Mediation has emerged as a preferred ADR method among commercial organizations involved in contract disputes. However, its use by the Navy has been rare. Mediation has shown to provide benefits to its commercial users such as: improved business relations, time and cost savings, flexibility and adaptability and superior control over outcomes. This thesis provides information on mediation and examines the differences and similarities between how commercial organizations and the Navy use mediation. The goal is to improve the Navy's use of mediation to resolve contract disputes. This research found, through survey results and the literature review, that as commercial organizations increase their use of mediation, they become familiar with the process and tend to reach higher levels of process and outcome satisfaction, making them more likely to continue its use. In order for the Navy to improve its use of mediation, it should use outside agencies to provide training, use contract clauses requiring its use and selecting mediators with adequate technical and legal background.