Title 10

PART 719 APPENDIX a



Appendix A to Part 719 - Guidance for Legal Resource Management

10:4.0.2.5.9.6.67.4.15 : Appendix A

Appendix A to Part 719 - Guidance for Legal Resource Management Management and Administration of Outside Legal Services 1.0 Alternative Dispute Resolution 2.0 Cost Allowability Issues 2.1 Underlying Cause for Incurrence of Costs Attachment - Contractor Litigation and Legal Costs, Model Bill Format Management and Administration of Outside Legal Services

This guidance is intended to assist contractors, contracting officers and retained legal counsel in managing the costs of outside legal services.

1.0 Alternative Dispute Resolution

Contractors are expected to evaluate all matters for appropriate alternative dispute resolution (ADR) at various stages of an issue in dispute, e.g., before a case is filed, during pre-discovery, after initial discovery and during pretrial. This evaluation should be done in coordination with the Department's ADR liaison if one has been established or appointed or Department Counsel if an ADR liaison has not been appointed. Contractors, contractor counsel, and Department Counsel are also encouraged to consult with the Department's Director of the Office of Conflict Prevention and Resolution. The Department anticipates that mediation will be the principal and most common method of alternative dispute resolution. Agreement to arbitrate should generally be consistent with the Administrative Dispute Resolution Act (incorporated in part at 5 U.S.C. 571, et seq.) and Department guidance issued under that Act. When a decision to arbitrate is made, a statement fixing the maximum award amount should be agreed to in advance by the participants.

2.0 Cost Allowability Issues

A determination of cost reasonableness depends on a variety of considerations and circumstances. 48 CFR 31.201-3 establishes that no presumption of reasonableness is attached to the incurrence of costs by a contractor.

2.1 Underlying Cause for Incurrence of Costs

While 10 CFR part 719 provides procedures associated with incurring and monitoring legal costs, the evaluation of the reason for the incurrence of the legal costs, e.g., liability, fault or avoidability, is a separate issue. The reason for the contractor incurring costs may affect the allowability of the contractor's legal costs. In some cases, the final determination of allowability of legal costs cannot be made until a matter is fully resolved. In certain circumstances, contract and cost principle language may permit conditional reimbursement of costs pending the outcome of the legal matter. Whether the Department makes conditional reimbursements or withholds any payment pending the outcome, legal costs ultimately reimbursed by the Department must comply with the applicable cost principles, the terms of the contract, and part 719.

Attachment - Contractor Litigation and Legal Costs, Model Bill Format 1. Model Bill Format

I - For Fees

Date of service Description of service Name or initials of attorney Approved rate Time charged Amount (rate × time)
(See Note 1 to this table).