1 Federal Aviation Administration Resolving and Avoiding Procurement Disputes at FAA ADR and...

1Federal AviationAdministration

Resolving and Avoiding Procurement Disputes at FAA

ADR and Adjudication at the Office of Dispute Resolution for Acquisition

Presented by:ODRA Administrative Judges

September 2015

2Federal AviationAdministration

TOPICS• The Office of Dispute Resolution for

Acquisition– Authorities– Operations

• The Dispute Resolution Process– Alternative Dispute Resolution (ADR)– Pre disputes

• ODRA Adjudication Process• New Developments• Best Practices and Discussion Questions

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ODRA AUTHORITIES

• 49 U.S.C. § 40110 (d)

• 14 CFR Part 17 – Procedural Regulations

• Delegations by the FAA Administrator

• AMS Policy § 3.9.1

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ODRA OPERATIONS

• Staffed by a Director and three Dispute Resolution Officers (DROs), all of whom have been designated as Administrative Judges by the FAA Administrator

• Impartial and independent of program offices and their counsel

• Mandated to use ADR:

“To the maximum extent practicable”

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ODRA DISPUTE RESOLUTION PROCESSES

3 COMPONENT PROCESSES

• ADR AS PRIMARY METHOD

• PRE-DISPUTE PROCESS

• STREAMLINED ADJUDICATION

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ODRA ADR PROCESS FOR BID PROTESTS AND CONTRACT DISPUTES

• ADR emphasized & explored in all cases– ODRA initiated – Early intervention– Entirely voluntary– Parties retain choice on ADR & neutral

• Forms of ADR employed– Neutral evaluation– Facilitative mediation– Binding arbitration

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ODRA ADR STATISTICS

• Cases completed from 6/96 through 12/14– 547 Protests– 213 Contract Disputes– 125 Pre-disputes

• Settled in ADR– 66% of all Protests – 90% of all Contract Disputes – 97% of all Pre-disputes

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ADR TECHNIQUES

• Mediation– Determine needs and interests of the parties– Facilitate discussion– Attempt to bridge gaps– Joint fact finding and problem solving

• Early Neutral Evaluation– Candid assessment of strengths and weaknesses– Explore litigation risks– Provide “second opinion”

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ADR AGREEMENTS

• Confidentiality of ADR Communications– Firewalled from adjudication– Neutral does not decide the case– ADR communications not part of Administrative Record

• Parties jointly craft terms of ADR Agreement• Tailor agreement and process to meet needs

of the parties• Establish structure and set a positive tone

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ADR SETTLEMENTS

• Executed ADR Agreement is a public document

• Upon execution of the settlement agreement, pending matter dismissed or placed on an inactive status pending fulfillment of the settlement terms

• ODRA limited review of challenges to ADR settlements– determine whether the CO had a reasonable perception of litigative risk.

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SETTLEMENT EXAMPLES• Bid protests:

– Protester Withdrawals (approximately 54% of settlements)• Based on early neutral evaluations• After enhanced debriefings• Capability demonstrations

– Agency voluntary action (approximately 46% of settlements)• Re-compete, immediately or after base year• Permit revised offers or revise specifications• Re-evaluate in whole or in part• Compete in lieu of sole source• Address past performance issues• Payment of B&P costs

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SETTLEMENT EXAMPLES

• Contract disputes:

– Negotiated dollar settlements, equitable adjustments

– Within scope contract modifications, time extensions

– Setoffs of claims and counterclaims

– Conversions of terminations

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ODRA PRE-DISPUTE PROCESS – A CONTRACT MANAGEMENT TOOL

• Initiated by FAA or private party

• Only by agreement of both parties

• Completely non-binding

• Also can be used for Grants, Other Transactions, and non-AMS Contract Disputes

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PRE-DISPUTE ADVANTAGES

• High resolution rate (97%)

• Economy of time and effort

• Maintains focus on project

• Preserves business relationships

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ODRAADJUDICATION PROCEDURES

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INTRODUCTION TO THEODRA ADJUDICATION PROCESS

• Begins with written notice to the ODRA Director by a party or the ADR Neutral that adjudication is necessary to achieve a complete resolution

• The ODRA Director appoints an Administrative Judge for

adjudication

• A full administrative record is developed in accordance with the Administrative Procedure Act

• Administrative Judge prepares findings of fact and a recommendation for a Final Order

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INTRODUCTION TO THE ODRA ADJUDICATION PROCESS (cont.)

• Adjudication of a bid protest or contract dispute ends with an Administrator’s Final Order adopting Findings and Recommendations of the ODRA.

• The Final Order is signed by the Administrator, or the ODRA Director by Delegation.

• The Director of the ODRA has been delegated Final Order authority for:– protests where the contract is valued at $20 million.– contract Disputes where the dispute is valued at $10 million.

• Final Orders may be appealed by a private party to the US Court of Appeals for the DC Circuit or the circuit wherein the party has its principal place of business.

• To date, no Administrator’s Final Orders have been overturned on appeal.

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BID PROTESTADJUDICATION PROCEDURES

• Filing deadlines (strictly enforced)– Protests against solicitation or amendment must be filed prior to bid opening or receipt of

proposals.– Other protests must be filed:

• Not later than seven (7) business days after the date protester knew or should have known of the grounds for the protest, or;

• If the protester has requested a post-award debriefing, not later than five (5) business days after the debriefing.

– A copy of the protest must be served on the CO on the same day as it is filed with the ODRA.

• Notification requirements– Upon receipt of the protest the CO notifies the awardee of the protest filing.– There is no requirement to notify other offerors that a protest has been filed.

• ODRA Initial Status Conference – Scheduled within 5 business days of the ODRA’s receipt of the protest– Establish initial schedule and address preliminary issues– Opportunity to exchange information and encourage use of ADR

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SUSPENSION REQUESTS

• AMS has a presumption against suspension• Protester must show compelling reasons for a

suspension.• FAA Response is usually due no later than the date

of the scheduling conference.• Protester can file reply to FAA response.• ODRA decides suspension as a preliminary matter.• Contracting officials assume the risk of continuing

contract performance if no suspension ordered.

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PROTECTIVE ORDERS

• Frequently requested in the protest filing.• Limits access to protected materials to

counsel or expert admitted under protective order.

• Documents subject to protective order must be clearly marked.

• Agency personnel have access but must safeguard proprietary or competition-sensitive information.

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THE ADMINISTRATIVE RECORD IN PROTESTS

• FAA Product Team Response – Due date established upon notice that adjudication is necessary. – Typically filed within 10 business days, or as scheduled by the ODRA.– Contains statement of position and all relevant documents,

chronologically arranged, indexed, and individually tabbed.– CO certifies completeness and authenticity of the documents.

• Protester / Intervener Comments – Filed within five (5) business days of the party’s receipt of the Product

Team response, or as scheduled by ODRA.

• Findings and Recommendation and a proposed Final Order prepared for the Administrator or delegee

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CONTRACT DISPUTES INITIAL PROCEDURES

• Either the contractor or the CO may file a contract dispute– File within 2 years of accrual; or– Before the contractor’s acceptance of final payment, if earlier– If fraud or latent defect claim, must file within 2 years of date FAA knew or

should have known– If warranty claim, must file within time limitation in contract’s warranty

provision• Informal Communications Period

– 20 business day informal resolution period after initial filing– Parties may conduct direct settlement negotiations or explore ADR

options with assigned neutral• Upon notification that ADR will not be used or is not likely to resolve all

the issues in controversy, an Administrative Judge is assigned to schedule further proceedings

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THE ADMINISTRATIVE RECORD FOR DISPUTES

• Dispute File is submitted by the opposing party– Contains substantive response to the claim– Includes chronologically arranged and indexed exhibits

of relevant documents– Filed within twenty (20) business days of the

commencement of the adjudication, or as scheduled by the ODRA

• Dispute File Supplementation– Submitted by the party that filed the dispute– Filed as scheduled by the ODRA

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THE ADMINISTRATIVE RECORD (cont.)

• Discovery is not part of the record unless admitted:– Exchanges of documents– Possible depositions

• Hearing (if required by the Administrative Judge) • Final submissions containing legal analysis with citation

to documents in the Dispute File and in the Administrative Record.

• Findings and Recommendation and a proposed Final Order is prepared for the Administrator or delegee.

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NEW DEVELOPMENTS

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SMALL BUSINESS SIZE CHALLENGE

• FAA exempted from Small Business Act and DoL jurisdiction.

• Standing Order 2013-2 (Small Business Size & Eligibility Protests).

• Addresses protests challenging the size of an awardee under a small business set aside solicitation, or whether an awardee satisfies the ownership requirements for a set-aside for socially and economically disadvantaged business (SEDB).

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ELECTRONIC FILING

Standing Order 2013-3 (Electronic Filing Program)

Establishes a convenient, optional method for parties to file initial pleadings and requests for ADR assistance

Initial filings may be submitted via email: 9-AGC-ODRA@faa.gov

In designated cases, parties also have the option to use the FAA’s KSN for electronic filings after the initial filing or for continued filing via email.

Use of the KSN allows for simultaneous filing and service of documents in both ADR and adjudicative processes

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PRE-DISPUTES UNDER SUBPART G • Non-binding, voluntary and confidential dispute

resolution services.• May be used in non-AMS disputes

– Grants– Cooperative Agreements– Other transactions

• Requested by any party, in writing, pursuant to 14 CFR §17.59.

• ODRA contacts the opposing party to offer its services. – If the opposing party agrees, the ODRA will provide Pre-dispute

services. If the opposing party does not agree, the ODRA Pre-dispute file will be closed.

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BEST PRACTICES

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BEST PRACTICES

CONSULT WITH AN ATTORNEY AND DETERMINE:

• Whether the filing involves protected information.

• Whether the filing requests a suspension.• What are the factual and legal issues raised.• What and where the relevant records are

and how are they stored.• Who has first-hand knowledge of the facts.

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BEST PRACTICES

EMBRACE THE ADR OPPORTUNITY• Engage in joint problem solving and

information exchange.• Use the opportunity to explain and clarify.• Narrow and define issues.• Explore and broaden settlement options.• Streamline any necessary adjudication.• Identify and explore ways to accommodate

common interests of the parties.

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ADDITIONAL PRACTICE TIPS• Attempt to resolve issues with the opposing party

before ODRA involvement, if possible.

• Be aware of and comply with the ODRA procedural rules.

• Take advantage of the pre-dispute process where appropriate.

• Recognize differences between the adjudication and ADR processes.

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ODRA WEBSITEwww.faa.gov/go/odra

• Guide to ODRA processes and procedural rules

• Research ODRA Case law

• Sample forms, orders & agreements

• Hyperlinks to other resources

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QUESTIONS

AND

ANSWERS(ANSWER KEY ON LAST PAGE)

35Federal AviationAdministration

An ODRA Finding and Recommendation adopted by the FAA Administrator in a Final Order has the force and effect of law and may serve as precedent in future ODRA matters.

True or False?

Click to See Answer

36Federal AviationAdministration

Upon receipt of a protest of a contract award, the CO must notify:

a. All offerors who responded to the SIR

b. Only the awardee

c. Only the ODRA

d. The procurement community by posting on https://faaco.faa.gov

Click to See Answer

37Federal AviationAdministration

A Contracting Officer’s Final Decision is a pre-requisite to filing a contract dispute with the ODRA.

True or False?

Click to See Answer

38Federal AviationAdministration

Size and eligibility protests of AMS procurements are also filed with the Small Business Administration Office of Hearings and Appeals.

True or False?

Click to See Answer

39Federal AviationAdministration

In a protest of an awardee’s size or eligibility, the ODRA may request that the contracting officer render a determination as to whether the awardee meets the standard stated in the SIR. This is because:a. As a principle, the ODRA does not substitute its

judgment for the properly exercised judgment of authorized procurement officials.

b. The contracting officer is required to review and verify financial documentation in support of the business declaration prior to making the award.

c. Financial circumstances may change from those existing as of the date of self certification.

Click to See Answer

40Federal AviationAdministration

Provided that the business declaration certifying the offeror’s size and eligibility is signed and completed, the Contracting Officer prior to a protest may rely solely on the information presented therein.

True or False?

Click to See Answer

41Federal AviationAdministration

In a protest, the ADR process must include any intervenor/awardee who requests to participate.

True or False?

Click to See Answer

42Federal AviationAdministration

An email sent by a contracting official to the FAA attorney, and copied to the ADR Neutral is considered an improper ex parte communication.

True or False?

Click to See Answer

43Federal AviationAdministration

What is the purpose of requiring documents submitted for the record to be certified as authentic and complete?

a. To ensure their reliability

b. To determine whether they are probative

c. To avoid the need for a hearing

d. To establish their relevance and materiality

e. All of the above

Click to See Answer

44Federal AviationAdministration

The burden of proof in ODRA cases is:

a. Reasonable suspicion

b. Beyond a reasonable doubt

c. Preponderance of the evidence

d. Probable cause

Click to See Answer

45Federal AviationAdministration

Which of the following is not a fundamental AMS principle?

a. Contracting officials exercise sound business judgment and flexibility at the lowest levels while maintaining fairness and integrity.

b. The AMS provides an internal process for deciding bid protests and disputes in a timely, cost-effective and flexible manner

c. Because of the broad authority given to contracting officials under the AMS, routine business decisions do not require supporting documentation.

d. While competition is the preferred method of contracting, single-source contracting is permissible when necessary to fulfill the FAA’s mission

Click to See Answer

46Federal AviationAdministration

A contracting action may be found to lack a rational basis on the basis of inconsistency because it:

a. Conflicts with an express SIR provision or evaluation plan

b. Conflicts with information readily available in procurement record

c. Interprets a latent ambiguity in the SIR in the FAA’s favor

d. Causes unequal unfair treatment of offerors

e. Conflicts with a mandatory AMS requirement

f. All of the above

Click to See Answer

47Federal AviationAdministration

A contracting action may be found to lack a rational basis for lack of support if:

a. It relies on erroneous information

b. It is based on evidence not in the record

c. It is justified with explanations made after the fact that are not corroborated by the contemporaneous record

d. All of the above

Click to See Answer

48Federal AviationAdministration

The purpose of “communications” is to:

a. identify areas of proposal weakness that need improvement to be competitive

b. benefit the offeror and increase its chances of receiving an award

c. improve the FAA’s understanding of the offer and document the offeror’s response.

d. None of the above

Click to See Answer

49Federal AviationAdministration

It is improper to use FAR language to modify mandatory AMS clauses to allow for the use of GAO precedent.

True or False?

Click to See Answer

50Federal AviationAdministration

Offeror fails to sign the business declaration and the SIR language states:

An offeror’s failure to comply with the SIR instructions and provide complete information may result in disqualification from award.

The CO does not have discretion to allow the offeror to sign the declaration and award it the contract.

True or False?

Click to See Answer

51Federal AviationAdministration

Offeror fails to sign the business declaration and the SIR language states:

An offeror’s failure to comply with the SIR instructions and provide complete information shall result in disqualification from award.

The CO does not have discretion to allow the offeror to sign the declaration and award it the contract.

True or False?

Click to See Answer

52Federal AviationAdministration

The ODRA Pre-Dispute process can be used for:

a. Grants

b. Cooperative Agreement

c. OTA’s

d. FAA purchases from other Federal Agencies

e. All of the above

Click to See Answer

53Federal AviationAdministration

Appeals of Final Orders adopting Findings and Recommendations of the ODRA are filed with:

a. The General Accountability Office

b. The Civilian Board of Contract Appeals

c. The Court of Appeals for the DC Circuit

d. The Federal Circuit Court of Appeals

e. The Head of the Line of Business

f. The FAA Administrator

Click to See Answer

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ANSWER KEY

Slide Answer

35 True

36 b.

37 False

38 False

39 a.

40 True

41 False

42 False

43 e.

44 c.

Slide Answer

45 c.

46 f.

47 d.

48 c.

49 True

50 False

51 True

52 e.

53 c.