[Federal Register Volume 63, Number 164 (Tuesday, August 25, 1998)]
[Proposed Rules]
[Pages 45372-45389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22386]



[[Page 45371]]

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Part V





Department of Transportation





_______________________________________________________________________



Federal Aviation Administration



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14 CFR Parts 14 and 17



Procedures for Protests and Contract Disputes; Amendment of Equal 
Access to Justice Act Regulations; Proposed Rule

  Federal Register / Vol. 63, No. 164 / Tuesday, August 25, 1998 / 
Proposed Rules  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 14 and 17

[Docket No. 29310; Notice No. 98-8]
RIN 2120-AG19


Procedures for Protests and Contract Disputes; Amendment of Equal 
Access to Justice Act Regulations

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This document proposes regulations for the conduct of protests 
and contract disputes under the Federal Aviation Administration 
Acquisition Management System. The proposed regulations set forth 
procedures for the efficient management of protests and contract 
disputes within the Federal Aviation Administration procurement system. 
The regulations would allow protesters and contractors a uniform, 
economical means of pursuing protests and contract disputes with the 
Federal Aviation Administration. Also, the Federal Aviation 
Administration regulations governing the application for, and award of, 
Equal Access to Justice Act fees are amended to include procedures 
applicable to the resolution of protests and contract disputes under 
the Acquisition Management System, and to conform to the current Equal 
Access to Justice Act statute.

DATES: Comments must be received on or before October 26, 1998.

ADDRESSES: Comments on this notice may be delivered or mailed, in 
triplicate, to: U.S. Department of Transportation Dockets, Docket No.: 
FAA-98-29310, 400 Seventh Street, SW., Room 401, Washington, DC 20591. 
Comments submitted must be marked: ``Docket No. 29310.'' Comments may 
also be sent electronically to the following Internet address: 9-NPRM-
[email protected]. Comments may be filed and examined in Room Plaza 401 
between 10:00 a.m. and 5:00 p.m., weekdays except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Marie A. Collins, Staff Attorney and 
Dispute Resolution Officer, FAA Office of Dispute Resolution for 
Acquisition, AGC-70, Room 8332, Federal Aviation Administration, 400 
7th Street, SW., Washington, DC 20590, telephone (202) 366-6400.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to participate in the making of the 
proposed rule by submitting such written data, views, or arguments as 
they may desire. Comments relating to the environmental, energy, 
federalism, or economic impact that might result from adopting the 
proposals in this notice are also invited. Substantive comments should 
be accompanied by cost estimates. Comments must identify the regulatory 
docket or notice number and be submitted in triplicate to the Rules 
Docket address specified above.
    All comments received, as well as a report summarizing each 
substantive public contact with FAA personnel on this rulemaking, will 
be filed in the docket. The docket is available for public inspection 
before and after the comment closing date.
    All comments received on or before the closing date will be 
considered by the Administrator before taking action on this proposed 
rulemaking. Late-filed comments will be considered to the extent 
practicable. The proposals contained in this notice may be changed in 
light of the comments received.
    Commenters wishing the FAA to acknowledge receipt of their comments 
submitted in response to this notice must include a pre-addressed, 
stamped postcard with those comments on which the following statement 
is made: ``Comments to Docket No. 29310.'' The postcard will be date 
stamped and mailed to the commenter.

Availability of NPRMs

    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the FAA regulations section 
of the Fedworld electronic bulletin board service (telephone: 703-321-
3339), the Government Printing Office's electronic bulletin board 
service (telephone: 202-512-1661), or the FAA's Aviation Rulemaking 
Advisory Committee Bulletin Board service (telephone: (800) 322-2772 or 
(202) 267-5948).
    Internet users may reach the FAA's web page at http://www.faa.gov/
avr/arm/nprm/nprm.htm or the Government Printing Office's webpage at 
http://www.access.gpo.gov/nara for access to recently published 
rulemaking documents.
    Any person may obtain a copy of this NPRM by submitting a request 
to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 
800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 
267-9680. Communications must identify the notice number or docket 
number of this NPRM.
    Persons interested in being placed on the mailing list for future 
NPRM's should request from the above office a copy of Advisory Circular 
No. 11-2A, Notice of Proposed Rulemaking Distribution System, that 
describes the application procedure.

Background

Statement of the Problem

    In accordance with Congressional mandate, the FAA procures, 
acquires, and develops services as well as material in support of its 
mission of safety in civil aviation. In recent years, the FAA 
acquisition system was hampered both by the number of procurement and 
acquisition laws and by the different forums that heard and decided 
procurement protests and contract disputes. Both the Administration and 
the Congress became concerned that the safety mission of the FAA might 
suffer from the complexity of the existing acquisition system.
    In the Fiscal Year 1996 Department of Transportation Appropriations 
Act, Pub. L. 104-50, 109 Stat. 436 (November 15, 1995), the Congress 
directed the FAA ``to develop and implement, not later than April 1, 
1996, an acquisition management system that addressed the unique needs 
of the agency and, at a minimum, provided for more timely and cost 
effective acquisitions of equipment and materials.'' In that Act, the 
Congress instructed the FAA to design the system notwithstanding 
provisions of federal acquisition law, and specifically instructed the 
FAA not to use certain provisions of federal acquisition law. In 
response, the FAA developed the Acquisition Management System (AMS) for 
the management of FAA procurement. The AMS is a system of policy 
guidance that maximizes the use of agency discretion in the interest of 
best business practice. As a part of the AMS, the FAA created the 
Office of Dispute Resolution for Acquisition (ODRA) to facilitate the 
Administrator's review of procurement protests and contract disputes. 
Notice of establishment of the ODRA was published on May 14, 1996, in 
the Federal Register (61 FR 24348). In that notice, the FAA stated it 
would promulgate rules of procedure governing the dispute resolution 
process. Currently, procedures and other provisions related to dispute 
resolution are included or referenced in all FAA Screening Information 
Requests (SIRs) and contracts, and are made available to offerors and 
contractors upon request or through briefings. The FAA has determined 
that it will be more

[[Page 45373]]

effective and efficient to establish by rulemaking the dispute 
resolution procedures that apply to all protests concerning SIRs and 
contract awards, and to all disputes arising from established 
contracts. The proposed rule is designed to contain the minimum 
procedures necessary for efficient and orderly resolution of protests 
and contract disputes arising under the AMS.
    The FAA Dispute Resolution Process, and the procedures implementing 
that process, are based upon the powers Congress delegated to the 
Administrator of the FAA under Title 49, United States Code, Subtitle 
VII (49 U.S.C. 40101, et seq.). These delegated powers include the 
Administrator's power to procure goods and services, and to investigate 
and hold hearings regarding any matter placed under the Administrator's 
authority. In the Federal Aviation Reauthorization Act of 1996, Pub. L. 
104-264 (October 9, 1996), the Congress altered 49 U.S.C. 106(f) to 
make the Administrator of the FAA the final authority over the FAA 
procurement process.
    These FAA dispute resolution procedures will encourage the parties 
to protests and contract disputes to use Alternate Dispute Resolution 
(ADR) as the primary means to resolve protests and contract disputes, 
pursuant to the Administrative Dispute Resolution Act of 1996, Pub. L. 
104-320, 5 U.S.C. 570-579, and in consonance with Department of 
Transportation and FAA policies to utilize ADR to the maximum extent 
practicable. Under these procedures, the ODRA would actively encourage 
parties to consider ADR techniques such as case evaluation, mediation, 
arbitration, or other types of ADR.
    The procedures for protests and contract disputes anticipate that, 
for a variety of reasons, certain disputes are not amenable to 
resolution through ADR. In other cases, ADR may not result in full 
resolution of a dispute. Thus, there is provision for a Default 
Adjudicative Process in part 17. The EAJA, 5 U.S.C. 504, can apply in 
instances where an eligible protester or contractor prevails over the 
FAA in the Default Adjudicative Process. Title 14 of the Code of 
Federal Regulations, Part 14 is amended to provide guidance for the 
conduct of EAJA applications under the dispute resolution regulations 
promulgated in 14 CFR part 17.

General Discussion of the Proposals

14 CFR Part 14

    The dispute resolution procedures in part 17 can include adversary 
adjudication, where the FAA program office responsible for the 
procurement activity is represented by counsel. The FAA EAJA 
regulations, 14 CFR part 14, would be amended to include procedures 
applicable to part 17. Also, part 14 would be amended to conform to 
changes made in the EAJA statute since the initial regulations were 
issued.

14 CFR Part 17

    The proposed procedures implement the FAA Dispute Resolution 
Process under the direction of the Director of the ODRA. The procedures 
are designed to promote resolution of protests and contract disputes 
without formal adjudication. This process promotes informal resolution 
prior to and during direct ODRA involvement. The procedures promote the 
use of ADR, with the use of the Default Adjudicative Process available 
if ADR cannot resolve a protest or contract dispute.
    Under Title 49, the Administrator has final authority with respect 
to the procurement of goods and services. That final authority is 
exercised when the Administrator approves or rejects an ODRA 
recommendation by a final order. Under Title 49, review of a final 
order by the Administrator must be sought in the U.S. courts of 
appeals.
    Part 17 is organized along functional lines. Subpart A addresses 
general matters such as protective orders, filing, computing time, and 
the delegation of authority to the Director of the ODRA. Subpart B 
addresses initial matters pertaining to protests, including procedures 
for the use of ADR or for resort to the Default Adjudicative Process. 
Subpart C addresses initial matters pertaining to contract disputes, 
including procedures for use of ADR or for resort to the Default 
Adjudicative Process. Subpart D addresses the initiation and conduct of 
ADR. Subpart E addresses the Default Adjudicative Process. Subpart F 
addresses when a final order has been issued by the Administrator, and 
seeking review of a final order in a U.S. court of appeals.

Section-by-Section Discussion of the Proposals

14 CFR Part 14

Subpart A--General provisions
Section 14.02  Proceedings Covered
    Section 14.02 would be amended to include adversary adjudication 
under the AMS.
Section 14.03  Eligibility of Applicants
    Section 14.03(a) would be amended to add notice of the eligibility 
requirements set forth in 5 U.S.C. 504(b)(1)(B).
    Section 14.03(f) would be amended to add the term ``adjudicative 
officer'' to the term ``administrative law judge (ALJ)'' for 
proceedings held under 14 CFR part 17 and the AMS.
Section 14.05  Allowance Fees and Expenses
    Section 14.05(b) would be amended to alter the maximum hourly rate 
awarded for attorney's fees from $75 per hour to $125 per hour in order 
to conform to the revision of the EAJA statute in Pub. L. 104-121 
(March 29, 1996).
    Section 14.05(c) would be amended to add the term ``adjudicative 
officer'' for proceedings held under 14 CFR part 17 and the AMS.
    Section 14.05(e) would be amended to reflect that the adversarial 
portion of a proceeding under 14 CFR part 17 and the AMS commences with 
the initiation of the adjudicative phase of the proceedings.
Subpart B--Information Required From Applicants
Section 14.11  Net Worth Exhibit
    Section 14.11(c) would be amended to add the term ``adjudicative 
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Subpart C--Procedures for Considering Applications
Section 14.20  When an Application May Be Filed
    Section 14.20(a) would be amended to reflect that adversary 
proceedings under 14 CFR part 17 and the AMS conclude with the service 
of an order from the Administrator.
    Section 14.20(c) would be amended to add a new paragraph (1) noting 
that the date of service of an order from the Administrator is the date 
of final disposition for proceedings under 14 CFR part 17 and the AMS; 
previous paragraphs (1) through (4) are renumbered (2) through (5) 
without change.
Section 14.21  Filing and Service of Documents
    Section 14.21 would be amended to add the requirement that an 
application for award or other filing for proceedings under 14 CFR part 
17 and the AMS must be filed with the opposing FAA attorney and the 
ODRA.
Section 14.22  Answer to Application
    Section 14.22(b) would be amended to add the term ``adjudicative 
officer'' for proceedings held under 14 CFR part 17 and the AMS.

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Section 14.24  Comments by Other Parties
    Section 14.24(b) would be amended to add the term ``adjudicative 
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Section 14.26  Further Proceedings
    Section 14.26(a) would be amended to add the term ``adjudicative 
officer'' for proceedings held under 14 CFR part 17 and the AMS.
Section 14.27  Decision
    Section 14.27 would be amended to add a new paragraph (b), 
requiring the adjudicative officer to prepare findings and 
recommendations concerning proceedings under 14 CFR part 17 and the AMS 
for the ODRA. Paragraph (c) sets forth the content of the initial 
decision of the ALJ in paragraph (a), and the findings and 
recommendations for the ODRA in paragraph (b).
Section 14.28  Review by FAA Decisionmaker
    Section 14.28 would be amended to distinguish between proceedings 
under part 13 using an ALJ in paragraph (a), and proceedings under 14 
CFR part 17 and the AMS in paragraph (b). A new paragraph (b) is added, 
requiring that, in proceedings under 14 CFR part 17 and the AMS, the 
adjudicative officer prepares findings and recommendations for the ODRA 
with recommendations as to whether or not an award should be made, the 
amount of the award, and the reasons therefor. The ODRA should submit a 
recommended order to the Administrator within sixty (60) business days 
after completion of all submissions related to the EAJA application. 
Upon the Administrator's action, the order shall become final, and may 
be reviewed under 49 U.S.C. Sec. 46110.

14 CFR Part 17

Subpart A--General
Section 17.1  Applicability and Purpose
    Proposed Sec. 17.1 would apply part 17 to all protests or contract 
disputes against the FAA arising from or relating to contracts entered 
into under the AMS.
Section 17.3  Definitions
    Proposed Sec. 17.3 would define certain terms used in this part. Of 
special note is that the definition for ``interested party'' pertains 
only to protests and to specific parties, and that a ``contract 
dispute'' does not require a final Contracting Officer (CO) decision, 
nor that the issue be in dispute. Part 17 defines the ``Program 
Office'' as the party representing the FAA in a protest or a contract 
dispute, and includes the responsible FAA procurement organization, the 
CO, and the assigned FAA legal counsel.
Section 17.5  Delegation of Authority
    Proposed Sec. 17.5(a) would set forth the delegation of the 
Administrator's authority to the Director of the Office of Dispute 
Resolution for Acquisition.
    Proposed Sec. 17.5(b) would state that the authority which has been 
delegated to the Director of the Office of Dispute Resolution for 
Acquisition may be re-delegated by the Director, Office of Dispute 
Resolution for Acquisition to a DRO or Special Master in order to 
resolve issues pertaining to protests or contract disputes.
Section 17.7  Filing and Computation of Time
    Proposed Sec. 17.7 would set forth the procedural requirements for 
filing a protest or contract dispute with the ODRA.
    Proposed Sec. 17.7(a) would set forth two important aspects of 
filing a protest or contract dispute with the ODRA. First, in addition 
to mail, overnight delivery, or hand delivery, a protest or contract 
dispute may be filed by facsimile. Second, there is no ``mail box 
rule.'' A filing must be received by the ODRA by the close of its 
normal business hours `` 5:00 p.m. (EST or EDT, whichever is in use)--
on the last day of a given period, or the filing will be rejected as 
untimely.
    Proposed Sec. 17.7(b) would allow all submissions after the initial 
filing to be performed by any means available in paragraph (a).
    Proposed Sec. 17.7(c) would note that time limits stated in part 17 
are calculated in business days only. The day of the event which starts 
the running of a time period is not counted, but the last day is 
counted, except where the last day falls on a weekend or federal 
holiday.
    Proposed Sec. 17.7(d) would inform the party wishing to seek 
judicial review of a final order that the procedures set forth in 49 
U.S.C. 46110 shall govern. Please note that, independently of 49 U.S.C. 
46110, proposed Sec. 17.7(d) would require service of a copy of the 
petition for review upon the ODRA and the FAA attorney of record when 
the petition is filed with the court.
Section 17.9  Protective Orders
    Proposed Sec. 17.9 would address the formulation and use of 
protective orders. Many procurement protests or contract disputes 
potentially involve the use of trade secrets or confidential commercial 
information.
    Proposed Sec. 17.9(a) would state that the ODRA may issue 
protective orders upon the request of any party or on its own 
initiative. Proposed Sec. 17.9(b) would set forth the requirements for 
a protective order.
    Proposed Sec. 17.9(c) would set forth the procedures for the access 
of counsel or consultants to material protected under the terms of a 
protective order. Persons participating in the protective order process 
must apply for access, and attest to a professional relationship with 
the party represented, and not be involved in competitive 
decisionmaking, as discussed in U.S. Steel Corp. v. United States, 730 
F.2d 1465 (Fed. Cir. 1984).
    Proposed Sec. 17.9(d) would provide notice that sanctions are 
available against a person who violates the terms of a protective order 
agreement.
    Proposed Sec. 17.9(e) would allow the parties to agree upon what 
material may be covered by a protective order, subject to the approval 
of the Director of the ODRA.
Subpart B--Protests
Section 17.11  Matters Not Subject to Protest
    Proposed Sec. 17.11 would set forth those procurement actions that 
are not subject to protest before the ODRA.
Section 17.13  Dispute Resolution Process for Protests
    Proposed Sec. 17.13 would outline the FAA Dispute Resolution 
Process for protests, emphasizing efficient and rapid resolution 
consistent with sound case management.
    Proposed Sec. 17.13(a) would require that all protests be conducted 
under the FAA Dispute Resolution Process for Protests.
    Proposed Sec. 17.13(b) would encourage the potential protester to 
seek informal resolution with the Contracting Officer (CO) prior to 
filing a protest with the ODRA.
    Proposed Sec. 17.13(c) would allow a protest to be filed pursuant 
to Sec. 17.15 if either informal resolution with the CO is not 
successful, or the time limits set forth in proposed Sec. 17.17 are 
about to expire. Attempts at informal resolution with the CO will not 
extend the time limits in Sec. 17.17.
    Proposed Sec. 17.13(d) would set forth the protest procedure that 
would be followed. The initial process includes a status conference 
being held by the ODRA, after which the parties will have five (5) 
working days to determine whether they can use ADR pursuant to Subpart 
D of this part, and if they are unable to do so, the parties will have 
to state why they cannot. If the parties can

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use ADR, they are allowed five (5) working days in which to submit a 
signed ADR agreement to the ODRA. The parties will have twenty (20) 
working days within which to complete the ADR process. If the parties 
cannot agree to ADR and must resort to the Default Adjudicative 
Process, the Program Office will have ten (10) working days after the 
status conference to submit an initial response to the protest, after 
which the Default Adjudicative Process under Subpart E will commence. 
If the ADR process is unsuccessful, the ODRA will assign a DRO or 
Special Master for the Default Adjudicative Process under Subpart E of 
this part.
    Proposed Sec. 17.13(e) would allow the ODRA to modify any time 
constraints for pending protests.
    Proposed Sec. 17.13(f) would allow the ODRA to combine multiple 
protests concerning the same SIR or contract award for efficient case 
resolution.
    Proposed Sec. 17.13(g) would state the presumption against 
suspension of a procurement during the pendency of a protest. The 
section states that procurement will continue unless compelling reasons 
warrant suspension.
Section 17.15  Filing a Protest
    Proposed Sec. 17.15 would govern the timing and content of a 
protest. The protester is required to set forth all information that 
will allow an early assessment of the protest by the ODRA.
    Proposed Sec. 17.15(a) would state that only an interested party 
may file a protest, and would set forth the times within which a 
protest must be filed with the ODRA. Where a protest addresses an 
alleged impropriety in the SIR, the protest must be filed prior to bid 
opening or the time for initial offers. For protests other than those 
involving solicitation improprieties, the protester must file a protest 
within seven (7) business days of the time that the protester knew or 
should have known of the grounds for protest. Where a debriefing was 
offered, the protester must file within 5 business days of the date on 
which the debriefing was held.
    Proposed Sec. 17.15(b) would set forth the ODRA address for filing 
purposes, including the ODRA's telephone and facsimile numbers.
    Proposed Sec. 17.15(c) would set forth the information that must be 
included in a protest. Of special note are the following:
     The protester must identify a Protester Designee, who 
shall be the point of contact for the protest.
     The protester must state its case for timeliness and 
standing.
     The protester must state its need for a protective order.
    Proposed Sec. 17.15(d) would require the protester to set forth any 
compelling reasons that would support a decision by the FAA 
Administrator to suspend or delay the procurement. The protester is 
required to supply detailed information concerning the protester's 
position, and to clearly identify any adverse consequences that relate 
to the requested suspension or delay.
    Proposed Sec. 17.15(e) would require the protester to: (1) Serve a 
copy of the protest on the CO so that the protest will be received by 
the CO on the same day that it is received by the ODRA; and (2) certify 
as to that service, by a signed statement to the ODRA.
    Proposed Sec. 17.15(f) would require the CO to: (1) Provide the 
ODRA with the names, addresses, telephone numbers and facsimile numbers 
of the awardee and interested parties to a protest, and (2) notify 
these parties of the existence of the protest. This proposed section 
would require such interested parties to inform the ODRA within two (2) 
business days of the notification of their interest in participating in 
the protest.
    Proposed Sec. 17.15(g) would note that the Director of the ODRA has 
the discretion to designate those parties who may participate in a 
protest as intervenors.
Section 17.17  Initial Protest Procedures
    Proposed Sec. 17.17 would contain the initial protest procedures. 
These procedures over an initial period of ten business days would 
include assigning a DRO, holding a status conference, and determining 
whether the protest is to be resolved by use of ADR or the Default 
Adjudicative Process.
    Proposed Sec. 17.17(a) would provide that the ODRA will assign a 
DRO to a protest when one is filed.
    Proposed Sec. 17.17(b) would require the FAA to respond within two 
(2) business days to a protester's request made pursuant to 
Sec. 17.15(d) that the procurement be suspended by the Administrator, 
and would allow the ODRA, in its discretion, to recommend such 
suspension.
    Proposed Sec. 17.17(c) would require the ODRA to hold a status 
conference with the parties as soon as practicable after the protest is 
filed, and establishes the matters to be addressed during the status 
conference. The subjects to be covered in a status conference would 
include: a review of procedures; exploration of any issues relating to 
summary dismissal of the protest or to suspension recommendations; 
establishing a protective order, if needed; exploring the possibility 
of using ADR; the conduct of early neutral evaluation, if appropriate; 
and other appropriate matters.
    Proposed Sec. 17.17(d) would require the parties to file a joint 
statement with the ODRA on the fifth business day following the status 
conference indicating: (1) That the parties will use ADR to resolve the 
protest; or (2) submit a written explanation of why ADR cannot be used 
and why the parties will have to resort to use of the Default 
Adjudicative Process.
    Proposed Sec. 17.17(e) would require the parties to submit their 
choice of an ADR neutral and ADR technique, together with an executed 
ADR agreement within five (5) business days of the status conference.
    Proposed Sec. 17.17(f) would require that, if the Default 
Adjudicative Process must be used, the Program Office will have ten 
business days from the status conference to file with the ODRA a 
Program Office response to the protest. The Program Office response 
shall consist of a statement of pertinent facts, and applicable legal 
or other defenses, and shall be accompanied by all documents deemed 
relevant to the Program Office actions, plus any affidavits or other 
forms of support for the Program Office position. A copy of the 
responses shall be furnished to the protester at the same time, and by 
the same means, it is filed with the ODRA. At that point, the protester 
would proceed under the Default Adjudicative Process, pursuant to 
Sec. 17.37.
    Proposed Sec. 17.17(g) would allow the ODRA the discretion to 
extend time limitations for the process.
Section 17.19  Dismissal or Summary Decision of Protests
    Proposed Sec. 17.19 would set forth the procedures for dismissal of 
a protest or any portion of a protest, thereby promoting economy and 
efficiency in dispute resolution.
    Proposed Sec. 17.19(a) would state three bases for dismissal. 
Proposed Sec. 17.19(a)(1) would allow dismissal for lack of standing or 
for lack of timeliness. Proposed Sec. 17.19(a)(2) would allow dismissal 
for failure to state a claim upon which relief can be granted. Proposed 
Sec. 17.19(a)(3) would allow for summary decision, where no material 
facts remain at issue and a protest, or portion thereof, can be decided 
as a matter of FAA policy as stated in the AMS, or as a matter of 
applicable law.
    Proposed Sec. 17.19(b) would provide that the ODRA will consider 
any material facts in dispute relating to the motion to dismiss or to a 
motion for

[[Page 45376]]

summary decision in a light most favorable to the non-moving party.
    Proposed Sec. 17.19(c) would allow the Director of the ODRA at any 
time, to recommend to the Administrator either dismissal or the 
issuance of a summary decision with respect to an entire protest, or 
for the Director of the ODRA, to dismiss or issue a summary decision of 
any portion of a protest.
    Proposed Sec. 17.19(d) would state that where an ODRA 
recommendation for dismissal or summary decision of an entire protest 
is adopted by the Administrator, or where the ODRA dismisses or issues 
a summary decision of an entire protest under a delegation of authority 
from the Administrator, the dismissal would be a final agency order. 
However, dismissal or summary decision of a count or portion of a 
protest is not a final agency order, unless and until the dismissal or 
decision is incorporated into a decision by the Administrator (or the 
ODRA, by delegation) regarding the entire protest.
Section 17.21  Protest Remedies
    Proposed Sec. 17.21 would list remedies that may be recommended by 
the ODRA. These remedies are consistent with remedies available to 
other agencies, with the addition of discretion to fashion a remedy 
under the AMS that is appropriate under the circumstances of a 
particular FAA procurement.
    Proposed Sec. 17.21(a) would list the remedies available, and notes 
that either a combination of the remedies, or a remedy appropriate to 
the situation and consistent with the AMS may be acceptable.
    Proposed Sec. 17.21(b) would set forth factors to be considered by 
the ODRA when considering a remedy.
    Proposed Sec. 17.21(c) would allow the award of attorney's fees to 
a qualified prevailing protester under the EAJA, 5 U.S.C. 504(a)(1). 
EAJA decisions or recommendations made under auspices of the ODRA would 
weigh whether (1) the Program Office decision was substantially 
justified or (2) special circumstances make an award unjust. The EAJA 
applies to final adjudicative FAA orders pursuant to 49 U.S.C. 
Sec. 46102.
Subpart C--Contract Disputes
Section 17.23  Dispute Resolution Process for Contract Disputes
    Proposed Sec. 17.23 would describe the FAA Dispute Resolution 
Process for Contract Disputes. The dispute resolution process 
contemplates that many contract disputes can be solved by cooperative 
action between the contractor, the CO, and the project team.
    The filing of a contract dispute under this section requires the 
contractor to define the nature of the problem, and to request a 
remedy. In view of the goal of informal resolution through the use of 
ADR, there is no need for a ``final decision'' by the CO. The process 
contemplates an attempt at informal resolution between the contractor 
and the CO, with assistance from the ODRA if requested, prior to any 
formal action. Once formal ODRA action is initiated, the emphasis will 
be upon the use of ADR techniques, unless the contract dispute cannot 
be resolved except through the Default Adjudicative Process.
    Proposed Sec. 17.23(a) would require that all contract disputes 
pertaining to contracts entered into pursuant to the AMS be resolved 
under the FAA Dispute Resolution Process.
    Proposed Sec. 17.23(b) would require the contractor to file a 
contract dispute with the ODRA and with the CO.
    Proposed Sec. 17.23(c) contemplates that the contractor will seek 
informal resolution with the CO. The CO has full authority and 
discretion, with the aid of FAA legal counsel, to settle the contract 
dispute. The parties will have up to thirty (30) business days in which 
to reach an informal resolution of the dispute, and may seek the 
informal assistance of the ODRA during that time. If no informal 
resolution is foreseeable within the thirty (30) business day period, 
the parties must file a joint statement regarding whether or not ADR 
will be employed, in accordance with Sec. 17.27.
    Proposed Sec. 17.23(d) would allow the parties to make one joint 
request to the ODRA for an extension of time beyond the original thirty 
(30) business day period, to file the joint statement under Sec. 17.27.
    Proposed Sec. 17.23(e) would provide that a status conference be 
scheduled within ten (10) business days after receipt by the ODRA of 
the joint statement required by Sec. 17.27, in order to establish the 
procedures that will be used to resolve the contract dispute.
    Proposed Sec. 17.23(f) would require continued performance in 
accordance with the provisions of the contract, pending resolution of a 
contract dispute arising under or related to that contract.
Section 17.25  Filing a Contract Dispute
    Proposed Sec. 17.25 would set forth the requirements for filing a 
contract dispute with the ODRA. A contract dispute is filed with the 
ODRA prior to the commencement of the thirty (30) business day informal 
resolution period.
    Proposed Sec. 17.25(a) would require that the contract dispute be 
in writing and contain the following information when it is filed:
     The contractor's name, address, telephone, and fax number;
     The contract number and the name of the Contracting 
Officer;
     A detailed statement of the legal and factual basis of the 
contract dispute, or of each element or count of the contract dispute, 
including copies of relevant documents;
     All information establishing that the contract dispute was 
timely filed; a request for a specific remedy or the specification of a 
monetary request in a sum certain; and the signature of a duly 
authorized representative.
    Proposed Sec. 17.25(b) would state the ODRA address where a 
contract dispute is to be filed.
    Proposed Sec. 17.25(c) would require a contractor with a contract 
dispute against the FAA to file that contract dispute with the ODRA 
within six months of the date that the contract dispute accrues. A 
contract dispute by the FAA against a contractor (other than those 
alleging warranty issues, fraud or latent defects) likewise must be 
filed within six months of the accrual of the contract dispute. If a 
contract clause provides for different time limitations, such 
limitations will apply. With limited exceptions, neither party will be 
permitted to file a contract dispute with the ODRA after the 
contractor's acceptance of final contract payment.
    Proposed Sec. 17.25(d) would state that a party who files a 
contract dispute with the ODRA shall serve a copy of the contract 
dispute with the other party.
Section 17.27  Submission of Joint Statement
    Proposed Sec. 17.27(a) would require parties to submit a joint 
statement to the ODRA by no later than the end of the thirty (30) 
business day informal resolution period of proposed Sec. 17.23, where 
the dispute has not been resolved during that period.
    Proposed Sec. 17.27(b) would set forth the information required for 
that joint statement, namely, either a request for ADR--together with 
an executed ADR agreement, pursuant to Sec. 17.33(d)--or, in the event 
ADR will not be utilized, a written explanation as to why ADR will not 
be utilized and why the parties must resort to the Default Adjudicative 
Process.
    Proposed Sec. 17.27(c) would state the ODRA address to which the 
statement of the case is to be filed, including the ODRA telephone and 
facsimile numbers.

[[Page 45377]]

Section 17.29  Dismissal of Contract Disputes
    Proposed Sec. 17.29 would address the procedures to be followed for 
dismissal of a contract dispute, or individual portions of a contract 
dispute. Dismissal is appropriate where the contract dispute is not 
filed within time, or is filed by a subcontractor, or fails to state a 
claim upon which relief can be granted. The dismissal of a contract 
dispute, or the striking of an individual portion of a contract 
dispute, is allowed in the interest of economy and efficiency.
    Proposed Sec. 17.29(a) would allow dismissal of a contract dispute, 
or the striking of an individual portion of a contract dispute: (1) On 
timeliness grounds; (2) if filed by a subcontractor; (3) where there is 
a failure to state a claim upon which relief can be granted; and (4) if 
the dispute involves a matter not subject to the jurisdiction of the 
ODRA.
    Proposed Sec. 17.29(b) would provide that the ODRA, when weighing a 
motion to dismiss or to strike, should consider disputed facts in a 
light most favorable to the party against whom the motion to dismiss or 
strike is made.
    Proposed Sec. 17.29(c) would allow the ODRA to dismiss or strike 
any portion of a contract dispute upon its own initiative at any time. 
This section also provides for the dismissal of an entire contract 
dispute, either by the Administrator, upon recommendation by the ODRA, 
or directly by the ODRA, when such authority is delegated by the 
Administrator.
    Proposed Sec. 17.29(d) would state that an order dismissing an 
entire contract dispute, issued either by the Administrator, or by the 
ODRA, upon delegation of authority from the Administrator, will 
constitute a final agency order. It further provides that an ODRA order 
dismissing or striking an individual count or portion of a dispute 
would not constitute a final agency order.
Subpart D--Alternative Dispute Resolution
Section 17.31  Use of Alternate Dispute Resolution
    Proposed Sec. 17.31(a), (b), and (c) would set forth the basic 
requirements for both the ODRA and the parties respecting the use of 
ADR. Pursuant to the Alternative Dispute Resolution Act of 1996, Pub. 
L. 104-320 and Department of Transportation and FAA policies, the ODRA 
will be required to utilize ADR to the maximum extent practicable, that 
the ODRA encourage the parties to utilize ADR to resolve protests and 
contract disputes as their primary means of dispute resolution. The 
section clarifies that the Default Adjudicative Process is to be used 
only when the parties cannot achieve agreement on the use of ADR or 
when the ODRA concludes that ADR will not provide an expeditious means 
of dispute resolution in a particular case.
Section 17.33  Election of Alternative Dispute Resolution Process
    Proposed Sec. 17.33 would set forth procedures for initiating the 
use of ADR.
    Proposed Sec. 17.33(a) would state that the ODRA makes its 
personnel available to serve as Neutrals in ADR proceedings and 
attempts to make qualified non-FAA personnel available, if requested by 
the parties, through neutral sharing arrangements. The section also 
permits the parties to select a mutually acceptable Compensated Neutral 
at their shared expense.
    Proposed Sec. 17.33(b) would require the parties to a protest who 
use ADR to submit an executed ADR agreement containing the information 
required in paragraph (d) of this section to the ODRA within five (5) 
business days from the time the ODRA holds the status conference 
pursuant to Sec. 17.17(c).
    Proposed Sec. 17.33(c) would require the parties to a contract 
dispute who use ADR to submit to the ODRA an executed ADR agreement 
containing the information required in paragraph (d) of this section, 
as part of the joint statement specified under Sec. 17.27.
    Proposed Sec. 17.33(d) would require the parties who use an ADR 
process, to prepare and submit to the ODRA an executed ADR agreement 
detailing: the type of ADR they wish to use; the manner that they will 
use ADR; the Neutral or Compensated Neutral to be used; and sharing 
equally the cost of any Compensated Neutral they choose.
    Proposed Sec. 17.33(e) would permit the use of various non-binding 
ADR techniques in combination with each other, provided that the 
techniques are agreed upon and specified in the ADR agreement; and 
would allow the parties to consider the use of any ADR technique that 
is fair and reasonable and designed to achieve a prompt resolution of 
the matters in dispute.
    Proposed Sec. 17.33(f) would allow binding arbitration only on a 
case-by-case basis, subject to the provisions of 5 U.S.C. Sec. 575 (a), 
(b) and (c), and applicable law or where the Administrator's non-concur 
with the arbitrator's decision is preserved by agreement.
    Proposed Sec. 17.33(g) would provide that the ADR process for 
protests will be completed within twenty (20) business days from the 
filing of an ADR agreement with the ODRA, unless the parties obtain an 
extension of time from the ODRA.
    Proposed Sec. 17.33(h) would provide that the ADR process for 
contract disputes will be completed within forty (40) business days 
from the filing with the ODRA of an executed agreement with the ODRA, 
unless the parties obtain an extension of time from the ODRA.
    Proposed Sec. 17.33(i) would require the parties to submit to the 
ODRA an agreed-upon protective order, if one is necessary, in 
accordance with the requirements of Sec. 17.9.
Section 17.35  Selection of Neutrals for the Administrative Dispute 
Resolution Process
    Proposed Sec. 17.35 would address the selection of Neutrals for the 
ADR process, whether for protests or for contract disputes.
    Proposed Sec. 17.35(a) would allow the parties to select a 
Compensated Neutral acceptable to both, or to request the ODRA for the 
services of a DRO, or a Neutral who is not an employee of the FAA.
    Proposed Sec. 17.35(b) would allow the parties who select a 
Compensated Neutral, acceptable to both, to request the services of a 
DRO to advise on matters of ODRA procedure, if the Compensated Neutral 
is not familiar with ODRA procedural matters.
    Proposed Sec. 17.35(c) would allow the ODRA to assign a DRO to be 
the Neutral in ADR for appropriate protests or contract disputes, 
unless the parties agree otherwise.
Subpart E--Default Adjudicative Process
Section 17.37  Default Adjudicative Procedures for Protests
    Proposed Sec. 17.37 would address the Default Adjudicative Process 
for protests, lasting thirty (30) business days. The Default 
Adjudicative Process is available if there is no resolution at the CO 
level, the parties cannot agree to ADR, or are unsuccessful in 
resolving the protest fully. Under the Default Adjudicative Process, 
the parties present their positions with supporting evidence. The 
question to be resolved is whether the protested FAA decision had a 
rational basis, or was not arbitrary, capricious or an abuse of 
discretion under the AMS.
    Proposed Sec. 17.37(a) would state that the process begins when 
either the initial Program Office response to the protest is submitted 
pursuant to Sec. 17.17(f) ten (10) business days

[[Page 45378]]

following the status conference held pursuant to Sec. 17.17(d), or the 
parties notify the ODRA that the ADR process has failed, or that the 
twenty (20) business days allotted for resolution through ADR have 
expired or will expire with no reasonable probability of their 
achieving a resolution.
    Proposed Sec. 17.37(b) would provide that the ODRA may select 
either a DRO or a qualified person not employed by the FAA to serve as 
a Special Master to conduct fact-finding proceedings and to provide 
findings of fact and recommendations concerning some or all of the 
matters in controversy.
    Proposed Sec. 17.37(c) would allow the DRO or Special Master to 
prepare any necessary procedural orders for the proceedings and would 
allow the DRO or Special Master to require additional submissions, as 
appropriate.
    Proposed Sec. 17.37(d) would allow the DRO or Special Master to 
convene the parties or their representatives as necessary to conduct 
the Default Adjudicative Process.
    Proposed Sec. 17.37(e) would allow the DRO or Special Master the 
discretion to decide the protest on the record if the written material 
submitted by the parties is sufficient for that purpose.
    Proposed Sec. 17.37(f) would allow the DRO or Special Master the 
discretion to manage the discovery process, including limiting its 
length and availability, to assure that the discovery schedule is 
consistent with the time limitations established in this part.
    Proposed Sec. 17.37(g) would allow the DRO or Special Master the 
discretion to permit or request oral presentations, and to limit them 
to specific witnesses or issues.
    Proposed Sec. 17.37(h) would allow the ODRA to review the status of 
the Default Adjudicative Process with the DRO or Special Master during 
the pendency of the protest.
    Proposed Sec. 17.37(i) would require the DRO or Special Master to 
submit the findings of fact and recommendations to the ODRA within 
thirty (30) business days of the commencement of the Default 
Adjudicative Process, unless a shorter or longer period of time is 
permitted at the discretion of the ODRA. The findings of fact and 
recommendations shall contain findings of fact, application of the 
principles of the AMS, or any law or authority applicable to the 
findings of fact, a recommendation for a final order, and, if 
appropriate, suggestions for future agency action.
    Proposed Sec. 17.37(j) would instruct the DRO or Special Master to 
base the findings of fact and recommendations specifically upon whether 
the FAA actions complained of had a rational basis, or whether or not 
the FAA decision was arbitrary, capricious or an abuse of discretion, 
and to assure that any findings of fact underlying a recommendation be 
supported by substantial evidence.
    Proposed Sec. 17.37(k) would allow the DRO or Special Master to 
exercise broad discretion to recommend a remedy for a successful 
protest that is consistent with Sec. 17.21.
    Proposed Sec. 17.37(l) would require the Special Master or DRO to 
submit the findings of fact and recommendations only to the Director of 
the ODRA.
    Proposed Sec. 17.37(m) would state that the Administrator, or the 
Administrator's delegee, issues the final agency decision and order of 
the Administrator.
Section 17.39  Default Adjudicative Process for Contract Disputes
    Proposed Sec. 17.39 would address the Default Adjudicative Process 
for contract disputes. Under this Default Adjudicative Process, the 
parties present their respective positions on the issues underlying the 
contract dispute, and present evidence supporting those positions.
    Proposed Sec. 17.39(a) would call for the Default Adjudicative 
Process to commence on the latter of the parties' submission of a joint 
statement under Sec. 17.27, indicating that the ADR will not be 
utilized, or their submission of joint notification regarding the 
inability of ADR to achieve a resolution of the contract dispute.
    Proposed Sec. 17.39(b) would require the Program Office to prepare 
and file a Dispute File, consisting of relevant documents 
chronologically arranged and indexed. The contractor would be permitted 
to supplement such a Dispute File.
    Proposed Sec. 17.39(c) would provide that the Director of the ODRA 
assign a DRO or Special Master to conduct fact-finding and provide 
findings and recommendations on some or all of the issues in the 
dispute.
    Proposed Sec. 17.39(d) would require the DRO or Special Master to 
convene a Status Conference within ten (10) business days of 
commencement of the Default Adjudicative Process and would permit the 
DRO or Special Master to issue such orders and directives as are 
necessary to carry out the Default Adjudicative Process.
    Proposed Sec. 17.39 (e) would set forth the basic subject matter of 
the Status Conference. First, it directs that the issues be analyzed by 
the DRO or Special Master and the parties, in order to: (1) Prepare a 
discovery plan sufficient to prepare any remaining issues for 
resolution; (2) review the need for a protective order, and if one is 
needed, issue a protective order, agreed upon by the parties; (3) 
determine whether any issue can be stricken; and (4) prepare and issue 
a procedural order for the proceedings.
    Proposed Sec. 17.39(f) would require that the parties prepare final 
submissions to the DRO or Special Master in advance of the decision. 
The submissions are to include: a joint statement of the issues; a 
joint statement of undisputed facts related to each issue; separate 
statements of disputed facts related to each issue, with appropriate 
citations to the record; and separate legal analyses in support of each 
party's respective position on the disputed issues.
    Proposed Sec. 17.39(g) would require the parties to provide copies 
of their final submissions to one another, so that such copies are 
received on the same date they are received by the ODRA.
    Proposed Sec. 17.39(h) would allow the DRO or Special Master either 
to decide the contract dispute on the record, or to allow the parties 
to make further presentations in person and in writing.
    Proposed Sec. 17.39(i) would require the DRO or Special Master to 
prepare and submit findings of fact and recommendations to the ODRA 
within thirty (30) business days of the final submissions of the 
parties, unless that time is extended by the ODRA for good cause. The 
findings of fact and recommendations shall contain findings of fact, 
application of the principles of the AMS and other law or authority 
applicable to the findings of fact, a recommendation for a final order, 
and, if appropriate, suggestions for future agency action.
    Proposed Sec. 17.39(j) would instruct the DRO or Special Master to 
review the disputed issue or issues in the context of the contract, 
applicable law and the AMS, and to support any findings of fact with 
substantial evidence.
    Proposed Sec. 17.39(k) would require the Special Master or DRO to 
submit a findings of fact and recommendations only to the Director of 
the ODRA.
    Proposed Sec. 17.39(l) would state that the Administrator, or the 
Administrator's delegee, would issue the final FAA order concerning the 
contract dispute.
    Proposed Sec. 17.39(m) would state that attorneys' fees of a 
prevailing contractor are allowable to the extent permitted by the 
EAJA, 5 U.S.C. Sec. 504(a)(1); and that if required by contract or 
applicable law, the FAA will pay interest on the amount found due the 
contractor, if any.

[[Page 45379]]

Subpart F--Finality and Review
Section 17.41  Final Orders
    Proposed Sec. 17.41 would state that a final agency order shall be 
issued only after the protester or contractor has exhausted all 
available administrative remedies under this FAA dispute resolution 
process. Exhaustion of administrative remedies occurs when the 
Administrator, or a person who has been delegated by the Administrator 
to act in circumstances where such delegation applies, has issued a 
final order accepting or modifying a recommendation from the ODRA.
Section 17.43  Judicial Review
    Proposed Sec. 17.43(a) would direct the parties to seek review of a 
final FAA order in the manner allowed by law.
    Proposed Sec. 17.43(b) would require that a petition for review 
also be filed with the ODRA and the FAA attorney involved, at the time 
the petition for review is filed.

Paperwork Reduction Act

    This proposal contains information collections which are subject to 
review by the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)). The title, description, 
respondent description and annual burden are shown below.
    Title: Procedures for Protests and Contract Disputes--Equal Access 
to Justice Act (EAJA) Regulations.
    Description: The FAA proposes to publish procedural requirements 
for the conduct of protests and contract disputes before the Office of 
Dispute Resolution for Acquisition. These procedures are designed to 
reduce the paperwork requirement ordinarily associated with such 
actions in other forums. The emphasis in the procedures is the 
resolution of a case as soon as is practicable, but also to provide for 
resolution through adjudication should the resolution require such.
    Description of Respondents: Businesses or other organizations or 
persons who do business with the FAA.
    This proposal generates a paperwork requirement upon only those 
respondents who pursue protests or contract disputes. The actual 
paperwork burden and cost for an individual case would vary with the 
complexity of the subject matter, and whether the protester or 
contractor and the FAA are able to reach an early resolution of the 
issues in the case. The following estimate is based upon cases filed 
with the ODRA in the first year, but assumes a higher annual caseload 
of 100 protests or contract disputes. In this analysis, the annual 
paperwork burden for all respondents would be approximately 3385 hours. 
This figure is derived from estimates based on cases processed in the 
first year of ODRA operation. At 2 hours per pleading, the total 
pleading burden for all cases is 200 hours (100  x  2). Fifty percent 
of all cases filed with the ODRA are settled or withdrawn after the 
initial pleadings are made. That means that for 50 of the cases filed 
with ODRA, there is no additional paperwork burden (50  x  0).
    Only Of the 50 remaining cases requiring additional paperwork, 34 
cases filed with ODRA go through the full adjudicative procedure. Of 
those cases, only 90% (31/34) can be described as average. One such 
case, based on an EAJA submission, involved 55 hours of paperwork 
burden. Using this figure yields a total of 1705 hour burden for the 
average cases (31  x  55). This estimate further assumes that of the 34 
cases that go through full adjudicative procedure, 3 of them will be 
complex and contentious, requiring an above average number of hours. 
For purposes of this analysis, the FAA will use the estimate of 200 
hours per complex/contentious case. Accordingly, for the above average 
cases, the total paperwork burden is 600 hours (3  x  200). There still 
remain the 16 cases that are settled/withdrawn after the pleadings are 
filed but that require some additional paperwork. Assuming that each of 
these cases incur an additional burden of 55 hours to achieve 
settlement/withdrawal, the total burden for these cases increases by 
880 hours (16  x  55). The sum of all the hours described above is 3385 
and is depicted graphically in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of                     Total hourly 
                      Description of effort                            cases      Hours incurred      burden    
----------------------------------------------------------------------------------------------------------------
Filing of Pleadings.............................................             100               2             200
Cases Settled/Withdrawn After Initial Pleadings Filed...........              50               0               0
Cases Requiring Average Number of Hours.........................              31              55            1705
Cases Requiring Above Average Number of Hours...................               3             200             600
Cases Requiring Below Average Number of Hours...................              16              55             880
                                                                 -----------------------------------------------
      Total.....................................................  ..............  ..............           3,385
----------------------------------------------------------------------------------------------------------------

    It is important to note that these numbers are merely estimates and 
the hourly cost for preparation of pleadings and responses to 
procedural requirements varies upon whether a respondent hires a law 
firm, or pursues the matter with in-house counsel, or chooses to 
proceed pro se, without the services of a lawyer.
    Individuals and organizations may submit comments on the 
information collection requirement by October 26, 1998, and should 
direct them to the address listed in the ADDRESSES section of this 
document. Comments also should be submitted to the Office of 
Information and Regulatory Affairs, OMB, New Executive Office Building, 
Room 10202, 725 17th Street NW., Washington, DC 20503, Attn: Desk 
Officer for FAA.
    Persons are not required to respond to a collection of information 
unless it displays a currently valid OMB control number. The burden 
associated with this proposal has been submitted to OMB for review. The 
FAA will publish a notice in the Federal Register notifying the public 
of the approval numbers and expiration date.

Regulatory Evaluation Summary

    Four principal requirements pertain to the economic impacts of 
changes to the Federal Regulations. First, Executive Order 12866 
directs Federal agencies to promulgate new regulations or modify 
existing regulations after consideration of the expected benefits to 
society and the expected costs. The order also requires federal 
agencies to assess whether a proposed rule is considered a 
``significant regulatory action.'' Second, the Regulatory Flexibility 
Act of 1980 requires agencies to analyze the economic impact of 
regulatory changes on small entities. Third, the Office of Management 
and Budget directs agencies to assess the effect of regulatory changes 
on international trade. Finally, Public Law 104-4 requires federal 
agencies to assess the impact of any federal mandates on state,

[[Page 45380]]

local, tribal governments, and the private sector.
    In conducting these analyses, the FAA has determined that this rule 
would generate cost-savings that would exceed any costs, and is not 
``significant'' as defined under section 3(f) of Executive Order 12866 
and Department of Transportation's (DOT) policies and procedures (44 FR 
11034, February 26, 1979). In addition, under the Regulatory 
Flexibility Determination, the FAA certifies that this proposal would 
not have a significant impact on a substantial number of small 
entities. Furthermore, this proposal would not impose restraints on 
international trade. Finally, the FAA has determined that the proposal 
would not impose a federal mandate on state, local, or tribal 
governments, or the private sector of $100 million per year. These 
analyses, available in the docket, are summarized below.

Executive Order 12866 and DOT's Policies and Procedures

    Under Executive Order 12866, each federal agency shall assess both 
the costs and the benefits of the proposed regulations while 
recognizing that some costs and benefits are difficult to quantify. A 
proposed rule is promulgated only upon a reasoned determination that 
the benefits of the proposed rule justify its costs.
    In this proposed rule, the establishment of the Office of Dispute 
Resolution for Acquisition (ODRA) under the FAA's new Acquisition 
Management System would provide a cost savings to the private sector 
(protesters and contractors). To resolve protests and contract disputes 
with the FAA, offerors and contractors would realize a cost savings of 
$1,000 to $1,000,000 per case, and the FAA would realize an average 
cost savings of $2,200 per protest case and $4,200 per contract 
dispute. Costs for this proposed rule are estimated to be about $1,000 
or less per case for the private sector to abide by the procedures of 
the ODRA, and no additional costs would be attributed to the FAA for 
implementing such procedures. Therefore the FAA concludes that not only 
do the benefits justify the costs, but that they actually exceed the 
costs.
    The proposed rule would also not be considered a significant 
regulatory action because (1) it does not have an annual effect of $100 
million or more or adversely affect in a material way the economy or a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local or tribal 
governments or communities; (2) it does not create a serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) it does not materially alter the budgetary impact 
of entitlements, grants, user fees, or loan programs or the rights and 
obligations of recipients; and (4) it does not raise novel legal or 
policy issues arising out of legal mandates, the President's priorities 
or principles set forth in the Executive Order. Because the proposed 
rule was not considered significant under these criteria, it was not 
reviewed by the Office of Management and Budget (OMB) for consistency 
with applicable law, the President's priorities, and the principles set 
forth in this Executive Order nor was OMB involved in deconflicting 
this proposed rule with ones from other agencies.

Initial Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 establishes ``as principle 
of regulatory issuance that agencies shall endeavor, consistent with 
the objective of the rule and of applicable statues, to fit regulatory 
and informational requirements to the scale of the business, 
organizations, and governmental jurisdictions subject to regulation.'' 
To achieve that and to explain the rationale for their actions, the Act 
covers a wide-range of small entities, including small businesses, not-
for-profit organizations and small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule would have a significant economic impact on a substantial 
number of small entities. If the determination is that it will, the 
agency must prepare a regulatory flexibility analysis (RFA) as 
described in the Act.
    However, if an agency determines that a proposed rule is not 
expected to have a significant economic impact on a substantial number 
of small entities, section 605(b) of the 1980 act provides that the 
head of the agency may so certify and an RFA is not required. The 
certification must include a statement providing the factual basis for 
this determination, and the reasoning should be clear.
    The FAA conducted the required review of this proposal and 
determined that it would not have a significant economic impact on a 
substantial number of small entities (protesters and contractors). 
Accordingly, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605 
(b), the FAA certifies that this rule would not have a significant 
economic impact on a substantial number of small entities for the 
following reason: The proposed rule would provide an estimated cost 
savings of $1,000 to $1 million per case in resolving its differences 
with the FAA, while requiring about $1,000 or less per case per entity 
to resolve the issue. For small entities, the FAA estimates that cost 
savings per case would be closer to $1,000 than $1 million and 
concludes there would be no significant economic impact on small 
entities. The FAA solicits comments from affected entities with respect 
to this finding and determination.

International Trade Impact Assessment

    The FAA has determined that the proposed rule would neither affect 
the sale of aviation products and services in the United States nor the 
sale of U.S. products and services in foreign countries.

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (the Act), 
enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. 
Section 204(a) of the Act, 2 U.S.C. 1534(a), requires the Federal 
agency to develop an effective process to permit timely input by 
elected officers (or their designees) of State, local, and tribal 
governments on a proposed ``significant intergovernmental mandate.'' A 
``significant intergovernmental mandate'' under the Act is any 
provision in a Federal agency regulation that would impose an 
enforceable duty upon State, local, and tribal governments, in the 
aggregate, of $100 million (adjusted annually for inflation) in any one 
year. Section 203 of the Act, 2 U.S.C. 1533, which supplements section 
204(a), provides that before establishing any regulatory requirements 
that might significantly or uniquely affect small governments, the 
agency shall have developed a plan that, among other things, provides 
for notice to potentially affected small governments, if any, and for a 
meaningful and timely opportunity to provide input in the development 
of regulatory proposals.
    This rule does not contain a Federal intergovernmental or private 
sector mandate that exceeds $100 million a year, therefore the 
requirements of the act do not apply.

[[Page 45381]]

International Compatibility

    The FAA has determined that a review of the Convention on 
International Civil Aviation Standards and Recommended Practices is not 
warranted because there is not a compatible rule under ICAO standards.

Federalism Implications

    The regulations proposed herein will not have substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 12612, it is determined that this 
proposal would not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment.

List of Subjects

14 CFR Part 14

    Claims, Equal access to justice, Lawyers, Reporting and 
recordkeeping requirements.

14 CFR Part 17

    Administrative practice and procedure, Alternative Dispute 
Resolution (ADR), Authority delegations (Government agencies), 
Government contracts, Government procurement.

The Proposed Amendments

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend chapter I of title 14 of the Code of 
Federal Regulations as follows:

PART 14--RULES IMPLEMENTING THE EQUAL ACCESS TO JUSTICE ACT OF 1980

    1. The authority citation for part 14 is revised to read as 
follows:

    Authority: 5 U.S.C. 504; 49 U.S.C. 106(f), 40113, 46104 and 
47122.

    2. Section 14.02 is amended by revising paragraph (a) to read as 
follows:


Sec. 14.02  Proceedings covered.

    (a) The Act applies to certain adversary adjudications conducted by 
the FAA under 49 CFR part 17 and the Acquisition Management System 
(AMS). These are adjudications under 5 U.S.C. 554, in which the 
position of the FAA is represented by an attorney or other 
representative who enters an appearance and participates in the 
proceeding. This subpart applies to proceedings under 49 U.S.C. 46301, 
46302, and 46303 and to the Default Adjudicative Process under 14 CFR 
part 17 and the AMS.
* * * * *
    3. Section 14.03 is amended by revising paragraphs (a) and (f) to 
read as follows:


Sec. 14.03  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adversary 
adjudication for which it seeks an award. The term ``party'' is defined 
in 5 U.S.C. 504(b)(1)(B) and 5 U.S.C. 551(3). The applicant must show 
that it meets all conditions or eligibility set out in this subpart.
* * * * *
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation, or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the 
applicant directly or indirectly owns or controls a majority of the 
voting shares or other interest, will be considered an affiliate for 
purposes of this part, unless the administrative law judge (ALJ) or 
adjudicative officer determines that such treatment would be unjust and 
contrary to the purposes of the Act in light of the actual relationship 
between the affiliated entities. In addition, the administrative law 
judge or adjudicative officer may determine that financial 
relationships of the applicant, other than those described in this 
paragraph, constitute special circumstances that would make an award 
unjust.
* * * * *
    4. Section 14.05 is amended by revising paragraphs (b), (c), and 
(e) to read as follows:


Sec. 14.05  Allowance fees and expenses.

* * * * *
    (b) No award for the fee of an attorney or agent under this part 
may exceed $125 per hour. No award to compensate an expert witness may 
exceed the highest rate at which the agency pays expert witnesses. 
However, an award may also include the reasonable expenses of the 
attorney, agent, or witness as a separate item, if the attorney, agent, 
or witness ordinarily charges clients separately for such expenses.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent, or expert witness, the administrative law judge or 
adjudicative officer shall consider the following:
    (1) If the attorney, agent, or witness is in private practice, his 
or her customary fee for similar services, or if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent, or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
* * * * *
    (e) Fees may be awarded only for work performed after the issuance 
of a complaint, or the initiation of the adjudicative phase of a 
protest or contract dispute under 14 CFR part 17 and the AMS.
    5. Section 14.11 is amended by revising paragraph (c) to read as 
follows:


Sec. 14.11  Net worth exhibit.

* * * * *
    (c) Ordinarily, the net worth exhibit will be included in the 
public record of the proceeding. However, an applicant that objects to 
public disclosure of the net worth exhibit, or any part of it, may 
submit that portion of the exhibit directly to the administrative law 
judge or adjudicative officer in a sealed envelope labeled 
``Confidential Financial Information,'' accompanied by a motion to 
withhold the information.
    (1) The motion shall describe the information sought to be withheld 
and explain, in detail, why it should be exempt under applicable law or 
regulation, why public disclosure would adversely affect the applicant, 
and why disclosure is not required in the public interest.
    (2) The net worth exhibit shall be served on the FAA counsel, but 
need not be served on any other party to the proceeding.
    (3) If the administrative law judge or adjudicative officer finds 
that the net worth exhibit, or any part of it, should not be withheld 
from disclosure, it shall be placed in the public record of the 
proceeding. Otherwise, any request to inspect or copy the exhibit shall 
be disposed of in accordance with the FAA's established procedures.
    6. Section 14.20 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec. 14.20  When an application may be filed.

    (a) An application may be filed whenever the applicant has 
prevailed in the proceeding, but in no case later than 30 days after 
the FAA Decisionmaker's final disposition of the proceeding, or

[[Page 45382]]

service of the order of the Administrator in a proceeding under the 
AMS.
* * * * *
    (c) For purposes of this part, final disposition means the later 
of:
    (1) Under 14 CFR part 17 and the AMS, the date on which the order 
of the Administrator is served;
    (2) The date on which an unappealed initial decision becomes 
administratively final;
    (3) Issuance of an order disposing of any petitions for 
reconsideration of the FAA Decisionmaker's final order in the 
proceeding;
    (4) If no petition for reconsideration is filed, the last date on 
which such a petition could have been filed; or
    (5) Issuance of a final order or any other final resolution of a 
proceeding, such as a settlement or voluntary dismissal, which is not 
subject to a petition for reconsideration.
    7. Section 14.21 is revised to read as follows:


Sec. 14.21  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding, 
except as provided in Sec. 14.11(b) for confidential financial 
information. Where the proceeding was held under 14 CFR part 17 and the 
AMS, the application shall be filed with the FAA's attorney and with 
the Office of Dispute Resolution for Acquisition (ODRA).
    8. Section 14.22 is amended by revising paragraph (b) to read as 
follows:


Sec. 14.22  Answer to application.

* * * * *
    (b) If the FAA's counsel and the applicant believe that the issues 
in the fee application can be settled, they may jointly file a 
statement of their intent to negotiate a settlement. The filing of this 
statement shall extend the time for filing an answer for an additional 
30 days, and further extensions may be granted by the administrative 
law judge or adjudicative officer upon request by the FAA's counsel and 
the applicant.
* * * * *
    9. Section 14.24 is revised to read as follows:


Sec. 14.24  Comments by other parties.

    Any party to a proceeding other than the applicant and the FAA's 
counsel may file comments on an application within 30 days after it is 
served, or on an answer within 15 days after it is served. A commenting 
party may not participate further in proceedings on the application 
unless the administrative law judge or adjudicative officer determines 
that the public interest requires such participation in order to permit 
full exploration of matters raised in the comments.
    10. Section 14.26 is amended by revising paragraph (a) to read as 
follows:


Sec. 14.26  Further proceedings.

    (a) Ordinarily the determination of an award will be made on the 
basis of the written record; however, on request of either the 
applicant or agency counsel, or on his or her own initiative, the 
administrative law judge or adjudicative officer assigned to the matter 
may order further proceedings, such as an informal conference, oral 
argument, additional written submissions, or an evidentiary hearing. 
Such further proceedings shall be held only when necessary for full and 
fair resolution of the issues arising from the application and shall be 
conducted as promptly as possible.
* * * * *
    11. Section 14.27 is revised to read as follows:


Sec. 14.27  Decision.

    (a) The administrative law judge shall issue an initial decision on 
the application within 60 days after completion of proceedings on the 
application.
    (b) An adjudicative officer in a proceeding under 14 CFR part 17 
and the AMS shall prepare a findings and recommendations for the ODRA.
    (c) A decision under paragraph (a) or (b) of this section shall 
include written findings and conclusions on the applicant's eligibility 
and status as a prevailing party and an explanation of the reasons for 
any difference between the amount requested and the amount awarded. The 
decision shall also include, if at issue, findings on whether the FAA's 
position was substantially justified, or whether special circumstances 
make an award unjust.
    12. Section 14.28 is revised to read as follows:


Sec. 14.28  Review by FAA decisionmaker.

    (a) In proceedings other than those under 14 CFR part 17 and the 
AMS, either the applicant or the FAA counsel may seek review of the 
initial decision on the fee application. Additionally, the FAA 
Decisionmaker may decide to review the decision on his/her own 
initiative. If neither the applicant nor the FAA's counsel seeks review 
within 30 days after the decision is issued, it shall become final. 
Whether to review a decision is a matter within the discretion of the 
FAA Decisionmaker. If review is taken, the FAA Decisionmaker will issue 
a final decision on the application or remand the application to the 
administrative law judge who issued the initial fee award determination 
for further proceedings.
    (b) In proceedings under 14 CFR part 17 and the AMS, the 
adjudicative officer shall prepare a findings and recommendations for 
the ODRA with recommendations as to whether or not an award should be 
made, the amount of the award, and the reasons therefor. The ODRA shall 
submit a recommended order to the Administrator after the completion of 
all submissions related to the EAJA application. Upon the 
Administrator's action, the order shall become final, and may be 
reviewed under 49 U.S.C. 46110.
    13. A new part 17 is added to 14 CFR chapter I, subchapter B, to 
read as follows:

PART 17--PROCEDURES FOR PROTESTS AND CONTRACT DISPUTES

Subpart A--General

Sec.
17.1  Applicability.
17.3  Definitions.
17.5  Delegation of authority.
17.7  Filing and computation of time.
17.9  Protective orders.

Subpart B--Protests

17.11  Matters not subject to protest.
17.13  Dispute resolution process for protests.
17.15  Filing a protest.
17.17  Initial protest procedures.
17.19  Dismissal or summary decision of protests.
17.21  Protest remedies.

Subpart C--Contract Disputes

17.23  Dispute resolution process for contract disputes.
17.25  Filing a contract dispute.
17.27  Submission of joint statement.
17.29  Dismissal or summary decision of contract disputes.

Subpart D--Alternative Dispute Resolution

17.31  Use of alternative dispute resolution.
17.33  Election of alternative dispute resolution process.
17.35  Selection of neutrals for the alternative dispute resolution 
(ADR) process.

Subpart E--Default Adjudicative Process

17.37  Default adjudicative process procedures for protests.
17.39  Default adjudicative process procedures for contract 
disputes.

Subpart F--Finality and Review

17.41  Final orders.
17.43  Judicial review.

[[Page 45383]]

Appendix A To Part 17--Alternative Dispute Resolution (ADR)

    Authority: 5 U.S.C. 570-581; 49 U.S.C. 106(f)(2), 40110, 40111, 
40112, 46102, 46014, 46105, 46109, and 46110.

Subpart A--General


Sec. 17.1  Applicability.

    This part applies to all protests or contract disputes against the 
FAA.


Sec. 17.3  Definitions.

    (a) Accrual means to come into existence as a legally enforceable 
claim.
    (b) Accrual of a contract dispute occurs on the date when all 
events underlying the dispute were known or should have been known.
    (c) Acquisition Management System (AMS) establishes the policies, 
guiding principles, and internal procedures for the FAA's acquisition 
system.
    (d) Administrator means the Administrator of the Federal Aviation 
Administration.
    (e) Alternative Dispute Resolution (ADR) is the primary means of 
dispute resolution that would be employed by the FAA's Office of 
Dispute Resolution for Acquisition (ODRA). See Appendix A of this part.
    (f) Compensated Neutral refers to an impartial third party chosen 
by the parties to act as a facilitator, mediator, or arbitrator 
functioning to resolve the protest or contract dispute under the 
auspices of the ODRA. The parties pay equally for the services of a 
Compensated Neutral. A Dispute Resolution officer (DRO) or Neutral 
cannot be a Compensated Neutral.
    (g) Contract Dispute, as used in this part, means a written request 
to the ODRA seeking as a matter of right, the payment of money in a sum 
certain, the adjustment or interpretation of contract terms, or other 
relief arising under, relating to or involving an alleged breach of 
contract, entered into pursuant to the AMS. A contract dispute does not 
require, as a prerequisite, the issuance of a Contracting Officer final 
decision.
    (h) Default Adjudicative Process is an adjudicative process used to 
resolve protests or contract disputes where the parties cannot achieve 
resolution through informal communication or the use of ADR. The 
Default Adjudicative Process is conducted by a DRO or Special Master 
selected by the ODRA to serve as ``adjudicative officers,'' as that 
term is used in 14 CFR part 14.
    (i) Discovery in the Default Adjudicative Process is the procedure 
where opposing parties in a protest or contract dispute may, when 
allowed, obtain testimony from, or documents and information held by, 
other parties or non-parties.
    (j) Dispute Resolution Officer (DRO) is a licensed attorney 
reporting to the ODRA. The term DRO can include the Director of the 
ODRA, ODRA staff attorneys or other FAA attorneys assigned to the ODRA.
    (k) An interested party is designated as such at the discretion of 
the ODRA, and in the context of a bid protest is one who: Prior to the 
closing date for responding to a Screening Information Request (SIR), 
is an actual or prospective participant in the procurement, excluding 
prospective subcontractors; or after the closing date for responding to 
a SIR, is an actual participant who would be next in line for award 
under the SIR's selection criteria if the protest is successful, or is 
an actual participant who is not next in line for award under the SIR's 
selection criteria but who alleges specific improper actions or 
inactions by the Program Office that caused the party to be other than 
next in line for award. Proposed subcontractors are not eligible to 
protest. The awardee of the contract may be allowed to participate in 
the protest as an intervenor.
    (l) An intervenor is an interested party other than the protester 
whose participation in a protest is allowed by the ODRA.
    (m) Neutral refers to an impartial third party in the ADR process 
chosen by the ODRA to act as a facilitator, mediator, arbitrator, or 
otherwise to resolve the protest or contract dispute. A Neutral can be 
a DRO or a person not an employee of the FAA who serves on behalf of 
the ODRA.
    (n) The Office of Dispute Resolution for Acquisition (ODRA), under 
the direction of the Director, acts on behalf of the Administrator to 
manage the FAA Dispute Resolution Process, and to recommend action to 
the Administrator on matters concerning protests or contract disputes.
    (o) Parties include a protester or a contractor, the FAA, and any 
intervenor.
    (p) Program Office, as used in these rules, refers to the FAA 
organization responsible for the procurement activity and includes the 
Contracting Officer (CO) and assigned FAA legal counsel, when that FAA 
organization represents the FAA as a party to a protest or contract 
dispute before the ODRA.
    (q) Screening Information Request (SIR) means a request by the FAA 
for information concerning an approach to meeting a requirement 
established by the FAA.
    (r) A Special Master is a legal professional, usually with 
extensive adjudicative experience, who has been assigned by the ODRA to 
act as its finder of fact, and to make findings and recommendations 
based upon AMS policy and applicable law and authorities in the Default 
Adjudicative Process.


Sec. 17.5  Delegation of authority.

    (a) The authority of the Administrator to conduct dispute 
resolution proceedings concerning acquisition matters, is delegated to 
the Director of the Office of Dispute Resolution for Acquisition.
    (b) The Director of the Office of Dispute Resolution for 
Acquisition may redelegate to Special Masters and DROs such delegated 
authority in paragraph (a) of this section as is deemed necessary by 
the Director for efficient resolution of an assigned protest or 
contract dispute.


Sec. 17.7  Filing and computation of time.

    (a) Filing of a protest or contract dispute may be accomplished by 
mail, overnight delivery, hand delivery, or by facsimile. A protest or 
contract dispute is considered to be filed on the date it is received 
by the ODRA during normal business hours. The ODRA's normal business 
hours are from 8:30 a.m. to 5:00 p.m. EST or EDT, whichever is in use. 
A protest or contract dispute received via mail, after the time period 
prescribed for filing, shall not be considered timely filed even though 
it may be postmarked within the time period prescribed for filing.
    (b) Submissions to the ODRA after the initial filing of the protest 
or contract dispute may be accomplished by any means available in 
paragraph (a) of this section.
    (c) The time limits stated in this part are calculated in business 
days, which exclude weekends and Federal holidays. In computing time, 
the day of the event beginning a period of time shall not be included. 
If the last day of a period falls on a weekend or a Federal holiday, 
the first business day following the weekend or holiday shall be 
considered the last day of the period.
    (d) A petition for review shall be filed pursuant to 49 U.S.C. 
46110, and a copy of the petition shall be served upon the ODRA and the 
Program Office attorney of record on the day the petition is filed with 
the court.


Sec. 17.9  Protective orders.

    (a) The ODRA may issue protective orders addressing the treatment 
of protected information, either at the request of a party or upon its 
own initiative. Such information may include proprietary, confidential, 
or source-selection-sensitive material, or

[[Page 45384]]

other information the release of which could result in a competitive 
advantage to one or more firms.
    (b) The terms of protective orders can be negotiated by the 
parties, subject to the approval of the ODRA. The protective order 
shall establish procedures for application for access to protected 
information, identification and safeguarding of that information, and 
submission of redacted copies of documents omitting protected 
information.
    (c) After a protective order has been issued, counsel or 
consultants retained by counsel appearing on behalf of a party may 
apply for access to the material under the order by submitting an 
application to the ODRA, with copies furnished simultaneously to all 
parties. The application shall establish that the applicant is not 
involved in competitive decisionmaking for any firm that could gain a 
competitive advantage from access to the protected information and that 
the applicant will diligently protect any protected information 
received from inadvertent disclosure. Objections to an applicant's 
admission shall be raised within two (2) days of the application, 
although the ODRA may consider objections raised after that time for 
good cause.
    (d) Any violation of the terms of a protective order may result in 
the imposition of sanctions or the taking of the actions as the ODRA 
deems appropriate.
    (e) The parties are permitted to agree upon what material is to be 
covered by a protective order, subject to approval by the ODRA.

Subpart B--Protests


Sec. 17.11  Matters not subject to protest.

    The following matters may not be protested:
    (a) FAA purchases from or through federal, state, local, and tribal 
governments and public authorities;
    (b) Grants;
    (c) Cooperative agreements;
    (d) Other transactions which do not fall into the category of 
procurement contracts subject to the AMS.


Sec. 17.13  Dispute resolution process for protests.

    (a) Protests concerning FAA SIRs or contract awards shall be 
resolved pursuant to this part.
    (b) The offeror initially should attempt to resolve any issues 
concerning potential protests with the CO. The CO, in coordination with 
FAA legal counsel, will make reasonable efforts to answer questions 
promptly and completely, and, where possible, to resolve concerns or 
controversies.
    (c) Offerors or prospective offerors shall file a protest with the 
ODRA in accordance with Sec. 17.15. The time limitations set forth in 
Sec. 17.17 will not be extended by attempts to resolve a potential 
protest with the CO.
    (d) A status conference may be called by the ODRA after the protest 
is filed to attempt resolution of the protest through a combination of 
informal communication and early neutral evaluation. If a conference is 
called, the parties will have five (5) business days after the status 
conference to inform the ODRA whether the parties agree to use ADR 
pursuant to Subpart D of this part; or to state why they cannot use ADR 
and must resort to the Default Adjudicative Process, pursuant to 
Subpart E of this part.
    (1) Should the parties decide to utilize ADR, they will have five 
(5) business days after the status conference within which to agree 
upon the use of an ODRA-approved Neutral or a Compensated Neutral, in 
accordance with Sec. 17.33(c), as well as upon the ADR technique to be 
employed. Within those five (5) business days, the parties are required 
to execute and file with the ODRA a written ADR agreement, pursuant to 
Sec. 17.33(h). The parties will have up to twenty (20) business days to 
complete the ADR process.
    (2) If the parties do not agree to use ADR, the Program Office will 
have ten (10) business days after the status conference within which to 
submit a Program Office response to the protest, after which the 
protest will proceed under the Default Adjudicative Process. If the ADR 
process is undertaken, but subsequently proves to be unsuccessful, a 
DRO or Special Master will be assigned to oversee the Default 
Adjudicative Process, pursuant to Subpart E of this part.
    (e) The ODRA retains the discretion to modify any time constraints 
for pending protests.
    (f) Multiple protests concerning the same SIR, solicitation, or 
contract award may be consolidated at the discretion of the ODRA, and 
assigned to a single DRO.
    (g) Procurement activities, and, where applicable, contractor 
performance pending resolution of a protest shall continue during the 
pendency of a protest, unless there is a compelling reason to suspend 
or delay all or part of the procurement activities. Pursuant to 
Secs. 17.15(d) and 17.17(b), the ODRA may recommend suspension of 
contract performance for a compelling reason. A decision to suspend or 
delay procurement activities or contractor performance would be made in 
writing by the FAA Administrator or the Administrator's delegee for 
that purpose.


Sec. 17.15  Filing a protest.

    (a) Only an interested party may file a protest, and shall initiate 
a protest by filing a written protest with the ODRA within the times 
set forth below, or the protest shall be dismissed as untimely:
    (1) Protests based upon alleged improprieties in a solicitation or 
a SIR that are apparent prior to bid opening or the time set for 
receipt of initial proposals shall be filed prior to bid opening or the 
time set for the receipt of initial proposals;
    (2) In procurements where proposals are requested, alleged 
improprieties that do not exist in the initial solicitation, but which 
are subsequently incorporated into the solicitation, must be protested 
not later than the next closing time for receipt of proposals following 
the incorporation;
    (3) For protests other than those related to alleged solicitation 
improprieties, the protest must be filed within seven (7) business days 
of the time that the protester knew or should have known of the grounds 
for the protest;
    (4) If the protester has requested a post-award debriefing from the 
FAA, then any protest other than one related to solicitation 
improprieties shall be filed not later than five (5) business days 
after the date on which the FAA holds that debriefing.
    (b) Protests shall be filed at:
    (1) Office of Dispute Resolution for Acquisition, AGC-70, Federal 
Aviation Administration, 400 7th Street, S.W., Room 8332, Washington, 
DC 20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
    (2) Other address as shall be published from time to time in the 
Federal Register.
    (c) A protest shall be in writing, and set forth:
    (1) The protester's name, address, telephone number, and facsimile 
(FAX) number;
    (2) The name, address, telephone number, and FAX number of a person 
designated by the protester (Protester Designee), and who shall be duly 
authorized to represent the protester, to be the point of contact;
    (3) The SIR number or, if available, the contract number and the 
name of the CO;
    (4) The basis for the protester's status as an interested party;
    (5) The facts supporting the timeliness of the protest;
    (6) Whether the protester requests a protective order, the material 
to be protected, and attach a redacted copy of that material;

[[Page 45385]]

    (7) A detailed statement of both the legal and factual grounds of 
the protest, and attach one (1) copy of each relevant document;
    (8) The remedy or remedies sought by the protester, as set forth in 
Sec. 17.21;
    (9) The signature of the Protester Designee, or another person duly 
authorized to represent the protester.
    (d) If the protester wishes to request a suspension or delay of the 
procurement and believes there are compelling reasons that, if known to 
the FAA, would cause the FAA to suspend or delay the procurement 
because of the protested action, the protester shall:
    (1) Set forth each such compelling reason, supply all facts 
supporting the protester's position, identify each person with 
knowledge of the facts supporting each compelling reason, and identify 
all documents that support each compelling reason.
    (2) Clearly identify any adverse consequences to the protester, the 
FAA, or any interested party, should the FAA not suspend or delay the 
procurement.
    (e) At the same time as filing the protest with the ODRA, the 
protester shall serve a copy of the protest on the CO and any other 
official designated in the SIR for receipt of protests by means 
reasonably calculated to be received by the CO on the same day as it is 
to be received by the ODRA. The protest shall include a signed 
statement from the protester, certifying to the ODRA the manner of 
service, date, and time when a copy of the protest was served on the CO 
and other designated official(s).
    (f) Upon receipt of the protest, the CO shall inform the ODRA of 
the names, addresses, and telephone and facsimile numbers of the 
awardee and/or other interested parties. The CO shall also immediately 
notify the awardee and/or interested parties in writing of the 
existence of the protest. The awardee and/or interested parties shall 
notify the ODRA in writing, of their interest in participating in the 
protest as intervenors within two (2) business days of receipt of the 
CO's notification, and shall, in such notice, designate a person as the 
point of contact for the ODRA. Such notice may be submitted to the ODRA 
by facsimile.
    (g) The ODRA has discretion to designate the parties who shall 
participate in the protest as intervenors.


Sec. 17.17  Initial protest procedures.

    (a) When a protest is filed with the ODRA, a DRO will be assigned 
to the protest.
    (b) If the protester requests a suspension or delay of procurement 
pursuant to Sec. 17.15(d), the Program Office shall submit a response 
to the request to the ODRA within two (2) business days of receipt of 
the protest. The ODRA, in its discretion, may recommend such suspension 
or delay to the Administrator or the Administrator's designee.
    (c) The ODRA may convene a status conference to--
    (1) Review procedures;
    (2) Identify and develop issues related to summary dismissal and 
suspension recommendations;
    (3) Handle issues related to protected information and the issuance 
of any needed protective order;
    (4) Encourage the parties to use ADR;
    (5) Conduct early neutral evaluation of the protest by the DRO, at 
the discretion of the ODRA; and
    (6) For any other reason deemed appropriate by the DRO or by the 
ODRA.
    (d) On the fifth business day following a status conference, the 
parties will file with the ODRA--
    (1) A joint statement that they have decided to pursue ADR to 
resolve the protest; or
    (2) A written explanation as to why ADR cannot be used and why the 
parties will have to resort to the use of the Default Adjudicative 
Process.
    (e) Should the parties elect to utilize ADR to resolve the protest, 
they will agree upon the neutral to conduct the ADR proceedings (either 
an ODRA-designated Neutral or a Compensated Neutral of their own 
choosing) pursuant to Sec. 17.33(c), and shall execute and file with 
the ODRA a written ADR agreement within five (5) business days after 
the status conference.
    (f) Should the parties indicate at the status conference that ADR 
will not be used, then within ten (10) business days following the 
status conference, the Program Office will file with the ODRA a Program 
Office response to the protest. The Program Office response shall 
consist of a statement of pertinent facts, applicable legal or other 
defenses, and shall be accompanied by all documents deemed relevant by 
the Program Office, position. A copy of the response shall be furnished 
to the protester at the same time, and by the same means, as it is 
filed with the ODRA. At that point the protest will proceed under the 
Default Adjudicative Process pursuant to Sec. 17.37.
    (g) The time limitations of this section may be extended by the 
ODRA for good cause.


Sec. 17.19  Dismissal or summary decision of protests.

    (a) At any time during the protest, any party may request, by 
motion to the ODRA, that--
    (1) The protest, or any count or portion of a protest, be dismissed 
for lack of jurisdiction, if the protester fails to establish that the 
protest is timely, or that the protester has no standing to pursue the 
protest;
    (2) The protest, or any count or portion of a protest, be dismissed 
for failure to state a claim, if the protester fails to state a matter 
upon which relief may be had;
    (3) A summary decision be issued with respect to the protest, or 
any count or portion of a protest, if:
    (i) The undisputed material facts demonstrate a rational basis for 
the Program Office action or inaction in question, and there are no 
other material facts in dispute that would overcome a finding of such a 
rational basis; or
    (ii) The undisputed material facts demonstrate, that no rational 
basis exists for the Program Office action or inaction in question, and 
there are no material facts in dispute that would overcome a finding of 
the lack of such a rational basis.
    (b) In connection with any request for dismissal or summary 
decision, the ODRA shall consider any material facts in dispute, in a 
light most favorable to the party against whom the request is made.
    (c) Either upon motion by a party or on its own initiative, the 
ODRA may, at any time, exercise its discretion to:
    (1) Recommend to the Administrator dismissal or the issuance of a 
summary decision with respect to the entire protest;
    (2) Dismiss the entire protest or issue a summary decision with 
respect to the entire protest, if delegated that authority by the 
Administrator; or
    (3) Dismiss or issue a summary decision with respect to any count 
or portion of a protest.
    (d) A dismissal or summary decision regarding the entire protest by 
either the Administrator, or the ODRA by delegation, shall be construed 
as a final agency order. A dismissal or summary decision that does not 
resolve all counts or portions of a protest shall not constitute a 
final agency order, unless and until such dismissal or decision is 
incorporated or otherwise adopted in a decision by the Administrator 
(or the ODRA, by delegation) regarding the entire protest.


Sec. 17.21  Protest remedies.

    (a) The ODRA may recommend one or more, or a combination of, the 
following remedies--
    (1) Amend the SIR;
    (2) Refrain from exercising options under the contract;
    (3) Issue a new SIR;

[[Page 45386]]

    (4) Terminate an existing contract for the FAA's convenience, and 
require recompetition;
    (5) Direct an award to the protester;
    (6) Award bid and proposal costs; or
    (7) Any combination of the above remedies, or any other action 
consistent with the AMS that is appropriate under the circumstances.
    (b) In determining the appropriate recommendation, the ODRA should 
consider the circumstances surrounding the procurement or proposed 
procurement including, but not limited to: the nature of the 
procurement deficiency; the degree of prejudice to other parties or to 
the integrity of the procurement system; the good faith of the parties; 
the extent of performance completed; the cost of any proposed remedy to 
the FAA; the urgency of the procurement; and the impact of the 
recommendation on the FAA.
    (c) Attorney's fees of a prevailing protester are allowable to the 
extent permitted by the Equal Access to Justice Act, 5 U.S.C. 
504(a)(1)(EAJA).

Subpart C--Contract Disputes


Sec. 17.23  Dispute resolution process for contract disputes.

    (a) All contract disputes arising under contracts entered into 
pursuant to the AMS shall be resolved under this part.
    (b) Contractors shall file contract disputes with the ODRA and the 
CO pursuant to Sec. 17.25.
    (c) After filing the contract dispute, the contractor should seek 
informal resolution with the CO:
    (1) The CO, with the advice of FAA legal counsel, has full 
discretion to settle contract disputes, except where the matter 
involves fraud;
    (2) The parties shall have up to thirty (30) business days within 
which to resolve the dispute informally, and may contact the ODRA for 
assistance in facilitating such a resolution; and
    (3) If no informal resolution is achieved during the thirty (30) 
business day period, the parties shall file a joint statement with the 
ODRA pursuant to Sec. 17.27.
    (d) If informal resolution of the contract dispute appears probable 
during the informal resolution period, the contractor and the CO may 
jointly request one extension of time from the ODRA to resolve the 
matter before filing the joint statement under Sec. 17.27.
    (e) The ODRA may hold a status conference with the parties within 
ten (10) business days after receipt of the joint statement required by 
Sec. 17.27, in order to establish the procedures to be utilized to 
resolve the contract dispute.
    (f) The FAA will require continued performance in accordance with 
the provisions of a contract, pending resolution of a contract dispute 
arising under or related to that contract.


Sec. 17.25  Filing a contract dispute.

    (a) Contract disputes are to be in writing and shall contain:
    (1) The contractor's name, address, telephone, and fax number;
    (2) The contract number and the name of the Contracting Officer;
    (3) A detailed statement of the legal and factual basis of the 
contract dispute or of each element or count of the contract dispute, 
including copies of relevant documents;
    (4) All information establishing that the contract dispute was 
timely filed;
    (5) A request for a specific remedy, and if a monetary remedy is 
requested, a sum certain must be specified; and
    (6) The signature of a duly authorized representative of the 
initiating party.
    (b) Contract disputes shall be filed by mail, in person, by 
overnight delivery or by facsimile at the following address:
    (1) Office of Dispute Resolution for Acquisition, AGC-70, Federal 
Aviation Administration, 400 7th Street, SW., Room 8332, Washington, DC 
20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
    (2) Other address as shall be published from time to time in the 
Federal Register.
    (c) A contract dispute against the FAA shall be filed with the ODRA 
within six months of the accrual of the contract dispute. A contract 
dispute by the FAA against a contractor (excluding contract disputes 
alleging warranty issues, fraud or latent defects) likewise may be 
filed within six months after the accrual of the contract dispute. If 
the contract underlying provides for time limitations for filing of 
contract disputes with the ODRA, the limitation periods in the contract 
shall control over the limitation period of this section. In no event 
will either party be permitted to file with the ODRA a contract dispute 
seeking an equitable adjustment or other damages after the contractor 
has accepted final contract payment, with the exception of FAA claims 
related to warranty issues, fraud or latent defects.
    (d) A party shall serve a copy of the contract dispute upon the 
other party, by means reasonably calculated to be received on the same 
day as the filing is to be received by the ODRA.


Sec. 17.27  Submission of joint statement.

    (a) If the matter has not been resolved informally, the parties 
shall file a joint statement with the ODRA no later than thirty (30) 
business days after the filing of the contract dispute. The ODRA may 
extend this time for good cause.
    (b) The joint statement of the case shall include either--
    (1) A request for ADR, and an executed ADR agreement, pursuant to 
Sec. 17.33(d), specifying which ADR techniques will be employed; or
    (2) A written explanation as to why ADR will not be utilized and 
why the parties must resort to the Default Adjudicative Process.
    (c) Such joint statements shall be directed to the following 
address:
    (1) Office of Dispute Resolution for Acquisition, AGC-70, Federal 
Aviation Administration, 400 7th Street, SW., Room 8332, Washington, DC 
20590, Telephone: (202) 366-6400, Facsimile: (202) 366-7400; or
    (2) Other address as shall be published from time to time in the 
Federal Register.


Sec. 17.29  Dismissal or summary decision of contract disputes.

    (a) Any party may request, by motion to the ODRA, that a contract 
dispute be dismissed, or that a count or portion of a contract dispute 
be stricken, if: (1) It was not timely filed with the ODRA; (2) It was 
filed by a subcontractor; (3) It fails to state a matter upon which 
relief may be had; or (4) It involves a matter not subject to the 
jurisdiction of the ODRA.
    (b) In connection with any request for dismissal of a contract 
dispute, or to strike a count or portion thereof, the ODRA should 
consider any material facts in dispute in a light most favorable to the 
party against whom the request for dismissal is made.
    (c) At any time, whether pursuant to a motion or request or on its 
own initiative and at its discretion, the ODRA may--
    (1) Dismiss or strike a count or portion of a contract dispute;
    (2) Recommend to the Administrator that the entire contract dispute 
be dismissed; or
    (3) With delegation from the Administrator, dismiss the entire 
contract dispute.
    (d) An order of dismissal of the entire contract dispute, issued 
either by the Administrator or by the ODRA where delegation exists, on 
the grounds set forth in this section, shall constitute a final agency 
order. An ODRA order dismissing or striking a count or portion of a 
contract dispute shall not constitute a final agency order, unless and 
until such ODRA order is incorporated or otherwise adopted in a 
decision of the Administrator.

[[Page 45387]]

Subpart D--Alternative Dispute Resolution


Sec. 17.31  Use of alternative dispute resolution.

    (a) The ODRA shall encourage the parties to utilize ADR as their 
primary means to resolve protests and contract disputes.
    (b) The parties shall make a good faith effort to employ ADR in 
every appropriate case. The ODRA will encourage use of ADR techniques 
such as mediation, neutral evaluation, or minitrials, or variations of 
these techniques as agreed by the parties and approved by the ODRA.
    (c) The Default Adjudicative Process will be used where the parties 
cannot achieve agreement on the use of ADR; or where ADR has been 
employed but has not resolved all pending issues in dispute; or when 
ODRA concludes that ADR will not provide an expeditious means of 
resolving a particular dispute.


Sec. 17.33  Election of alternative dispute resolution process.

    (a) The ODRA makes its personnel available to serve as Neutrals in 
ADR proceedings and, upon request by the parties, attempts to make 
qualified non-FAA personnel available to serve as Neutrals through 
neutral-sharing programs and other similar arrangements. The parties 
may elect to employ a mutually acceptable Compensated Neutral, and 
shall share equally the costs of any such Compensated Neutral.
    (b) The parties using an ADR process to resolve a protest shall 
submit an executed ADR agreement containing the information outlined in 
paragraph (d) of this section to the ODRA within five (5) business days 
after the ODRA conducts a status conference pursuant to Sec. 17.17(c). 
The ODRA may extend this time for good cause.
    (c) The parties using an ADR process to resolve a contract dispute 
shall submit an executed ADR agreement containing the information 
outlined in paragraph (d) of this section to the ODRA as part of the 
joint statement specified under Sec. 17.27.
    (d) The parties to a protest or contract dispute who use ADR shall 
agree to submit to the ODRA an ADR agreement setting forth:
    (1) The type of ADR technique(s) to be used;
    (2) The agreed-upon manner of using the ADR process; and
    (3) Whether the parties agree to use a Neutral through the ODRA or 
to use a Compensated Neutral of their choosing, and, if a Compensated 
Neutral is to be used, that the cost of the Compensated Neutral's 
services shall be shared equally.
    (e) Non-binding ADR techniques are not mutually exclusive, and may 
be used in combination if the parties agree that a combination is most 
appropriate to the dispute. The techniques to be employed must be 
determined in advance by the parties and shall be expressly described 
in their ADR agreement. The agreement may provide for the use of any 
fair and reasonable ADR technique that is designed to achieve a prompt 
resolution of the matter.
    (f) Binding arbitration may be permitted on a case-by-case basis; 
and shall be subject to the provisions of 5 U.S.C. 575(a), (b), and 
(c), and applicable law. Arbitration that is binding on the parties, 
subject to the Administrator's right to approve or disapprove the 
arbitrator's decision, may also be permitted.
    (g) For protests, the ADR process shall be completed within twenty 
(20) business days from the filing of an executed ADR agreement with 
the ODRA unless the parties request, and are granted an extension of 
time from the ODRA.
    (h) For contract disputes, the ADR process shall be completed 
within forty (40) business days from the filing of an executed ADR 
agreement with the ODRA, unless the parties request, and are granted an 
extension of time from the ODRA.
    (i) The parties shall submit to the ODRA an agreed-upon protective 
order, if necessary, in accordance with the requirements of Sec. 17.9.


Sec. 17.35  Selection of neutrals for the alternative dispute 
resolution (ADR) process.

    (a) In connection with the ADR process, the parties may select a 
Compensated Neutral acceptable to both, or may request the ODRA to 
provide the services of a DRO or Neutral.
    (b) In cases where the parties select a Compensated Neutral who is 
not familiar with ODRA procedural matters, the parties or Compensated 
Neutral may request the ODRA for the services of a DRO to advise on 
such matters.
    (c) The ODRA may appoint a DRO to serve as the Neutral for small 
dollar value and/or simplified acquisitions, unless the parties agree 
otherwise.

Subpart E--Default Adjudicative Process


Sec. 17.37  Default adjudicative procedures for protests.

    (a) The Default Adjudicative Process for protests will commence on 
the latter of:
    (1) Submission of the Program Office response to the ODRA pursuant 
to Sec. 17.17(f) ten (10) business days following the status conference 
held pursuant to Sec. 17.17(c); or
    (2) The parties submission of joint written notification to the 
ODRA that the ADR process has not resolved all outstanding issues, or 
that the twenty (20) business-day period allotted for ADR for protests 
has either expired or will expire with no reasonable probability of the 
parties achieving a resolution.
    (b) The Director of the ODRA may select a DRO or a Special Master 
to conduct fact-finding proceedings and to provide findings and 
recommendations concerning some or all of the matters in controversy.
    (c) The DRO or Special Master may prepare procedural orders for the 
proceedings as deemed appropriate; and may require additional 
submissions from the parties.
    (d) The DRO or Special Master may convene the parties and/or their 
representatives, as needed, to pursue the Default Adjudicative Process.
    (e) If, in the sole judgment of the DRO or Special Master, the 
parties have presented written material sufficient to allow the protest 
to be decided on the record presented, the DRO or Special Master shall 
have the discretion to decide the protest on that basis.
    (f) Discovery may be permitted within the discretion of the DRO or 
Special Master. The DRO or Special Master shall manage the discovery 
process, including limiting its length and availability, and shall 
establish schedules and deadlines for discovery consistent with time 
frames established in this part.
    (g) The DRO or Special Master may permit or request oral 
presentations, and may limit the presentations to specific witnesses 
and/or issues.
    (h) The Director of the ODRA may review the status of any protest 
in the Default Adjudicative Process with the DRO or Special Master 
during the pendency of the process.
    (i) Within thirty (30) business days of the commencement of the 
Default Adjudicative Process, or at the discretion of the ODRA, the DRO 
or Special Master will submit findings and recommendations for the ODRA 
that shall contain the following:
    (1) Findings of fact;

[[Page 45388]]

    (2) Application of the principles of the AMS, and any applicable 
law or authority to the findings of fact;
    (3) A recommendation for a final FAA order; and
    (4) If appropriate, suggestions for future FAA action.
    (j) In the findings and recommendations, the DRO or Special Master 
shall state whether or not the Program Office actions in question had a 
rational basis, and whether or not the Program Office decision under 
question was arbitrary, capricious or an abuse of discretion. Findings 
of fact underlying the recommendations must be supported by substantial 
evidence.
    (k) The DRO or Special Master, where appropriate, has broad 
discretion to recommend a remedy that is consistent with Sec. 17.21.
    (l) A DRO or Special Master shall submit findings and 
recommendations only to the Associate Chief Counsel and Director of the 
ODRA. The findings and recommendations will be released to the parties, 
subject to any protective order, upon issuance of the Administrator's 
final order in the case.
    (m) The FAA Administrator or the Administrator's delegee issues the 
final agency decision.


Sec. 17.39  Default adjudicative process procedures for contract 
disputes.

    (a) The Default Adjudicative Process for contract disputes will 
commence on the latter of:
    (1) The parties' submission to the ODRA of a joint statement 
pursuant to Sec. 17.27 which indicates that ADR will not be utilized; 
or
    (2) The parties' submission to the ODRA of joint notification that 
the parties have not settled some or all of the dispute issues, and it 
is unlikely that they can do so within the time period allotted and/or 
any reasonable extension.
    (b) Within twenty (20) business days of the commencement of the 
Default Adjudicative Process, the Program Office shall prepare and 
submit to the ODRA, with a copy to the contractor, a chronologically 
arranged and indexed Dispute File, containing all documents which are 
relevant to the facts and issues in dispute. The contractor will be 
entitled to supplement such a Dispute File with additional documents.
    (c) The Director of the ODRA shall assign a DRO or a Special Master 
to conduct fact-finding proceedings and provide findings and 
recommendations concerning the issues in dispute.
    (d) The Director of the ODRA may delegate discretion to the DRO or 
Special Master to conduct a Status Conference within ten (10) business 
days of the commencement of the Default Adjudicative Process, and, 
within the scope of the delegation, either at such a conference, or at 
any time during the Default Adjudicative Process, to issue such orders 
or decisions as are considered necessary in the discretion of the DRO 
or Special Master to promote the efficient resolution of the contract 
dispute.
    (e) At any such Status Conference, or as necessary during the 
Default Adjudicative Process, the DRO or Special Master will:
    (1) Determine the minimum amount of discovery required to resolve 
the dispute;
    (2) Review the need for a protective order, and if one is needed, 
prepare a protective order pursuant to Sec. 17.9;
    (3) Determine whether any issue can be stricken; and
    (4) Prepare necessary procedural orders for the proceedings.
    (f) At a time or at times determined by the DRO or Special Master, 
and in advance of the decision of the case, the parties shall make 
final submissions to the ODRA and to the DRO or Special Master, which 
submissions shall include the following:
    (1) A joint statement of the issues;
    (2) A joint statement of undisputed facts related to each issue;
    (3) Separate statements of dispute facts related to each issue, 
with appropriate citations to documents in the Dispute File, to pages 
of transcripts of any hearing or deposition, or to any affidavit or 
exhibit which a party may wish to submit with its statement;
    (4) Separate legal analyses in support of the parties' respective 
positions on disputed issues.
    (g) Each party shall serve a copy of its final submission on the 
other party by means reasonably calculated so that such submission is 
received by the other party on the same date it is received by the 
ODRA.
    (h) The DRO or Special Master may decide the contract dispute on 
the basis of the submissions referenced in this section and the record, 
or may, in the DRO or Special Master's discretion, allow the parties to 
make additional presentations at a hearing, and/or in writing.
    (i) The DRO or Special Master shall prepare findings and 
recommendations within thirty (30) business days from receipt of the 
final submissions of the parties, unless that time is extended by the 
ODRA for good cause. The findings and recommendations shall contain 
findings of fact, application of the principles of the AMS and other 
law or authority applicable to the findings of fact, a recommendation 
for a final FAA order, and, if appropriate, suggestions for future FAA 
action.
    (j) As a part of the findings and recommendations, the DRO or 
Special Master shall review the disputed issue or issues in the context 
of the contract, any applicable law and the AMS. Any finding of fact 
set forth in the findings and recommendations must be supported by 
substantial evidence.
    (k) A DRO or Special Master's findings and recommendations shall be 
submitted only to the Director of the ODRA, and shall be released to 
the parties upon issuance of the final agency order for the contract 
dispute.
    (l) The FAA Administrator or the Administrator's delegee issues the 
final agency order on the contract dispute.
    (m) Attorneys' fees of a qualified, prevailing contractor are 
allowable to the extent permitted by the EAJA, 5 U.S.C. 504(a)(1). If 
required by contract or applicable law, the FAA will pay interest on 
the amount found due the contractor, if any.

Subpart F--Finality and Review


Sec. 17.41  Final orders.

    A final FAA order is issued by the FAA Administrator or by a 
delegee of the Administrator. The order would be issued only when the 
offeror, potential offeror, or contractor exhausts its administrative 
remedies under, this FAA dispute resolution process.


Sec. 17.43  Judicial review.

    (a) A protester or contractor may seek review of a final FAA order 
in the manner otherwise prescribed by law.
    (b) A copy of the petition for review shall be filed with the ODRA 
and the Program Office attorney on the date that the petition for 
review is filed with the appropriate circuit court of appeals.

Appendix A to Part 17--Alternative Dispute Resolution (ADR)

    A. The FAA dispute resolution procedures encourage the parties 
to protests and contract disputes to use ADR as the primary means to 
resolve protests and contract disputes, pursuant to the 
Administrative Dispute Resolution Act of 1996, Pub. L. 104-320, 5 
U.S.C. 570-579, and Department of Transportation and FAA policies to 
utilize ADR to the maximum extent practicable. Under the procedures 
presented in this part 17, the ODRA would encourage parties to 
consider ADR techniques such as case evaluation, mediation, or 
arbitration.
    B. ADR encompasses a number of processes and techniques for 
resolving protests or contract disputes. The most commonly used 
types include:
    (1) Mediation. The Neutral or Compensated Neutral ascertains the 
needs and interests of both parties and facilitates discussions 
between or among the parties and an

[[Page 45389]]

amicable resolution of their differences, seeking approaches to 
bridge the gaps between the parties' respective positions. The 
Neutral or Compensated Neutral can meet with the parties separately, 
conduct joint meetings with the parties' representatives, or employ 
both methods in appropriate cases.
    (2) Neutral Evaluation. At any stage during the ADR process, as 
the parties may agree, the Neutral or Compensated Neutral will 
provide a candid assessment and opinion of the strengths and 
weaknesses of the parties' positions as to the facts and law, so as 
to facilitate further discussion and resolution.
    (3) Minitrial. The minitrial resembles adjudication, but is less 
formal. It is used to provide an efficient process for airing and 
resolving more complex, fact-intensive disputes. The parties select 
principal representatives who should be senior officials of their 
respective organizations, having authority to negotiate a complete 
settlement. It is preferable that the principals be individuals who 
were not directly involved in the events leading to the dispute and 
who, thus, may be able to maintain a degree of impartiality during 
the proceeding. In order to maintain such impartiality, the 
principals typically serve as ``judges'' over the mini-trial 
proceeding together with the Neutral or Compensated Neutral. The 
proceeding is aimed at informing the principal representatives and 
the Neutral or Compensated Neutral of the underlying bases of the 
parties' positions. Each party is given the opportunity and 
responsibility to present its position. The presentations may be 
made through the parties' counsel and/or through some limited 
testimony of fact witnesses or experts, which may be subject to 
cross-examination or rebuttal. Normally, witnesses are not sworn in 
and transcripts are not made of the proceedings. Similarly, rules of 
evidence are not directly applicable, though it is recommended that 
the Neutral or Compensated Neutral be provided authority by the 
parties' ADR agreement to exclude evidence which is not relevant to 
the issues in dispute, for efficiency in the proceeding 
expeditiously. Frequently, minitrials are followed either by direct 
one-on-one negotiations by the parties' principals or by meetings 
between the Neutral/Compensated Neutral and the parties' principals, 
at which the Neutral/Compensated Neutral may offer his or her views 
on the parties' positions (i.e., Neutral Evaluation) and/or 
facilitate negotiations and ultimate resolution via Mediation.

    Issued in Washington, DC, on August 14, 1998.
James W. Whitlow,
Deputy Chief Counsel.
[FR Doc. 98-22386 Filed 8-24-98; 8:45 am]
BILLING CODE 4910-13-P