THE SOUNDS OF SILENCE: PROMOTING ALTERNATIVE DISPUTE RESOLUTION IN AIR
FORCE PROCUREMENT By putting confidence into confidentiality

Major John E. Hartsell[^1]

Santino, come here. What's the matter with you? I think your brain is
going soft. . . . Never tell anybody outside the family what you're
thinking again.[^2]

> **I. Introduction**

Litigation can be expensive, inefficient and acrimonious, and there is
always the chance you will lose; on the other hand, alternative dispute
resolution (ADR) can be inexpensive and efficient, [^3] but there is
always the chance you could end up worse off than if you had chosen to
litigate. Remarkably, both litigation and ADR, its fashionable
alternative,[^4] are risky, but they are risky for entirely different
reasons. The ultimate risk in litigation is the risk of losing. In ADR,
the ultimate risk concerns confidentiality[^5]---or lack thereof---in
negotiations.

ADR negotiations can cause parties to reveal case strengths, weaknesses,
strategies, and concerns in an effort to achieve resolution.
Unfortunately, the lack of confidentiality protections in ADR
negotiations may allow those revelations to be used against the party
who made them.[^6] Accordingly, the lack of adequate confidentiality has
both the ability to make litigation more attractive and the ability to
jeopardize the future of ADR in Air Force procurement; in this regard,
"loose lips could sink gunships."

ADR comes in many forms. In fact, the Federal Acquisition Regulation
(FAR) definition of ADR includes multiple types of ADR:

> Alternative Dispute Resolution (ADR) means any type of procedure or
> combination of procedures voluntarily used to resolve issues in
> controversy. These procedures may include, but are not limited to,
> conciliation, facilitation, mediation, fact-finding, minitrials,
> arbitration, and the use of ombudsmen.[^7]

A common thread in many of these forms of ADR in federal procurement is
the presence of a third party "who may be used to facilitate resolution
of the issue in controversy using the procedures chosen by the
parties."[^8] Generally speaking, the third party should be neutral and
detached, and it is critical that the confidences made to him or her by
the parties remain secret.[^9]

Secrecy, or confidentiality, can be critical to dispute resolution[^10]
because it encourages parties and the neutral third party to freely
exchange ideas and proposals with an eye towards resolving the dispute
and avoiding an even greater conflict.[^11] It allows parties to drop
the finger pointing, drop their guard, and through unpretentious
discourse, ultimately drop lawsuits. On the other hand, half-baked
confidentiality protections can allow parties to engage in half-hearted
resolution efforts. Unfortunately, confidentiality protections in
federal procurement fall into the latter category.

The current confidentiality protections in Air Force procurement are a
loose, hodge-podge collection of statutes, rules, and agreements.
Parties can conduct ADR one day under one factual scenario and then
conduct ADR the following day under almost the same scenario and end up
with entirely different results due to confidentiality issues.[^12]
Trying to understand which communications are protected and which are
not can be maddening to the parties and threatening to the entire
process. Weak confidentiality may cause parties to shy away from using
ADR; moreover, it may allow parties to easily abuse ADR. ADR bears noble
intentions, but the Freedom of Information Act[^13] (FOIA) did as well,
and a few prospective bidders have been known to try to use FOIA for a
competitive advantage.[^14] Confidentiality in Air Force procurement ADR
needs to be strengthened to make it more consistent and effective.[^15]

This article will examine the limits of ADR confidentiality under
federal law and recommend changes to improve its protections. It will
briefly examine the legal basis for federal ADR, explore the growth of
ADR in Air Force procurement, and discuss the model used by the Air
Force for ADR. Thereafter, it will identify the protections governing
confidentiality and examine their most glaring weaknesses, including the
failure to protect conduct during ADR negotiations, the need to
establish protections for matters inadvertently made public during
negations, the absolute mandate to create confidentiality for
disclosures made between parties, and the creation of a formal process
to make authorized disclosures. This article does not seek to thrust
uniformity onto the entire ADR world. Instead, its primary purpose is to
identify weaknesses in the confidentiality rules of Air Force
procurement ADR and propose changes to governing legal provisions in an
effort to strengthen ADR and establish it as a consistently advantageous
alternative to litigation.

This article will employ an unconventional literary tool in order to
highlight the importance of confidentiality: several, fictional
cross-examination vignettes. The cross-examination vignettes are brief,
purposely elementary, intended to illustrate the limitations of
confidentiality under federal law and confidentiality concepts, and
demonstrate precisely how painful it can be if ADR confidentiality is
breached. Each cross-examination vignette is based upon the same basic
fact pattern which is not derived from an actual case. For academic
purposes, they do not address the objections that may invariably be made
by the parties.

*Cross-Examination Vignette #1*

The fact pattern for the cross-examination vignettes is based upon a
contract dispute. Imagine if you will, a solicitation to construct a
small, unremarkable building on an Air Force installation. The Air Force
receives over a dozen proposals, but Dojoro Construction, a reputable
builder with decades of experience constructing facilities for the Air
Force, is awarded the contract. Shortly thereafter, Dojoro begins
performance. A few weeks before the facility is completed, the president
of Dojoro Construction calls the contracting officer overseeing the
project, Mr. Ko. The president asks Mr. Ko about a possible discrepancy
in the blueprints. He tells Mr. Ko the new facility and the nearby
grounds will need a storm drain in the event of a hurricane, and none is
provided for in the blueprints. Mr. Ko tells the president, "Good catch,
I missed that one. Well, if you think it's necessary, I don't see how
anyone could begrudge the change." The president of Dojoro Construction
considers the comment an affirmative authorization for a change, and
performs the work. Meanwhile, Mr. Ko completely forgets the
conversation.

A few weeks later, the president of Dojoro Construction presents Mr. Ko
with a bill for the storm drain change. The bill is startlingly high.
Mr. Ko complains he did not authorize any such change to the original
contract and he refuses to pay. Understandably, the tenor of the
disagreement escalates, and litigation looms. Nonetheless, the president
of Dojoro Construction desires to maintain positive relations with the
Air Force; therefore, he asks Mr. Ko if he would agree to try to mediate
the matter. Mr. Ko agrees.[^16]

The parties agree upon a mediator, Mr. Secretz, and upon mediation
procedures. Mr. Secretz initiates the mediation proceedings by meeting
with each party separately (in a caucus) in an effort to learn the
nature of the conflict, the interests of the parties, and to foster
cooperation. First, Mr. Secretz meets with the president of Dojoro. He
assures the president that their discussions are confidential and tries
to put the president at ease. The president tells Mr. Secretz about the
phone call and after some discussion, the president reveals that in
hindsight, he probably should have clarified Mr. Ko's alleged
authorization before he started construction.

The next day, Mr. Secretz meets with Mr. Ko. Mr. Ko is ready for the
mediation, and has even prepared a report for Mr. Secretz listing all
the strengths and weaknesses of each party's case. Mr. Secretz patiently
assures Mr. Ko that their discussions are confidential while Mr. Ko
thoughtlessly flips through the Dojoro Construction ADR report he has in
his briefcase. Mr. Secretz then asks Mr. Ko if there was ever any type
of communication between the parties wherein Mr. Ko could have possibly
authorized the change.

Suddenly, Mr. Ko, for the first time remembers the telephone call and is
horrified. Mr. Ko slams his briefcase shut, his face turns red, his eyes
bulge out, and he drops his head down into his hands and sighs. Mr.
Secretz talks to Mr. Ko for another fifteen to twenty minutes, but all
Mr. Ko can do is nod every time Mr. Secretz says, "It sounds like you
may have authorized a change." Mr. Ko is unhappy, but he finally
collects himself, sits up, and insists his comments were an observation
not an authorization. Mr. Ko maintains that he will not pay for the
change, demands a trial, and storms out of his meeting.

Mr. Ko is so upset with his past absentmindedness that he runs to his
car, puts his briefcase on the roof of his car, unlocks the car door,
gets in, and quickly drives away to an early lunch. Mr. Ko's briefcase
majestically travels on the roof of his car for about one mile and then
falls off and lands on a nearby Dojoro Construction work site where a
Dojoro employee fatefully discovers it.

*Cross-Examination Vignette #2*

Imagine a second fictional conflict that arises as a direct result of
the storm drain change. Mr. Loser, an unsuccessful offeror from the Air
Force building solicitation, learns that Dojoro Construction is seeking
payment for constructing the storm drain. Mr. Loser is convinced the
storm drain is an "out-of-scope" project, and believes Dojoro
Construction is attempting to avoid competition. Mr. Loser is convinced
that the president of Dojoro Construction has benefited, over the years,
from parochialism. He also believes that Dojoro has continually escaped
termination for default actions on other projects and always gets
out-of-scope changes authorized. As a result, Mr. Loser files his own
suit.

*Cross-Examination Vignette #3*

The following fictional cross-examination vignette by government counsel
of Mr. Secretz, the mediator, graphically illustrates the absolute need
for some degree confidentiality in ADR.

> Q: Mr. Secretz, you were a mediator between the two parties, Dojoro
> Construction and the Air Force?
>
> A: That is correct.
>
> Q: And as I understand it, a mediator serves as a neutral third party
> who encourages negotiating parties to come to a mutually beneficial
> consensus?
>
> A: Generally speaking, yes.
>
> Q: Is it true that a mediator will meet with each party privately in
> an effort to encourage this consensus?
>
> A: Yes. If the parties decide to do that they can.
>
> Q: And ordinarily these private discussions are confidential, meaning
> you don't tell anyone what you've heard right?
>
> A: They are intended to be confidential.
>
> Q: I see. During these secret little meetings you have, do parties
> reveal things to you that they don't want anyone else to know?
>
> A: It's not confessional in nature, but yes, often a party reveals
> company secrets or agency confidences, but only so I can consider
> their concerns in a matter.
>
> Q: In this case, did you tell your confidant here (pointing a finger
> at the president of Dojoro Construction) that he was free to tell you
> anything he wanted and you would do your best to hide that information
> from the Air Force?
>
> A: Hide it? No. Protect it, certainly. But of course, you found a way
> around that protection counselor. The parties...
>
> Q: ...and of course, since this was mediation, if he was open and
> forthright with you, it would presumably improve his chances of
> resolving this high dollar matter?
>
> A: Yes, that's logical.
>
> Q: Now, as a mediator, do you remind parties of the rewards and
> financial incentives for being open, candid, and forthright?
>
> A: I remind them, but I believe the process encourages it as well.
>
> Q: Mr. Secretz, given the financial incentives for being forthright
> and the encouraging effect both you and the process had, let's talk
> about what you learned during this secret little meeting?
>
> A: (Turning to the judge.) Your Honor, I'd like to renew my objections
> to revealing these matters. The parties never expected their
> admissions to become public; they never intended their documents to be
> discoverable. My role as a mediator should be sacrosanct.
>
> Judge: Overruled Mr. Secretz. Our lawmakers had a chance, even the
> parties had a chance, to make these matters confidential, but they
> declined. Proceed with the cross-examination counselor.
>
> Q: Thank you Your Honor. Mr. Secretz, did you say you had documents,
> too?

This hypothetical cross-examination demonstrates that the president of
Dojoro Construction would have had a financial incentive and an
assurance of confidentiality to act and speak candidly to the neutral
party. Hence, any revelations are extremely powerful and potentially
incriminatory. The use of a party's confidences, in a courtroom could
make or break a litigated case. Revelations of this sort could make or
break the future of ADR.

**II. The Legal Basis for Federal ADR**

The Administrative Dispute Resolution Act (ADRA),[^17] the legal basis
for ADR in the federal government, has been in operation for a
relatively short period of time. Its purpose is to authorize and govern
the use of ADR in federal agencies.[^18] One particular area the ADRA
governs closely is confidentiality and the disclosure of protected
communications.[^19] The ADRA has evolved over time, and has had the
benefit of legislative reflection and amendment.

The ADRA was originally enacted in 1990 to encourage federal agencies to
use ADR.[^20] Congress wanted to offer an expeditious and inexpensive
means to resolve disputes rather than restrict itself to formal, federal
administrative forums.[^21] When enacted, the ADRA contained a sunset
provision, indicating that the legislation would expire after five
years.

The 1990 Act had some problems that created challenges for ADR
advocates. One of the most significant challenges concerned
confidentiality. Congress had failed to carve out a FOIA exemption to
the ADRA.[^22] "Therefore any citizen could request copies of any
federal records of confidential dispute resolution communications merely
by filing a FOIA claim with the agency."[^23] Another challenge
concerned the definition of ADR. The language of the Act included
"settlement negotiations" as a type of ADR procedure.[^24] As a result,
practitioners in Air Force procurement litigation who were merely
negotiating settlements believed they were successfully engaging in ADR;
this "slowed implementation of third-party assisted ADR."[^25]

These problems were resolved in the Act's reauthorization.[^26] "In the
new Act, confidential communications between the parties and the neutral
are explicitly exempted from FOIA."[^27] This change "permit\[s\]
agencies to communicate their settlement positions more freely."[^28]
Additionally, settlement negotiations were eliminated as a form of
ADR.[^29] Since that time, the ADRA has become a welcome piece of
legislation,[^30] "imbedded as a tool used by the Air Force to resolve
disputes."[^31]

**III. Air Force Acquisitions and the Use of ADR**

**A. The Growth of ADR in Air Force Procurement**

The term "alternative dispute resolution" has all but become a misnomer
in the Air Force: ADR is no longer just an alternative. There has been a
conscious and consistent effort to take the "A" out of ADR[^32] and
utilize it to the maximum extent practicable.[^33] The effort to
maximize ADR in the Air Force does not appear to be a passing fancy.

Department of Defense (DoD) policy is that, "\[a\]ll DoD Components
shall use ADR techniques as an alternative to litigation or formal
administrative proceedings whenever appropriate. Every dispute,
regardless of subject matter, is a potential candidate for ADR."[^34] In
1999, F. Whitten Peters, the Acting Secretary of the Air Force, stated
that, "\[t\]he Air Force remains fully committed to fostering the use of
ADR."[^35] As a result, Air Force policy is "to use ADR to the maximum
extent practicable and appropriate to resolve disputes at the earliest
state feasible, by the fastest and least expensive method possible, and
at the lowest possible organizational level."[^36]

The results of this policy in Air Force procurement unquestionably
compel the use of ADR. In October of 2000, the *Federal Contracts
Report* noted that the Air Force estimates the total value of all
contract disputes resolved by ADR at about \$1 billion.[^37] The same
year, the Air Force reported that it had attempted ADR in a total of
ninety-four contract appeals and that there was a ninety-three percent
resolution rate.[^38] In 2001, fifty to seventy percent of the cases
proceeding toward litigation at the board of contract appeals were
re-directed to ADR.[^39] In 2001, Air Force ADR cases were resolved
within 121 days while a case proceeding to the appeals board took twelve
to eighteen months before the board ever rendered a final decision.[^40]

Speedy resolution also potentially saves money in interest. "Since the
Air Force is also required to pay Contract Disputes Act interest on
claims from the date of the contracting officer's final decision until
payment is made, quicker resolution significantly reduces the Air
Force's interest expenses."[^41] As a result, the Air Force has saved
millions in interest payments.[^42] Alternative dispute resolution in
Air Force procurement has tremendous promise and potential; therefore,
it's weaknesses and pitfalls should be corrected before they negatively
affect a rewarding and remarkable program.

**B. The Air Force Alternative Dispute Resolution Model**

The Air Force ADR model for contract controversies is designed to
encourage ADR before an appeal of a contracting officer's final
decision.[^43] The first element of the model addresses resolution
through simple negotiation.[^44] If the Air Force and a contractor
determine that ADR is in their best interests, the parties will then
need to agree upon a number of negotiation issues. The ADR process must
be agreed upon, timelines and methods must be established, an ADR
agreement must be drafted, and an appropriate third-party neutral needs
to be identified.[^45] A flowchart of the Air Force ADR model for
contract controversies is displayed at Appendix A. [^46]

Air Force procurement officials have further tailored the ADR model, in
a number of cases, by establishing standing corporate level ADR
agreements with the Air Force's top contractors.[^47] The agreements
establish "tailored rules of engagement" in the event of a future
contract dispute.[^48] They help structure a particular ADR model
between the Air Force and the contractor, in advance, in the event a
contract conflict arises. These agreements are individually drafted and
do not apply across the board (to all contractors) like a FAR clause
would; however, they do promote the use of ADR between the Air Force and
the top suppliers to the Air Force.[^49]

The Air Force has made a concerted effort to ensure "\[t\]hese
agreements---which can either be a memoranda of understanding between
the Air Force program offices and their industry partners or a special
contract requirement contained in the contract---will cover the Air
Force's forty largest programs and their prime contractors, or between
sixty-five and seventy percent of Air Force contract dollars."[^50] The
goal of these program-level agreements is to commit Air Force "program
managers, contracting officers and their industry partners to using ADR
first---promoting constructive long-term business relationships and
reducing the time and cost associated with resolving contract
controversies.[^51]

**IV. The Importance of Confidentiality**

As discussed above, ADR has become increasingly prominent in the U.S.
government's approach to resolving contract disputes.[^52] "It is
generally thought that an expectation of confidentiality on the part of
participants is critical to a successful \[ADR\] process."[^53] The law
regarding confidentiality, however, is neither completely consistent nor
completely effective. The law includes a collection of statutes (the
ADRA and the FAR), rules of evidence and civil procedure, and corporate
level agreements. If parties lack confidence in confidentiality they
"could well begin to worry that their communications might indeed be
used against them later and decide to avoid mediating with the
government altogether."[^54] Therefore, it is necessary to examine the
current law on confidentiality, identify weaknesses in it, and seek
corrective measures if Air Force ADR participants hope to maintain a
reasonable measure of confidence in confidentiality.

One might argue that changes are unnecessary. Air Force leadership and
procurement personnel promote ADR, corporations voluntarily agree to
engage in ADR, and the results themselves illustrate that ADR is a
resounding success even without consistent and effective laws regarding
confidentiality. At first glance, one might proffer that if the results
are positive, then maybe the confidentiality rules simply are not a
problem. Some proponents of Air Force ADR might suggest that, "If it
ain't broke, don't fix it." Nonetheless, this logic is flawed. Air Force
ADR is simply too immature to be able to rely on its past successes, and
confidentiality is too important to depend upon banal colloquialisms and
naïve logic. The importance of confidentiality is an axiom of ADR
because it protects the present disclosures and future successes of
ADR.[^55]

**V**. **Sources of Confidentiality Protections in Federal ADR**

**A. The Confidentiality Protections of Federal Rule of Evidence 408**

A party who engages in ADR may do so for any number of reasons. A party
may have numerous lawsuits pending against them and seek ADR as a means
of resolving his or her lesser suits. The party may have a weak case and
seek a forum that allows him or her to negotiate liability downward. On
the other hand, a party may have a strong case, but he or she may desire
a quick, expedient resolution through ADR. A party may even want to
mediate a case in an effort to maintain cordial relations with the
opposing party. There are any number of reasons why a party might seek
ADR, but a skillful litigator could make a factfinder focus on only one
reason: fault. Imagine the following fictional cross-examination of the
president of Dojoro Construction by government counsel, highlighting
fault and equating fault with liability.

> Q: Sir, you are the President of Dojoro Construction?
>
> A: Yes.
>
> Q: And yesterday you told us all about your particular complaints
> against the Air Force?
>
> A: That's correct.
>
> Q: And you tried to convince us that it was the big, bad Government's
> fault?
>
> A: It certainly was.
>
> Q: And you honestly, truly believe you are in the right?
>
> A: Absolutely.
>
> Q: In fact, you believe you were right with such firm, unequivocal
> conviction, that YOU went to them, and YOU asked them if they would
> let YOU settle?
>
> A: I asked if they wanted to mediate the issue.
>
> Q: Let me see if I have this right, you honestly thought you'd win at
> trial, but tried to keep this out of court?
>
> A: Yes.
>
> Q: Do you naturally surrender when you have a strong case?
>
> A: No.
>
> Q: So this was a conscious decision for your allegedly strong case?
>
> A: Um ...[^56]

Rule 408 prohibits the admissibility of evidence of compromise as well
as offers to compromise in order to prove liability.[^57] It also
restricts the use of evidence derived from those compromise
efforts.[^58] The rule applies equally to situations in which the
evidence of compromise arises out of the same case and to situations in
which the evidence of compromise arises out of a previous related case
between either of the parties.[^59] The intent of the prohibition is "to
allow free and open bargaining in which the parties could make
concessions for bargaining purposes that they would not later have to
explain."[^60] The prohibitions even apply to nonparties who may attempt
to use the compromise evidence in an entirely different case.[^61]

The scope of Rule 408 at first blush might lead one to believe no other
confidentiality protections are necessary under federal law. Rule 408
extends from pretrial negotiations through trial and post-trial
proceedings. Rule 408 applies to the immediate parties as well as to
third parties. It is a strict prohibition with a limited number of
exceptions. Those exceptions, however, create a tremendous challenge to
complete confidentiality.[^62]

First, Rule 408 "does not require exclusion when the evidence is offered
for another purpose, such as *proving bias or prejudice of a witness*,
negativing a contention of undue delay, or proving an effort to obstruct
a criminal investigation or prosecution."[^63] Hence, Rule 408 appears
to allow any party, at any time, to pierce ADR confidentiality in search
of bias or prejudice of a witness.

Second, the "rule does not require the exclusion of any evidence
*otherwise discoverable* merely because it is presented in the course of
compromise discussions."[^64] Rule 408, generally protects records,
statements, and agreements resulting from ADR efforts, in the courtroom,
but they are accessible outside of court by discovery rules that are
separate and distinct from Rule 408. "Rule 408 is a preclusionary rule,
not a discovery rule. It is meant to limit the introduction of evidence
of settlement negotiations at trial and is not a broad discovery
privilege."[^65] Hence, evidence of compromise, offers to compromise,
and evidence of conduct or statements made in compromise discussions can
be discoverable under the Federal Rules of Civil Procedure if they will
lead to admissible evidence.[^66]

Discovery is governed by Federal Rule of Civil Procedure 26 (Rule 26).
This Rule is a truly broad rule and it is liberally construed.[^67]
Federal Rule of Civil Procedure 26(b)(1) reads in part, "\[i\]t is not
grounds for objection \[to a discovery request\] that the information
sought will be inadmissible at the trial if the information sought
appears reasonably calculated to lead to the discovery of admissible
evidence."[^68] Additionally, efforts to defend against discovery
seeking matters originating in compromise negotiations may be doomed by
case law encouraging broad discovery, "\[o\]therwise, parties would be
unable to discover compromise offers which could be offered for a
relevant purpose."[^69] One can foresee endless discovery requests for
ADR matters alleging that the requestor needs access to such matters
ordinarily covered by Rule 408 in order to determine whether or not the
information contained therein could be admissible at trial to prove, for
example, the bias or prejudice of a witness.[^70]

Imagine the following hypothetical cross-examination of the mediator
(Mr. Secretz) wherein Rule 408 is in place but Mr. Loser's (the
unsuccessful offeror's) counsel nevertheless seeks ADR negotiation
information in an effort to prove parochialism between the Air Force and
Dojoro Construction.

> Q: Mr. Secretz, are you aware why I've asked you to testify at this
> hearing?
>
> A: I presume it has something to do with the fact that I have mediated
> several disputes between the Air Force and Dojoro Construction?
>
> Q: Are you aware that the Air Force, for several years now, has
> awarded numerous high-dollar contracts to Dojoro Construction rather
> than to my client?
>
> A: No.
>
> Q: But you are aware that the Air Force and Dojoro have had numerous
> disputes regarding the numerous contracts between them?
>
> A: Sure.
>
> Q: And despite those disputes, the Air Force, for some particular
> reason, has never terminated any contract with Dojoro Construction?
>
> A: I believe you are correct.
>
> Q: So it seems that Dojoro Construction gets lots of lucrative
> contracts and no matter what they do wrong, no matter how bad, the Air
> Force never terminates the procurement?
>
> A: I wouldn't say anyone did anything wrong, but if there's a dispute,
> mediation is the tool that helps resolve it.
>
> Q: That's your opinion isn't it?
>
> A: Well, yes.
>
> Q: You really don't know, with absolute certainty, if this cozy
> relationship is the result of successful mediation or simply
> favoritism?
>
> A: Ah, no.
>
> Q: Would you agree that in order to determine if there was any
> favoritism or bias in the procurements, we'd want to know the severity
> of any contract dispute and how much either side was willing to
> accommodate the other?
>
> A: Well, um, it could help.
>
> Q: Of course it could. Let's turn now to the contract disputes, your
> mediation discussions, and why the disputes were settled rather than
> terminated shall we?

Bias is the allegation in the above fictional scenario, and bias is both
a discovery and an in-court exception to Rule 408; hence, virtually any
unsuccessful offeror can navigate around the protections of Rule 408 and
discover confidential matters with Rule 26 and a simple allegation of
favoritism. In this regard, the confidentiality protections of Rule 408
are little more than a paper tiger.

After unhappy contractors lose a bid more than one time to the same
competitors, it is only natural for them to consider some degree of
parochialism as an explanation for the losing bids---providing they
believe their own bids should have won. Contractors suspecting
favoritism can illustrate their unease with a bid protest on the grounds
of bias which is a clear exception to Rule 408.

Rule 408 does not provide the confidentiality necessary for ADR because
it allows various confidential matters to be revealed both through
discovery and in the courtroom. Any unsuccessful offeror, with a little
effort and a little imagination, can fashion a credible allegation of
bias and enjoy a fair chance at running roughshod over Rule 408
protections.[^71] So while Rule 408 does form a fair, first-line defense
in protecting confidentiality, it does not provide sufficiently
effective confidentiality necessary to instill complete confidence in
ADR. Fortunately, the ADRA provides some additional assistance.[^72]

**B. The Confidentiality Protections of the ADRA**

The protections offered under the ADRA form a second line of defense
(after Rule 408's protections) in defending confidentiality.[^73] The
confidentiality protections provided under the ADRA are detailed and can
be confusing.[^74] Generally speaking, under the ADRA, confidentiality
protections extend to confidential communications between a neutral and
a party and between a party and a neutral,[^75] but these protections do
not rise to the level of a privilege.[^76] In fact, the ADRA permits
disclosure under a number of circumstances, and it restricts the
situations in which confidentiality applies. Hence, even under the ADRA,
confidentiality is limited.

1\. Disclosure by a Neutral Under the ADRA

The ADRA prohibits a neutral from voluntarily disclosing or being
required to disclose, through discovery or compulsory process,[^77]
dispute resolution communications or communications provided to them in
confidence.[^78] The ADRA defines dispute resolution communications as
oral or written communications "prepared for the purposes of a dispute
resolution proceeding."[^79] The dispute resolution proceeding occurs
when specified parties participate, a neutral third party is appointed,
and an alternative means of dispute resolution is used.[^80] Dispute
resolution communications include the memoranda, notes, and work product
of the neutral, parties, and nonparty participants.[^81] Conduct and
actions are not included in the definition of dispute resolution
communications; and written agreements to enter into dispute resolution,
final written agreements, and arbitral awards are specifically
excluded.[^82] Finally, communications provided in confidence come into
existence when they are made with the express intent that they not be
disclosed or under circumstances that would create a reasonable
expectation by the source that they will not be disclosed.[^83]

The ADRA grants neutrals more confidentiality protection than Rule 408
does, but like Rule 408, it contains several enumerated exceptions. A
neutral third party may disclose confidential communications in four
circumstances. First, the neutral may disclose confidential
communications if all parties (and participating non-parties \[*e.g.* an
expert providing testimony\]) to the ADR agree to disclosure.[^84]
Second, the neutral may disclose communications that have already been
made public.[^85] This exception is broad; it would cover intentional as
well as inadvertent disclosures. Third, the neutral may disclose
confidential communications if required by law.[^86] Fourth, the neutral
may disclose confidential communications if a court determines it
necessary to prevent a manifest injustice, establish a crime; or if it
would prevent harm to public health or safety.[^87] While
confidentiality protections held by a neutral are not absolute, they are
significantly better than the protections held by the actual disputing
parties.

2\. Disclosure by a Party Under the ADRA

Under the ADRA, a neutral cannot disclose any dispute resolution
communication or any communication provided to them in confidence.[^88]
The statute is significantly different for disclosures by a party; the
confidentiality protections are much more narrow. The ADRA prohibits a
party from voluntarily disclosing, or being required to disclose,
through discovery or compulsory process, "dispute resolution
communications."[^89] This protection is far different than the
protection covering disclosure by a neutral. When the confidence is held
by a neutral, the statutory protection involves "dispute resolution
communications" and "communications provided in confidence."[^90] When
the confidence is held by a party, the statutory language,
"communications provided in confidence," is starkly absent. The
significance of the absent language is compounded by an enumerated
exception under the ADRA which actually allows the disclosure of
confidences by a party to a party.

There are, in fact, several enumerated exceptions under subsection (b)
(which focuses on disclosures by a party) and they are similar to those
found in subsection (a) (which focuses on disclosures by a neutral).
First, a party may disclose confidential communications if they are the
party who originally prepared the communication.[^91] Second, a party
may also disclose the communications if all parties to the ADR consent
in writing.[^92] Third, a party may disclose information if the
communication has already been made public.[^93] As with the exception
pertaining to neutrals (under subsection (a)), this exception is
similarly broad and would cover intentional as well as inadvertent
disclosures. Fourth, a party may disclose confidential information if
required by statute.[^94] The fifth exception concerning parties is the
same as the exception for neutrals in subsection (a)(4). A party may
disclose confidential communications if a court determines it necessary
to prevent a manifest injustice; establish a crime; or if it prevents
harm to public health or safety.[^95] The sixth exception allows
disclosure to serve as parole evidence in the event there is a dispute
over the meaning of an agreement or an award.[^96] The last exception,
"(b)(7)", is the most striking and the most troubling,[^97] requiring
additional explanation.

Section 574(b)(7) (the last exception regarding disclosures by parties)
of the ADRA permits disclosure of any kind of dispute resolution
communication if it was provided to or was available to all the parties
and the neutral did not generate it.[^98] In other words, if the
communication did not originate with the neutral and, instead, was made
by one party to the other party, it has absolutely no confidentiality.
This is apparently the reason why the statutory language,
"communications provided in confidence" is absent from this portion of
the statute.[^99] There simply is no confidentiality for any
communication between parties. Two parties may intend complete
confidentiality in their discussions and communications may be "provided
in confidence" to one another---even with the neutral present---but the
intent of the parties is irrelevant, the communications are
discoverable.

The ADRA provides some protection to communications that are intended to
be confidential, but the exceptions of the ADRA create both large
loopholes and disparate results. Communications to the neutral third
party, who has no interest in the outcome, have more protection than
those directly between the parties. In fact, the parties have absolutely
no protection for confidences shared between or among themselves.
Notably, too, the Act is confusing regarding who makes the determination
of whether or not an exception to confidentiality exists at all. While
the ADRA has the potential to provide a greater defense of
confidentiality, it would have to be amended to provide substantial
confidentiality protections.

**VI. Improving Confidence BY AMENDING the ADRA**

For ADR in Air Force procurement to work, the process needs to keep
confidential communications confidential.[^100] The ADR process
necessarily encompasses a plethora of admissions, closely-held ideas,
sensitive strategies, and other "inside" information.[^101] For the most
part, ADR in Air Force procurement relies upon the protections of Rule
408, the ADRA, restraint, and corporate level agreements, to keep
individuals from trying to collect such inside information for
competitive purposes.

The current legal protections of ADR confidentiality in Air Force
procurement must be improved. As it stands, parties to ADR and outside
third parties can effectively derail ADR confidentiality protections
with little effort, without any violations of the law.[^102] Rule 408
and its paper tiger protections provide little security during
discovery,[^103] and the ADRA, while incredibly detailed, contains a
veritable smorgasbord of exceptions.[^104] If ADR in Air Force
procurement, and the players involved in it seem to be enjoying a type
of honeymoon existence,[^105] then a single indiscretion involving
confidentiality could disrupt its bright and seemingly limitless future.

One could argue that the ADRA needs a mechanism so that the protections
it does have are enforceable. Currently, the sole remedy provided in the
ADRA for breached confidentiality is reflected in subparagraph
(c),[^106] which states, "Any dispute resolution communication that is
disclosed in violation of subsection (a) or (b), shall not be admissible
in any proceeding relating to the issues in controversy with respect to
which the communication was made."[^107] This remedy is redundant as
Rule 408 already excludes evidence of compromise negotiations.

Moreover, since the ADRA already provides a number of well-pronounced
exceptions whereby confidences can be lawfully discovered without
violating the ADRA,[^108] creating additional enforcement mechanisms
while such glaring loopholes exist would be superfluous. Furthermore,
the federal rules of civil procedure already provide an adequate number
of civil remedies for violating discovery rules and for party
misconduct.[^109] Hence, the best way to improve the confidentiality
protections of ADR is to improve the protections of the ADRA itself.

The ADRA serves as the backbone for Air Force procurement ADR.[^110] It
establishes a single, uniform rule for all participants to follow, and,
if it is strengthened, Air Force procurement ADR will grow stronger as
well.[^111] The focus of the following discussion is to suggest ways of
making the ADRA's protections more precise and less susceptible to
confusion or abuse. Proposed statutory changes are laid out in Appendix
B.

**A. Protect Conduct During ADR from Disclosure (5 U.S.C. § 571)**

Subparagraphs (a) and (b) protect dispute resolution communications made
to the neutral.[^112] However, under § 571, those dispute resolution
communications must be oral or written communications prepared for the
purpose of ADR.[^113] Conduct that occurs during ADR is not included
within the definition of a dispute resolution communication.[^114] Thus,
it would appear from subparagraphs (a) and (b) that one could discover,
from a neutral or a party, the conduct of a particular party during ADR.
Conduct could include outrage, acts of accommodation, and even a simple
admission by silence.[^115]

Consider, the following hypothetical cross-examination vignette of the
mediator (Mr. Secretz) by counsel for Dojoro Construction wherein the
focus is on the conduct exhibited by the contracting officer (Mr. Ko)
during the ADR session. The vignette would undoubtedly be the subject of
a great amount of motion practice, but the academic point is that
conduct during negotiations is unprotected and not a single
cross-examination question will require the witness to discuss
protected, verbal communications.

> Q: Mr. Secretz were you the mediator between the Air Force and Dojoro
> Construction?
>
> A: Yes, I was.
>
> Q: Did you have private meetings with each party?
>
> A: Yes, I did.
>
> Q: With whom did you meet first?
>
> A: I met with the president of Dojoro Construction.
>
> Q: Why did you want to meet with him first?
>
> A: I wanted to hear the contractor's side of the story and to find out
> why he thought he'd been wronged.
>
> Q: How long was this meeting with the president?
>
> A: A few hours.
>
> Q: I don't want to know what was said, but as a result of this
> meeting, did you feel you understood Dojoro Construction's concerns?
>
> A: Absolutely.
>
> Q: Then you met with the contracting officer?
>
> A: Yes, Mr. Ko was his name.
>
> Q: How long after meeting with the president of the Dojoro
> Construction was this second meeting held?
>
> A: The next day.
>
> Q: When you met with Mr. Ko, who spoke first?
>
> A: I did.
>
> Q: How long did you personally speak for?
>
> A: Roughly twenty to thirty uninterrupted minutes.
>
> Q: I don't want you to tell me what was said but listen to my
> question. Let's go through this chain of events: after you met with
> the president of Dojoro Construction, after you sought to learn why he
> thought he'd been wronged, after you then met with Mr. Ko the
> following day, after you took the lead, and after you started talking,
> what did Mr. Ko do during those 20-30 uninterrupted minutes?

A: What did he say?

> Q: No, what did he DO while you were talking?
>
> A: Well, after the first five minutes he kinda gasped, his eyes bulged
> out, his face turned red, and then he sighed and dropped his head. He
> held his head in his hands for about a minute or two and then he just
> sat there and nodded as I continued talking.
>
> Q: How would you describe his demeanor?
>
> A: Shaken.

Sometimes actions speak louder than words. In the above scenario, the
conduct of the contracting officer (Mr. Ko) illustrates fault with
alarming clarity. Unquestionably, counsel for the contractor (Dojoro
Construction) will argue that the contracting officer's actions
demonstrate a complete admission of fault, and he never once had to ask
the mediator what the contracting officer said during ADR. The
proscriptions of the ADRA were followed, yet confidentiality was
trampled.

The drafters of subsection (a) and (b) have created an avenue through
which ADR confidences can be breached. Rule 408 specifically excludes
the admissibility of statements and conduct made in compromise
negotiations;[^116] the ADRA should mirror Rule 408 on this issue, and
should include a similar sweeping provision. To this end, the ADRA
definition of "dispute resolution communication"[^117] should be
expanded to include conduct as well as statements. Consequently, it
would be a more effective second line of defense for
confidentiality.[^118]

**B. Protect Unauthorized Disclosure of Matters That Have Already Been
Made Public (5 U.S.C. § 574(a)(2) and (b)(2))**

The second exception to subsection (a) and the third exception to
subsection (b) address communications that have already been disclosed
to the public.[^119] Specifically, they permit releasing communications
that have "already been made public."[^120] The rule has a logical
premise: there is no need to protect matters already common knowledge.
It's a simple concept that permits potentially secret matters to remain
protected while allowing shared information to continue to be shared.

The problem with the exception is that it unwittingly encourages
repeated violations of confidentiality. Subsection (a)(2) and (b)(3)
provide that once a communication has been made public---intentionally
or unintentionally, advertently or inadvertently---confidentiality may
be breached.[^121] If, for example, a party to ADR mistakenly or
purposefully releases confidential materials to the public, then those
matters lose all future protection because they have "already been made
public."[^122]

Consider the following fictional cross-examination of the contracting
officer (Mr. Ko) by counsel for Dojoro Construction about confidential
matters accidentally made public.

> Q: Mr. Ko you are a contracting officer for the Air Force?
>
> A: Yes, I am indeed.
>
> Q: And you were engaged in ADR with Dojoro Construction a few months
> ago?
>
> A: That's correct.
>
> Q: And in preparation for that ADR, you put together a report that you
> planned to share with the mediator, Mr. Secretz?
>
> A: I'm not at liberty to discuss that. Those matters are confidential.
>
> Q: I see. Mr. Smith did you lose a briefcase a few months ago?
>
> A: Why yes, at the very time I was engaged in ADR with Dojoro.
>
> Q: Did you get it back?

A: No.

Q: Did you expect to get it back?

> A: Sure. Anyone looking inside the briefcase would have found my name
> and address.
>
> Q: So obviously you expected someone to have read through the papers
> in your briefcase in the event they found it?
>
> A: ...um, well, they wouldn't have to read everything in the
> briefcase.
>
> Q: Do you see where we're going?

A: Yeah, and I don't think I wanna go there.

> Q: I'm showing you an exhibit, and I'd like to ask you if it looks
> anything like the ADR report you had in your briefcase a few months
> ago?
>
> A: That's confidential; it was prepared for the mediator's eyes only!
>
> Q: You do understand that by losing your briefcase, you forced folks
> to look inside of it for identification, and as a result, this report
> was, shall we say, "made public?"
>
> A: I didn't tell them to read my case files.
>
> Q: No, but you inadvertently made them public didn't you?

Confidential matters can be made public through many different means
that are inadvertent or unintentional (and advertent and intentional as
well). Reports prepared for ADR can be left behind on planes or
lunchrooms. Private conversations about confidential communications can
be overheard at a golf course, on a public phone, or in a locker room.

ADRA exceptions, as written, do not allow anyone to "unring the bell"
once any matter has been made public. Instead, once a confidential
communication has been made public, confidentiality protections under
the ADRA are permanently eliminated. Subsections (a)(2) and (b)(3) need
to be amended to maintain confidentiality despite unauthorized
releases.[^123]

**C. Create Confidentiality for Disclosures Between Parties (5 U.S.C. §
574(b)(7))**

As discussed above, subsection (b)(7) limits confidentiality between
parties; in fact, there is no confidentiality between them under the
ADRA.[^124] As a result, parties who engage in direct or indirect
communication cannot expect any confidentiality.[^125] Even discussions
between parties during a joint session are unprotected.[^126] (On the
other hand, virtually everything the neutral discusses during the joint
session is automatically protected.[^127])

The inability of parties to directly engage one another in protected
discussions is in head-on collision with the fact that ADR necessarily
involves an exchange of ideas between the parties. "The parties haggle,
talk, and listen, proposing any idea that comes to mind until a workable
resolution begins to gel. For that to happen, all parties must share
information openly."[^128] It is no wonder the Administrative Conference
of the United States---which evaluated ADR in government before the
reauthorization of the ADRA---reported to Congress that subsection
(b)(7) should be eliminated.[^129]

A practical review of the confidentiality weaknesses created by (b)(7)
reveals confusing results. For example, after ADR discussions have
begun, a conscientious contractor seeking quick resolution, unilaterally
prepares a report detailing which concerns he is prepared to forfeit and
which are non-negotiable, giving one copy of the report to the neutral
and a second copy to the opposing party. The first copy to the neutral
is supposed to receive confidential protections, but the second copy to
the opposing party receives none. If the neutral hands the first copy of
the report over to the opposing party, the first copy supposedly remains
confidential while the second copy still has no confidentiality---even
though they are both in the hands of the same individual. Subsection
(b)(7) seemingly allows a neutral third party to apply his or her "Midas
touch" to the report, rendering it suddenly confidential. This makes no
sense.

The confusion becomes mind numbing when you add the exception of
subsection (a)(2)[^130] to the exception in (b)(7). Imagine the same
scenario wherein a contractor provides the first copy of an ADR report
to a neutral and a second copy to the opposing party. As mentioned
above, the first copy of the ADR report to the neutral is supposed to be
confidential, while the second copy is unprotected. Imagine now that an
outsider enters the scenario and demands that the neutral turn over the
first copy of the ADR report. Naturally, the neutral will want to deny
the discovery request, but since the second copy of the report has
already been provided to the opposing party under (b)(7), it has now
been "made public" under (a)(2) and lost its confidentiality
protections.[^131] In short, the unprotected nature of the second report
causes the first---seemingly protected---report to lose its confidential
protections. The neutral will be hard pressed to legally deny the
discovery request under the ADRA. The recommendation of the
Administrative Conference of the United States should be implemented,
and (b)(7) should be eliminated.[^132]

**D. Establish a Disclosure Process for Parties (5 U.S.C. § 574(e))**

The provisions of the ADRA provide a limited process whereby a
participant can make a disclosure of confidential information.
Disclosure may occur if a court determines that communications must be
provided to prevent manifest injustice, establish a crime, or prevent
harm to the public health or safety.[^133] Additionally, disclosure may
occur if a neutral gives proper notice to the parties involved.
Unfortunately, the ADRA is silent on the processes or procedures that
must be followed if a party wants to, or needs to make a proper
disclosure.

There are times when the disclosure of confidential matters is proper.
For instance, exception (h) permits the disclosure of dispute resolution
communications if the requestor is gathering the information for
research or governmental purposes.[^134] Unfortunately, there are no
consistent guidelines establishing how disclosure should occur. If the
educational request is presented to a neutral, the neutral must notify
the participating parties before release; however, if the request is
presented to a party, there are no notification procedures required at
all.[^135]

There is no rhyme or reason to explain this disparity in release
procedures. As a result, parties are left to determine on their own
whether an opposing party might have an objection to the release of
confidential matters. Moreover, it is entirely left to the parties to
determine whether they even want to notify the opposing party that an
outsider is seeking confidential matters. Failure to provide consistent
guidance on how parties can or cannot release confidential information
provides more fertile ground for confusion and/or abuse. The ADRA should
be amended to provide parties with the same disclosure procedures that
neutrals currently have to follow; the amendment would be simple and
helpful.[^136]

**VII. Improving Confidence Through Changes in the FAR**

Practically speaking, it does not appear as if the ADRA will be amended
anytime soon, but the Air Force is not helpless in this regard.
Expeditious amendments to confidentiality protections are available
through an alternate means. Confidentiality protections can be improved
through contract provisions. Federal guidance recommends the use of a
contract to protect confidentiality between parties.

> The Council does recognize that these provisions could hinder a
> party's candor in a joint session, and therefore the Guidance suggests
> that parties address this issue through the use of a contract.
> Confidentiality agreements are a standard practice in many ADR
> contexts, and their use is encouraged in Federal dispute resolution
> processes where confidentiality of party-to-party communication is
> desired.[^137]

Contract language can be drafted to close a number of the loopholes
created by Rule 408[^138] and the ADRA.[^139] As discussed above, some
major contractors already sign ADR agreements with the Air Force,[^140]
but these agreements do not apply universally. Contract language that
strengthens confidentiality could apply to all contractors who deal with
the Air Force through the use of a supplemented FAR, D\[efense\]FAR or
A\[ir\]F\[orce\]FAR provision.

The use of a contract clause to make the ADRA more effective is entirely
consistent with the communication proscriptions of the ADRA.

> The ADRA provides that parties may agree to alternative confidential
> procedures for disclosures by a neutral. While there is no parallel
> provision for parties, the exclusive wording of this subsection should
> not be construed as limiting parties' ability to agree to alternative
> confidentiality procedures. Parties have a general right to sign
> confidentiality agreements and there is no reason this should change
> in a mediation context.[^141]

The content of separate confidentiality agreements is extremely
flexible. "Parties may agree to more, or less, confidentiality for
disclosure by the neutral or themselves than is provided for in the
Act."[^142]

Alternative dispute resolution and confidentiality are not foreign
concepts to the FAR. The FAR provides---like the ADRA---for the use of
ADR and for the use of supplemental ADR procedures in Part 33.214.[^143]
Under FAR Part 33.214, there are four essential elements for ADR:

> \(1\) Existence of an issue in controversy;
>
> \(2\) A voluntary election by both parties to participate in the ADR
> process;

\(3\) An agreement on alternative procedures and terms to be used in
lieu of formal litigation; and

> \(4\) Participation in the process by officials of both parties who
> have the authority to resolve the issue in controversy.[^144]

This clause also refers to confidentiality. It states, "\[t\]he
confidentiality of ADR proceedings shall be protected consistent with 5
U.S.C. 574 \[the ADRA\]."[^145]

The FAR even defines a neutral,[^146] stating that "a neutral person may
be used to facilitate resolution of the issue in controversy using the
*procedures chosen by the parties* (emphasis added)."[^147] The ADRA
needs to be supplemented, and FAR Part 33.214 is written to help meet
that need by authorizing supplemental procedures to accomplish that
task.

An amended FAR clause (*i.e.* FAR Part 33.214) improving confidentiality
should address the same ADRA weaknesses identified in the immediately
preceding section.[^148] As is evident from the proposed amendments at
Appendix C, an amended FAR Part 33.214 would follow the same framework
as the ADRA.

Understandably, any contract provisions affecting confidentiality could
only be enforceable against contract signatories. Confidentiality
contract provisions would not apply to third parties attempting to
discover ADR negotiations, but such a limitation should not prevent the
strengthening of ADR confidentiality through the FAR. Confidentiality
contract provisions would still improve confidentiality between the
participants and allow protections to progress beyond their current,
limited status. Promises of confidentiality must be promoted if the
promise of ADR in Air Force procurement is to be fully realized.[^149]

**VIII. Conclusion**

The Air Force has recognized that litigation is frequently too costly:
it is financially expensive,[^150] risky,[^151] and
time-consuming.[^152] On the other hand, ADR provides a more "palatable
environment for parties to resolve their differences."[^153] The Air
Force has embraced ADR, and its leadership is actively promoting
it.[^154] Early successes in ADR have resulted in its use being mandated
to the maximum extent practicable,[^155] and, such use in the Air Force
has been bountifully rewarded in the world of procurement.[^156] Cases
are being resolved more quickly, and billions of dollars are being
saved.[^157] Accordingly, it would seem that alternative dispute
resolution should have a bright future in Air Force procurement.

Nonetheless, litigation continues to be a fact of life in conducting the
ongoing sizeable business of the modern Air Force. Some cases are not
right for ADR, and litigation may be the only means to resolve
them.[^158] Effective litigators endeavor to win, capitalizing on
strengths and concomitantly exploiting weaknesses. In the alternative
dispute resolution process, the most significant weakness is its limited
confidentiality protections.[^159]

Litigators---or contractors with a litigation mindset---can exploit
ADR's confidentiality weaknesses. When there is a lot of money at issue,
there can be great temptation to seek ADR information.[^160] Litigators
can certainly be lured into trying to gain an advantage by piercing the
confidentiality of ADR.[^161] They may have a weak case, they may
suspect wrongdoing, or they may just desire victory; after all, there is
no shame in representing a client zealously. Regardless, under Rule 408
and the ADRA, litigators can discover confidential matters through
numerous lawful means.[^162]

Alternative dispute resolution is successful because litigation can be
extraordinarily taxing on the parties.[^163] Nonetheless, alternative
dispute resolution's popularity will undoubtedly diminish if litigators
are able to use it as a discovery vehicle. Some parties will be less
forthcoming in their negotiations and others may stay away from it
entirely.[^164] If parties have no confidence in confidentiality, they
will have little or no confidence in the use of ADR.[^165] In this
regard, the future of ADR is contingent upon the effectiveness of ADR's
confidentiality protections, and, at present, those protections are not
particularly effective.[^166]

Confidentiality must be improved. The ADRA must be amended, or, in the
alternative, a contract clause should be developed and added to protect
the confidentiality of ADR communications between participants and allow
them to engage in a collegial exchange of ideas without worrying about
who generated the discussion and who can legally discover the contents
of the discussion.[^167] If prompt resolution of issues can be expected
without having to resort to litigation, there must be confidence that
ADR confidential communications will be kept confidential. This can only
occur with adequate legal protections. Until such protections are in
effect, the long-term success of ADR remains in doubt.

Appendix A[^168]^\*^

![](media/image1.png){width="5.873611111111111in"
height="4.289583333333334in"}

**Appendix B**

**[Proposed Changes to the
ADRA]{.underline}**[^169]**^[\*\*]{.underline}^**

§ 571.  Definitions\
\
For the purposes of this subchapter \[5 USCS §§ 571 et seq.\], the
term\--\
   (1) \"agency\" has the same meaning as in section 551(1) of this
title;\
   (2) \"administrative program\" includes a Federal function which
involves protection of the public interest and the determination of
rights, privileges, and obligations of private persons through rule
making, adjudication, licensing, or investigation, as those terms are
used in subchapter II of this chapter \[5 USCS §§ 551 et seq.\];\
   (3) \"alternative means of dispute resolution\" means any procedure
that is used to resolve issues in controversy, including, but not
limited to, conciliation, facilitation, mediation, factfinding,
minitrials, arbitration, and use of ombuds, or any combination thereof;\
   (4) \"award\" means any decision by an arbitrator resolving the
issues in controversy;\
   (5) \"dispute resolution communication\" means any oral or written
communication prepared for the purposes of***, or conduct made in,*** a
dispute resolution proceeding, including any memoranda, notes or work
product of the neutral, parties or nonparty participant; except that a
written agreement to enter into a dispute resolution proceeding, or
final written agreement or arbitral award reached as a result of a
dispute resolution proceeding, is not a dispute resolution
communication;\
   (6) \"dispute resolution proceeding\" means any process in which an
alternative means of dispute resolution is used to resolve an issue in
controversy in which a neutral is appointed and specified parties
participate;\
   (7) \"in confidence\" means, with respect to information, that the
information is provided\--\
      (A) with the expressed intent of the source that it not be
disclosed; or\
      (B) under circumstances that would create the reasonable
expectation on behalf of the source that the information will not be
disclosed;\
   (8) \"issue in controversy\" means an issue which is material to a
decision concerning an administrative program of an agency, and with
which there is disagreement\--\
      (A) between an agency and persons who would be substantially
affected by the decision; or\
      (B) between persons who would be substantially affected by the
decision;\
   (9) \"neutral\" means an individual who, with respect to an issue in
controversy, functions specifically to aid the parties in resolving the
controversy;\
   (10) \"party\" means\--\
      (A) for a proceeding with named parties, the same as in section
551(3) of this title; and\
      (B) for a proceeding without named parties, a person who will be
significantly affected by the decision in the proceeding and who
participates in the proceeding;\
   (11) \"person\" has the same meaning as in section 551(2) of this
title; and\
   (12) \"roster\" means a list of persons qualified to provide services
as neutrals.

§ 574.  Confidentiality\
\
(a) Except as provided in subsections (d) and (e), a neutral in a
dispute resolution proceeding shall not voluntarily disclose or through
discovery or compulsory process be required to disclose any dispute
resolution communication or any communication provided in confidence to
the neutral, unless\--\
   (1) all parties to the dispute resolution proceeding and the neutral
consent in writing, and, if the dispute resolution communication was
provided by a nonparty participant, that participant also consents in
writing;\
   (2) the dispute resolution communication has already been
***intentionally or advertently*** made public;\
   (3) the dispute resolution communication is required by statute to be
made public, but a neutral should make such communication public only if
no other person is reasonably available to disclose the communication;
or\
   (4) a court determines that such testimony or disclosure is necessary
to\--\
      (A) prevent a manifest injustice;\
      (B) help establish a violation of law; or\
      (C) prevent harm to the public health or safety, of sufficient
magnitude in the particular case to outweigh the integrity of dispute
resolution proceedings in general by reducing the confidence of parties
in future cases that their communications will remain confidential.\
 \
(b) A party to a dispute resolution proceeding shall not voluntarily
disclose or through discovery or compulsory process be required to
disclose any dispute resolution communication ***or any communication
provided in confidence to the party***, unless\--\
   (1) the communication was prepared by the party seeking disclosure;\
   (2) all parties to the dispute resolution proceeding consent in
writing;\
   (3) the dispute resolution communication has already been
***intentionally or advertently*** made public;\
   (4) the dispute resolution communication is required by statute to be
made public;\
   (5) a court determines that such testimony or disclosure is necessary
to\--\
      (A) prevent a manifest injustice;\
      (B) help establish a violation of law; or\
      (C) prevent harm to the public health and safety,\
   of sufficient magnitude in the particular case to outweigh the
integrity of dispute resolution proceedings in general by reducing the
confidence of parties in future cases that their communications will
remain confidential;\
   (6) the dispute resolution communication is relevant to determining
the existence or meaning of an agreement or award that resulted from the
dispute resolution proceeding or to the enforcement of such an agreement
or award~~; or\
   (7) except for dispute resolution communications generated by the
neutral, the dispute resolution communication was provided to or was
available to all parties to the dispute resolution proceeding~~.\
 \
(c) Any dispute resolution communication that is disclosed in violation
of subsection (a) or (b), shall not be admissible in any proceeding
relating to the issues in controversy with respect to which the
communication was made.\
 \
(d) (1) The parties may agree to alternative confidential procedures for
disclosures by a neutral. Upon such agreement the parties shall inform
the neutral before the commencement of the dispute resolution proceeding
of any modifications to the provisions of subsection (a) that will
govern the confidentiality of the dispute resolution proceeding. If the
parties do not so inform the neutral, subsection (a) shall apply.\
   (2) To qualify for the exemption established under subsection (j), an
alternative confidential procedure under this subsection may not provide
for less disclosure than the confidential procedures otherwise provided
under this section.\
 \
(e) If a demand for disclosure, by way of discovery request or other
legal process, is made upon a neutral ***or party*** regarding a dispute
resolution communication, the neutral ***or party*** shall make
reasonable efforts to notify the parties and any affected nonparty
participants of the demand. Any party or affected nonparty participant
who receives such notice and within 15 calendar days does not offer to
defend a refusal of the neutral ***or party*** to disclose the requested
information shall have waived any objection to such disclosure.\
 \
(f) Nothing in this section shall prevent the discovery or admissibility
of any evidence that is otherwise discoverable, merely because the
evidence was presented in the course of a dispute resolution
proceeding.\
 \
(g) Subsections (a) and (b) shall have no effect on the information and
data that are necessary to document an agreement reached or order issued
pursuant to a dispute resolution proceeding.\
 \
(h) Subsections (a) and (b) shall not prevent the gathering of
information for research or educational purposes, in cooperation with
other agencies, governmental entities, or dispute resolution programs,
so long as the parties and the specific issues in controversy are not
identifiable.\
 \
(i) Subsections (a) and (b) shall not prevent use of a dispute
resolution communication to resolve a dispute between the neutral in a
dispute resolution proceeding and a party to or participant in such
proceeding, so long as such dispute resolution communication is
disclosed only to the extent necessary to resolve such dispute.\
 \
(j) A dispute resolution communication which is between a neutral and a
party***, or between a party and a party,*** and which may not be
disclosed under this section shall also be exempt from disclosure under
section 552(b)(3).

**Appendix C**

**[Proposed Changes to FAR Part
33.214]{.underline}**[^170]**^[\*\*\*]{.underline}^**

a\) The objective of using ADR procedures is to increase the opportunity
for relatively inexpensive and expeditious resolution of issues in
controversy. Essential elements of ADR include \--

> \(1\) Existence of an issue in controversy;
>
> \(2\) A voluntary election by both parties to participate in the ADR
> process;
>
> \(3\) An agreement on alternative procedures and terms to be used in
> lieu of formal litigation; and
>
> \(4\) Participation in the process by officials of both parties who
> have the authority to resolve the issue in controversy**.**

\(b\) If the contracting officer rejects a contractor\'s request for ADR
proceedings, the contracting officer shall provide the contractor a
written explanation citing one or more of the conditions in 5 U.S.C.
572(b) or such other specific reasons that ADR procedures are
inappropriate for the resolution of the dispute. In any case where a
contractor rejects a request of an agency for ADR proceedings, the
contractor shall inform the agency in writing of the contractor\'s
specific reasons for rejecting the request.

\(c\) ADR procedures may be used at any time that the contracting
officer has authority to resolve the issue in controversy. If a claim
has been submitted, ADR procedures may be applied to all or a portion of
the claim. When ADR procedures are used subsequent to the issuance of a
contracting officer\'s final decision, their use does not alter any of
the time limitations or procedural requirements for filing an appeal of
the contracting officer\'s final decision and does not constitute a
reconsideration of the final decision.

\(d\) When appropriate, a neutral person may be used to facilitate
resolution of the issue in controversy using the procedures chosen by
the parties.

\(e\) The confidentiality of ADR proceedings shall be protected
consistent with 5 U.S.C. §§ 571, 574 **except to the extent they (5
U.S.C. §§ 571, 574)** **are supplemented by the following provisions**.

**(1) \"Dispute resolution communication\" means any oral or written
communication prepared for the purposes of*[, or conduct made
in,]{.underline}* a dispute resolution proceeding, including any
memoranda, notes or work product of the neutral, parties or nonparty
participant; except that a written agreement to enter into a dispute
resolution proceeding, or final written agreement or arbitral award
reached as a result of a dispute resolution proceeding, is not a dispute
resolution communication.\
 **

**(2) Except as provided in 5 U.S.C. §574,** **subsections (d) and (e),
a neutral in a dispute resolution proceeding shall not voluntarily
disclose or through discovery or compulsory process be required to
disclose any dispute resolution communication or any communication
provided in confidence to the neutral, unless the dispute resolution
communication has already been *[intentionally or
advertently]{.underline}* made public.\
 \
(3) A party to a dispute resolution proceeding shall not voluntarily
disclose or through discovery or compulsory process be required to
disclose any dispute resolution communication *[or any communication
provided in confidence to the party]{.underline}*, unless\--**

**(a) the dispute resolution communication has already been
*[intentionally or advertently]{.underline}* made public, or\
   **

(b) the dispute resolution communication is relevant to determining the
existence or meaning of an agreement or award that resulted from the
dispute resolution proceeding or to the enforcement of such an agreement
or award.

** \
(4) If a demand for disclosure, by way of discovery request or other
legal process, is made upon a neutral *[or party]{.underline}* regarding
a dispute resolution communication, the neutral *[or party]{.underline}*
shall make reasonable efforts to notify the parties and any affected
nonparty participants of the demand. Any party or affected nonparty
participant who receives such notice and within 15 calendar days does
not offer to defend a refusal of the neutral *[or party]{.underline}* to
disclose the requested information shall have waived any objection to
such disclosure.**[^171]**^\*\*\*\*^\
**

[^1]: ^\*^ *Major John E. Hartsell (B.S., Nova Southeastern University;
    M.H., University of Richmond; M.BA., Nova Southeastern University;
    J.D., Nova Southeastern University; LL.M., The Judge Advocate
    General's School, U.S. Army) is the Staff Judge Advocate,
    Headquarters, Standard Systems Group, Maxwell AFB, AL. He is a
    member of the Florida bar.*

[^2]: [The Godfather.]{.smallcaps} (Paramount Pictures 1972). In *The
    Godfather*, Vito Corleone admonishes his son for revealing family
    confidences during business negotiations. The revelations ultimately
    cause Vito to be shot and his son to be killed.

[^3]: *See* *infra* note 162 and accompanying text.

[^4]: ADR is fashionable but certainly not new. "Settle matters quickly
    with your adversary who is taking you to court. Do it while you are
    still with him on the way, or he may hand you over to the Judge and
    the Judge may hand you over to the officer, and you may be thrown in
    prison." Pamela A. Kentra, *Hear No Evil, See No Evil, Speak No
    Evil: The Intolerable Conflict for Attorney-Mediators Between a Duty
    to Maintain Mediation Confidentiality and the Duty to Report Fellow
    Attorney Misconduct*, 1997 [BYU L. Rev.]{.smallcaps} 715, 717 (1997)
    (citing *Matthew* 5:25-26).

[^5]: The definition of "confidential" under federal law is found in the
    Administrative Dispute Resolution Act. 5 U.S.C. §§ 571-83 (2000).
    "Confidential" means "the information is provided---(A) with the
    expressed intent of the source that it not be disclosed; or (B)
    under circumstances that would create the reasonable expectation on
    behalf of the source that the information will not be disclosed."
    *Id*. § 571(7).

[^6]: *Cf*. Confidentiality in Federal Alternative Dispute Resolution
    Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000)
    (*Guidance*)("Guarantees of confidentiality allow parties to freely
    engage in candid, informal discussions of their interests in order
    to reach the best possible settlement of their claims. A promise of
    confidentiality allows parties to speak openly without fear that
    statements made during an ADR process will be used against them
    later. Confidentiality can reduce posturing and destructive dialogue
    among parties during the settlement process.").

[^7]: [General Servs. Admin. et al., Federal Acquisition Reg.
    33.214(]{.smallcaps}a) [(June 1997) \[]{.smallcaps}hereinafter
    FAR\].

[^8]: *Id*. at 33.214(d).

[^9]: Charles Pou, Jr., *No Fear: Confidentiality Day-to-Day in Federal
    Dispute Resolution*, *in* [Federal Administrative Dispute Resolution
    Deskbook 76]{.smallcaps} (2001).

    > A neutral third party can enhance parties' negotiations by holding
    > separate meetings with each where they are able to speak candidly
    > about their positions, interests, and alternatives. The neutral,
    > without disclosing confidences, can then use the confidential data
    > to shape the negotiations to reach settlements that meet parties'
    > interests most effectively.

    *Id.* at 77.

[^10]: Pou, *supra* note Error: Reference source not found, at 76.
    Congress, "\[R\]ecognized that parties would be less forthcoming if
    they knew disclosure to be a significant possibility, and that even
    one or two cases where expectations of confidentiality are
    undermined could precipitate a damaging loss of trust in the
    confidentiality of federal ADR processes as a whole." *Id.*

[^11]: Kentra, *supra* note Error: Reference source not found, at 722.

    > Confidentiality lies at the heart of the mediation process.
    > Mediation would not be nearly as effective if the parties were not
    > assured their discussions would remain private. Parties would be
    > hesitant to bare their souls to someone who may be called as a
    > witness against them in subsequent litigation. It is therefore
    > essential to the success of the process that parties freely
    > disclose information relating to the dispute. Confidentiality
    > serves the crucial purpose of allowing the mediator to be seen by
    > the parties as a neutral, unbiased third party.

    *Id.*

[^12]: Subtle differences in ADR scenarios can result in drastically
    different results. A head nod, an overheard telephone call, or an
    innocuous discussion between parties can each result in a breach of
    confidentiality. The differences between a conversation protected by
    confidentiality and a conversation not protected by confidentiality
    can be insignificant, but the results can be disturbingly
    significant. *See infra* discussion Parts V-VII.

[^13]: 5 U.S.C. § 552 (2000).

[^14]: Nat'l Parks & Conservation Assoc. v. Morton, 498 F.2d 765 (D.C.
    Cir. 1974) (contractor seeking to use FOIA to discover financial
    information about a competing concessionaire). "The ADRA did not
    include an exemption from the disclosure requirements of the Freedom
    of Information Act ('FOIA')." Jeffrey M. Senger, *Turning the Ship
    of State*, 2000 [J. Disp. Resol.]{.smallcaps} 79, 81 (2000) (citing
    Administrative Dispute Resolution Act of 1996, 5 U.S.C. §§ 571-584
    (1994 & Supp. IV 1998)). Discovering how FOIA could be used to
    breach confidential communications, Congress later corrected the
    problem. *See* discussion *infra* Part II.

[^15]: While the comments herein address, for puposes of the primary
    intended audience, "Air Force procurement," virtually all of the
    analysis in this article is also applicable to the subject of
    federal procurement generally.

[^16]: The fact pattern is purposely rudimentary; it avoids a technical
    recitation of Air Force ADR procedures for the sake of simplicity.
    The focus of the fact pattern is on ADR confidentiality rather than
    the actual ADR process. For a discussion of actual Air Force ADR
    procedures, *see* *infra* Parts III.B. & Appendix A. *See also*
    Major Patrick E. Tolan, Jr., *Using ADR to Resolve Contract Disputes
    Between Contractors and the Air Force*, *in* [Federal Administrative
    Dispute Resolution Deskbook]{.smallcaps} (2001).

[^17]: 5 U.S.C. §§ 571-83 (2000).

[^18]: Diane R. Liff, *Administrative Dispute Resolution Act of 1996*,
    *in* [Federal Administrative Dispute Resolution Deskbook
    35]{.smallcaps} (2001).

[^19]: 5 U.S.C. § 574.

[^20]: Senger, *supra* note Error: Reference source not found, at 81.

[^21]: Tolan, *supra* note Error: Reference source not found, at 286-99.

[^22]: Senger, *supra* note Error: Reference source not found, at 81.

[^23]: *Id.* at 80.

[^24]: Tolan, *supra* note Error: Reference source not found, at 290
    (*citing* 5 U.S.C. § 571).

[^25]: *Id.* at 291.

[^26]: Senger, *supra* note Error: Reference source not found, at 81.

[^27]: *Id.* at 81 (*citing* 5 U.S.C. § 574(j)). Jonathon D. Mester,
    *The Administrative Dispute Resolution Act of 1996: Will the New Era
    of ADR in Federal Administrative Agencies Occur at the Expense of
    Public Accountability?*, 13 [Ohio St. J. On Disp.
    Resol.]{.smallcaps} 167, 168 (1997).

[^28]: Peter R. Steenland, Jr. & Peter A. Appel, *The Ongoing Role of
    Alternative Dispute Resolution in Federal Government Litigation*, 27
    [U. Tol. L. Rev.]{.smallcaps} 805, 819 (1996).

[^29]: Tolan, *supra* note Error: Reference source not found, at 291.

[^30]: Mester, *supra* note Error: Reference source not found, at 168.

[^31]: Tolan, *supra* note Error: Reference source not found, at 286.

[^32]: Darleen Druyun, A Quiet Revolution in Managing Contract
    Controversies, Address Before the ABA Public Contract Law Section
    (Apr. 26, 1999) \[hereinafter ADR First Speech\], *available at*
    http://www.adr.af.mil/afadr/druyunspeech.htm.

[^33]: *Id.* (*citing* Policy Letter, F. Whitten Peters, subject:
    Implementation of the Administrative Dispute Resolution Act of 1996
    (Apr. 21,1996) \[hereinafter AF ADR Policy Letter\]).

[^34]: [U.S. Dep't of Defense, Dir. 5145.5, Alternative Dispute
    Resolution]{.smallcaps} para[. A (]{.smallcaps}Apr. 22, 1996).

[^35]: AF ADR Policy Letter, *supra* note Error: Reference source not
    found.

[^36]: [U.S. Dep't of Air Force Policy Dir. 51-12, Alternative Dispute
    Resolution (A]{.smallcaps}pr. 1, 1999).

[^37]: Martha Mathews, *Air Force Launches Joint ADR Training Effort,
    Cites Resolution of \$1B in Contract Disputes*, 74 [Fed. Cont. Rep
    350,]{.smallcaps} 350-52 (Oct. 17, 2000).

[^38]: *Id.*

[^39]: Captain Kim D'Ippolito, *Air Force Materiel Command Leading the
    Way in "ADR First Policy"* [Leading Edge]{.smallcaps}, Aug. 2001,
    *available at* http://www.adr.af.mil/afadr/afmcadrfirst.htm.

[^40]: *Id*.

[^41]: *Id*.

[^42]: *Id*.

[^43]: Martha Mathews, *Air Force Makes Good on Promise to Rely on ADR
    in Contract Disputes* 73 [Fed. Cont. Rep. 152, 152-54]{.smallcaps}
    (8 Feb. 2000).

[^44]: AF ADR [Program Office, Report to the President of the United
    States and the Secretary of the Air Force for Fiscal
    Year]{.smallcaps} 1999 (1999) \[hereinafter [Report to the President
    on AF ADR\] ("]{.smallcaps}If negotiations do not result in a timely
    settlement (unresolved for more than 12 months) or if the estimated
    value of the issue is significant (more than \$10 million when
    received), the Contracting Officer will refer the matter to \[an\]
    Air Force Advisory Team for advice on the use of ADR.").

[^45]: Five Year Plan, SAF/IQ, subject: Air Force Alternative Dispute
    Resolution (ADR) Plan for Contract Controversies (9 July 1999)
    \[hereinafter 5 Year Plan\]; Mathews, *supra* note Error: Reference
    source not found, at 152-54.

[^46]: *See infra* Appendix A*.*

[^47]: Mathews, *supra* note Error: Reference source not found, at
    152-54.

[^48]: 5 Year Plan, *supra* note Error: Reference source not found.

[^49]: [Report to the President on AF ADR,]{.smallcaps} s*upra* note
    Error: Reference source not found.

[^50]: Martha Mathews, *Air Force Launches New Push for ADR Use; Drafts
    Legislation to Fund ADR Settlements,* 71 [Fed. Cont. Rep.
    608-09]{.smallcaps} (May 3,1999).

[^51]: Memorandum from Darleen A. Druyun, Principal Deputy Assistant
    Secretary (Acquisition & Management), to Air Force Acquisition
    Personnel, subject: Lightning Bolt (LB) 99-04, Alternative Dispute
    Resolution (18 Aug. 1999), *available at*
    http://www.safaq.hq.af.mil/contracting/toolkit/adr/adr-druyunmemo-18aug99.pdf.

[^52]: Marshall J. Breger & Gerald S. Schatz, *Federal Administrative
    Dispute Resolution: An Overview*, *in* [Federal Administrative
    Dispute Resolution Deskbook 76]{.smallcaps} (2001).

[^53]: Owen W. Gray, *Protecting the Confidentiality of Communications
    in Mediation*, 36 [Osgoode Hall L.J.]{.smallcaps} 667, 670 (1998)
    (citing [J. Folberg & A. Taylor]{.smallcaps}, [Mediation: A
    Comprehensive Guide to Resolving Conflicts Without
    Litigation]{.smallcaps} 264 (1984); L.R. Freedman & M.L. Prigoff,
    *Confidentiality in Mediation: The Need for Protection*, 2 [Ohio St.
    J. on Disp. Resol.]{.smallcaps} 37 (1986); M.L. Prigoff, *Toward
    Candor or Chaos: The Case of Confidentiality in Mediation*, 12
    [Seton Hall Legis. J.]{.smallcaps} 1 (1988); A. Kirtley, *The
    Mediation Privilege's Transition from Theory to Implementation:
    Designing a Mediation Privilege Standard to Protect Mediation
    Participants, the Process and the Public Interest*, [J. Disp.
    Resol.]{.smallcaps} 1, 8 (1995); and *Protecting Confidentiality in
    Mediation*, Note, 98 [Harv. L. Rev.]{.smallcaps} 441, 444-45 (1984).
    *But see* Gray, *supra* (citing E.D. Green, *A Heretical View of the
    Mediation Privilege*, [2 Ohio St. J. on Disp. Resol.]{.smallcaps} 1
    (1986); and K. Gibson, *Confidentiality in Mediation: A Moral
    Reassessment*, [J. Disp. Resol.]{.smallcaps} 25, 40 (1992)).

[^54]: Pou, *supra* note Error: Reference source not found, at 76.

[^55]: Ellen E. Deason, *Enforcing Mediated Settlement Agreements:
    Contract Law Collides With Confidentiality*, 35 [U.C. Davis L.
    Rev.]{.smallcaps} 33, 35 (2001). In her article, Deason examines the
    parameters of confidentiality when there is an attempt to enforce a
    mediated settlement agreement. Deason stresses, "\[Confidentiality\]
    is necessary to foster the neutrality of the mediator and essential
    if parties are to participate fully in the process." *Id.* *See
    also*, Peter Marksteiner, *How Confidential Are Federal Sector
    Employment-Related Dispute Mediations?* 14 [Ohio St. J. on Disp.
    Resol.]{.smallcaps} 89, 89, and 155 (1998) (citations omitted). In
    his article, Marksteiner dissects the confidentiality provisions of
    the ADRA and analyzes the future of mediation in Air Force labor
    disputes. He acknowledges the importance of confidentiality and
    later concludes, "Mediation will continue to be an effective way to
    resolve employment-related disputes in the Air Force as long as the
    confidentiality of private caucuses between the mediator and the
    parties is strictly protected." *Id*.

[^56]: The above cross-examination would not occur in the Federal system
    because Federal Rule of Evidence 408 (Rule 408) ensures that such
    matters are inadmissible. [Fed]{.smallcaps}. R. [Evid]{.smallcaps}.
    408:

    > Evidence of (1) furnishing or offering or promising to furnish, or
    > (2) accepting or offering or promising to accept, a valuable
    > consideration in compromising or attempting to compromise a claim
    > which was disputed as to either validity or amount, is not
    > admissible to prove liability for or invalidity of the claim or
    > its amount. Evidence of conduct or statements made in compromise
    > negotiations is likewise not admissible. This rule does not
    > require the exclusion of any evidence otherwise discoverable
    > merely because it is presented in the course of compromise
    > negotiations. This rule also does not require exclusion when the
    > evidence is offered for another purpose, such as proving bias or
    > prejudice of a witness, negativing a contention of undue delay, or
    > proving an effort to obstruct a criminal investigation or
    > prosecution.

[^57]: *Id.*

[^58]: *Id.* ("Evidence of conduct or statements made in compromise
    negotiations is likewise not admissible.").

[^59]: [Stephen A. Saltzburg et al., Federal Rules of Evidence Manual
    599]{.smallcaps} (7^th^ ed. 1998) (citing Fiberglass Insulators,
    Inc. Dupuy, 856 F.2d 652 (4^th^ Cir. 1988)).

[^60]: *Id.* at 599.

[^61]: *Id.* at 601 ("Thus, the fact that a party settled a litigation
    with another is not admissible to prove the validity or amount of
    the claim currently before the Court." ).

[^62]: W. Brazil, *Protecting the Confidentiality of Settlement
    Negotiations*, 39 [Hastings L. J. 955 (1988).]{.smallcaps} In his
    article Brazil comments, "The bottom line of this Article's analysis
    will be disheartening to some: despite the policy that inspires rule
    408, there are many circumstances in which the things that lawyers
    and clients say and do during settlement negotiations will not be
    protected from disclosure or barred from use at trial." *Id.* at
    957.

[^63]: *See* [Fed. R. Evid.]{.smallcaps} 408 (emphasis added).

[^64]: *Id*. (emphasis added).

[^65]: Computer Associates Int'l, Inc. v. Am. Fundware, Inc., 831 F.
    Supp. 1516, 1531 (D. Colo. 1993) (citing NAACP Legal Defense Fund v.
    United States Dep't of Justice, 612 F. Supp. 1143, 1146 (D.D.C.
    1985)).

[^66]: Morse/Diesel Inc. v. Trinity Industries, Inc., 142 F.R.D. 80, 85
    (S.D.N.Y. 1992); Manufacturing Systems, Inc. of Milwaukee v.
    Computer Technology, Inc., 99 F.R.D. 335, 336 (E.D. Wis. 1983).

[^67]: *Trinity*, 142 F.R.D. at 83 (citing [J. Weinstein & M.
    Berger]{.smallcaps}, [Evidence, ¶ 408\[1\],]{.smallcaps} at 408-15
    to 408-16 (1986)).

[^68]: *See* [Fed. R. Civ. P.]{.smallcaps} 26(b)(1).

[^69]: Morse/Diesel Inc. v. Trinity Indus., Inc., 122 F.R.D. 447, 449
    (S.D.N.Y. 1988) (*citing* *NAACP*, 612 F. Supp. at 1143, 1146)
    *aff'd*, 142 F.R.D. 80.

[^70]: Maureen A. Weston, *Checks on Participant Conduct in Compulsory
    ADR: Reconciling the Tension in the Need for Good-Faith
    Participation, Autonomy, and Confidentiality,* 76 [Ind. L.J. 591
    (2001).]{.smallcaps} Weston raises concerns over ADR being used
    simply as a discovery tool. She writes,

    > As the use of compulsory ADR continues to rise, concerns that
    > behind the closed doors of an ADR proceeding participants may
    > engage in abusive conduct, use the process simply as a subterfuge
    > for discovery, or fail to participate in a meaningful matter raise
    > the questions of what can be done to address participant
    > misconduct or abuse in ADR and to ensure basic procedural
    > fairness.

    *Id.* at 595 (citations omitted).

[^71]: Kentra, *supra* note Error: Reference source not found, at 729.
    "However, Rule 408 is fraught with exceptions, many of which raise
    serious concerns to whether essential portions of the mediation
    process would be deemed confidential." *Id.*

[^72]: 5 U.S.C. §§ 571-83 (2000). In his article, *Protecting the
    Confidentiality of Settlement Agreements*, Brazil reminds his reader
    that [Fed. R. Evid.]{.smallcaps} 403 (Rule 403) can also provide
    Rule 408 with some protective assistance. Brazil, *supra* note
    Error: Reference source not found, at 988. Rule 403 states,
    "Although relevant, evidence may be excluded if its probative weight
    is substantially outweighed by the danger of unfair prejudice,
    confusion of the issues, or misleading the jury, or by
    considerations of undue delay, waste of time, or needless
    presentation of cumulative evidence." [Fed. R. Evid.
    403.]{.smallcaps} Brazil writes, "\[I\]t is entirely appropriate to
    invoke Rule 403 to oppose the admission of settlement evidence that
    rule 408 would not automatically bar." Brazil, *supra* note Error:
    Reference source not found, at 988. Brazil's reliance on Rule 403 is
    justified if the issue of confidentiality is ever brought before a
    judge. However, Rule 403 is too amorphous to provide any practical
    guidance to the parties or neutrals who are trying to understand the
    parameters of ADR's confidentiality protections on a day-to-day
    basis.

[^73]: In fact, some argue it provides too much confidentiality at the
    expense of the public's right to know. *See Mester, supra* note
    Error: Reference source not found, at 185-86.

[^74]: Pou, *supra* note Error: Reference source not found, at 76. "In
    creating a confidentiality section that is the most detailed of any
    federal or state ADR statute, Congress gave parties in federally
    related ADR proceedings an assurance that their dispute resolution
    communications would generally be 'immune from discovery,' and
    defined these protections in detail." *Id.*

[^75]: Marksteiner, *supra* note Error: Reference source not found, at
    102.

[^76]: In re: Grand Jury Subpoena Dated Dec. 17, 1996, 148 F.3d 487, 492
    (5^th^ Cir. 1998) (*citing* Nguyen Da Yen v. Kissinger, 528 F.2d
    1194, 1205 (9^th^ Cir. 1975)( "'Confidential' does not necessarily
    mean 'privileged.'") .

[^77]: 5 U.S.C. §§ 571(5), 574 (2000). Although Rule 408's protections
    were limited during discovery, the ADRA's umbrella of protections
    specifically includes discovery of written and oral confidential
    communications.

[^78]: *Id.* § 574(a)( "Except as provided in subsections (d) and (e), a
    neutral in a dispute resolution proceeding shall not voluntarily
    disclose or through discovery or compulsory process be required to
    disclose any dispute resolution communication or any communication
    provided in confidence to the neutral . . .").

[^79]: *Id*. § 571(5).

    > '\[D\]ispute resolution communication' means any oral or written
    > communication prepared for the purposes of a dispute resolution
    > proceeding, including any memoranda, notes or work product of the
    > neutral, parties or nonparty participant; except that a written
    > agreement to enter into a dispute resolution proceeding, or final
    > written agreement or arbitral award reached as a result of a
    > dispute resolution proceeding, is not a dispute resolution
    > communication . . .

    *Id.*

[^80]: *Id*. § 571(6)(\"\'\[D\]ispute resolution proceeding' means any
    process in which an alternative means of dispute resolution is used
    to resolve an issue in controversy in which a neutral is appointed
    and specified parties participate . . .\").

[^81]: *Id*. § 571(5).

[^82]: *Id*. (Even though the ADRA does not protect discovery of
    agreements to enter into ADR or final written agreements, Rule 408
    prevents their use at trial.).

[^83]: *Id.* § 571(7).

    > '\[I\]n confidence' means, with respect to information, that the
    > information is provided\--(A) with the expressed intent of the
    > source that it not be disclosed; or (B) under circumstances that
    > would create the reasonable expectation on behalf of the source
    > that the information will not be disclosed.

    *Id.*

[^84]: *Id.* § 574(a)(1).

    > Except as provided in subsections (d) and (e), a neutral in a
    > dispute resolution proceeding shall not voluntarily disclose or
    > through discovery or compulsory process be required to disclose
    > any dispute resolution communication or any communication provided
    > in confidence to the neutral, unless\-- (1) all parties to the
    > dispute resolution proceeding and the neutral consent in writing,
    > and, if the dispute resolution communication was provided by a
    > nonparty participant, that participant also consents in writing.

    *Id.*

[^85]: *Id.* § 574(a)(2)("\[T\]he dispute resolution communication has
    already been made public . .").

[^86]: *Id.* § 574(a)(3)("\[T\]he dispute resolution communication is
    required by statute to be made public, but a neutral should make
    such communication public only if no other person is reasonably
    available to disclose the communication.").

[^87]: *Id.* § 574(a)(4).

    > \[A\] court determines that such testimony or disclosure is
    > necessary to\-- (A) prevent a manifest in justice; (B) help
    > establish a violation of law; or (C) prevent harm to the public
    > health or safety, of sufficient magnitude in the particular case
    > to outweigh the integrity of dispute resolution proceedings in
    > general by reducing the confidence of parties in future cases that
    > their communications will remain confidential.

    *Id.*

[^88]: *Id.* § 574(a).

[^89]: *Id.* § 574(b)( "A party to a dispute resolution proceeding shall
    not voluntarily disclose or through discovery or compulsory process
    be required to disclose any dispute resolution communication. . .
    .")

[^90]: *Id.* § 574(a).

[^91]: *Id.* § 574(b)(1)("\[T\]he communication was prepared by the
    party seeking disclosure . . .").

[^92]: *Id.* § 574(b)(2)("\[A\]ll parties to the dispute resolution
    proceeding consent in writing . . .").

[^93]: *Id.* § 574(b)(3)("\[T\]he dispute resolution communication has
    already been made public . . .").

[^94]: *Id.* § 574(b)(4)("\[T\]he dispute resolution communication is
    required by statute to be made public . . .").

[^95]: *Id.* § 574(b)(5).

    > \[A\] court determines that such testimony or disclosure is
    > necessary to (A) prevent manifest injustice; (B) help establish a
    > violation of law; or\
    > (C) prevent harm to the public health and safety, of sufficient
    > magnitude in the particular case to outweigh the integrity of
    > dispute resolution proceedings in general by reducing the
    > confidence of parties in future cases that their communications
    > will remain confidential.

    *Id.*

[^96]: *Id.* § 574(b)(6)("\[T\]he dispute resolution communication is
    relevant to determining the existence or meaning of an agreement or
    award that resulted from the dispute resolution proceeding or to the
    enforcement of such an agreement or award . . .").

[^97]: *Id.* § 574(b)(7)("\[E\]xcept for dispute resolution
    communications generated by the neutral, the dispute resolution
    communication was provided to or was available to all parties to the
    dispute resolution proceeding.").

[^98]: *Id.*

[^99]: 5 U.S.C. § 574(b).

[^100]: *See* discussion *supra* Parts II and IV.

[^101]: Lodge, *Comment: Legislation Protecting Confidentiality in
    Mediation: Armor of Steel or Eggshells?,* 41 [Santa Clara L.
    Rev.]{.smallcaps} 1093, 1112 (2001).

[^102]: *See* discussion *supra* Part V.

[^103]: *See* discussion *supra* Part IV.A.

[^104]: *See* discussion *supra* Part V.B.

[^105]: Interview with Major Karen White, Professor, Contract and Fiscal
    Law Department, The Judge Advocate General's School, in
    Charlottesville, Va. (Jan. 14, 2002).

[^106]: 5 U.S.C. § 574(c) (2000).

[^107]: *Id.*

[^108]: There do not appear to be any continuous violations of any
    particular portion of the ADRA to defend against or enforce against.
    Senger, *supra* note Error: Reference source not found, at 95.

[^109]: There are provisions under other federal statutes that offer a
    litany of enforcement mechanisms.

    > In a judicial setting, the Federal Rules of Civil Procedure
    > authorize courts to impose sanctions against an attorney or party
    > under Rule 11 for harassing and frivolous conduct in pleadings or
    > representations to the court; under Rule 37 for misconduct in
    > discovery; and under Rule 16 for misconduct or bad faith in the
    > conduct of pretrial conferences and settlement negotiations.

    Weston, *supra* note 69, at 607 (citations omitted).

[^110]: *See* discussion *supra* Part II.

[^111]: Strengthening the ADRA is not the only way to improve the future
    of ADR. ADR participants can seek to strengthen ADR in general by
    agreeing, amongst themselves, to abide by more effective, uniform
    confidentiality rules. Their agreement can be memorialized in the
    ADR agreement (*see* discussion *supra* Part III.B.) or in the
    procurement contract (*see* discussion *infra,* Part VII). However,
    strengthening the ADRA, rather than simply agreeing to new
    confidentiality rules, is a more effective action because the ADRA
    applies to all individuals, while agreements apply only to
    signatories. ADRA changes would apply to both the contracting
    parties and to unsuccessful offerors who may seek to breach
    confidentiality. *See* discussion *infra* Part VII.

[^112]: 5 U.S.C. § 574(a) and (b).

[^113]: *Id.*

[^114]: *Id.*

[^115]: [McCormick on Evidence]{.smallcaps} 648-53 (John William Strong,
    et al. eds) (1992).

[^116]: [Fed. R. Evid.]{.smallcaps} 408.

[^117]: 5 U.S.C. § 571.

[^118]: *See infra* Appendix B.

[^119]: 5 U.S.C. § 574(a)(2) and (b)(3).

[^120]: *Id.*

[^121]: *Id.*

[^122]: *Id*.

[^123]: *See infra* Appendix B.

[^124]: *See* discussion *supra* Part V.B.1.

[^125]: 5 U.S.C. § 574(b)(7).

[^126]: *Id.*

[^127]: *Id.* § 574(a).

[^128]: Lodge, *supra* note Error: Reference source not found, at 1112.

[^129]: [Administrative Conference of the United States, Report on
    Agency Implementation of the Administrative Dispute Resolution Act,
    subject: Toward Improved Agency Dispute Resolution: Implementing the
    ADR Act]{.smallcaps} (Feb. 1995)\[hereinafter [Administrative
    Conference Report]{.smallcaps}\].

[^130]: The exception of 5 U.S.C*.* § 574(a)(2) eliminates
    confidentiality if "the dispute resolution has already been made
    public." *Id.*

[^131]: *Id.*

[^132]: [Administrative Conference Report]{.smallcaps} *supra* note
    Error: Reference source not found. *See infra* Appendix B (5 U.S.C.
    § 574(j) would also have to be expanded to make confidential
    communications between the parties exempt from FOIA).

[^133]: 5 U.S.C. § 574(a)(4), (b)(5) (2000).

[^134]: *Id.* § 574(h)("Subsections (a) and (b) shall not prevent the
    gathering of information for research or educational purposes, in
    cooperation with other agencies, governmental entities, or dispute
    resolution programs, so long as the parties and the specific issues
    in controversy are not identifiable." ).

[^135]: *Id.* § 574(e).

    > (e) If a demand for disclosure, by way of discovery request or
    > other legal process, is made upon a neutral regarding a dispute
    > resolution communication, the neutral shall make reasonable
    > efforts to notify the parties and any affected nonparty
    > participants of the demand. Any party or affected nonparty
    > participant who receives such notice and within 15 calendar days
    > does not offer to defend a refusal of the neutral to disclose the
    > requested information shall have waived any objection to such
    > disclosure.

    *Id.*

[^136]: *See infra* Appendix B.

[^137]: Confidentiality in Federal Alternative Dispute Resolution
    Programs, 65 Fed. Reg. 83,085-87 (Dec. 29, 2000) (Guidance).

[^138]: *See* discussion *supra* Part V.A.

[^139]: *See* discussion *supra* Part V.B.

[^140]: *See* discussion *supra* Part III.B.

[^141]: Confidentiality in Federal Alternative Dispute Resolution
    Programs, 65 Fed. Reg. 83,085, 83093 (Dec. 29, 2000) (Guidance).

[^142]: *Id*.

[^143]: FAR, *supra* note Error: Reference source not found, at 33.214.

[^144]: *Id*.

[^145]: FAR, *supra* note Error: Reference source not found, at
    33.214(e).

[^146]: FAR, *supra* note Error: Reference source not found, at
    33.214(d).

[^147]: *Id*. ("When appropriate, a neutral person may be used to
    facilitate resolution of the issue in controversy using the
    procedures chosen by the parties." ).

[^148]: *See* discussion *supra* Parts VI.A-E.

[^149]: *See* discussion *supra* Part III.A.

[^150]: Marksteiner, *supra* note Error: Reference source not found, at
    91-92.

[^151]: Senger, *supra* note Error: Reference source not found, at 90.

[^152]: Kentra, *supra* note Error: Reference source not found, at 721.

[^153]: Weston, *supra* note Error: Reference source not found, at 594.

[^154]: *See* discussion *supra* Part III.A.

[^155]: AF ADR Policy Letter, *supra* note Error: Reference source not
    found.

[^156]: *See* discussion *supra* Part III.A*.*

[^157]: AF ADR Policy Letter, *supra* note Error: Reference source not
    found*.*

[^158]: 5 Year Plan, *supra* note Error: Reference source not found, at
    1; Senger, *supra* note Error: Reference source not found, at 93
    ("While we do not argue that ADR is appropriate in every case,
    situations where we recommend against it are rare, such as when the
    government needs a court ruling for a public sanction or a legal
    precedent.") (citation omitted).

[^159]: *See* discussion *supra* Part IV.

[^160]: *Id.*

[^161]: Weston, *supra* note Error: Reference source not found, at 595.

[^162]: *See* discussion *supra* Part V.

[^163]: Marksteiner, *supra* note Error: Reference source not found, at
    91-92; Senger, *supra* note Error: Reference source not found, at
    90; Kentra, *supra* note Error: Reference source not found, at 721;
    Weston, *supra* note Error: Reference source not found, at 594.

[^164]: *See* discussion *supra* Part IV.

[^165]: *Id.*

[^166]: *See* discussion *supra* Part V.

[^167]: Confidentiality in Federal Alternative Dispute Resolution
    Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000) (*Guidance*).

[^168]: ^\*\*^ 5 Year Plan, *supra* note Error: Reference source not
    found.

[^169]: ^\*\*\*^ Proposed additions to the ADRA appear in bold italics
    (e.g. ***proposed addition***). Proposed deletions from the ADRA
    appear in strike-through ~~proposed deletions~~.

[^170]: ^\*\*\*\*^ Proposed additions to the FAR appear in bold (*e.g*.
    **proposed addition**). Proposed additions to the FAR that are also
    proposed additions to the ADRA appear in bold, underlined italics
    (*e.g.* ***[proposed addition to the FAR which is also an addition
    to the ADRA]{.underline}***).

[^171]: ^\*\*\*\*\*^ The parties can agree to expand the rules of
    confidentiality but they cannot contractually agree to ignore the
    proscriptions of FOIA. Accordingly, 5 U.S.C. § 574(j) and its
    amending language, found in Appendix B *supra*, could not be added
    to a potential FAR clause.