33.214
Alternative dispute resolution (ADR)
ADR provides a voluntary, confidential, and potentially faster way to resolve contract disputes, but both parties must agree and follow specific procedural and documentation requirements.
Overview
FAR 33.214 establishes the framework for using Alternative Dispute Resolution (ADR) in government contracting disputes. ADR aims to resolve issues more quickly and cost-effectively than formal litigation. The section outlines the essential elements of ADR, including voluntary participation, mutual agreement on procedures, and involvement of authorized officials. It also details requirements for written explanations when ADR is rejected, the timing and scope of ADR use, confidentiality protections, and the use of neutral facilitators. Special rules apply to arbitration, including written agreements and agency-specific guidelines for binding arbitration.
Key Rules
- Essential Elements of ADR
- ADR requires a real dispute, voluntary participation, mutual agreement on procedures, and authorized decision-makers from both parties.
- Rejection of ADR
- If either party rejects ADR, they must provide a written explanation with specific reasons.
- Timing and Scope
- ADR can be used at any stage where the contracting officer has authority, including after a final decision, without affecting appeal timelines.
- Neutral Facilitators
- A neutral third party may be used to help resolve disputes.
- Confidentiality
- ADR proceedings must remain confidential per 5 U.S.C. 574.
- Arbitration Restrictions
- Arbitration cannot be required in solicitations unless mandated by law, and any agreement to arbitrate must be in writing with specified limits.
- Binding Arbitration
- Binding arbitration is only allowed per agency guidelines, which must outline its appropriate use and authority.
Responsibilities
- Contracting Officers: Must consider ADR, provide written reasons if rejecting ADR, ensure confidentiality, and follow agency guidelines for arbitration.
- Contractors: Must provide written reasons if rejecting ADR, participate voluntarily, and comply with confidentiality and procedural agreements.
- Agencies: Must establish guidelines for binding arbitration and ensure ADR confidentiality.
Practical Implications
- ADR offers a faster, less expensive alternative to litigation for resolving contract disputes.
- Both parties must agree to participate and follow established procedures.
- Written documentation is required for rejecting ADR, and confidentiality is strictly enforced.
- Contractors should be aware of agency-specific arbitration rules and ensure all agreements are properly documented.