[Federal Register Volume 66, Number 96 (Thursday, May 17, 2001)]
[Rules and Regulations]
[Page 27474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12450]

[[Page 27474]]



Defense Logistics Agency

48 CFR Parts 5433 and 5452

DLA Acquisition Directive: Alternative Dispute Resolution

AGENCY: Defense Logistics Agency (DLA), Defense.

ACTION: Final rule.


SUMMARY: This final rule adds a new provision to DLA solicitations 
concerning the use of alternative dispute resolution (ADR). The purpose 
is to establish ADR as the initial dispute resolution method, except 
for certain circumstances, to increase cooperative problem solving and 
reduce litigation. The provision is optional for offerors; however, if 
they agree to the provision, both the contractor and DLA will be 
committed to use of ADR except in limited circumstances. Increased use 
of ADR is consistent with the Administrative Dispute Resolution Act, 
the Federal Acquisition Regulation (FAR), and Departmental policy.

EFFECTIVE DATE: May 17, 2001.

FOR FURTHER INFORMATION CONTACT: Ms. Mary Massaro, Procurement Analyst, 
Defense Logistics Agency, DLA/J-336, at (703) 767-1366, or via email to 
[email protected].


A. Background

    DLA is pursuing several initiatives to increase the use of ADR in 
resolving contract disputes. One way to increase use of ADR is for the 
parties to agree, as part of the contract, that they will use ADR 
before initiating litigation. This type of approach is used by DoD in 
partnering agreements and Agency-contractor ADR pacts.
    The provision provides a vehicle for both parties to agree to use 
ADR. Offerors can opt out of the provision by checking the box if they 
do not want it in their contract in the event of award. Offerors can 
also propose alternate wording to tailor the language while retaining 
the concept.
    A proposed rule was published in the Federal Register on May 16, 
2000. Sixteen commenters submitted comments. Changes were made to the 
proposed rule to clarify or simplify the language, and to reference 
existing FAR and DLA requirements. The language of the final rule, as 
revised, appears below.

B. Regulatory Flexibility Act

    This final rule does 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. An initial regulatory 
flexibility analysis was not performed.

C. Paperwork Reduction Act

    This rule does not impose any new reporting or recordkeeping 
requirements that require the approval of OMB under 44 U.S.C. 3501 et 

List of Subjects in 48 CFR Parts 5433 and 5452

    Government procurement.

    For the reasons set forth above, the Defense Logistics Agency 
amends 48 CFR Chapter 54 as follows:
    1. Part 5433 is added to read as follows:


    Authority: 10 U.S.C. Chapter 137.

5433.214.  Alternative Dispute Resolution (ADR).

    The contracting officer shall insert the provision in 5452.233 in 
all solicitations unless the conditions at FAR 33.203(b) apply.


    2. The authority citation for Part 5452 continues to read as 

    Authority: 10 U.S.C. Chapter 137.

    3. Part 5452 is amended by adding solicitation provision 5452.233-
9001 to read as follows:

5452.233-9001  Disputes: Agreement to Use Alternative Dispute 
Resolution (ADR).

    As prescribed in 5433.214, insert the following provision:

Disputes: Agreement to Use Alternative Dispute Resolution (ADR) (Apr 

    (a) The parties agree to negotiate with each other to try to 
resolve any disputes that may arise. If unassisted negotiations are 
unsuccessful, the parties will use alternative dispute resolution 
(ADR) techniques to try to resolve the dispute. Litigation will only 
be considered as a last resort when ADR is unsuccessful or has been 
documented by the party rejecting ADR to be inappropriate for 
resolving the dispute.
    (b) Before either party determines ADR inappropriate, that party 
must discuss the use of ADR with the other party. The documentation 
rejecting ADR must be signed by an official authorized to bind the 
contractor (see FAR 52.233-1), or, for the Agency, by the 
contracting officer, and approved at a level above the contracting 
officer after consultation with the ADR Specialist and with legal 
counsel. Contractor personnel are also encouraged to include the ADR 
Specialist in their discussions with the contracting officer before 
determining ADR to be inappropriate.
    (c) If you wish to opt out of this clause, check here [ ]. 
Alternate wording may be negotiated with the contracting officer.

William J. Kenny,
Executive Director, Logistics Policy and Acquisition Management.
[FR Doc. 01-12450 Filed 5-16-01; 8:45 am]