Department of Defense Issues Interim Final Rule on Mandatory Arbitration

On May 19, 2010, the U.S. Department of Defense (DOD) issued in Interim Final Rule barring the use of mandatory arbitration by contractors receiving federally appropriated funds in excess of one million dollars. Section 8116 of the DOD's appropriation for 2010, offered by Senator Al Franken of Minnesota, restricts the use of mandatory arbitration agreements when using funds appropriated or otherwise made available by this DoD Appropriations Act to award contracts that exceed $1 million. It allows the Secretary of Defense to waive applicability to a particular contractor or subcontractor, if determined necessary to avoid harm to national security. Specifically, federally appropriated funds may not be used " if the contractor restricts its employees to arbitration for claims under title VII of the Civil Rights Act of 1964, or tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention. ...''

On February 17, 201, the department issued an instruction to the contracting agencies about the Franken Amendment. The Memorandum entitled "Class Deviation to Implement Additional Contractor Requirements and Responsibilities Implementing Mandatory Arbitration Agreements" instructs agencies to bar the use of Fiscal Year 2010 funds unless the contractor agrees not to enter into any agreement with employees or independent contractors that requires the employees or contractors to resolve any claims arising out of Title VII of the Civil Rights Act of 1964 through mandatory arbitration. To see the DOD instruction, go to: http://www.acq.osd.mil/dpap/policy/policyvault/USA000476-10-DPAP.pdf.

The DOD Interim Final Rule may be found at: http://frwebgate5.access.gpo.gov/cgi-bin/TEXTgate.cgi?WAISdocID=702255149300+5+1+0&WAISaction=retrieve

Another Obstacle for Affirmative Action, And Congress Is Prepared to Fight

The Washington Post
By Joe Davidson
Wednesday, December 3, 2008; D01

On Nov. 4, amid all the excitement surrounding Barack Obama's election, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit struck down a Pentagon program that included a 5 percent set-aside for companies run by African Americans, Asian Americans, Hispanic Americans and Native Americans.
The impact of the decision is unclear; the court's focus on an old Pentagon rule to decide the case created uncertainty about whether the set-aside remains. But if the panel's ruling stands, the implications for minority-owned companies that received almost $15 billion in fiscal year 2006 in Defense Department contracts could alter a long-standing program that allowed under-represented groups access to lucrative government contracts.
Last month, the panel ruled that the Defense Department erred when it failed to use a "price evaluation adjustment" tool, which allowed the Pentagon to increase bids from white-owned companies by 10 percent before comparing them to firms owned by people of color.
The Defense Department allowed International Computer and Telecommunications, a firm then owned by a Korean American couple, to win a computer contract even though its $5.75 million bid was $180,000 more than one submitted by Rothe Development, a San Antonio company owned by a white woman. Rothe sued the government in 1998.
A senior Defense Department official, who spoke on condition of anonymity, said that at the moment Pentagon officials are confused.
The court talked about the department using "preferential treatment based on race," but with the price tool defunct, that's not the case. "We don't really know what to do . . . " the official said about the decision. "We're having trouble explaining it."

Full Story: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/02/AR2008120203067.html