[House Report 104-597]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-597
_______________________________________________________________________


 
             ADMINISTRATIVE DISPUTE RESOLUTION ACT OF 1996

                                _______


  May 29, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Hyde, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 2977]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2977) to reauthorize alternative means of dispute 
resolution in the Federal administrative process, and for other 
proposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          Summary and Purpose

    H.R. 2977, the ``Administrative Dispute Resolution Act of 
1996'', permanently reauthorizes the Administrative Dispute 
Resolution Act (5 U.S.C. Sec. 571-583). The Act was designed to 
encourage and provide a framework to facilitate the use of 
alternative means of dispute resolution by agencies in the 
discharge of their administrative responsibilities. Despite an 
agency's inherent authority to utilize such alternative means, 
the Committee feels that a statute providing explicit authority 
for ADR has been, and would continue to be, more effective in 
promoting its use.

                Background and Need for the Legislation

    The Administrative Dispute Resolution Act was signed into 
law by President George W. Bush on November 15, 1990 and 
expired on October 1, 1995.\1\ The Act grew out of efforts by 
the Administrative Conference of the United States and the 
Federal Mediation and Conciliation Service that dated from the 
early 1980's to encourage flexible alternatives for the 
resolution of disputes regarding agency programs.
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    \1\ Administrative Dispute Resolution Act, Pub. L. 101-552.
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    Administrative Dispute Resolution (ADR) means a procedure 
such as mediation, arbitration, facilitation, minitrials, or 
various combinations of these, used voluntarily to resolve 
issues in controversy.\2\ The purpose of ADR is to lower the 
cost to all parties of agency decisions, while at the same time 
encouraging the kind of compromise and settlement that 
recognize and address the valid concerns of all parties to a 
dispute. It developed in response to the growth in formal 
hearings and litigation challenging agency actions that 
threatened to overburden the regulatory and judicial process. 
While before the passage of the Act only a few agencies engaged 
in ADR, its enactment has helped promote the use of ADR 
throughout the government. Among those agencies which have 
dedicated the most effort to ADR and the Air Force, the Army 
Corps of Engineers, the Environmental Protection Agency and the 
Federal Deposit Insurance Corporation. While agencies have 
utilized ADR techniques in a wide array of situations, the most 
active areas have been governmental contracting, workplace 
disputes, and enforcement and program-related disputes.\3\
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    \2\ Mediation utilizes a trained, neutral third-party to assist in 
negotiating a settlement; arbitration is a proceeding wherein a neutral 
third-party has authority to decide disputed issues following an 
informal evidentiary hearing; facilitation, or ``partnering'', is a 
process used to avoid contract disputes where parties establish a team 
approach to fulfilling project goals and use a neutral facilitator to 
maintain lines of communication during the project; minitrials are a 
structured settlement process whereby each party presents abbreviated 
versions of the case to a judge or jury with the results being used as 
the basis for settlement negotiations.
    \3\ ``Toward Improved Agency Dispute Resolution: Implementing the 
ADR Act'', Report of the Administrative Conference of the United States 
on Agency Implementation of the Administrative Dispute Resolution Act 
16-31 (February 1995).
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    The Administrative Conference of the United States (ACUS), 
which was given responsibility under the Act to survey and 
facilitate its use,\4\ has reported that several ADR techniques 
have been promising. It indicated that partnering, for example, 
was responsible for a dramatic decline in the volume of 
contract claims and appeals experienced by the Army Corps of 
Engineers (from 1,079 claims in 1988 to 314 in 1994, and from 
742 appeals in 1991 to 365 in 1994). The Air Force successfully 
resolved over 100 Equal Employment Opportunity disputes through 
mediation in 1992 and 1993, saving more than $4 million in 
complaint processing costs. The Federal Deposit Insurance 
Corporation and Resolution Trust Corporation have reported that 
mediation of claims and disputes among failed financial 
institutions they control has resulted in savings of $13 
million in legal costs over three years for the FDIC and more 
than $115 million over four years for the RTC.\5\
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    \4\ The Administrative Conference of the United States (ACUS) was 
not funded in fiscal year 96 and has passed out of existence. Section 4 
of H.R. 2977 amends current law to reflect that fact by deleting 
references to ACUS. Subsection (a) eliminates the requirement that 
agencies must consult with ACUS in developing policies to promote the 
use of ADR. Subsection (b) repeals the provisions requiring ACUS to 
compile information concerning agency use of ADR. Subsection (c) 
deletes the reference to ACUS in the Labor Management Relations Act.
    \5\ Id at 37. Savings attributable to the use of ADR is discussed 
more extensively infra.
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    While the Act was designed to encourage the use of 
alternative means of dispute resolution, it does recognize that 
some situations are not appropriate for such a method or 
proceeding and it establishes several criteria for identifying 
these instances. These are where
          A definitive or authoritative resolution of the 
        matter is required for precedential value, and an ADR 
        proceeding is not likely to be accepted generally as an 
        authoritative precedent;
          The matter involves or may bear upon significant 
        questions of Government policy that require additional 
        procedures before a final resolution may be made, and 
        an ADR proceeding would not likely serve to develop a 
        recommended policy for the agency;
          Maintaining established policies is of special 
        importance so that variations among individual 
        decisions are not increased and an ADR proceeding would 
        not likely reach consistent results among individual 
        decisions;
          The matter significantly affects persons or 
        organizations who are not parties to the proceeding;
          A full public record of the proceeding is important, 
        and a dispute resolution proceeding cannot provide such 
        a record; and
          The agency must maintain continuing jurisdiction over 
        the matter with authority to alter the disposition of 
        the matter in the light of changed circumstances, and a 
        dispute resolution proceeding would interfere with the 
        agency's fulfilling that requirement.6
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    \6\ 5 U.S.C. Sec. 572(b) (1994).
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    The Act has been a positive force in encouraging agencies 
to actively seek alternative means of settling disputes that 
might otherwise require costly and time-consuming litigation. 
Consequently, the Committee believes that the Act should be 
reauthorized.
    One means of resolving a dispute short of adjudication is 
arbitration. Arbitration resembles adjudication in that a 
neutral third party is empowered to decide disputed issues 
after hearing evidence and arguments from the parties. In the 
world of dispute negotiation, an arbitrator's decision may be 
binding on the parties through agreement or operation of law, 
or it may be nonbinding or advisory. It can be voluntary (when 
parties agree to it), or it may be mandatory and the exclusive 
means available for settling a particular dispute. Arbitration 
has been a tool for resolving disputes throughout American 
history, gaining more widespread use recently for labor 
relations and commercial practices.7
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    \7\ Professor Harold H. Bruff, ``Public Programs, Private Deciders: 
The Constitutionality of Arbitration in Federal Programs'', 67 Texas 
L.Rev. 441 (1989). (See also, A Report to the Administrative Conference 
of the United States, Studies in Administrative Law and Procedure, 
Agency Arbitration: Constitutional and Statutory Issues 9 (ACUS) (July 
1988).
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    However, the involvement of the federal government as a 
party to binding arbitration has introduced unsettled 
constitutional and policy questions that continue to arise. 
During hearings on proposed ADR legislation in 1990 before the 
Subcommittee on Administrative Law and Governmental Relations, 
William P. Barr, then Assistant Attorney General, Office of 
Legal Counsel, testified that binding arbitration raised 
potential constitutional concerns if it involved the executive 
branch. Mr. Barr felt that binding arbitration might violate 
the Appointments Clause of the United States Constitution 
8 by delegating to private individuals the ``performance 
of a significant governmental duty exercised pursuant to a 
public law'' 9 that must be performed by ``officers of the 
United States'' appointed in accordance with the aforementioned 
clause.10
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    \8\ U.S. Const. art. II, Sec. 2, cl. 2.
    \9\ Buckley v. Valeo, 424 U.S. 1, 140-141 (1976).
    \10\ Administrative Dispute Resolution: Hearing on H.R. 2497 Before 
the Subcommittee on Administrative Law and Governmental Relations of 
the House Comm. on the Judiciary, 101st Cong., 2nd Sess. 35-64 
(1990)(statement of William P. Barr, Assistant Attorney General, Office 
of Legal Counsel, Department of Justice). Mr. Barr also raised policy 
questions concerning binding arbitration. See also, Richard K. Berg, 
``Legal and Structural Obstacles the Use of Alternative Dispute 
Resolution for Claims For and Against the Federal Government'', A 
Report to the Administrative Conference of the United States, Studies 
in Administrative Law and Procedure, Agency Arbitration; Constitutional 
and Statutory Issues 43 (ACUS)(July 1988):

    ``In fairness one cannot ascribe the Comptroller General's 
reluctance to embrace arbitration solely to stubborn adherence to 
outdated doctrine or a desire to protect his turf. Private parties may 
spend their money as they please. Even publicly-owned private 
corporations are governed in their transactions by the remarkably 
flexible business judgement rule. But agencies of the Federal 
Government may spend or obligate public funds only up to the limits and 
with the conditions imposed by their appropriations laws and other 
relevant statutes. Id. at 57.''
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    The constitutional problem raised by Mr. Barr was solved by 
a compromise embodied in 5 U.S.C. Sec. 580 and Sec. 581(b) 
providing that an arbitration award would be reviewable and 
reversible by the agency head before becoming final, thus 
ensuring that an officer of the United States would be 
responsible for each such decision. 11

    \11\ This procedure resembles somewhat that established under 
specific statutes providing for the use of arbitration, viz. 7 U.S.C. 
Sec. 671 (1994) and 20 U.S.C. Sec. 107(d)(1-2)(1994).
---------------------------------------------------------------------------
    During testimony before the subcommittee in 1995, some 
witnesses indicated that this provision discouraged private 
parties from entering into arbitration with agencies because of 
the tentative nature of any award granted under it. A 
memorandum from the current Assistant Attorney General, Office 
of Legal Counsel, Walter Dellinger, was cited for its criticism 
of Mr. Barr's constitutional analysis and its conclusion that 
no constitutional barrier existed to binding arbitration 
involving the federal government.12
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    \12\ Memorandum from Walter Dellinger to John Schmidt, Associate 
Attorney General, Department of Justice regarding Constitutional 
Limitations on Federal Government Participation in Binding Arbitration. 
16 (September 7, 1995). Mr. Dellinger discusses at considerable length 
his differences with Mr. Barr's interpretation of the Appointments 
Clause which, he indicates, extends beyond the issue of arbitration to 
several other areas, leading him to ``disavow'' the holdings with 
respect to that issue of four recent prior opinions of the Office of 
Legal Counsel.
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    The committee was reluctant, however, to reverse a decision 
that the Congress made little more than five years earlier 
which had been motivated by constitutional concerns significant 
and persuasive enough to convince legislators to fashion a 
mechanism to allay them. To reject, at this point, the analysis 
of the previous Department of Justice was viewed as too abrupt 
a departure.13
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    \13\ Emphasizing the abruptness of this departure was the fact that 
barely two weeks before testifying at the subcommittee's hearing in 
favor of amending current law with respect to arbitration, the same 
witness representing the Department of Justice testified before the 
Senate Governmental Affairs Committee in favor of retaining current law 
despite the new memorandum of the Office of Legal Counsel.
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    Another issue raised during the hearings related to the 
expansion of the confidentiality protections of the Act. 
Currently, the Administrative Dispute Resolution Act prohibits 
third-party neutrals and parties from disclosing communications 
made during an ADR proceeding, with limited exceptions.14 
However, the communications are not necessarily exempt from 
disclosure under the Freedom of Information Act (FOIA).15 
Several witnesses testified that because a full and candid 
exchange between the parties and the neutral is necessary if 
mediation or another consensus process is to yield agreements, 
the uncertainty over whether ADR communications would be exempt 
from FOIA may have a chilling effect on the use of ADR.16 
In particular, the lack of a FOIA exemption serves as an 
incentive to hire private neutrals who are not subject to FOIA, 
rather than government neutrals.17 The Committee is also 
aware of opposition to the creation of any new exemption from 
FOIA.18
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    \14\ 5 U.S.C. Sec. 574 (1994).
    \15\ 5 U.S.C. Sec. 552 (1994).
    \16\ Oversight Hearing on the Reauthorization of the Administrative 
Dispute Resolution Before the Subcomm. on Commercial and Administrative 
Law of the House Comm. on the Judiciary, 104th Cong., 1st Sess. 4 
(1995) (statement by Peter R. Steenland, Jr., senior counsel, Office of 
Administrative Dispute Resolution, Department of Justice).
    \17\ Oversight Hearing on the Reauthorization of the Administrative 
Dispute Resolution Before the Subcomm. on Commercial and Administrative 
Law of the House Comm. on the Judiciary, 104th Cong., 1st Sess. 14 
(1995) (prepared statement of John Calhoun Wells, director, Federal 
Mediation and Conciliation Service).
    \18\ 1994-1995 Annual Report of The Administrative Conference of 
the United States, Recommendation 95-6, ADR Confidentiality and the 
Freedom of Information Act, Adopted June 15, 1995. 108-109 (statement 
of Jane Kirtley).

    ``The ADR Act was designed to address the interests of parties in 
resolving disputes. Its confidentiality provisions do not adequately 
represent the public interest in monitoring government activity. That 
is a job better left to the FOI Act, which strikes the appropriate 
balance between confidentiality and disclosure when the government 
plays a role as party, participant, neutral or record holder in ADR Act 
proceedings. Id. at 109.''
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    A careful balance must be struck between the desire on the 
part of ADR advocates for greater confidentiality protections 
and the basic purpose underlying FOIA, that openness in 
government is essential to accountability. H.R. 2977 provides 
that the memoranda, notes, or work product of the neutral are 
exempt from disclosure under FOIA. Exempting these 
communications from FOIA does not diminish the amount of 
information that would otherwise be available to the public if 
a neutral were not employed.

                                Hearings

    The Committee's Subcommittee on Commercial and 
Administrative Law held an oversight hearing on the 
Administrative Dispute Resolution Act on December 13, 1995. 
Testimony was received from Peter R. Steenland, Jr., senior 
counsel for Administrative Dispute Resolution, Office of the 
Associate Attorney General, U.S. Department of Justice; Joseph 
M. McDade, assistant general counsel, Office of the General 
Counsel, Department of the U.S. Air Force; Diane Liff, ADR 
counsel, on behalf of John C. Wells, director, Federal 
Mediation & Conciliation Services; Philip J. Harter, chair of 
the section of Administrative Law & Regulatory Practice of the 
American Bar Association; Gail Bingham, president, RESOLVE; and 
James C. Diggs, vice president & assistant general counsel, 
TRW, Inc.

                        Committee Consideration

    On February 29, 1996, the Subcommittee on Commercial and 
Administrative Law met in open session and ordered reported the 
bill (H.R. 2977), without amendment, by voice vote, a quorum 
being present. On March 12, 1996, the full Committee met in 
open session and ordered reported the bill (H.R. 2977), without 
amendment, by voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) or rule X of the 
Rules of the House of Representatives are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) or rule XI of Rules of 
the House of Representatives, the Committee sets forth, with 
respect to H.R. 2977, the following estimate and comparison 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 18, 1996.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2977, the Administrative Dispute Resolution Act 
of 1996, as ordered reported by the House Committee on the 
Judiciary on March 12, 1996. Enacting H.R. 2977 could result in 
some net savings to the federal government from increased use 
of alternative means of dispute resolution (ADR), but we cannot 
estimate the amount of any savings. Any improvement in the 
dispute resolution process would allow agencies to make more 
efficient use of their appropriated funds, but would affect 
total spending only if appropriations were reduced 
correspondingly. Enacting H.R. 2977 would not affect direct 
spending or receipts. Therefore, pay-as-you-go procedures would 
not apply to the bill.
    H.R. 2977 would make many changes and additions to the 
current laws relating to the application of ADR to conflicts 
involving the federal government. The bill would change the 
definition of ADR to include the use of ombudsmen. It would 
also exclude the use of settlement negotiations--that is, 
negotiations of a complaint by an employee and his or her 
agency without involving a neutral party--as a form of ADR. In 
addition, H.R. 2977 would permit parties to use ADR to resolve 
employment-related disputes and would increase the 
responsibilities of the Federal Mediation and Conciliation 
Service (FMCS).
    Federal Budgetary Impact. Currently, many executive branch 
agencies utilize various methods of ADR. Data compiled by the 
General Accounting Office (GAO) indicates that the use of ADR 
tends to result in more efficient resolutions of disputes, 
although such conclusions are based mainly on anecdotal 
evidence. Implementation of this bill likely would result in 
increased use of ADR by federal agencies. If greater use of ADR 
leads to more efficient dispute resolution, then agencies could 
realize some savings, and such savings could more than offset 
any increased spending by the FMCS in support of ADR. However, 
CBO does not have sufficient information to estimate the 
likelihood or magnitude of such potential savings.
    The bill would require the FMCS to take on some of the 
responsibilities formerly performed by the Administrative 
Conference of the United States (ACUS), which received $1.8 
million in appropriations for fiscal year 1995. Any increase in 
federal spending by the FMCS, however, would be subject to 
annual appropriations actions. Furthermore, as noted above, any 
additional costs from this provision could be offset by savings 
from enhanced use of alternative means of dispute resolution by 
federal agencies.
    Impact on State, Local and Tribal Governments. H.R. 2977 
contains no intergovernmental mandates as defined in Public Law 
104-4 and would impose no direct costs on state, local, or 
tribal governments. Such governments currently may resolve 
disputes with the federal government through the use of certain 
forms of ADR. H.R. 2977 would broaden the forms of ADR that are 
available.
    State, local, and tribal governments could decide to 
resolve disputes with the federal government through the use of 
these additional forms of ADR. However, instances where ADR is 
used are rare and usually involve highly complex legal and 
regulatory issues. In those cases, savings may accrue; however, 
the magnitude of any savings resulting from the changes in H.R. 
2977, in all likelihood, would be relatively small.
    Private Sector Mandates. This bill would impose no new 
private sector mandates, as defined in Public Law 104-4.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark 
Grabowicz and John Righter, Christi Hawley, and, for state and 
local impacts, Leo Lex.
            Sincerely,
                                         June E. O'Neill, Director.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.R. 
2977 will have no significant inflationary impact on prices and 
costs in the national economy.

                      Section-by-Section Analysis

Section 1. Short title

Section 2. Amended definitions

    Section 2 amends section 571 of title 5, United States 
Code, containing definitions relevant to the Administrative 
Disputes Resolution Act. H.R. 2977 changes the definition of 
``alternative means of dispute resolution'' to include ``the 
use of ombudsmen'' while striking ``settlement negotiations''. 
It also strikes language in subsection (3) to the effect that 
an ``alternative means of dispute resolution'' must be a 
procedure that is ``in lieu of an adjudication as defined in 
section 551(7)'' in order to broaden the options for use of 
ADR.
    The definition of ``issue in controversy'' is amended to 
delete the exemption for employee grievance proceedings 
specified under section 2302 or 7121(c) of title 5. This change 
would permit parties to use ADR to resolve employment related 
disputes.

Section 3. Confidentiality

    Section 3 amends the confidentiality provisions contained 
in section 574 of title 5, United States Code.
    Subsection (a) narrows the class of matters that are 
protected by the confidentiality provisions of the ADR Act with 
respect to neutrals by deleting ``any information concerning'' 
before ``any dispute resolution communication'' where it 
appears in section 574 (a) of title 5. This is in recognition 
of the fact that the bill extends greater protection from 
disclosure under FOIA to communications to a neutral under this 
section. While the Committee is thus strengthening the 
confidentiality to promote the participation of neutrals from 
the government by adding protection from disclosure under FOIA, 
it intends that protection to be applied as specifically as 
possible to the ADR process.
    Subsection (b) provides that alternative confidentiality 
procedures agreed to by the parties do not qualify for the 
Act's new exemption from FOIA unless they provide for more 
disclosure than the ADR Act itself.
    Subsection (c) changes section 574 of title 5, United 
States Code to provide that 5 U.S.C. Sec. 574 (a) is a statute 
specifically exempting disclosure under FOIA, thus protecting 
dispute resolution communications to neutrals from disclosure 
under FOIA.

Section 4. Amendment to reflect the closure of the administrative 
        conference

    Section 4 contains amendments necessary to reflect the fact 
that the Administrative Conference of the United States (ACUS) 
is no longer in existence. Subsection (a) eliminates the 
requirement that agencies must consult with ACUS in developing 
policies to promote the use of ADR. Subsection (b) repeals the 
provision requiring ACUS to compile information concerning 
agency use of ADR. Subsection (c) deletes the reference to ACUS 
in the Labor Management Relations Act (29 U.S.C. Sec. 173(f)).

Section 5. Amendments to support service provision

    Section 5 amends section 583 of title 5, United States Code 
to authorize agencies to use the services and facilities of 
State, local and tribal governments for the purposes of 
implementing the ADR Act.

Section 6. Amendments to the Contract Disputes Act

    Subsection 1 amends the Contract Disputes Act to require 
that only contract claims in excess of $100,000 must be 
certified.
    Subsection 2 amends the Contract Disputes Act to reflect 
the permanent reauthorization of the ADR Act.

Section 7. Amendments on acquiring neutrals

    Section 7 amends the sections of the ADR Act concerning the 
acquisition of neutrals. Subsection (a) amends the Federal 
Property and Administrative Services Act (41 U.S.C. 
Sec. 253(c)(3)(C) and Sec. 2304(c)(3)(C) of title 10, United 
States Code) to clarify that agencies may use expedited 
procurement procedures when hiring neutral third parties for 
ADR proceedings. Subsection (b) amends section 573 of title 5 
United State Code, which authorizes the government to use 
neutrals in ADR proceedings. This section, as amended by the 
bill, requires the Federal Mediation and Conciliation Service 
to assume the responsibilities formerly performed by the 
Administrative Conference of the United States (ACUS) to 
encourage and promote the use of ADR in federal agencies and 
develop procedures for agencies to hire neutrals on an 
expedited basis. The statutory requirements for the government 
to establish professional standards for neutrals and maintain a 
roster of eligible neutrals are repealed.

Section 8. Permanent Authorization of the Alternative Dispute 
        Resolution Provisions of title 5, United States Code

    Section 8 deletes the ADR Act's sunset provision, thereby 
providing permanent reauthorization of the Act.

Section 9. Authorization of appropriations

    Section 9 creates a new section 584 of title 5, United 
States Code which authorizes such funds as may be necessary to 
carry out the purposes of the ADR Act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      TITLE 5, UNITED STATES CODE

                     PART I--THE AGENCIES GENERALLY

          * * * * * * *

                  CHAPTER 5--ADMINISTRATIVE PROCEDURE

                    SUBCHAPTER I--GENERAL PROVISIONS

Sec.
500. Administrative practice; general provisions.
501. Advertising practice; restrictions.
502. Administrative practice; Reserves and National Guardsmen.
          * * * * * * *

     SUBCHAPTER IV--ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN THE 
                         ADMINISTRATIVE PROCESS

          * * * * * * *
[Sec. 582. Compilation of information.]
Sec. 583. Support services.
584. Authorization of appropriations.
          * * * * * * *

     SUBCHAPTER IV--ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN THE 
                         ADMINISTRATIVE PROCESS

Sec. 571. Definitions

    For the purposes of this subchapter, the term--
          (1)  * * *
          * * * * * * *
          (3) ``alternative means of dispute resolution'' means 
        any procedure that is used[, in lieu of an adjudication 
        as defined in section 551(7) of this title,] to resolve 
        issues in controversy, including, but not limited to, 
        [settlement negotiations,] conciliation, facilitation, 
        mediation, factfinding, minitrials, [and arbitration] 
        arbitration, and use of ombudsmen, or any combination 
        thereof;
          * * * * * * *
            (8) ``issue in controversy'' means an issue which 
        is material to a decision concerning an administrative 
        program of an agency, and with which there is 
        disagreement--
                    (A) between an agency and persons who would 
                be substantially affected by the decision; or
                    (B) between persons who would be 
                substantially affected by the [decision,] 
                decision;
        [except that such term shall not include any matter 
        specified under section 2302 or 7121(c) of this title;]
          * * * * * * *

Sec. 573. Neutrals

    (a)  * * *
          * * * * * * *
    [(c) In consultation with the Federal Mediation and 
Conciliation Service, other appropriate Federal agencies, and 
professional organizations experienced in matters concerning 
dispute resolution, the Administrative Conference of the United 
States shall--
            [(1) establish standards for neutrals (including 
        experience, training, affiliations, diligence, actual 
        or potential conflicts of interest, and other 
        qualifications) to which agencies may refer;
            [(2) maintain a roster of individuals who meet such 
        standards and are otherwise qualified to act as 
        neutrals, which shall be made available upon request;
            [(3) enter into contracts for the services of 
        neutrals that may be used by agencies on an elective 
        basis in dispute resolution proceedings; and
            [(4) develop procedures that permit agencies to 
        obtain the services of neutrals on an expedited basis.]
    (c) In consultation with other appropriate Federal agencies 
and professional organizations experienced in matters 
concerning dispute resolution, the Federal Mediation and 
Conciliation Service shall--
            (1) encourage and facilitate agency use of 
        alternative means of dispute resolution; and
            (2) develop procedures that permit agencies to 
        obtain the services of neutrals on an expedited basis.
          * * * * * * *
    (e) Any agency may enter into a contract with any person 
[on a roster established under subsection (c)(2) or a roster 
maintained by other public or private organizations, or 
individual] for services as a neutral, or for training in 
connection with alternative means of dispute resolution. The 
parties in a dispute resolution proceeding shall agree on 
compensation for the neutral that is fair and reasonable to the 
Government.

Sec. 574. Confidentiality

    (a) Except as provided in subsections (d) and (e), a 
neutral in a dispute resolution proceeding shall not 
voluntarily disclose or through discovery or compulsory process 
be required to disclose [any information concerning] any 
dispute resolution communication or any communication provided 
in confidence to the neutral, unless--
            (1) all parties to the dispute resolution 
        proceeding and the neutral consent in writing, and, if 
        the dispute resolution communication was provided by a 
        nonparty participant, that participant also consents in 
        writing;
          * * * * * * *
    (d)(1) The parties may agree to alternative confidential 
procedures for disclosures by a neutral. Upon such agreement 
the parties shall inform the neutral before the commencement of 
the dispute resolution proceeding of any modifications to the 
provisions of subsection (a) that will govern the 
confidentiality of the dispute resolution proceeding. If the 
parties do not so inform the neutral, subsection (a) shall 
apply.
    (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.
          * * * * * * *
    (j) [This section] This section (other than subsection (a)) 
shall not be considered a statute specifically exempting 
disclosure under section 552(b)(3) of this title.
          * * * * * * *

[Sec. 582. Compilation of information

    [The Chairman of the Administrative Conference of the 
United States shall compile and maintain data on the use of 
alternative means of dispute resolution in conducting agency 
proceedings. Agencies shall, upon the request of the Chairman 
of the Administrative Conference of the United States, supply 
such information as is required to enable the Chairman to 
comply with this section.]

Sec. 583. Support services

    For the purposes of this subchapter, an agency may use 
(with or without reimbursement) the services and facilities of 
other Federal agencies, State, local, and tribal governments, 
public and private organizations and agencies, and individuals, 
with the consent of such agencies, organizations, and 
individuals. An agency may accept voluntary and uncompensated 
services for purposes of this subchapter without regard to the 
provisions of section 1342 of title 31.

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.
          * * * * * * *
                              ----------                              


                 ADMINISTRATIVE DISPUTE RESOLUTION ACT

          * * * * * * *

SEC. 3. PROMOTION OF ALTERNATIVE MEANS OF DISPUTE RESOLUTION.

    (a) Promulgation of Agency Policy.--Each agency shall adopt 
a policy that addresses the use of alternative means of dispute 
resolution and case management. In developing such a policy, 
each agency shall--
          (1) consult with [the Administrative Conference of 
        the United States and] the Federal Mediation and 
        Conciliation Service; and
          * * * * * * *

[SEC. 11. SUNSET PROVISION.

    [The authority of agencies to use dispute resolution 
proceedings under this Act and the amendments made by this Act 
shall terminate on October 1, 1995, except that such authority 
shall continue in effect with respect to then pending 
proceedings which, in the judgment of the agencies that are 
parties to the dispute resolution proceedings, require such 
continuation, until such proceedings terminate.]
                              ----------                              


        SECTION 203 OF THE LABOR MANAGEMENT RELATIONS ACT, 1947

                        functions of the service

    Sec. 203. (a)  * * *
          * * * * * * *
    (f) The Service may make its services available to Federal 
agencies to aid in the resolution of disputes under the 
provisions of subchapter IV of chapter 5 of title 5, United 
States Code. Functions performed by the Service may include 
assisting parties to disputes related to administrative 
programs, training persons in skills and procedures employed in 
alternative means of dispute resolution, and furnishing 
officers and employees of the Service to act as neutrals. Only 
officers and employees who are qualified in accordance with 
section 573 of title 5, United States Code, may be assigned to 
act as neutrals. The Service shall consult with [the 
Administrative Conference of the United States and] other 
agencies in maintaining rosters of neutrals and arbitrators, 
and to adopt such procedures and rules as are necessary to 
carry out the services authorized in this subsection.
                              ----------                              


             SECTION 6 OF THE CONTRACT DISPUTES ACT OF 1978

                  decision by the contracting officer

    Sec. 6. (a)  * * *
          * * * * * * *
    (d) Notwithstanding any other provision of this Act, a 
contractor and a contracting officer may use any alternative 
means of dispute resolution under subchapter IV of chapter 5 of 
title 5, United States Code (as in effect on September 30, 
1995), or other mutually agreeable procedures, for resolving 
claims. [In a case in which such alternative means of dispute 
resolution or other mutually agreeable procedures are used, the 
contractor shall certify that the claim is made in good faith, 
that the supporting data are accurate and complete to the best 
of his or her knowledge and belief, and that the amount 
requested accurately reflects the contract adjustment for which 
the contractor believes the Government is liable.] The 
contractor shall certify the claim when required to do so as 
provided under subsection (c)(1) or as otherwise required by 
law. All provisions of subchapter IV of chapter 5 of title 5, 
United States Code (as in effect on September 30, 1995), shall 
apply to such alternative means of dispute resolution.
    (e) [The authority of agencies to engage in alternative 
means of dispute resolution proceedings under subsection (d) 
shall cease to be effective on October 1, 1999, except that 
such authority shall continue in effect with respect to then 
pending dispute resolution proceedings which, in the judgment 
of the agencies that are parties to such proceedings, require 
such continuation, until such proceedings terminate.] In any 
case in which the contracting officer rejects a contractor's 
request for alternative dispute resolution proceedings, the 
contracting officer shall provide the contractor with a written 
explanation, citing one or more of the conditions in section 
572(b) of title 5, United States Code (as in effect on 
September 30, 1995), or such other specific reasons that 
alternative dispute resolution procedures are inappropriate for 
the resolution of the dispute. In any case in which a 
contractor rejects a request of an agency for alternative 
dispute resolution proceedings, the contractor shall inform the 
agency in writing of the contractor's specific reasons for 
rejecting the request.
                              ----------                              


              SECTION 2304 OF TITLE 10, UNITED STATES CODE

Sec. 2304. Contracts: competition requirements

    (a)  * * *
          * * * * * * *
    (c) The head of an agency may use procedures other than 
competitive procedures only when--
          (1)  * * *
          * * * * * * *
          (3) it is necessary to award the contract to a 
        particular source or sources in order (A) to maintain a 
        facility, producer, manufacturer, or other supplier 
        available for furnishing property or services in case 
        of a national emergency or to achieve industrial 
        mobilization, (B) to establish or maintain an essential 
        engineering, research, or development capability to be 
        provided by an educational or other nonprofit 
        institution or a federally funded research and 
        development center, or (C) to procure the services of 
        an expert for use, in any litigation or dispute 
        (including any reasonably foreseeable litigation or 
        dispute) involving the Federal Government, in any 
        trial, hearing, or proceeding before any court, 
        administrative tribunal, or [agency, or] agency, or to 
        procure the services of an expert or neutral for use in 
        any part of an alternative dispute resolution process, 
        whether or not the expert is expected to testify;
          * * * * * * *
                              ----------                              


SECTION 303 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 
                                  1949

SEC. 303. COMPETITION REQUIREMENTS.

    (a)  * * *
          * * * * * * *
    (c) An executive agency may use procedures other than 
competitive procedures only when--
          (1)  * * *
          * * * * * * *
          (3) it is necessary to award the contract to a 
        particular source or sources in order (A) to maintain a 
        facility, producer, manufacturer, or other supplier 
        available for furnishing property or services in case 
        of a national emergency or to achieve industrial 
        mobilization, (B) to establish or maintain an essential 
        engineering, research, or development capability to be 
        provided by an educational or other nonprofit 
        institution or a federally funded research and 
        development center, or (C) to procure the services of 
        an expert for use, in any litigation or dispute 
        (including any reasonably foreseeable litigation or 
        dispute) involving the Federal Government, in any 
        trial, hearing, or proceeding before any court, 
        administrative tribunal, or [agency, or] agency, or to 
        procure the services of an expert or neutral for use in 
        any part of an alternative dispute resolution process, 
        whether or not the expert is expected to testify;
          * * * * * * *