When ADR is Appropriate?

Using ADR should always be considered when a significant controversy arises and especially when litigation is on the horizon.  Indeed, given the federal policies favoring the use of ADR in acquisition matters (see, e.g., FAR and AMS policies), the appropriate question is, “Why aren’t we using the ADR?” rather than “Should we do it?”  Generally speaking, most routine matters rarely involve the statutory considerations describing when ADR might be inappropriate, and ADR usually is a way to resolve a case–in whole or in part–with less expense, time, and effort.

There’s no bright-line test for assessing if a case is a good candidate for ADR, but there are factors to consider that indicate when ADR may be a good choice:

  • Parties want to maintain a positive working relationship
  • Desire for early problem solving by use of creative alternatives
  • Flexibility desired in shaping relief (for example, the parties may want to achieve a more comprehensive resolution involving other issues, which are not part of the contract controversy).
  • Need for a quicker resolution than could be achieved by litigation
  • Need to minimize disruption to other programs or mission areas by diversion of resources to support litigation
  • Parties are polarized into an “all or nothing” position and believe that an evaluation by a third party neutral could help resolve the matter and provide some perspective
  • It is reasonably clear that some entitlement exists and the real task is negotiating a reasonable amount
  • One party’s view of the case is unrealistic, and a realistic appraisal of the situation by a neutral third party may help
  • ADR could speed anticipated settlement by streamlining or limiting the exchange of information and time needed to resolve the matter
  • Bad facts, bad law, or other factors make avoiding an adverse precedent desirable

The attorneys and contracting staff who are most intimately involved with a case should help assess whether ADR is appropriate for that case.  They are the ones who are most familiar with the facts of the case, as well as the opposing party’s issues and ability to cooperate in the resolution effort.  More objective senior officials should also be consulted, however, because they have a broader view and less emotional involvement that can affect judgement.  Since ADR is frequently the best choice, the next step is to select the ADR processes that are best for the case.


If we offer ADR, won’t we look weak?

Subpages (1): ADR Offers Don’t Show Weakness