Consolidation drives evolution of dispute boards

Risk, of course, raises the issue of potential costs. To cover them, companies have to
charge higher prices for their goods and services. To limit the risk, we have to make sure
that the dispute resolution system is sound.

Although the contracting community has been swept by a tempest of procurement reform in
recent years, the dispute resolution structure--not associated with bid protests--has
remained intact.

In the Contract Disputes Act of 1978, Congress established a structure for
administrative resolution of government contract

disputes. The law allowed each agency to establish its own board of contract appeals,
provided that it could justify a workload for at least three administrative judges.

Of course, that provision has never been a problem for the government's principal
contracting agencies--the Defense Department and the General Services Administration.

Nine other civil agencies have such boards. These are the departments of Agriculture,
Interior, Energy, Housing and Urban Development, Labor, Transportation and Veterans
Affairs, and the Army Corps of Engineers and the Postal Service.

Having specialized boards in agencies has always been a policy compromise. Twenty years
ago, many people thought that because each agency had a unique set of contracting needs
and procedures, its problems could best be understood by its own cadre of specialized
administrative judges.

That reasoning is still persuasive, but today we can see that the differences among
agencies in the contracting field are less important than the similarities. For example,
the Federal Acquisition Regulations now cover all agencies.

Having a limited number of judges housed in the agency that appears before them is a
flawed system.

First of all, the agency can threaten the impartiality of the judges, and thus the
fairness of the system, by putting the judges under the administrative thumb of the
agency--the same agency that represents one side of every case they hear.

Second, it permits very small boards in which the judges can become sheltered from the
intellectual give-and-take that strengthens the analysis of larger tribunals.

Having 11 boards also increases costs. This is clearly the case for contractors. They
have to learn different sets of rules and practices for each agency they do business with.
Or they may have to find a lawyer with particular experience before one of these obscure

Recently one cabinet agency, in wondering whether it needs to fund a separate board,
has made it clear that multiple forums add extra costs.

Consolidated boards could also fortify their independence by relying on their own
support staff and systems, while at the same time reducing the total overhead costs of
board operations.

As government moves to a system of contracting that values so-called industry partners
and emphasizes alternative, less formal means of dispute resolution, the number of
disputes is reduced, and so is the time that has to be devoted to them.

With these reforms, the question of consolidation of boards of contract appeals on the
civil side of government may be especially timely.

I'm certainly not suggesting that consolidation be used to reduce the current number of
administrative judges. To the contrary, we need to ensure that each contract appeals judge
is sufficiently secure in his or her position to dispense fair and impartial justice. Any
consolidation should maintain all incumbent judges.

But as judges retire, not all of the slots would have to be filled, permitting
right-sizing of the dispute resolution apparatus within a larger, more robust and
independent board.

Thomas Jefferson wrote that laws and institutions must go hand in hand with the
progress of the human mind.

Jefferson added that a society might as well require a man to wear the coat that fit
him as a boy, as keep itself ever under the regime of its ancestors.

Consolidating dispute resolution into two boards, one for all civilian agencies and one
for Defense agencies, is worth considering, as long as the incumbent judges are protected.

Stephen M. Ryan is a partner in the Washington law firm of Brand, Lowell & Ryan. He
has long experience in federal information technology issues. E-mail him at

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