
  We worry about what effect the Scanwell language might have and what 
atmosphere it casts over the final passage of this legislation. The 
gentleman from Rhode Island was correct in stating that hearings ought 
to be held and that the next Congress ought to make it a part of its 
agenda. I want to place on the record my pledge that if reelected and 
we return to the work of the committee in which we participate, that we 
will hold hearings and look at it very closely. But for now, we do no 
harm to anyone by leaving the law as it is without delving into the 
controversial aspects of the Scanwell item about which we speak. So, 
with that pledge, I am determined to offer the best possible face of 
this legislation so it can be reauthorized now, along with its other 
provisions.
  I wonder if the gentleman from Rhode Island would engage in a 
colloquy with me with some of my remaining time. I remembered during 
the conference that the gentleman from Rhode Island was not unhappy 
with but was not final in his determination as to the report language. 
Could I ask the gentleman if he is now satisfied with the report 
language as now will accompany the bill?
  Mr. REED. Mr. Speaker, will the gentleman yield?
  Mr. GEKAS. I yield to the gentleman from Rhode Island.
  Mr. REED. Mr. Speaker, I believe we have made progress with respect 
to the report language and it is adequate. We have made progress with 
the report language. I believe at this juncture, it is adequate to 
substantiate our understanding of the legislation and provide guidance 
to interpretation of the legislation.
  Mr. GEKAS. Mr. Speaker, I thank the gentleman.
  So that the last tidiness that has to be applied to this legislation, 
namely the report language, will probably offer no obstacle to the 
final passage of this legislation; is that correct?
  Mr. REED. Mr. Speaker, I do not think there is anything that we 
should know. I believe that the staffs have been in communication and 
that there is an understanding that the language of the report will 
substantiate our mutual understanding of the legislation. Consequently, 
I do not at this juncture anticipate any problems.
  Mr. GEKAS. Mr. Speaker, I am rapidly coming to the close of the 
remarks that I want to insert into the record, but I am searching 
diligently for even additional language that I feel should become part 
of the Record. I am doing that to give time to the gentleman from 
Georgia, [Mr. Linder], to get here so that we can proceed with the next 
item of business. You are going to have to listen to me drone on for a 
few minutes, if you do not mind. The gentleman from Massachusetts [Mr. 
Moakley], is present but he cannot begin the process without the 
presence of his colleague from the Committee on Rules. We are 
consulting here on how best we can fill the time.
  Mr. Speaker, as my final item in the discourse which I have embarked 
on this morning, I want to give some statistics that will show the 
value of what we are about here today. The Army Corps of Engineers 
reportedly used dispute resolution in 55 contract disputes between 
1989-94, 53 of which were successful. One case reportedly resulted in a 
claim for $55 million being settled for $17 million in 4 days. So this 
gives you an idea that we are not just puffing here when we are saying 
that to allow for a mechanism for alternative ways to solve disputes 
between contractors and agencies, that we indeed can demonstrate to the 
public that we are utilizing time, energy and cost savings very 
efficiently.
  I think that the gentleman from Georgia, [Mr. Linder], would agree 
with me if he were here. If he should get to the floor rather quickly, 
I could end my discourse.
  Mr. Speaker, this is not the most exciting of issues and my heart is 
not pounding with the rapture that usually accompanies my involvement 
in issues before the floor, but insofar as it was granted to us to have 
the power to deal with the issue and because it was relegated to my 
committee, I now take the privilege of thanking every member of the 
Subcommittee on Commercial and Administrative Law of the Committee on 
the Judiciary, both on the minority side and the majority side. This 
may be the last time that our voice, collectively or individually, will 
be heard as members of that committee.
  I daresay that we had excellent cooperative, bipartisan action on 
many items and where we did devolve into ideological or partisan 
approaches to a particular problem, those were handled on a civil basis 
with great cooperation being accorded between staffs and between and 
among Members.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1200

  Mr. REED. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like, if I could, to engage the gentleman from 
Pennsylvania [Mr. Gekas] in a colloquy, and

[[Page H11452]]

in doing so I would like to take a moment to address a concern that was 
recently brought to my attention by the gentlewoman from Colorado [Mrs. 
Schroeder]. She wanted to make clear that this bill does not authorize 
an agency or any other employer to require its employees to submit to 
binding arbitration as a condition of employment, or to relinquish 
rights they may have under title 7 of the Civil Rights Act of 1964 or 
any other statute. I want to assure her that she has no reason to worry 
about this bill and that the decision to engage in binding arbitration 
must be voluntary by all parties, as provided in sections styled 72(a) 
and (c) of the ADR act, and in fact would like if the gentleman could 
confirm that understanding.
  Mr. GEKAS. Mr. Speaker, will the gentleman yield?
  Mr. REED. I yield to the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Speaker, I assert for the record and for the 
gentleman's confirmation that indeed this bill does not in any way 
change the current law, the current system for handling binding 
arbitration of the type that has been described by the gentleman in his 
hypothetical. We remain nongermane in this bill as to the current 
situation on binding arbitration.
  Mr. REED. Mr. Speaker, I thank the gentleman from Pennsylvania, and 
reclaiming my time once again, I do want to commend him for his 
leadership on the committee and to commend all of my colleagues on the 
committee, both the members of the minority and majority parties and 
the staffs who have done an excellent job. I, too, second the 
chairman's determination that this has been a committee I think marked 
by collegiality and cooperation, and at times when we did disagree it 
was done based upon principle, in a very civil and constructive manner, 
and I thank the chairman for that atmosphere that he has created.
  I have no more speakers, Mr. Speaker, and I would reserve the balance 
of my time pending other comments by the gentleman from Pennsylvania.
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, one other item: I made it the point throughout the 
entire 2-year period in which I chaired this committee to begin the 
each meeting and each hearing on time. When we said 10 o'clock or 9:30 
or 11 o'clock, the gavel actually rapped every single time that we had 
a hearing or meeting throughout the course of the 2 years.
  Now many times we had to recess immediately upon convening the 
hearing because of the absence of a quorum, but I want the record to 
show that every single meeting or hearing that was conducted in the 
Subcommittee on Commercial and Administrative Law of the Committee on 
the Judiciary began on time. I believe, unless someone can contravene 
it, that that is a record.
  Mr. MOAKLEY. Mr. Speaker, will the gentleman yield?
  Mr. GEKAS. I yield to the gentleman from Massachusetts (Mr. Moakley) 
to see if he can challenge that assertion on my part. Seeing that he is 
rising, that worries me, but I will yield to the gentleman.
  Mr. MOAKLEY. Mr. Speaker, actually I cannot affirm whether or not 
that is true, but the only thing is I know that presently, right now, I 
am waiting for a Republican member of the Committee on Rules to show up 
who is not on time.
  Mr. GEKAS. Mr. Speaker, I thank the gentleman for his non-comment.
  Another matter that I wanted to bring before the Congressional Record 
is my personal thanks to Ray Smietanka, to Roger Fleming, to Charles 
Kern, who are staff attorneys in the subcommittee, and of course Susan 
Guttierez and Becky Ward who are visible most of the time, but 
invisible another part-time, but who very boldly and carefully helped 
the process of the committee.
  Now I want to speak some more, and the gentleman from Georgia (Mr. 
Linder) is here, but I refuse to end my discourse because I am getting 
warm now. But I think I am going to have to do so.
  Mr. Speaker, I yield back the balance of my time.
  Mr. REED. Mr. Speaker, I have no further speakers, and I yield back 
the balance of my time.
  The SPEAKER pro tempore. 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. 4194.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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