[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S11848-S11850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          ALTERNATIVE MEANS OF DISPUTE RESOLUTION ACT OF 1996

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of H.R. 4194 which was received 
from the House.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 4194) to reauthorize alternative means of 
     dispute resolution in the Federal administrative process, and 
     for other purposes.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill.


                           Amendment No. 5421

 (Purpose: To make amendment and to establish concurrent jurisdiction 
for purposes of hearing bid protests between the district courts of the 
    United States and the United States Court of Federal claims and 
   sunsetting bid protest jurisdiction of the district courts of the 
                   United States and other purposes)

  Mr. GRASSLEY. Senator Cohen has an amendment at the desk and I ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for Mr. Cohen, 
     proposes an amendment numbered 5421.

  Mr. GRASSLEY. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

       The amendment is as follows:

       At the end of the bill insert the following:

     SEC. 12. JURISDICTION OF THE UNITED STATES COURT OF FEDERAL 
                   CLAIMS AND THE DISTRICT COURTS OF THE UNITED 
                   STATES: BID PROTESTS.

       (a) Bid Protests.--Section 1491 of Title 28, United States 
     Code, is amended--
       (1) by redesignating subsection (b) as subsection (c);
       (2) in subsection (a) by striking out paragraph (3); and
       (3) by inserting after subsection (a), the following new 
     subsection:
       ``(b) (1) Both the United States Court of Federal Claims 
     and the district courts of the United States shall have 
     jurisdiction to render judgment on an action by an interested 
     party objecting to a solicitation by a Federal agency for 
     bids or proposals for a proposed contract or to a proposed 
     award or the award of a contract or any alleged violation of 
     statute or regulation in connection with a procurement or a 
     proposed procurement. Both the United States Court of Federal 
     Claims and the district courts of the United States shall 
     have jurisdiction to entertain such an action without regard 
     to whether suit is instituted before or after the contract is 
     awarded.
       ``(2) To afford relief in such an action, the courts may 
     award any relief that the court considers proper, including 
     declaratory and injunctive relief except that any monetary 
     relief shall be limited to bid preparation and proposal 
     costs.
       ``(3) In exercising jurisdiction under this subsection, the 
     courts shall give due regard to the interests of national 
     defense and national security and the need for expeditious 
     resolution of the action.
       ``(4) In any action under this subsection, the courts shall 
     review the agency's decision pursuant to the standards set 
     forth in section 706 of title 5.''
       (b) Effective Date.--This section and the amendments made 
     by this section shall take effect on December 31, 1996 and 
     shall apply to all actions filed on or after that date.
       (c) Study.--No earlier than 2 years after the effective 
     date of this section, the United States General Accounting 
     Office shall undertake a study regarding the concurrent 
     jurisdiction of the district courts of the United States and 
     the Court of Federal Claims over bid protests to determine 
     whether concurrent jurisdiction is necessary. Such a study 
     shall be completed no later than December 31, 1999, and shall 
     specifically consider the effect of any proposed change on 
     the ability of small businesses to challenge violations of 
     federal procurement law.
       (d) Sunset.--The jurisdiction of the district courts of the 
     United States over the actions described in section 
     1491(b)(1) of title 28, United States Code, (as amended by 
     subsection (a) of this section) shall terminate on January 1, 
     2001 unless extended by Congress. The savings provisions in 
     subsection (e) shall apply if the bid protest jurisdiction of 
     the district courts of the United States terminates under 
     this subsection.
       (e) Savings Provisions.--
       (1) Orders.--A termination under subsection (d) shall not 
     terminate the effectiveness of orders that have been issued 
     by a court in connection with an action within the 
     jurisdiction of that court on or before December 31, 2000. 
     Such orders shall continue in effect according to their terms 
     until modified, terminated, superseded, set aside, or revoked 
     by a court of competent jurisdiction or by operation of law.
       (2) Proceedings and applications.--(A) A termination under 
     subsection (d) shall not affect the jurisdiction of a court 
     of the United States to continue with any proceeding that is 
     pending before the court on December 31, 2000.
       (B) Orders may be issued in any such proceeding, appeals 
     may be taken therefrom, and payments may be made pursuant to 
     such orders, as if such termination had not occurred. An 
     order issued in any such proceeding shall continue in effect 
     until modified, terminated, superseded, set aside, or revoked 
     by a court of competent jurisdiction or by operation of law.
       (C) Nothing in this paragraph prohibits the discontinuance 
     or modification of any such proceeding under the same terms 
     and conditions and to the same extent that proceeding could 
     have been discontinued or modified absent such termination.
       ``(f) Nonexclusivity of GAO Remedies.--In the event that 
     the bid protest jurisdiction of the district courts of the 
     United States is terminated pursuant to subsection (d), then 
     section 3556 of title 31, United States Code, shall be 
     amended by striking ``a court of the United States or'' in 
     the first sentence.

  Mr. COHEN. Mr. President, the amendment I am offering this morning to 
H.R. 4194, a bill to reauthorize alternative means of dispute 
resolution in the Federal administrative process, is the result of a 
compromise reached last night with the other house.
  The amendment deals with the issue of bid protest jurisdiction in the 
Federal district courts and the U.S. Court of Federal Claims. The 
amendment will expand the bid protest jurisdiction of the Court of 
Federal Claims. It should be noted, however, that this amendment in no 
way expands the jurisdiction of the Court of Federal Claims beyond bid 
protests or changes the standard of review in any other area of 
jurisdiction of the Court of Federal Claims.
  Currently, the Court of Federal Claims only has jurisdiction over bid 
protests which are filed before a contract award is made. My amendment 
provides for both pre- and post-award jurisdiction. The Federal 
district courts also have jurisdiction over bid protests. Prior to a 
1969 Federal court decision, however, the Federal district courts had 
no jurisdiction over Federal contract awards. A Federal district court, 
in Scanwell Lab., Inc. versus Shaffer, held that a contractor can 
challenge a Federal contract award in Federal district court under the 
Administrative Procedures Act.
  It is my belief that having multiple judicial bodies review bid 
protests of Federal contracts has resulted in forum shopping as 
litigants search for the most favorable forum. Additionally, the 
resulting disparate bodies of law between the circuits has created a 
situation where there is no national uniformity in resolving these 
disputes. That is why I have included provisions in this amendment for 
studying the issue of concurrent jurisdiction and have provided for the 
repeal of the Federal district courts' Scanwell jurisdiction after the 
study is complete in 2001.
  The chamber of commerce fully supports this language as do our 
colleagues in the other chamber.
  I would like to express my deep gratitude for the willingness of my 
colleagues and their staffs in both houses to work with me and my staff 
to develop this compromise.

[[Page S11849]]

  Mr. LEVIN. Mr. President, we all want a government that works better 
and costs less. In the rush of closing business in this Congress, I am 
pleased that the Senate has made time for legislation authored by 
myself and Senator Chuck Grassley to encourage faster, less costly ways 
to resolve disputes with the Federal Government. This bill, which has 
gone through several versions, is now before us as H.R. 4194, and has 
been approved by both sides of the aisle in the Senate and the House. I 
am hopeful that, by the end of the day, this legislation will be on its 
way to the President.
  It's a fact of life that many people have disputes with the Federal 
Government. In the late 1980's, of the 220,000 civil cases filed in 
Federal court, more than 55,000 involved the Federal Government in one 
way or another. Resolving these disputes costs taxpayers billions of 
dollars.
  Resolving them before they become courtroom dramas is one way to make 
a dent in this billion-dollar drain on taxpayer funds. Mediation, 
arbitration, mini trials and other methods offer cheaper, faster 
alternatives to courtroom battles.
  That's why, 6 years ago, Senator Grassley and I cosponsored the 
Administrative Dispute Resolution Act of 1990. It is why we have teamed 
up again this year to reauthorize and fine-tune that Act and make it a 
permanent part of U.S. law. Perhaps the most important improvement we 
would make is to expand the alternative dispute resolution or ADR tools 
available to Federal agencies by making binding arbitration a more 
attractive option. The bill takes two steps to do so. First, it would 
eliminate a one-way escape clause that allowed Federal agencies, but 
not private parties, unilaterally to vacate a binding arbitration award 
that disadvantaged the government. In the 5 years this escape clause 
has been on the books, no one has ever agreed to an arbitration 
proceeding with the Government on this basis. Eliminating this 
unilateral escape clause is expected to encourage more private parties 
to agree to use binding arbitration as a cost-saving alternative to 
civil litigation. Second, the bill would put into place several 
safeguards to protect the United States from improper or unwise use of 
this ADR technique, including requiring agencies to think through, 
ahead of time and in writing, when binding arbitration should be used; 
requiring every agreement to use binding arbitration to be in writing 
and to specify the maximum dollar award that an arbitrator may award 
against the United States; and ensuring that agency officials cannot 
even offer to use binding arbitration unless the official already has 
authority to settle the matter.
  Also, to ensure that binding arbitration remains a voluntary 
procedure, the bill maintains the provision in the ADR law, 5 U.S.C. 
575(a)(3), which prohibits Federal agencies from requiring individuals 
to agree to use binding arbitration to settle disputes as a condition 
of entering into a contract or obtaining a benefit. Both the bill 
sponsors and the authorizing committees intend this provision to 
include prohibiting an agency from requiring a party to submit to 
binding arbitration as a condition of Federal employment or to 
relinquish rights under other laws such as the Civil Rights Act. It is 
not the intent of the bill to coerce anyone into using binding 
arbitration.
  The bill makes a number of other refinements in the ADR law as well, 
including clarifying the confidentiality of ADR proceedings; clarifying 
agency authority to hire mediators and other ADR neutrals on an 
expedited basis; allowing agencies to accept donated services from 
State, local and tribal governments to support an ADR proceeding; 
adding an explicit authorization for appropriations; removing a ban on 
Federal employees' electing to use ADR methods to resolve certain 
personnel disputes; and eliminating special paperwork burdens on 
contractors willing to use ADR to resolve small claims against the 
Government under the Contract Disputes Act. The bill would also 
reassign the task of encouraging and facilitating agency use of ADR 
methods from the Administrative Conference of the United States, which 
has been terminated due to a lack of appropriations, to an agency or 
interagency committee to be designated by the President.
  In addition to reauthorizing the ADR law, the bill also includes the 
Levin-Grassley amendment to reauthorize the Negotiated Rulemaking Act 
of 1990. The Negotiated Rulemaking Act is another reform effort that 
seeks to interject common sense and cost savings into the way the 
Federal Government does business. In essence, it allows a Federal 
agency to form an advisory committee with its regulated community, 
public interest groups and other interested parties to draft 
regulations that everyone can support and live by.
  As its name implies, the point of the law is to get parties to 
negotiate with each other and the Federal Government to devise 
sensible, cost effective rules. No one is required to participate in a 
negotiation, and no one gives up their rights by agreeing to negotiate. 
It is a voluntary, rather than a mandatory, process.
  Agencies and others have discovered that, in many rulemaking 
situations, negotiation beats confrontation in terms of cost, time, 
aggravation, and the ability to develop regulations that parties with 
very different perspectives can accept. One industry participant in a 
negotiated rulemaking involving the Clean Air Act put it this way: 
``It's a better situation when people who are adversaries can sit down 
at the table and talk about it rather than throwing bricks at each 
other in courtrooms and the press.'' An environmental journal reached 
the same conclusion, summing up a negotiated rulemaking involving the 
Grand Canyon with the headline, ``See You Later, Litigator.'' The 
Washington Post has called negotiated rulemaking ``plainly a good 
idea,'' while the New York Times has called it ``an immensely valuable 
procedure that ought to be used far more often.''
  Like ADR, the bill would make the Negotiated Rulemaking Act a 
permanent fixture in Federal law, while fine-tuning some provisions. 
The improvements include facilitating agency hiring of neutrals, called 
convenors and facilitators, on an expedited basis; providing an 
explicit authorization for appropriations; clarifying the authority of 
agencies to accept gifts to support negotiated rulemaking proceedings; 
and reassigning the responsibility for facilitating and encouraging 
agency use of negotiated rulemaking from the Administrative Conference 
of the United States, which has been terminated, to an agency or 
interagency committee to be designated by the President.
  If enacted during this Congress, the bill would avoid a lapse in the 
negotiated rulemaking law which is otherwise scheduled to expire in 
November. That is why it is so important to pass this legislation 
before Congress closes its doors for the year.
  Finally, the bill would address the unrelated issue of judicial 
jurisdiction over procurement protests. At present, the Court of 
Federal Claims reviews some procurement protests, while the Federal 
district courts have responsibility for others. This overlapping 
authority has led to forum shopping and has resulted in unnecessary and 
wasteful litigation over jurisdictional issues. For this reason, the 
January 1993 report of the Acquisition Law Advisory Panel (the so-
called section 800 Panel) recommended that:

       There should be only one judicial system for consideration 
     of bid protests and that forum should have jurisdiction to 
     consider all protests which can now be considered by the 
     district courts and by the Court of Federal Claims. * * * The 
     Court of Federal Claims should be the single judicial forum 
     with jurisdiction to consider all protests that can presently 
     be considered by any district court or by the Court of 
     Federal Claims.

  The original Senate bill contained a provision that would have 
implemented this recommendation and consolidated Federal court 
jurisdiction for procurement protests in the Court of Federal Claims.
  The revised bill we are taking up today contains a compromise 
provision that would consolidate the jurisdiction of the Court of 
Federal Claims and the district courts. For 4 years, the consolidated 
jurisdiction would be shared by the Court of Federal Claims and the 
district courts. Each court system would exercise jurisdiction over the 
full range of bid protest cases previously subject to review in either 
system. After 4 years, the jurisdiction of the district courts would 
terminate, and the Court of Federal Claims would exercise exclusive 
judicial jurisdiction

[[Page S11850]]

over procurement protests. These provisions addressing Federal court 
jurisdiction over procurement protests would 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, and they would not 
affect the jurisdiction or standards applied by either the district 
courts or the Court of Federal Claims in any area of the law other than 
the procurement protests to which they are addressed.
  Mr. President, I would like to thank Senator Grassley, and in 
particular his staffer, Kolan Davis, for the hard work and leadership 
he has shown to renew and strengthen the ADR and negotiated rulemaking 
laws. I would also like to thank Senator Glenn, Senator Cohen, and 
Senator Stevens, from the Governmental Affairs Committee for their 
continuing support. And this bill would not have had a chance without 
the hard work, persistence, and creative effort of three House Members 
and their outstanding staffs, and I would like to thank Congressmen 
Jack Reed, George Gekas, and Henry Hyde for getting this legislation to 
the floor despite a crowded calendar. This bill shows that 
bipartisanship is alive and functioning in this Congress.
  Alternative dispute resolution methods and negotiated rulemaking 
provide new and better ways to conduct government business. They cost 
less, they're quicker, they're less adversarial, they develop sensible 
solutions to problems, and they free up courts for other business. They 
are two success stories in creating a government that works better and 
costs less.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the 
amendment be agreed to, the bill be deemed read for the third time, 
passed, the motion to reconsider be laid upon the table, and that any 
statements relating to the bill be placed at the appropriate place in 
the Record.
  The amendment (No. 5421) was agreed to.
  The bill (H.R. 4194), as amended, read the third time, and passed.

                          ____________________