National 8(a) Association Winter Conference February 11, 2014 - PowerPoint PPT Presentation


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


Avoiding and Resolving Government Contract Disputes with the Federal Government ... workshop immediately after award to ... program Civilian Board ... – PowerPoint PPT presentation

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Title: 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

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 magazines 100 Best Companies
    to Work For for eleven consecutive years (2003
  • Ranked as a leading firm in Chambers USA.
  • Law 360 Award for Top Government Contracting
  • Extensive SBA Knowledge.

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

Differences in Resolving Claims with Federal
  • 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
  • So, typically, the sooner the better

Differences in Resolving Claims with Federal
  • 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

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
  • Limited use in Government Contracts, but becoming
    fairly common in commercial contracts

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

Issue Escalation Clause Elements
  • The time periods to convene the first level and
    subsequent levels typically are tight (such as 10
  • Sometimes provides for an alternative dispute
    resolution (ADR) mechanism if multi-level
    consideration by the parties has not resolved the
  • ADR Non-judicial resolution (mediation or

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

  • Focuses on the relationship between the parties
    and the achievement of mutually beneficial
  • Build an alliance, improve communications and
    avoid disputes
  • U.S. Army Corps of Engineers leader in use of
  • USACE includes Partnering clauses in some

  • 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
  • Initiated at the beginning of the contract
  • Must have the buy-in of all stakeholders

  • 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

Partnering Workshop Agenda
  • Workshop Agenda
  • Establish expectations
  • Describe partnering
  • Importance of communication and cooperation
  • Mutual vision

Partnering Workshop Agenda
  • Workshop Agenda (cont)
  • Potential problems
  • Common Goals
  • Plan to sustain the relationship
  • Draft and sign Charter

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

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

Alternative Dispute Resolution (ADR)
  • 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

  • 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

  • Settlement Judge
  • ASBCA judge not assigned to the appeal
  • Procedures can be altered based on parties'
  • Non-binding mediation
  • Mediation Statement

  • Mini-trial
  • Each party presents an abbreviated version of its
    position to principals with authority and to a
    Board-appointed neutral advisor
  • Upon conclusion of presentations, settlement
    discussions are conducted
  • Neutral advisor's recommendations are not binding

  • 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

ASBCA ADR Procedure
  • If non-binding ADR is unsuccessful, the appeal
    will be restored to the docket
  • ASBCA judge who participated in the non-binding
    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

  • 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

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
  • Even after a claim is submitted, the parties can
    agree to postpone a final decision and possible
    appeal to the ASBCA pending ADR proceedings

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

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

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

Funding An ASCBA Settlement
  • Funds allocated to the contract
  • Judgment Fund for "judgments"
  • Binding ADR decisions for BCA appeals qualify as

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

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.

  • 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

Questions or comments?
  • Christine Williams
  • Perkins Coie LLP 1029 West Third Ave., Suite
    300 Anchorage, AK 99501 (907) 263-6931 CWilliams_at_
  • Rick Oehler Perkins Coie LLP 1201 Third Ave.,
    Suite 4800
  • Seattle, WA 98101 (206) 359-8419 ROehler_at_perkinsco