DATE: May 16, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Logistics Agency Acquisition Directive (DLAD); Alternative Dispute Resolution (ADR)

SOURCE: Federal Register, May 16, 2000, Vol. 65, No. 95, page 31131

AGENCIES: Defense Logistics Agency (DLA)

ACTION: Proposed Rule

SYNOPSIS: DLA is proposing to add to the DLAD a solicitation provision which would require the use of alternative dispute resolution (ADR) before resorting to litigation if negotiations are unable to resolve a dispute. The provision would be optional for offerors, but would be mandatory on DLA if the contractor accepts the provision.

EDITOR'S NOTE: The DLAD is Chapter 54 of Title 48 of the Code of Federal Regulations. It is available on the Internet at http://www.procregs.hq.dla.mil/default.htm.

DATES: Submit comments on or before June 15, 2000.

FOR FURTHER INFORMATION CONTACT: Send written comments to Ms. Mary Massaro, Defense Logistics Agency, DLSC-PPP, Headquarters Center, 8725 John J. Kingman Road, Suite 3147, Fort Belvoir, VA 22060-6221; e-mail: mary_massaro@hq.dla.mil.

SUPPLEMENTAL INFORMATION: DLA is seeking ways to increase the use of ADR in resolving contract disputes. One of the ways is the proposal to add DLAD 5452.233-9001, Disputes: Agreement to Use Alternative Dispute Resolution, which the proposed prescription at DLAD 5433.214, Contract Clause: Agreement to Use Alternative Dispute Resolution, would require to be included in all DLA solicitations "unless the conditions at FAR [Federal Acquisition Regulation] 33.203(b) apply" (that is, the contract is with a foreign government or an international organization). Proposed DLAD 5452.233-9001 would state that "the parties agree to use their best efforts to resolve any disputes that may arise without litigation. If unassisted negotiations are unsuccessful, the parties will use ADR techniques in an attempt 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. If the ADR is not successful, the parties retain their existing rights." However, an offeror would be able to check a box "if you wish to opt out of this clause." The provision would also permit "alternate wording" to be negotiated with the DLA contracting officer.

EDITOR'S NOTE: In the introductory material to this proposed rule, DLA states, "Despite the fact that wording can be individually negotiated, DLA is seeking public comments to arrive at optimal language and to partner with industry in developing this provision."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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