# Presentation: 098154

## ADR & Technology: Introduction to the Cutting Edge

**Sponsors:**
**The ABA Public Contract Law Section Alternative Dispute Resolution Committee**
**The ABA Dispute Resolution Section Public Contracts Committee**
**The ABA Committee on Continuing Education of the Bar**
**The Interagency ADR Working Group Contracts and Procurement Section**

## Overview

- Setting the Stage - Getting to the techno- ADR
- Cheap-Tech for Hearings
- Video Teleconferencing ADR
- Online Dispute Resolution at NMB

## Overview (cont.)

- Most forms of ADR alter either the decision making process, or the information exchange process.
- Technologies mostly improve the information exchange process.
- All presentations focus on overcoming barriers by communication such as:
- Explaining ADR to clients
- Compressing a weeks trial into a few days.
- Overcoming distance

## Setting the Stage: ADR & Clients

- Clients need to understand the ADR process.
- For DON personnel and contractors, we have e-learning at:
- _adr.navy.mil/etraining.asp_
- It is a public site

*Launch from here down here*

## Setting the Stage: ADR & Clients

- Clients need to understand the ADR process.
- For DON personnel and contractors, we have e-learning at:
- _adr.navy.mil/etraining.asp_
- It is a public site

## Setting the Stage: ADR & Clients

- Clients need to understand the ADR process.
- For DON personnel and contractors, we have e-learning at:
- _adr.navy.mil/etraining.asp_
- It is a public site

*Click here to get a brief intro, followed by specific areas, including acquisition.*

## Setting the Stage: ADR & Clients

- Clients need to understand the ADR process.
- For DON personnel and contractors, we have e-learning at:
- _adr.navy.mil/etraining.asp_
- It is a public site

## Setting the Stage: ADR & Clients

- Clients need to understand the ADR process.
- For DON personnel and contractors, we have e-learning at:
- _adr.navy.mil/etraining.asp_
- It is a public site

## Setting the Stage: The ADR Agreement

- ADR Agreements frequently have document exchange clauses.
- Consider in advance how you will treat PowerPoint and other unique tools used in an ADR proceeding.
- Avoid charges of surprise in non-binding mediations (r*emember the idea is to convince the others to settle!*)
- For summary trial w/ binding decision, what will be in the record?
- Should they be part of an expert’s report?
- Should graphs, images, etc. be limited to documents previously exchanged?

## Setting the Stage: ADR Agreement

- For example, ASBCA “settlement judge” form has the following statement:
*5.**	*_*Agenda*_*.  The presentations of the parties will be informal and the rules of evidence are waived.  The settlement judge may, nonetheless, guide the presentation of evidence.  [The parties should spell out how they wish to make their informal presentations and agree on time to be allotted to various phases of the process.  ....]*
*http://www.law.gwu.edu/asbca/Settjdge.doc*

## Setting the Stage: ADR Agreement

- Consider, therefore:
*5.**	*_*Agenda*_*.  The presentations of the parties will be informal and the rules of evidence are waived.  The settlement judge may, nonetheless, guide the presentation of evidence.  ****The parties anticipate using PowerPoint presentations during the proceeding.  Such presentations shall not be considered part of the record, and do not need to be exchanged in advance of the mediation.  ....]***

## Setting the Stage: Damages

- “You should use some objective, systematic method of valuing a case and of determining the opening and bottom line positions.”
- J.W. Cooley, *Mediation Advocacy,* p. 72 (1996)
- Reduce your systemic method to a spreadsheet format.
- Ideally, you should tie the spreadsheet into your entitlement and quantum themes.
- As negotiations advance, you can recalculate your position rapidly. (See example on next page.)

## Slide 13

## An Example 

- Using PowerPoint and Trial Director in High-Dollar Procurement Mediation

## Overview

- Contract Dispute
- ADR
- Situation
- Solution
- Observations

## The Contract

- Firm Fixed Price
- $9,343,048
- Turnkey
- 1990 – 1996
- Protest

## Contract for what?

- Human Centrifuge

## CFET

- Centrifuge-Based Environmental Trainer

## CFET Facility

## Gear Reducer

- CFET Centrifuge Device

- Arm

- Gondola

- Gear Reducer

- Motor

- Shaft

## The Claims

- $12,000,000
- 60 sub-items
- Massive Document Collection
- Years of litigation
- Every Government Contract Issue

## The Other Cases

- Contractor vs. Subcontractor
- Construction – Miller Act Arbitration
- Software - Arbitration

## Natural Frequency

*$5,728,598*

*$648,254*

*$1,083,223*

*$1,050,181*

*$1,457,937*

*$29,615*

*$1,170,521*

*$635,875*

**Bid **
**Protest**

**Facility**

**Available **
**Facility**
**Funds**

**Omnibus**

**Noncon-**
**formances**

**Facility**
**With-**
**holding**

**Supp.**
**Omnibus**

**MDC **
**Arbitration**

**9/12/94**

**11/30/94**

**2/23/96**

**2/23/96**

**6/27/97**

**3/19/97**

**3/5/99**

**2/24/99**

## The Client’s Desires

- End this mess
- Does not have the money

## Draft ADR Agreement

- Evidence
- Cross-examine
- Rejected

## Revised ADR Agreement

- Presentation
- 3-days each
- Panel of three
- Judgment Fund

## What Now?

- Massive record
- Complex issues
- Multiple Players
- Days vs. weeks/months

## Pre-Trial Brief

- Drafting
- Findings of fact
- Legal Argument
- 850 pages
- Linked

## Contractor Brief

- Less than 50 pages
- No electronic documents
- 40 loose-leaf note books

## Presentation I

- We can do what we want!
- Good-bye
- Evidence
- Authenticity
- Relevance

## Presentation II

- Opening Statement
- Lay out the case.
- Include legal argument
- One hour planned
- Ran three hours
- Interaction

## Presentation III

- Screens Side by Side
- Trial Director
- Quotes and Images

## Example:

- CFET Facility

*Example:*
*Incorporating an image of the document into the slide.*

## Gear Reducer

- CFET Centrifuge Device

- Arm

- Gondola

- Gear Reducer

- Motor

- Shaft

## Mr. Engineer – Finding 24

- Mr. Engineer ...testified:  "Everything has a natural frequency.  If you happen to excite that thing at its natural frequency, it starts resonating."  **Engineer Deposition at Volume 1, pg. 52:18-20.**
- Put another way, Mr. Engineer testified: "If a system has a natural frequency, and you try to excite it from outside with the same frequency, then it resonates."  **Engineer Deposition at Volume 1, pg. 138:8-10.**

## Government Position

- Plain Meaning
- Contemporaneous Actions
- Proposal
- Pre-dispute Actions

## Contract Specification

- 3.2.1.1.2.4.2. _Arm_ _Natural_ _Frequency_.
- 	“The support arm shall be designed such that the lowest natural frequency in the vertical, onset/offset horizontal (torque), and radial directions shall be above 10.0 cycles per second.  The complete centrifuge system, including foundation, drive, support structure, arm, gondola and moving accessories shall exhibit no resonance at frequencies below 10.0 cycles per second.”

**Notes:**
Finding 11 CFET Contract, Specification 3.2.1.1.2.4.2 ("Arm Natural Frequency"), pg. 3-23.

This paragraph of the specification carries the title Arm Natural Frequency.  The text of paragraph is in two sentences.  The first sentence says that the lowest natural frequency must be above 10Hz. Stated another way, positively, the specification required that the natural frequency of the arm be more than, i.e. above, 10Hz.  The parties agree about this sentence. Note that the first sentence says the “arm shall be designed . . .,” telling the reader that the design does not exist.  
The second sentence speaks to the “complete . . . system” in terms of resonance.  The second sentence requires that there be no resonance below 10hz. Thus the first sentence requires a natural frequency above 10Hz and the second sentence requires no resonance below 10hz.  When it is understood that a device resonates at it natural frequency, then the reader understands that the specification paragraph requires that the complete system have a natural frequency above 10Hz, meaning it would not resonate below 10Hz.  

## Slide 38

## Sub Suspends Work

- June 10, 1992
- August 7, 1992
- 58 days
- Prime directs
- Finding 308 – 325

## Prime vs. Sub

- Navy not a party
- Finding 385
- April 1993
- Prime demands arbitration
- Finding 386

## Prime vs. Sub

- Prime demands arbitration
- Finding 389
- May 1993
- Prime seeks injunction
- Finding 387
- May 1993

## Prime Starts Over

- Finding 391
- June 8, 1993
- Prime starts to develop ADA
- Within scope of basic contract

## Termination 

- Finding 398
- August 2, 1993
- Prime terminates sub for default

## Unabsorbed Overhead

- Precipitating Event
- _Overall_ Contract Delay

## Unabsorbed Overhead

- Whose fault is it?
- Excusable Delay
- Compensable Delay
- No contractor responsible delay
- No concurrent delay

## Legal Elements	Unabsorbed Overhead

- In addition to compensable delay
- Suspension
- Or substantial diminishment
- Stand-by

## Unabsorbed Overhead

- Eichleay Formula “is the _only_ proper method of calculating unabsorbed home office overhead.  _No other formula may be used_.”
*Wickham Contracting Co., Inc. v. Fischer*,
- 12 F.3d 1547, 1575 (Fed. Cir. 1994)

## Unabsorbed Overhead

- “Alternatives to Eichleay Disapproved”
*Wickham Contracting Co., Inc. v. Fischer*,
- 12 F.3d 1547, 1579 - 80 (Fed. Cir. 1994)

## Results

- Settlement
- Judgment Fund Paid
- Client was happy

## Observations

- Technology Enhances
- Methods of Persuasion
- Remain
- Not everyone wants to play
- Do your homework
- Rehearse