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Structuring and Negotiating the TLC’s TPEP Agreements. Marc Lindsey IATR Annual Conference (New York) September 14, 2009. Introduction to LB3.

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Structuring and negotiating the tlc s tpep agreements l.jpg

Structuring and Negotiating the TLC’s TPEP Agreements

Marc Lindsey

IATR Annual Conference (New York)

September 14, 2009


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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.


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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


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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


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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


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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


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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


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Contact Information

Marc Lindsey

Levine, Blaszak, Block & Boothby, LLP2001 L Street, NW., Suite 900Washington, DC 20036Phone -- (202) 857-2564Fax -- (202) 223-0833Email: [email protected]

Levine, Blaszak, Block & Boothby, LLP


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