[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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