[Federal Register Volume 62, Number 207 (Monday, October 27, 1997)]
[Proposed Rules]
[Pages 55678-55679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28328]



[[Page 55677]]

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Part II

Department of Defense
_______________________________________________________________________
General Services Administration
_______________________________________________________________________
National Aeronautics and Space Administration
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48 CFR Parts 6, 24, 33, and 52



Federal Acquisition Regulation: Alternative Dispute Resolution, 1996; 
Proposed Rule

  Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / 
Proposed Rules  

[[Page 55678]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 6, 24, 33, and 52

[FAR Case 97-015]
RIN 9000-AH72


Federal Acquisition Regulation; Alternative Dispute Resolution--
1996

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement the Administrative Dispute 
Resolution Act of 1996 (Pub. L. 104-320) and Section 4321(a)(7) of the 
Clinger-Cohen Act of 1996 (Pub. L. 104-106). This regulatory action was 
not subject to Office of Management and Budget review under Executive 
Order 12866, dated September 30, 1993. This is not a major rule under 5 
U.S.C. 804.

DATES: Comments should be submitted on or before December 26, 1997 to 
be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (MVRS), 1800 F Street, 
NW, Room 4035, Washington, DC 20405.
    E-mail comments submitted over Internet should be addressed to: 
[email protected].
    Please cite FAR case 97-015 in all correspondence related to this 
case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405 (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Jack O'Neill, Procurement Analyst, at (202) 501-
3856. Please cite FAR case 97-015.

SUPPLEMENTARY INFORMATION:

A. Background

    The proposed rule amends FAR Parts 6, 24, 33, and 52 to implement 
the Administrative Dispute Resolution Act of 1996 (Pub. L. 104-320) and 
Section 4321(a)(7) of the Clinger-Cohen Act of 1996 (Pub. L. 104-106). 
The rule makes clear the authority to contract with a neutral person as 
an exception to requirements for full and open competition, revises 
requirements for certification of a claim under the Administrative 
Dispute Resolution Act to conform to the requirements under the 
Contract Disputes Act, allows for binding arbitration in certain 
circumstances, and specifies that certain dispute resolution 
communications are exempt from disclosure under the Freedom of 
Information Act.

B. Regulatory Flexibility Act

    This proposed rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
adds guidance pertaining to, but does not significantly alter the 
procedures for, alternative dispute resolution. Alternative dispute 
resolution procedures allow voluntary resolution of issues in 
controversy without the need to resort to litigation. An Initial 
Regulatory Flexibility Analysis has, therefore, not been performed. 
Comments from small entities concerning the affected FAR subpart will 
be considered in accordance with 5 U.S.C. 610 of the Act. Such comments 
must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAR 
case 97-015), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the FAR do not impose recordkeeping or information 
collection requirements, or collections of information from offerors, 
contractors, or members of the public which require the approval of the 
Office of Management and Budget under 44 U.S.C. 3501, et seq. However, 
it does reduce the information collection requirements relating to 
certification of claims (OMB Control Number 9000-0135).

List of Subjects in 48 CFR Parts 6, 24, 33, and 52

    Government procurement.

    Dated: October 21, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, it is proposed that 48 CFR Parts 6, 24, 33, and 52 be 
amended as set forth below:
    1. The authority citation for 48 CFR Parts 6, 24, 33, and 52 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 6--COMPETITION REQUIREMENTS


6.302-3  [Amended]

    2. Section 6.302-3 is amended in paragraph (a)(2)(iii) by inserting 
``or neutral person'' after the word ``expert''.

PART 24--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION:

    3. Section 24.202 is amended by adding paragraph (c) to read as 
follows:


24.202  Prohibitions.

* * * * *
    (c) A dispute resolution communication that is between a neutral 
person and a party to alternative dispute resolution proceedings, and 
that may not be disclosed under 5 U.S.C. 574, is exempt from disclosure 
under the Freedom of Information Act (5 U.S.C. 552(b)(3)).

PART 33--PROTESTS, DISPUTES, AND APPEALS

    4. Section 33.201 is amended by revising the definition 
``Alternative dispute resolution (ADR)'' to read as follows:


33.201  Definitions.

* * * * *
    Alternative dispute resolution (ADR) means any type of procedure or 
combination of procedures voluntarily used to resolve issues in 
controversy without the need to resort to litigation. These procedures 
may include, but are not limited to, conciliation, facilitation, 
mediation, fact-finding, minitrials, arbitration, and use of ombudsmen.
* * * * *


33.204  [Amended]

    5. Section 33.204 is amended in the fifth sentence by removing ``, 
Public Law 100-522,'' and inserting in its place ``(5 U.S.C. 571, et 
seq.),''.
    6. Section 33.207 is amended by revising paragraph (a) to read as 
follows:


33.207  Contractor certification.

    (a) Contractors shall provide the certification specified in 
33.207(c) when submitting any claim exceeding $100,000.
* * * * *
    7. Section 33.214 is amended in paragraph (a)(3) by inserting 
``and'' after ``litigation;'' in (a)(4) by removing ``; and'' and 
inserting a period in its place; removing (a)(5); revising the first 
sentence of paragraph (b); and adding paragraphs (f) and (g) to read as 
follows:


33.214  Alternative dispute resolution (ADR).

* * * * *

[[Page 55679]]

    (b) If the contracting officer rejects a contractor's request for 
ADR proceedings, the contracting officer shall provide the contractor a 
written explanation citing one or more of the conditions in 5 U.S.C. 
572(b) or such other specific reasons that ADR procedures are 
inappropriate for the resolution of the dispute. * * *
* * * * *
    (f)(1) A solicitation shall not require arbitration as a condition 
of award, unless arbitration is otherwise required by law. Contracting 
officers should have flexibility to select the appropriate ADR 
procedure to resolve the issues in controversy as they arise.
    (2) An agreement to use arbitration shall be in writing and shall 
specify a maximum award that may be issued by the arbitrator, as well 
as any other conditions limiting the range of possible outcomes.
    (g) Binding arbitration, as an ADR procedure, may be agreed to only 
as specified in agency guidelines. Such guidelines shall provide advice 
on the appropriate use of binding arbitration and when an agency has 
authority to settle an issue in controversy through binding 
arbitration.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    8. Section 52.233-1 is amended by revising the date of the clause 
and paragraphs (d)(2)(i) and (g) to read as follows:


52.233-1  Disputes.

* * * * *

DISPUTES (DATE)

* * * * *
    (d)(2)(i) Contractors shall provide the certification specified 
in subparagraph (d)(2)(iii) of this clause when submitting any claim 
exceeding $100,000.
* * * * *
    (g) If the claim by the Contractor is submitted to the 
Contracting Officer or a claim by the Government is presented to the 
Contractor, the parties, by mutual consent, may agree to use 
alternative dispute resolution (ADR). If the Contractor refuses an 
offer for ADR, the Contractor shall inform the Contracting Officer, 
in writing, of the Contractor's specific reasons for rejecting the 
offer.
* * * * *
[FR Doc. 97-28328 Filed 10-24-97; 8:45 am]
BILLING CODE 6820-EP-P