Ch.03 – ADR is Effective

Experienced federal contracts practitioners know that ADR is effective.  Because it is effective, ADR has become a well-integrated and essential tool in the federal contract protest and dispute resolution process.  Though not every contract dispute can or should be resolved using an ADR process, ADR should be considered.

ADR Saves Time.  A dispute can be resolved much sooner with ADR, often in a matter of months, even weeks.  In contrast, litigating a contract dispute frequently takes a year or more.  In each case, parties decide the most appropriate time to use ADR, e.g., pre-claim, pre-appeal, pre-discovery, post-discovery, pre-hearing, post-hearing.  If early ADR does not result in settlement, the parties may still wish to try ADR again later.

ADR Saves Money.  ADR normally is significantly less expensive than litigation.  When cases are resolved earlier through ADR, parties can save substantial money they would have spent on attorney fees, discovery costs, experts’ fees, travel costs, and other litigation expenses.  Moreover, forums typically make their judges available free to the parties as ADR neutrals, particularly when parties regularly appear before those boards.

ADR Offers Various Methods For Resolution.  Variety and flexibility characterize ADR.  ADR processes can be binding, non-binding, or a combination of both.  Not all neutrals employ the same style.  Some use an evaluative approach while others use a more facilitative approach, and most are receptive to the parties’ views on how they would like a particular ADR conducted and what role the neutral should play. See Ch.01, ADR Processes.

ADR Increases Parties’ Control Over the Process and the Outcome.  In ADR, parties play a large role in shaping both the ADR process and its outcome.  They have direct input in neutral selection.  If the parties had past favorable experience with a particular neutral, they may be able to request and obtain the services of that neutral to assist them in resolving their current dispute.  During the ADR process, parties have more opportunity to tell their side of the story in a more cohesive way than they would at hearing, which typically uses a question and answer format of direct and cross-examination.  In ADR, parties can communicate their thoughts and concerns in a way not constrained by formal rules or procedures.  ADR affects control over outcome of the dispute because unless the parties have voluntarily elected a binding form of ADR, they maintain control over whether or not to settle.  See Ch.23, Selecting a Process.

ADR Allows Creative Solutions.  Sometimes the best solution for parties with a contract problem is not available through litigation.  ADR processes allow the parties to be creative and to focus on both legal and extra-legal issues when devising possible resolutions for their dispute.  In ADR, all potential solutions that the parties mutually agree to consider can be considered.  ADR can help the parties work through problems that might only be exacerbated if the problem is elevated to or continues in litigation.  Also, litigation focuses more on legal rights and responsibilities, whereas in ADR less tangible, though still vital, interests of both parties are frequently discussed (e.g., more rapid payment and continued contract performance).  See Ch.28, Creative Solutions.

ADR Helps Parties’ Focus and Narrow the Issues.  Even if an overall settlement is not achieved through ADR, the ADR process can work to narrow the issues in dispute and help the parties to focus on the facts that are most critical as they proceed with litigation.

ADR Helps Preserve and Repair Relationships.  Many disputes occur in the context of longstanding and ongoing relationships.  An ADR proceeding that addresses all parties’ interests often can help preserve a working relationship in ways that are not available in adjudication.  An experienced neutral can maintain a non-adversarial tone throughout the ADR proceeding and can help the parties learn to communicate their needs and respective points of view more effectively to one another, so that understanding between them prevails and future disputes are averted.

ADR Increases Parties’ Satisfaction.  In an adjudicated decision, issued after a hearing, there is typically a winner and a loser. The loser is not likely to be happy, and even the winner may not be completely satisfied with the outcome.  ADR can help the parties find mutually satisfactory solutions that also achieve each party’s real goals.  This, along with all of ADR’s other potential advantages in terms of cost and time savings, may increase the parties’ overall satisfaction with both the dispute resolution process and the outcome.  Parties generally are more satisfied with solutions that they fashion, as opposed to solutions that are imposed on them by a judge.

ADR Can Improve Attorney-Client Relationships.  Attorneys may also benefit from ADR by being seen as problem-solvers rather than combatants.  Quick, cost-effective, and satisfying resolutions are likely to produce happier clients and may generate repeat business from those clients as well as future referrals to friends and associates.  In addition, experienced attorneys recognize that their clients more likely will accept a less than favorable appraisal of the weaknesses of their case from a neutral with expertise in public contracts, especially from a sitting judge, rather than directly from them.  In this way, ADR can help to preserve the attorneys’ relationships with their clients.


Statistics – ODRA Cases
Statistics – ASBCA Cases