[House Report 104-841]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-841
_______________________________________________________________________


 
             ADMINISTRATIVE DISPUTE RESOLUTION ACT OF 1996

                                _______
                                

               September 25, 1996.--Ordered to be printed

_______________________________________________________________________


  Mr. Hyde, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 2977]

    The committee of conference on the disagreeing votes of the 
two Houses on the amendments of the Senate to the bill (H.R. 
2977), to reauthorize alternative means of dispute resolution 
in the Federal administrative process, and for other purposes, 
having met, after full and free conference, have agreed to 
recommend and do recommend to their respective Houses as 
follows:
    That the House recede from its disagreement to the 
amendment of the Senate to the text of the bill and agree to 
the same with an amendment as follows:
    In lieu of the matter proposed to be inserted by the Senate 
amendment, insert the following:

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.
    (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.

SEC. 12. JURISDICTION OF THE UNITED STATES COURT OF FEDERAL CLAIMS: 
                    PROCUREMENT PROTESTS.

    (a) Procurement Protests.--
            (1) Termination of jurisdiction of district 
        courts.--Section 1491 of title 28, United States Code, 
        is amended--
                    (A) by redesignating subsection (b) as 
                subsection (d) and by striking ``(d)'' and 
                inserting ``(d) Exclusive Jurisdiction of Other 
                Tribunals.--'';
                    (B) in subsection (a)--
                            (i) by striking ``(a)(1)'' and 
                        inserting ``(a) Claims Against the 
                        United States.--'';
                            (ii) in paragraph (2), by striking 
                        ``(2) To'' and inserting ``(b) Remedy 
                        and Relief.--To''; and
                            (iii) by striking paragraph (3); 
                        and
                    (C) by inserting after subsection (b), as 
                designated by paragraph (1)(B)(ii), the 
                following new subsection (c):
    ``(c) Procurement Protests.--(1) The United States Court of 
Federal Claims has exclusive jurisdiction to render judgment on 
an action by an interested party objecting to a solicitation by 
a Federal agency for procurements or proposals for a proposed 
contract or to a proposed award or the award of a contract. The 
court has 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 court may 
award any relief that the court considers proper, including 
declaratory and injunctive relief.
    ``(3) In exercising jurisdiction under this subsection, the 
court 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 court shall 
review the agency's decision pursuant to the standards set 
forth in section 706 of title 5, United States Code.''.
            (2) Clerical amendments.--
                    (A) Section heading.--The heading of such 
                section is amended by inserting ``procurement 
                protests;'' after ``generally;''.
                    (B) Table of sections.--The table of 
                sections at the beginning of chapter 91 of 
                title 28, United States Code, is amended by 
                striking the item relating to section 1491 and 
                inserting the following:

``1491. Claims against United States generally; procurement protests; 
          actions involving Tennessee Valley Authority.''.

    (b) Nonexclusivity of GAO Remedies.--Section 3556 of title 
31, United States Code, is amended by striking ``a district 
court of the United States or'' in the first sentence.
    (c) Savings Provisions.--
            (1) Orders.--The amendments made by this section 
        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 the day 
        before the effective date of this section. 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) The 
        amendments made by this section shall not affect the 
        jurisdiction of a court of the United States to 
        continue with any proceeding that is pending before the 
        court on the day before the effective date of this 
        section.
            (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 this section had 
        not been enacted. 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 such proceeding could have been 
        discontinued or modified if this section had not been 
        enacted.
    (d) Effective Date.--This section and the amendments made 
by this section shall take effect on December 31, 1996.
    And the Senate agree to the same.
    That the Senate recede from its amendment to the title of 
the bill.

                                   Henry Hyde,
                                   George W. Gekas,
                                   Michael Patrick Flanagan,
                                   John Conyers, Jr.,
                                   Jack Reed,
                                 Managers on the Part of the House.

                                   Ted Stevens,
                                   Bill Cohen,
                                   Chuck Grassley,
                                   John Glenn,
                                   Carl Levin,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendments of the Senate to the bill (H.R. 2977) to 
reauthorize alternative means of dispute resolution in the 
Federal administrative process, and for other purposes, submit 
the following joint statement to the House and the Senate in 
explanation of the effect of the action agreed upon by the 
managers and recommended in the accompanying conference report:
      The Senate amendment to the text of the bill struck all 
of the House bill after the enacting clause and inserted a 
substitute text.
      The House recedes from its disagreement to the amendment 
of the Senate with an amendment that is a substitute for the 
House bill and the Senate amendment. The differences between 
the House bill, the Senate amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clerical 
changes.
      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.
      Secton 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.

                                   Henry Hyde,
                                   George W. Gekas,
                                   Michael Patrick Flanagan,
                                   John Conyers, Jr.,
                                   Jack Reed,
                                 Managers on the Part of the House.

                                   Ted Stevens,
                                   Bill Cohen,
                                   Chuck Grassley,
                                   John Glenn,
                                   Carl Levin,
                                Managers on the Part of the Senate.