I'm very pleased to be with you today, and to join all of you in honoring those who are responsible for outstanding uses of Alternative Dispute Resolution by federal agencies and private companies in acquisition matters.
As you know, President Bush is not a lawyer but instead received an MBA, and spent considerable time as a business executive before entering politics. He therefore has a particular appreciation for results-oriented programs and under his leadership the Office of Management and Budget has made effective management one of its main initiatives. It is therefore particularly fitting that the Office of Federal Procurement Policy today recognizes those who spend their energies attempting to resolve federal acquisition disputes more expeditiously, more harmoniously, and more efficiently than traditional litigation might ordinarily permit. By honoring these efforts, we both reward valued public servants and their private counterparts and hope to spur others on to pursue similarly noteworthy programs.
This is the second time that the Office of Federal Procurement Policy has given these awards. At the time the first ADR in Procurement Awards were announced in April 2002, I was serving as Chief Counsel of the FAA, and had the pleasure of attending the ceremony in this room at which the FAA was recognized for the work of its Office of Dispute Resolution for Acquisition. The ODRA, as it is known, was under my supervision as Chief Counsel, so I can fairly be said to be an interested party in touting its success. But I can assure you that the ODRA was fully functional - and fully successful - long before I arrived on the scene.
ODRA was formed in 1996, and is charged with responsibility for resolving all protests and contract disputes arising out of procurements and contracts entered into under the FAA's Acquisition Management System. The ODRA dispute resolution process recognizes that it is in the interest of the FAA and the protester or contractor to work together to resolve acquisition related controversies in a prompt, amicable fashion, utilizing ADR techniques to the maximum extent practicable. As OFPP recognized at its last award ceremony, and as I can tell you from personal experience, this effort has resulted in concrete dividends for the agency and the contractor community.
Long before I arrived at the FAA, I was exposed in my professional activities to a variety of dispute resolution mechanisms. For most of my career, I was a litigator in private practice right here in Washington, D.C. For those of you who've lived in that world - whether as lawyers or as parties - you know that nearly all commercial litigation today is resolved through some mechanism that is an "alternative" to the formal and adversarial "dispute resolution" provided in courtrooms. The most common alternative, of course, is an agreement by parties to compromise their claims by settlement. Thus, as many have observed, one might well wonder in this day and age whether resolution of disputes by litigation is itself the true "alternative dispute resolution" in the sense that it increasingly uncommon.
What the marketplace tells us, therefore, is that parties - particularly those involved in commercial disputes - have repeatedly made the judgment that it is in their own self-interest to resolve their disputes without resort to full-blown litigation. There are many good and valid reasons for this. The most obvious reasons parties conclude that they should avoid litigation are cost and delay. As costs of litigation skyrocket, fewer and fewer disputes involve the stakes necessary to justify the expenditures to support extensive discovery and motions practice - not to mention the costs of an actual trial. Delay, of course, can cripple the ability of parties to conduct their continuing affairs with a full understanding of legal rights and relationships. Certainly my client who waited three years after oral argument for a decision from the D.C. Court of Appeals became acutely aware of the burdens of uncertainty.
The instinct to avoid litigation also arises because parties to disputes may have ongoing relationships that cannot simply be tossed aside while they duke it out in court. Retailer and supplier, builder and developer, government contractor and agency may well be involved in multiple and repeated interactions on a daily basis. When disputes remain unresolved - and pending for resolution in the most adversarial context - those interactions become increasingly strained and tense.
For all these reasons and more, therefore, it is plain that even parties with substantial disagreements that need to be resolved would prefer to avoid litigation. Experience and common sense also tell us, however, that parties involved in disputes that are or are about to be in litigation are generally incapable of reaching satisfactory resolution on their own. Otherwise, they would have done so and lawyers would not be in the mix. And lawyers, for the most part, are trained to participate in the adversary process; except in recent years, they have not received training in other means of dispute resolution, negotiation, and settlement.
This is where ADR comes in. Through the development and availability of ADR programs, and as lawyers are trained and gain experience in negotiation and resolution of disputes, the legal community has begun to fill the rather large gap between the needs and desires of clients and the abilities of lawyers and the legal system to meet those needs and desires.
As an appellate litigator, I occasionally participated in mandatory court sponsored mediation prior to the formal appellate process. One of these mediations was highly successful; after a full day mediation in Sioux City, the parties resolved a complex multi-million dollar dispute. Another, I have to say, was a waste of time; those familiar with the case knew that the appellant's argument was nearly frivolous and therefore there was no basis for resolution. But apart from this extreme case, in my experience other informal mediations in the context of litigation were almost always worthwhile - even if unsuccessful. Parties and attorneys had a chance to try out their arguments and positions before a disinterested neutral whose instinctive reaction gave them fresh insight into the strengths and weaknesses of their case.
Of course, ADR as it has developed consists of far more than these last-ditch attempts to avoid formal litigation. In fact, one web site I reviewed defined ADR to include not just court-based arbitration and mediation but also international arbitration, private arbitration, conciliation, early neutral evaluation, mini-trials, private judging, regulatory negotiation, summary jury trials, and other processes too numerous to mention here.
And, as the awards given today recognize, the federal government is increasingly joining the consensus of private parties that commercial disputes are often best resolved short of formal litigation. As then-Associate Attorney General Jay Stephens recounted at last year's awards ceremony, the expansion of federal participation in ADR began in 1990 with the Administrative Dispute Resolution Act, which requires every executive agency to designate a senior official to serve as the dispute resolution specialist of the agency, provide for training on a regular basis, adopt an official ADR policy, and review each of its standard contract agreements to encourage the use of ADR. Following the 1990 Act were the creation of an Interagency Working Group to coordinate the government-wide ADR effort, and the enactment of the Alternative Dispute Resolution Act in 1998, which required every district court to adopt an ADR program.
Spurred by these processes, agencies across the federal government have increasingly come to rely on ADR. The Department of Justice, for example, reports that in FY 1995, it completed 509 ADR processes; by FY 2002 that number had increased nearly six-fold, to 2866.
Despite the many successes of ADR and the common sense reasons that support its use, I would be remiss if I did not use this occasion to make two cautionary points. First, it is imperative that those of you who practice in the ADR community remain on guard to ensure that the collection of processes designed to provide an alternative to formal litigation does not itself become overly formalized and bureaucratic. It is, I believe, in the nature of corporate and governmental programs to become increasingly more formal, more complex, and more detailed. The layering on of additional process and formality takes place incrementally, with each step along the way looking perfectly reasonable to those responsible for its development. I urge all of you reasonable folks to step back from time to time for a bit of perspective on the state of your ADR programs.
Second, and relatedly, I would urge you to constantly subject your programs to rigorous examination to determine whether they actually serve the interests you intend them to serve. Not all disputes are appropriate for ADR, and different types of ADR should be adapted to serve the needs of particular agencies and disputes. One of the great benefits of ADR is its great flexibility. Make sure to put that benefit to good use.
It is on the basis of this sort of rigorous examination that we honor today's award winners. OFPP has evaluated the way in which they use ADR and has found them to be the "best in class." I congratulate each of them for their success and wish all of you continued success as you work to bring about positive and efficient resolution of disputes in our society.