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  1. Structuring and Negotiating the TLC’s TPEP Agreements Marc Lindsey IATR Annual Conference (New York) September 14, 2009

  2. Introduction to LB3 • Levine, Blaszak, Block & Boothby, LLP (LB3) is a Washington, DC-based law firm representing enterprise and government customers in connection with technology-related agreements. A detailed description of the firm and its practice can be found at www.lb3law.com. • The firm’s 14 partners are all experienced in structuring and negotiating technology and telecom transactions. Lawyer biographies can be found at www.lb3law.com/attorneys.cfm.

  3. TLC Contract Structure • Master Services Agreement • No fees • Framework and narrative of the deal • Key service elements and their inter-dependencies • Owner-supplier contracting obligations • Rules of the market place • Service level management approach • Governance • Term and termination • Intellectual property rights • Confidentiality • Risk allocation (e.g., indemnifications, reps and warranties, limits on liability) • Key Attachments to the MSA • City Law Dep’t standard Contract Terms • Acceptance Criteria and Plan • Change control • Owner-Contractor form • Service descriptions • Info security requirements • Performance Bond form • Service levels • Implementation schedule • List of pre-approved subcontractors

  4. Key Negotiation Issues • Four vendors with very different market positions awarded contracts • Legacy NYC taximeter company (Taxitronics) • New joint venture of industry insiders (Creative Mobile Knowledge and fleet owner) using Clear Channel as a subcontractor • Start up (Taxi Technology) • Taxi technology vendor without NYC experience (Digital Dispatch) • With capitalization of certain vendors in question, substantial upfront investment and high visibility of the project, ensuring performance was a serious concern • Insurance requirements, including E&O and computer fraud coverage • Performance security via a $1M performance bond

  5. Key Negotiation Issues • Enabling competition while promoting a level playing field for all vendors • Negotiated a “single contract” with four separate vendors and their counsel • Minimized market distortions based on pre-existing market conditions • Interfaces to legacy taximeters were required for a successful solution, but taxi meter company (and bidder) believed its interface specifications were proprietary • Clear Channel claimed that its contracts with certain cab owners interfered with the in-cab advertizing some vendors planned to use to subsidize the cost of the technology enhancements • Industry insiders might attempt to lock up a considerable portion of the owner market selling to themselves (only) at a deep discount

  6. Key Negotiation Issues • Enabling fair competition (cont’d) • The agreements required all vendors to offer their products to all owners under the same terms, conditions, prices and service levels (no preferential sweetheart deals) • The agreements conditioned participation in the program on contractors’ forbearance to enforce pre-existing contract and IP rights and remedies

  7. Key Negotiation Issues • Looking out for the owners • Owners were required to purchase technology enhancements, and were captive to four vendors • With the exception of fleet owners, most owners had little experience and leverage to negotiate contracts with the vendors effectively • TLC negotiated a standard owner-vendor, which all vendors must accept from any owner • TLC negotiated minimum service levels • Prices and pricing methodologies negotiated with the TLC • Owners could try to negotiate different Ts&Cs • Contractors required to disclose to the TLC all contracts entered with owners • Balancing the taxicab drivers’ privacy concerns about GPS technology used for trip sheets and route maps and the TLC’s policy objectives

  8. Contact Information Marc Lindsey Levine, Blaszak, Block & Boothby, LLP2001 L Street, NW., Suite 900Washington, DC 20036Phone -- (202) 857-2564Fax -- (202) 223-0833Email: mlindsey@lb3law.com Levine, Blaszak, Block & Boothby, LLP