[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Rules and Regulations]
[Pages 58594-58595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28957]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 6, 24, 33, and 52

[FAC 97-09; FAR Case 97-015; Item III]
RIN 9000-AH72


Federal Acquisition Regulation; Alternative Dispute Resolution--
1996

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

ACTION: Final rule.

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

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Jack O'Neill, Procurement Analyst, at (202) 501-
3856. Please cite FAC 97-09, FAR case 97-015.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends FAR Parts 6, 24, 33, and 52 to implement the 
Administrative Dispute Resolution Act of 1996 (Pub. L. 104-320) and 
Section 4321(a)(7) of the Clinger-Cohen Act of 1996 (Pub. L. 104-106). 
The rule makes clear the authority to contract with a neutral person as 
an exception to requirements for full and open competition, revises 
requirements for certification of a claim under the Administrative 
Dispute Resolution Act to conform to the requirements under the 
Contract Disputes Act, and specifies that certain dispute resolution 
communications are exempt from disclosure under the Freedom of 
Information Act.
    A proposed rule was published in the Federal Register at 62 FR 
55678, October 27, 1997. Comments were received from eight sources. All 
comments were considered in the development of the final rule.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule adds guidance 
pertaining to, but does not significantly alter the procedures for, 
alternative dispute resolution. Alternative dispute resolution 
procedures allow voluntary resolution of issues in controversy.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq. However, it does 
reduce the information collection requirements relating to 
Certification of Claims, OMB Control No. 9000-0035. Accordingly, a 
request to reduce the total burden hours has been submitted to OMB.

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

    Government procurement.

    Dated: October 22, 1998.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, 48 CFR Parts 6, 24, 33, and 52 are amended as set forth 
below:
    1. The authority citation for 48 CFR Parts 6, 24, 33, and 52 
continues to read as follows:

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

PART 6--COMPETITION REQUIREMENTS

    2. Section 6.302-3 is amended by revising paragraph (a)(2)(iii) to 
read as follows:


6.302-3  Industrial mobilization; engineering, developmental, or 
research capability; or expert services.

    (a) * * *
    (2) * * *
    (iii) To acquire the services of an expert or neutral person (see 
33.201) for any current or anticipated litigation or dispute.
* * * * *

PART 24--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

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


24.202  Prohibitions.

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

PART 33--PROTESTS, DISPUTES, AND APPEALS

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


33.201  Definitions.

* * * * *
    Alternative dispute resolution (ADR) means any type of procedure or 
combination of procedures voluntarily used to resolve issues in 
controversy. These procedures may include, but are not limited to, 
conciliation, facilitation, mediation, fact-finding, minitrials, 
arbitration, and use of ombudsmen.
* * * * *

[[Page 58595]]

33.204  [Amended]

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


33.207  Contractor certification.

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


33.214  Alternative dispute resolution (ADR).

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

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

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


52.233-1  Disputes.

* * * * *

Disputes (Dec 1998)

* * * * *
    (d)(2)(i) The Contractor shall provide the certification 
specified in paragraph (d)(2)(iii) of this clause when submitting 
any claim exceeding $100,000.
* * * * *
    (g) If the claim by the Contractor is submitted to the 
Contracting Officer or a claim by the Government is presented to the 
Contractor, the parties, by mutual consent, may agree to use 
alternative dispute resolution (ADR). If the Contractor refuses an 
offer for ADR, the Contractor shall inform the Contracting Officer, 
in writing, of the Contractor's specific reasons for rejecting the 
offer.
* * * * *
[FR Doc. 98-28957 Filed 10-29-98; 8:45 am]
BILLING CODE 6820-EP-U