Transcript National 8(a) Association Winter Conference February 11, 2014

National 8(a) Association Winter
Conference
February 11, 2014
Christine V. Williams
Richard W. Oehler
Perkins Coie LLP
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Perkins Coie
 With more than 900 lawyers in 19 offices across the
United States and Asia, Perkins Coie represents great
companies across a wide range of industries and
stages of growth-from start-ups to Fortune 50
corporations.
 Listed on Fortune magazine’s “100 Best Companies to
Work For” for eleven consecutive years (2003 – 2013)
 Ranked as a leading firm in Chambers USA.
 Law 360 Award for Top Government Contracting Firm.
 Extensive SBA Knowledge.
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Avoiding and Resolving Government
Contract Disputes with the Federal
Government
Christine Williams
Rick Oehler
February 11, 2014
Avoiding and Resolving Contract
Disputes with the Federal Government
 Having disputes with the Federal Government
can be a time consuming and costly process
 We will discuss concepts for avoiding and
resolving Government Contract disputes with the
Federal Government
 We will discuss some processes and also some
substantive tips
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Differences in Resolving Claims with
Federal Government
 A contractor's chances of resolving an issue or
dispute improves if he submits to the
Government a well-reasoned explanation of his
position and supporting documentation
 In our experience, this is true regardless of
where the parties are in the issue resolution
process
 So, typically, the sooner the better
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Differences in Resolving Claims with
Federal Government
 Early documentation of an issue helps ensure
that one identifies all relevant events and
compiles all relevant information
 Avoid potential lack of timely notice defense
asserted by the Government
 Differing Site Conditions – Prompt written notice to
the CO before the condition is disturbed
 Changes – Within 30 days of receipt of change order
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Issue Escalation Clause
 Prescribes a specific process (usually with
deadlines) for consideration of an issue at 2 or 3
levels within the contracting agency and the
contractor
 Limited use in Government Contracts, but
becoming fairly common in commercial contracts
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Issue Escalation Clause - Elements
 First Level – Involves personnel who are familiar
with the dispute
 Second Level – Involves personnel who are not
involved in the dispute
 Sometimes a third, senior level
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Issue Escalation Clause – Elements
 The time periods to convene the first level and
subsequent levels typically are tight (such as 10
days)
 Sometimes provides for an alternative dispute
resolution (ADR) mechanism if multi-level
consideration by the parties has not resolved the
dispute
 ADR = Non-judicial resolution (mediation or
arbitration)
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Issue Escalation Clause
 Easy to draft and use such a clause
 No need to involve a third party neutral under
this clause and can be scheduled when
convenient
 This process conceivably could be utilized
before a CDA claim or REA is submitted
 Can result in a quick resolution
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Partnering
 Focuses on the relationship between the parties
and the achievement of mutually beneficial
objectives
 Build an alliance, improve communications and
avoid disputes
 U.S. Army Corps of Engineers – leader in use of
partnering
 USACE includes Partnering clauses in some
solicitations
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Partnering
 Parties seek to accomplish their goals through
their own actions without the involvement of a
third party neutral
 Focus is more on business interests than
contract rights
 Initiated at the beginning of the contract
 Must have the buy-in of all stakeholders
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Partnering
 Usually a workshop immediately after award to
identify mutual objectives, roles and
responsibilities of the parties, methods to ensure
effective communications and establish an issue
resolution ladder
 Involves cost of facilitator and training
 Substantial involvement of management
including senior management
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Partnering – Workshop Agenda
 Workshop Agenda
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Establish expectations
Describe partnering
Importance of communication and cooperation
Mutual vision
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Partnering – Workshop Agenda
 Workshop Agenda (cont)
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Potential problems
Common Goals
Plan to sustain the relationship
Draft and sign Charter
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Resolving a Dispute After the CO's Final
Decision
 This focuses on the alternative dispute
resolution (usually mediation) that may be
available in the forums where contractors appeal
and litigate an adverse Contracting Officer's
Final Decision
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Resolving a Dispute After the CO's
Final Decision
 Armed Services Board of Contract Appeals
(ASBCA) – solid program
 Civilian Board of Contract Appeals (BCA)
 Court of Federal Claims – Appendix H
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Alternative Dispute Resolution (ADR)
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Less common in Government Contract
disputes, but we frequently try to convince the
Government to use ADR
It can produce a result in less time than
traditional litigation
It also may result in a business solution
There may be something of value (other than
money) that the Government can provide and
the contractor values
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ASBCA ADR
 Three ADR techniques generally used at
ASBCA
 Settlement judge (non-binding mediation)
 Mini-trial (non-binding)
 Summary trial with binding decision
 ASBCA allows the parties to use any ADR
method, or combination of methods, regardless
of the amount in dispute
 Mutual agreement and Board concurrence
required to use ADR
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ASBCA ADR
 Settlement Judge
 ASBCA judge not assigned to the appeal
 Procedures can be altered based on parties'
agreement
 Non-binding mediation
 Mediation Statement
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ASBCA ADR
 Mini-trial
 Each party presents an abbreviated version of its
position to principals with authority and to a Boardappointed neutral advisor
 Upon conclusion of presentations, settlement
discussions are conducted
 Neutral advisor's recommendations are not binding
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ASBCA ADR
 Summary Trial with Binding Decision
 Expedited appeal hearing
 Trial informally before a judge
 A summary bench decision at the conclusion of the
hearing or a summary written decision issued NLT 10
days after conclusion of trial or after receipt of trial
transcript
 The decision is final and nonappealable
 Decision has no precedential value
 Pretrial, trial and post-trial procedures generally
modified or eliminated to expedite resolution of the
appeal
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ASBCA ADR Procedure
 If non-binding ADR is unsuccessful, the appeal
will be restored to the docket
 ASBCA judge who participated in the nonbinding ADR will not:
 Participate in the restored appeal, unless explicitly
requested by both parties and approved by the
ASBCA Chair
 Discuss the merits or substantive matters with other
ASBCA judges
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CFC ADR
 ADR Automatic Referral Program
 All cases, except bid protests, assigned to certain
judges shall automatically be referred to an ADR
judge for ADR consideration
 There is then a early meeting with the ADR judge to
understand the differences between the parties and
the prospects for settlement
 After the initial meeting with the ADR judge, the
parties indicate whether they agree to go forward with
ADR
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ADR Prior to Submitting a Claim
 ADR may be employed to resolve a Request for
Equitable Adjustment
 Use of ADR must be voluntary by both parties
 Remain aware of any time bars for submitting
your claim
 Even after a claim is submitted, the parties can
agree to postpone a final decision and possible
appeal to the ASBCA pending ADR proceedings
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Benefits of ADR
 Parties save in terms of cost
 Parties save in terms of time
 A formal ASBCA appeal (including pleadings,
discovery, trial, post-trial briefing and time for the
judge to write the decision) can take two to three
years
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When ADR Makes Sense
 Routine matters are well suited for ADR
 For matters that are more significant ("bet the
company" disputes), litigation may be a more
appropriate approach
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Lessons Learned
 Keep the process as simple as possible
 Allow for sufficient, but not excessive,
information exchange
 Ensure that business representatives and
financial decision-makers are available and
willing to commit the necessary time
 Identify funding sources for an anticipated
settlement prior to beginning ADR
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Funding An ASCBA Settlement
 Funds allocated to the contract
 Judgment Fund – for "judgments"
 Binding ADR decisions for BCA appeals qualify
as judgments
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Funding an ASBCA Settlement
 For non-binding ADR, the parties may agree to a
"stipulated judgment" and request the board to
treat it as a consent judgment
 Also payable from the Judgment Fund
 Parties must reach agreement on how to treat
CDA interest for settlements paid from the
Judgment Fund
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Combination ADRs
 "Med-Arb" proceedings have become more
common
 Process begins with a full mediation
 Parties agree that if mediation is unsuccessful, it will
be followed by a summary trial with a binding decision
 "Last Chance" arbitration is where, prior to a
judge rendering a decision in a summary trial
proceeding, the parties attempt a mediated
settlement (usually just a few hours). If
unsuccessful, the judge issues a decision.
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Confidentiality
 Written material prepared specifically for use in
ADR, oral presentations made in ADR, and all
discussions in connection with ADR proceedings
are confidential
 The underlying facts and information used
during ADR are not confidential
 The parties can agree to allow the admission of
ADR materials and discussions as evidence in
future proceedings
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Questions or comments?
Christine Williams
Perkins Coie LLP
1029 West Third Ave., Suite 300
Anchorage, AK 99501
(907) 263-6931
[email protected]
Rick Oehler
Perkins Coie LLP
1201 Third Ave., Suite 4800
Seattle, WA 98101
(206) 359-8419
[email protected]
28943111
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