On March 17, 2004, the United States Department of Justice hosted a meeting of the Interagency Alternative Dispute Resolution ("ADR") Steering Committee. As part of the meeting, the Office of the Associate Attorney General issued a report recognizing the contributions that federal ADR is making to the President's vision of good government and congratulating federal agencies on their use of ADR to maximize their resources. Associate Attorney General Robert D. McCallum, Jr., discussed and presented the substance of the report in remarks at the meeting.

Report to the Steering Committee
Interagency Alternative Dispute Resolution Working Group
March 17, 2004

     The Office of the Associate Attorney General is pleased to present this report on the status of federal alternative dispute resolution ("ADR") to the Steering Committee of the Interagency Alternative Dispute Resolution Working Group. The Attorney General is the Presidentially-appointed leader of federal ADR, and the Steering Committee representatives are experts in that field. Those representatives and the federal agencies have compiled an impressive track record in ADR. Through this report, the Department of Justice recognizes the hard work they have done, the achievements they have realized, and the goals they continue to work toward.

     These are challenging times. Terrorism has added a compelling new dimension to the administration of law and justice. In this new world, the emphasis falls - as it must - on counter-terrorism. Yet, at the same time, the United States Government must discharge many other significant mandates. Our federal agencies have many other responsibilities and program areas that are essential to the well-being of the United States and its citizens.

     Those who are working for the federal government in those other areas may feel overlooked these days because so much of the spotlight is focused on terrorism-related issues. But they should not feel that way. Their work - and the benefits of ADR - are more important, not less important, in the face of the new national priorities. There is a reason the Secretary of Defense has made the adoption of better business practices one of his top priorities. Good use of ADR at his agency has saved the Department of Defense money and it has avoided litigation. Perhaps even more importantly, ADR enables the leadership at the Department of Defense to eliminate distractions and focus on the war against terrorism.

     The Steering Committee is an impressive group of federal officials with an important mission. Its members are the senior ADR professionals appointed pursuant to the Administrative Dispute Resolution Act of 1996. They represent all of the Cabinet departments and many of the independent agencies. They are responsible for facilitating and encouraging agency use of ADR in their respective jurisdictions. Their accomplishments in doing so contribute to the goals, efficiency, and productivity of the federal government and its agencies. A review of their contributions and how they fit into the policy direction of the federal government is enlightening.

     The President has given very clear direction for how the government should be guided. First, the government should be results-oriented. Second, the government should be citizen-centered. Third, wherever possible, the government should be market-based.

     ADR is transforming the way that the government resolves disputes. In doing so, the federal agencies' ADR programs have implemented the President's policies in many areas. Of course, it is always risky to mention specifics, because those omitted may fear they somehow did not "make the grade." But that is not the case. Practical limitations force a selective listing of just some examples of the many federal successes to illustrate the breadth and scope of their significant contributions to good government.

     First, federal ADR programs are implementing the President's directive to make government results-oriented. What matters here is completion, performance, and results. ADR does a better, quicker, and more cost effective job than traditional adversarial processes in resolving disputes that involve the public. Here are some examples:

• At the Federal Energy Regulatory Commission, the use of mediation by its Dispute Resolution Service saves parties, on average, $100,000 in avoided costs by resolving disputes concerning electricity and natural gas. These savings lower energy costs, which can only benefit consumers.

• At the Department of Health and Human Services, the Provider Reimbursement Review Board uses ADR to settle about 150 health care provider disputes each year. It costs $11,000 to hear one of those cases, but only $750 to mediate it, so the cost savings is over $10,000 per case. As an added benefit, while they are at the table, the parties often resolve issues for future cost years, and thereby avert future disputes they would have otherwise faced.

• At the Federal Aviation Administration, the Office of Dispute Resolution for Acquisition has resolved 89% of all contract disputes, ranging from small claims under $100,000 to large, multi-million dollar claims. It has also resolved 67% of all bid protests, ranging from small contract values to large acquisitions valued over one billion dollars. The savings to corporations, in time and money, from avoiding protracted, non-productive litigation, contributes to a better overall business and economic climate.

• The Department of Energy's technology transfer ombuds program deals with issues of licenses, patents, and the Cooperative Research and Development Agreements with non-federal partners. The program has had an 85% success rate and has enabled technological innovation to proceed at a faster rate. Thus, small businesses and entrepreneurs can utilize their limited funds to further their business objectives, rather than engage in litigation.
• At the Environmental Protection Agency, the use of ADR to reach agreement for the cleanup of contaminated Superfund sites has saved private corporations and the government millions of dollars in litigation and transaction costs.

ADR also is demonstrating results in dealing with internal disputes. Unlike traditional adversarial processes, ADR is reducing costs, improving workforce morale, and increasing productivity. For example:

• At the U.S. Air Force, over 2700 workplace disputes were mediated last year. Seventy-five percent (75%) of them were successful. The average cost savings was $14,000 per case. The average time savings was 410 days per case. The number of informal workplace complaints has dropped by 70% and formal complaints have dropped by 56%.
• The Department of Energy saved about $1.3 million dollars over the last three years by mediating longstanding workplace problems.
• The U.S. Postal Service mediates 10,000 workplace disputes every year. Its exit surveys show that 90% of both managers and employees are satisfied with the mediation process. There has been a 40% decline in the percentage of postal service employees who initiate a new EEO complaint.

The program evaluations that enable agencies to demonstrate these results of ADR are equally impressive:

• The Department of Veterans Affairs has created a web-based tracking system for 250 facility locations throughout the country, with data query capabilities, that will enable it to identify best practices as well as areas where improvement is needed.
• At the Environmental Protection Agency, the Conflict Prevention and Resolution Center has created a performance evaluation system that gives continuous feedback for the enhancement of environmental ADR services.

All agencies should strive to use effective tools like these to evaluate their programs, measure their results, and improve their services. That is the best way for an agency to determine whether it has achieved its purpose, and how it can continue improving.

     Federal ADR programs are also implementing the President's second directive, which is to make government citizen-centered. What matters here is fostering a good relationship between citizens and their government, and making the government responsive to those citizens. ADR is a tool for the government to do exactly that. Instead of telling citizens what is in their best interest, the government is using ADR to obtain citizen input in a collaborative process that achieves a satisfactory result for everyone. For example:

• The U.S. Institute for Environmental Conflict Resolution provided expertise and resources for 50 site-specific projects in the past year, including the Grand Canyon overflight noise controversy in Arizona, and collaborative water management planning for the Florida Everglades.
• In the past year, the Department of the Interior successfully completed two negotiated rule makings with all interested parties. It used that collaborative process to develop new regulations covering Indian education under the No Child Left Behind Act, and off-road driving on the Fire Island National Seashore in New York.
• The Federal Mediation and Conciliation Service worked with the National Institute of Standards and Technology to obtain public input for the design of new buildings in the wake of post-9/11 structural concerns.

The government is also demonstrating a focus on citizens by using ADR to avert citizen disputes before they arise or to deal with them quickly when they do arise. For example:

• The Department of Education's ombudsman deals with hundreds of federal student loan problems weekly. The program has been successful in resolving long-standing issues, identifying problem trends, and recommending improvements.
• The Federal Energy Regulatory Commission has a policy of encouraging parties to contact its Enforcement Hotline or its Dispute Resolution Service - and consider the use of ADR- before a formal complaint is filed. The successful use of this proactive approach avoids the cost of formal adjudicatory processes for both the Commission and the parties.

In another citizen-centered approach, the government is partnering with citizens to make sure ADR services are available. For example:

• The Federal Mediation and Conciliation Service has a roster of 1,000 private citizens who serve as private judges to settle contract disputes.
• The Environmental Protection Agency, in conjunction with the U.S. Institute for Environmental Conflict Resolution, designed and maintains an extensive roster of private neutral professionals who are experienced in managing environmental disputes. The EPA has also awarded a five-year, $61 million contract for private professional services as needed in any area of environmental ADR, ranging from training and systems design to consensus building and case mediation.

     The President's third directive, which is to make government market-based wherever possible, is also supported by federal ADR initiatives. What matters here is enabling businesses to run effectively so that they can foster innovation and competition. Businesses can concentrate on running their business if they can avoid time-consuming and often unnecessary litigation. ADR helps them do just that. Some examples are:

• The Department of Energy used preventive dispute resolution to minimize problems with a multi-billion dollar contract for the cleanup of a former nuclear weapons production facility. That partnering approach contributed to an on-time, on-budget, and safe execution of the contract.
• At the National Mediation Board, more than 600 labor-management cases in the railroad and airline industries have been mediated with only three work stoppages (one of which lasted for less than 90 minutes).

The government is also demonstrating a market approach when it uses ADR to give businesses more choices. For example:

• The Federal Aviation Administration's Office of Dispute Resolution for Acquisition has developed a user-friendly website that provides a plain language guide to practice and procedures. It includes descriptions of past adjudicated cases that allow businesses to assess litigation risks and establish reasonable parameters for ADR settlement.
• In our global economy, the Federal Mediation and Conciliation Service has entered partnerships to build the infrastructure for conflict resolution and prevention in Argentina, Bulgaria, Canada, Colombia, Croatia, Indonesia, Latvia, Mozambique, Peru, Serbia, Thailand, and Uganda.

The government is employing a business approach for its own internal conflict management so that it can save time and money better spent on more critical issues. For example:

• The National Institutes of Health is using ADR to promote scientific innovation by addressing conflicts in authorship, sharing of biological materials, and collaboration among scientists.
• The National Archives and Records Administration created a nationwide integrated conflict management system with preventive services to improve workplace relationships and avert disputes.

     There are many more illustrations of ADR success stories. The federal agencies have made those success stories happen, and the ADR experts within the agencies have helped their agencies play a critical role in the President's quest for good government.

     The many endeavors the Working Group Sections and the Steering Committee continue to undertake are also deserving of recognition:

• The Civil Enforcement and Regulatory Section is publishing a newsletter and this year is sponsoring a series of brown bags in partnership with private sector organizations.
• The Claims Against the Government Section has partnered with Indiana University to evaluate the effectiveness of ADR in claims against agencies which have been defended by the Department of Justice.
• The Contracts and Procurement Section sponsors a regular series of ADR programs for federal agency employees on a wide variety of topics like effective ADR preparation and the unique aspects of construction-related ADR.
• The Workplace Section is partnering with George Mason University's Institute for Conflict Analysis and Resolution to analyze the complaint patterns and resolution outcomes of federal workplace disputes.
• The Steering Committee is grappling with difficult issues like confidentiality and ethics in ADR, and with practical concerns like agency guidance on acquiring neutrals.

The range of these projects, and the dedication and energy that federal ADR experts bring to them, is most impressive.

     Disputes are a continuing fact of life that must be faced. And there will always be issues of policy, or issues that require the establishment of precedent, where ADR will not be appropriate. But use of ADR in most areas is a winner. ADR provides an efficient and cost-effective way to manage the government's business and to permit agencies to perform their core functions. ADR assists economic development by enabling leaders to focus on running their business. And ADR gives the nation's citizens and businesses more choices, as well as an opportunity to influence decisions that affect them. There are not many undertakings that offer so many potential pluses.

     There are two truths that should always be remembered in the administration of our legal system. The first truth is that achieving justice, the just result, is the ultimate goal. The second truth is that, even where justice is actually done, it is important that there also be a perception of justice being achieved, a belief that justice has been done. To achieve justice - and the perception of justice - it is critically important that all viewpoints and perceptions be considered and heard. ADR is a vehicle that enables its practitioners to do exactly that, for the good of government and for the good of all.

     The Office of the Associate Attorney General extends its appreciation to the members of the Steering Committee and the federal ADR experts for their commitment and achievements, and encourages them to build upon their many successes going forward in the future.