1 federal aviation administration resolving and avoiding procurement disputes at faa adr and...
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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
3Federal AviationAdministration
ODRA AUTHORITIES
• 49 U.S.C. § 40110 (d)
• 14 CFR Part 17 – Procedural Regulations
• Delegations by the FAA Administrator
• AMS Policy § 3.9.1
4Federal AviationAdministration
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
6Federal AviationAdministration
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
7Federal AviationAdministration
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
8Federal AviationAdministration
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”
9Federal AviationAdministration
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
10Federal AviationAdministration
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.
11Federal AviationAdministration
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
12Federal AviationAdministration
SETTLEMENT EXAMPLES
• Contract disputes:
– Negotiated dollar settlements, equitable adjustments
– Within scope contract modifications, time extensions
– Setoffs of claims and counterclaims
– Conversions of terminations
13Federal AviationAdministration
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
14Federal AviationAdministration
PRE-DISPUTE ADVANTAGES
• High resolution rate (97%)
• Economy of time and effort
• Maintains focus on project
• Preserves business relationships
15Federal AviationAdministration
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
17Federal AviationAdministration
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.
18Federal AviationAdministration
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
19Federal AviationAdministration
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.
20Federal AviationAdministration
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.
21Federal AviationAdministration
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
22Federal AviationAdministration
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
23Federal AviationAdministration
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
24Federal AviationAdministration
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.
25Federal AviationAdministration
NEW DEVELOPMENTS
26Federal AviationAdministration
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).
27Federal AviationAdministration
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: [email protected]
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
28Federal AviationAdministration
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.
29Federal AviationAdministration
BEST PRACTICES
30Federal AviationAdministration
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.
31Federal AviationAdministration
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.
32Federal AviationAdministration
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.
33Federal AviationAdministration
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
34Federal AviationAdministration
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
54Federal AviationAdministration
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.