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###### Department of Defense

###### Defense Logistics Agency

          - 48 CFR Parts 5433 and 5452

# AGENCY:

Defense Logistics Agency (DLA), Defense.

# ACTION:

Proposed rule.

# SUMMARY:

This proposed rule would add a new provision to DLA solicitations concerning the use of alternative dispute resolution (ADR). The purpose is to establish ADR as the initial dispute resolution method, except for certain circumstances, to increase cooperative problem solving and reduce litigation. The provision would be optional for offerors; however, if they agreed to the provision, both the contractor and DLA would be committed to use ADR except in limited circumstances. Increased use of ADR is consistent with the Administrative Dispute Resolution Act, the Federal Acquisition Regulation (FAR), and Departmental policy.

# DATES:

Comments due on or before June 15, 2000.

# ADDRESSES:

Send written comments to Ms. Mary Massaro, Defense Logistics Agency, DLSC-PPP, Headquarters Center, 8725 John J. Kingman Road, Suite 3147, Fort Belvoir, VA 22060-6221, or via email to mary_massaro@hq.dla.mil. 

# FOR FURTHER INFORMATION CONTACT:

Ms. Mary Massaro, Procurement Analyst, Defense Logistics Agency, DLSC-PPP, at (703) 767-1366.

# SUPPLEMENTARY INFORMATION:

*A. Background.*                     DLA is pursuing several initiatives to increase the use of ADR in resolving contract disputes. One way to increase use of ADR is for the parties to agree, as part of the contract, that they will use ADR before initiating litigation. This type of approach is used by DoD in partnering agreements and Agency-contractor ADR pacts.                

The proposed provision provides a vehicle for both parties to agree to use ADR. Offeror can opt out of the provision by checking the box if they do not want it in their contract in the event of award. Offerors can also propose alternate wording to tailor the language while retaining the concept. Despite the fact that wording can be individually negotiated, DLA is seeking public comments to arrive at optimal language and to partner with industry in developing this provision.

*B. Regulatory Flexibility Act.*                     This proposed rule does not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 USC 601*et seq.*                     An initial regulatory flexibility analysis was not performed.                

*C. Paperwork Reduction Act.*                     This notice does not impose any new reporting or record keeping requirements that require the approval of OMB under 44 USC 3501*et seq.*

# List of Subjects in 48 CFR Parts 5433 and 5452

      - Government procurement

For the reasons set forth above, the Defense Logistics Agency proposes to amend 48 CFR Chapter 54 as follows:

1. Part 5433 is added to read as follows:

# PART 5433—PROTESTS, DISPUTES AND APPEALS

Authority:10 U.S.C. Chapter 137

§ 5433.214. 

The contracting officer shall insert the provision in 5452.233 in all solicitations unless the conditions at FAR 33.203(b) apply.

# PART 5452—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

2. The authority citation for Part 5452 continues to read as follows:

Authority:10 U.S.C. Chapter 137

                        3. Part 5452 is amended by adding contract clause 5452.233-9001 to read as follows:                              ( print page 31132)    

#### 5452.233-9001 Disputes: Agreement to Use Alternative Dispute Resolution (ADR).

As prescribed in 5433.214, insert the following clause:

DISPUTES: AGREEMENT TO USE ALTERNATIVE DISPUTE RESOLUTION (ADR) xxx 2000)—DLAD

(a) The parties agree to use their best efforts to resolve any disputes that may arise without litigation. If unassisted negotiations are unsuccessful, the parties will use ADR techniques in an attempt to resolve the dispute. Litigation will only be considered as a last resort when ADR is unsuccessful or has been documented by the party rejecting ADR to be inappropriate for resolving the dispute. If the ADR is not successful, the parties retain their existing rights.

(b) If you wish to opt out of this clause, check here [ ]. Alternate wording may be negotiated with the contracting officer.

William J. Kenny,

Executive Director, Logistics Policy and Acquisition Management.

[FR Doc. 00-12106 Filed 5-15-00; 8:45 am]

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