Advances In ADR Within The Air Force

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Memorandum For Secreatary Widnall

Shortly after Vice President Gore issued the Report of the National
Performance Review (NPR) in September of 1993, you requested that various
offices find ways to implement its recommendations. One of the major
recommendations of the NPR report is that agencies “expand their use of
alternative dispute resolution [ADR] techniques.”

I am pleased to report that we have made significant progress in expanding
the use of ADR within the Air Force. In a recent report to Congress prepared by
the Administrative Conference of the United States, the Air Force’s efforts were featured prominently. Many
now consider the Air Force to be one of the leaders in this field. In December
of last year, the House Judiciary Committee asked the Air Force to testify about
the achievements of its program as an exemplar for the rest of the government.
Likewise, the Justice Department featured the Air Force’s experience as a model ADR program at a
government-wide ADR conference hosted by Attorney General Reno in September.

In the right circumstances, ADR can achieve fair and reasonable resolutions
of disputes in less time, and at lower costs, than traditional means. We have
achieved those purposes repeatedly. For example, in FY 92, the Air Force used
ADR in 128 EEO complaints. In FY 95, ADR was attempted in over 770 EEO
complaints with a full or partial settlement achieved in 78% of the reported
cases. Use of ADR also explains, in part, why the time required to settle formal
EEO complaints declined from 329 days in FY 92 to 136 days in FY 95.

Equally important, customer satisfaction with ADR use in this area is
overwhelmingly positive. For example, a supervisor recently agreed to mediate a
civilian workplace dispute involving an employee whose performance, in the eyes
of the supervisor, was sub-standard. During the mediation process, the
supervisor learned for the first time about a number of significant
misperceptions he and the employee had about one another. As a direct result of
the mediation process, this employee is now, in the words of his supervisor,
“one of my top performers.” This anecdote underscores an important fact —
because ADR techniques can serve as a non-adversarial, confidential management
tool, the intangible benefits of ADR can be as significant as the tangible
benefits.

ADR has also enjoyed great success in the contracts area. It has been used in
almost 64 litigated cases with a 90% settlement rate. In each of these cases,
the Air Force saved time and costs in resolving these disputes. In addition,
because ADR is typically less adversarial than traditional litigation, ADR has
helped to minimize negative impact on the long-term relationships between the
Air Force and its contractors. In short, we believe ADR use requently permits us
to provide quality dispute resolution services in less time than normally
required by formal dispute resolution systems.

A. Background

The Air Force Alternative Dispute Resolution Program promotes common sense
resolution in a wide variety of disputes. ADR is the term used to describe an
array of voluntary conflict management techniques designed to resolve disputes
in a faster, less expensive, and more amicable manner. As previously noted, an
important value of the ADR processes is the ability to preserve, and sometimes
strengthen, the working relationships of all Air Force stakeholders.

On January 12, 1993, the Secretary of the Air Force issued an Air Force-wide
memorandum about ADR. The Secretary designated the Deputy General Counsel to be
responsible for implementing ADR within the Air Force and required specific
Assistant Secretaries and Air Staff personnel to assist in the development and
implementation of the Air Force’s ADR
Program. The Secretary’s memorandum
ensured there would be senior civilian and military officials’ input, guidance, and support as well as
funding for the program.

Our initial challenge was to seek to change the mindset of those within and
without the Air Force who did not view ADR as a realistic alternative to
litigation. To address this problem, we first embarked on an intensive research
effort. We canvassed the private and public-sector legal communities for
organizations that developed and implemented ADR programs. This effort yielded
the twin benefits of educating us about the best practices in the field and
providing us concrete examples of ADR success stories. Next, we synthesized this
information to brief Air Force personnel and organizations about the proven
benefits of ADR use. As a result, key Air Force officials agreed to dedicate
personnel and resources to implementing the Air Force ADR Program. We also met
with the private sector, and senior representatives of the major aerospace
contractors in particular, to solicit their participation in the program and
commitment to the use of ADR in lieu of litigation.

In response to the Secretary’s
direction, we next convened an ADR Working Group (the Group) of senior officials
to establish initial ADR priorities. The Group concluded that the ADR program
should initially focus on contract and personnel disputes and stressed the need
to educate Air Force personnel about ADR. In addition, the Group determined that
the ADR Program should emphasize stakeholder education and awareness about ADR
by briefing those most affected by these types of disputes, i.e., contracting
officers, contractors, EEO personnel, and senior civilian and military members
of the Air Force.

B. Civilian Personnel Disputes

A survey conducted last year by the Air Force Personnel Operations Agency
(AFPOA) showed

significant increases in ADR use in civilian personnel disputes in the Air
Force. Between FY 92 and FY 95, the reported use of ADR to resolve EEO
complaints increased five-fold; the average number of days required to settle
formal EEO complaints decreased by 60%; significant time savings wee also
reported for the resolution of informal EEO complaints.

To put these statistics in perspective, the transaction costs of processing a
formal EEO complaint through the traditional process is estimated to be as low
as $2,000, if the case is resolved early, and as high as $60,000, if the dispute
is resolved by the EEOC. There are also significant intangible costs associated
with resolving an EEO complaint: e.g., loss of productivity, diversion of
resources from mission accomplishment, and problems in morale. Using ADR to
resolve EEO disputes at the earliest possible time and at the lowest
organizational level helps keep tangible and intangible costs at the lower end
of the range.

It would be an overstatement to attribute these results to ADR use alone. As
in many processes, there are a number of important variables. Nevertheless, ADR
training and use provided much needed skills and methods for improving our
management of civilian personnel disputes.

To further facilitate use of ADR to resolve civilian personnel disputes, our
office is working with AFPOA to develop a system to provide mediation of formal
and informal EEO complaints within four weeks of a request for its use. Part of
this effort involves identifying the most experienced and successful mediators
among the 1,000 who have been trained and certified thus far. This group will
serve as mediation mentors for trained, but less experienced, Air Force
mediators. If the mediation is successful, the Air Force receives the twin
benefits of resolution and apprenticeship training. If the mediation is
unsuccessful, the inexperienced Air Force mediator still receives an excellent
training opportunity.

We are also working with the Navy and the Army to collect our “best
practices” and compile them into a mediation handbook. Because of our progress
in this area, the Air Force is now recognized as one of the leading federal
agencies in the field, and our methods and mediation handbook are likely to be
widely imitated.

C. Contract Disputes

As we began to try to foster ADR use in contract disputes, we found that the
biggest obstacle to ADR use was the lack of knowledge about ADR techniques. In
response to this, we worked with SAF/AQ and AF/JA to develop a two-pronged
approach. First, we identified the Air Force Trial Team within the law Office at
HQ AFMC as a target for special ADR attention. The Trial Team routinely provides
a legal review of contract matters that will likely result in claims by or
against the Air Force. Because of the Trial Team’s unique role, we proposed they begin
screening contract disputes for ADR potential. After providing intensive ADR
training to most of the Trial Team’s
attorneys, the Trial Team began its ADR case screening effort.

Second, SAF/GCQ undertook an Air Force-wide initiative to identify and train
200 acquisition

professionals and attorneys as ADR Specialists. Once trained, these
Specialists helped to educate field-level personnel about ADR and also promote
its use throughout the major commands. More than 90% of the students who have
attended this training rated it “excellent” or “very good.” Because of this,
other agencies have asked us to train their personnel as well. This track record
explains why the Air Force is asked more than any other DoD component to brief
industry on ADR.

Since FY 92, the Air Force has attempted ADR in 64 litigated cases and
successfully resolved 60. In addition, 217 contract disputes not yet in
litigation have been reviewed, and ADR use was recommended in 51. The following
is an example of the notable ADR successes the Air Force has achieved in this
area. The case involved 10 contract claims worth $500,000. After some initial
discovery was completed, the parties entered into an ADR process that resolved
all 10 contract claims in two days. Had the parties proceeded to litigate this
same dispute, we estimate resolution would have involved a trial of more than
two weeks, not to mention months of trial preparation, and as much as a year for
the judge to issue an opinion. Equally important, the result reached was
acceptable to all parties and resolved all problems then existing between the
parties, rather than just the narrow legal disputes. The contracting officers
found that they had a better working relationship with the contractor after use
of the ADR technique.

The Air Force has also had some notable success using innovative methods to
avoid contract disputes. Once such process is known as “Partnering,” which is
normally employed shortly after contract award and before any disputes arise out
of contract performance. Partnering is designed to increase communications
between the parties and to identify common interests and goals in completing the
project. In addition, the parties anticipate problem areas and establish
proposed solutions and processes to resolve anticipated difficulties. Partnering
was used in a $228 million complex construction project at Arnold Engineering
and Development Center. This project was completed under budget, ahead of
schedule, and without generating a single lawsuit. While a good contract
structure and sound management practices obviously played a central part, key
participants credit the use of Partnering as one of the most significant reasons
for their achievement.

D. Selected MAJCOM Initiatives

1. Air Mobility Command

In 1994, Brigadier General Hemingway, Staff Judge Advocate for the Air
Mobility Command (AMC), directed that each of the Command’s legal offices appoint an ADR advocate
within their offices, and he subsequently established use of ADR as one of the
criteria for measuring the quality of services being provided by AMC legal
offices. In FY 95, AMC reported successfully resolving 96% (73 of 76 cases) of
the civilian disputes in which ADR use was attempted. In addition, AMC reports
that a number of complex, long-running or contentious contract, labor, and
environmental disputes were successfully resolved using ADR techniques.

2. Joint Direct Attack Munition Program (JDAM)

In the Fall of 1995, the Air Force awarded the Joint Direct Attack Munition
(JDAM) production

contract to McDonnell Douglas. Among other things, the JDAM program has
initiated a number of innovative cost-cutting measures to reduce the unit cost
from an estimated $40,000 to $18,000. To ensure that potential contract disputes
do not drive up the program’s costs,
the JDAM contract contains an ADR clause. This clause commits the Air Force and
McDonnell Douglas to: (1) establish a partnering process; (2) negotiate contract
disputes expeditiously; and (3) establish a dispute resolution board to render
non-binding decisions on any dispute the parties are unable to settle through
negotiations. This ADR clause demonstrates the commitment of the Air Force to
fostering the use of ADR in major system acquisitions and, we believe,
represents the most sophisticated ADR clause yet included in a major system
acquisition. Other programs are emulating this approach.

3. Air Force Materiel Command and the Kirtland Air Force Base Mediation
Center

Kirtland AFB in New Mexico encountered a mounting caseload of personnel
complaints starting

around 1990. As the situation worsened, the Commander of the 377th Air Base
Wing took several actions, including the creation of an independent Mediation
Center (KMC). KMC opened its doors in December of 1993, and the Commander soon
thereafter designated it as the sole provider of mediation services for disputes
of this kind at Kirtland. To date, KMC has mediated 72 matters and settled 51
for a resolution rate of 71%. AFMC is currently awaiting the results of a study
to determine whether the KMC concept should be exported to other Air Force
installations.

E. Current Initiatives

We plan to expand the scope of the Program beyond civilian personnel and
contract disputes.

Environmental controversies and tort claims, in particular, have enjoyed
notable ADR successes in other federal agencies and the private-sector. Next
Fiscal Year we plan to focus on these areas in our continuing efforts to foster
ADR use Air Force-wide.

Access to ADR information remains one of our biggest challenges. To address
this problem, we are developing a site on the World-Wide-Web. This site will
contain information needed to match Air Force ADR needs with existing resources.
We plan to include all relevant Air Force ADR materials, statistics, and
training opportunities as well as the best such products and services from other
federal agencies. In addition, our site will permit users to download useful
documents and forms and provide links to similar sites around the world. Beyond
that, we are designing an ADR newsletter to be sent by e-mail to appropriate
private and public-sector personnel.

Improvements to our training program are also underway. We have provided
multi-media ADR

briefings to approximately 5,000 government personnel. While the content of
these presentations

consistently receives exceptionally positive feedback, more needs to be done
to leverage our ability to reach large audiences. We believe that distance
learning will greatly assist us in this effort. Accordingly, we have, in
cooperation with AFMC, provided several two-hour ADR awareness briefings to some
600 Air Force personnel at more than 20 Air Force installations via satellite
broadcasts. Our experiences have convinced us that increased use of distance
learning will provide a cost-effective method to deliver ADR training and
education.

We also plan to brief the commanders and key staff of all MAJCOMs to ensure
they are familiar with the benefits of ADR and the resources the Air Force ADR
Program can provide for appropriate innovative or pilot programs.

F. Conclusion

The Air Force ADR program has achieved important results in a relatively
short period of time. Our success stems from:

• Strong support from senior management;

• At least one employee working full-time on implementing ADR initiatives as
  well as matching agency ADR needs with appropriate government and private-sector
  resources;

• Extensive ADR training and awareness briefings; and

• Financial support for ADR initiatives.

Sheila C. Cheston

General Counsel