asbo md dc spring conference may 2014 contract writing: key considerations for development of a...
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ASBO MD DC Spring ConferenceMay 2014
Contract Writing:Key Considerations for Development of a Document
Effectively Supporting the Student Safety, Educational Service and Efficiency Components of the Transportation
Service Delivery Mission
Winship WheatleyAACPS TD (Retired!!)
Bus Service Contract Writing: Key Considerations
• Or, Things to Consider and Address When Writing a School Bus Contract! – The Setting
• Personal Experience• Absence of Comprehensive Document• Price, Service and Equipment Specification “Negotiation”• Labor and Vendor Management• Vendor Leverage and Influence• Lack of Pricing Efficacy (Dated Mechanism)• The Taxpayer and the Transportation CZAR• Legal, Risk and Financial Exposure• 79 “Independent” Vendors• System Ownership??
Bus Service Contract Writing: Key Considerations
The Foundation Issue• Whether the Existing
Contract Addressed the – Contingencies– Responsibilities
• Of Both Parties to the Contract
• AND, Equally Important,• Who was the greatest
beneficiary of a fixed price negotiated contract.
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Financial Responsibility• AKA Insurance
– MD Min 30 – 60 - 15– 750 K 1985– 1.62 M CPI– 3.18 M Medical CPI
• 49 CFR 387.27 – School Bus General Exemption
• 49 CFR 387.33 – 2.5 M 5.0 M Passenger Carrier
• Sovereign Immunity & Social Responsibility
• Impact on Contract Vendors:– $5M, $20 M, $100M– Redundancy????
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Drug Testing
• Specific Releases• Pool Co Mingle• Data Security• THC• An Employer
Responsibility
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Data Retention Policy
• GPS Data• Video & Audio• Inspection Data• Pre and Post Trip• Fault Code• Others
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Technology Considerations
• GPS Data• Fuel Consumption• Real Time Notice– Fault Codes to Passengers
• Medicaid• Student Management• Social & Taxpayer
Responsibility
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
The Economics• Applies TO:
– Price– Scale– Term Certainty– Eligibility– Insurance & Bonding– Demographics & Location– Contract Rotation– Labor Services– Equipment– Supervision (Contract
Management)
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Some Examples• Payment Reliability• Payment Timing• Term of Years• Financial Condition• Price Certainty
– Annual Days– Minimum Hours and Miles– Fuel Price Indexing– Dead Head Certainty
• Equipment Specifications• Personnel Requirements• Insurance & Indemnification• Inspection Expectations• SCALE of OPERATION• Legal Responsibilities
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
The Decision Made, Now What• Labor Wage Protection• Equipment Minimum Standards Raised• General Liability Insurance• Inspection Expectation• Fines and Incentives• Vendor Responsibility
– Driver In Service– Driver Credentials– Driver Observations– Driver Discipline
• Pay and Pay Assessment• Reconciliation of Standard “Boilerplate”
Language• AKA “Commodity Description”• Defaults and Remedies
Marginal Cost ConceptsThe Concept:
Bus Service Contract Writing: Key Considerations
Term and Pricing Models• Evergreen (Negotiated)• Three Year Term (That’s It)• Three Year Term w Extension • RFP Models• 3-6-9-12 Transition• 12 Year Transition• Equipment Ownership• Service Only • Others
Marginal Cost ConceptsMatch the Contract to the Condition:
Bus Service Contract Writing: Key Considerations
Pricing Terms• Define The T&M Commencement Point• Fixed Fee
– Primary & Secondary– Capitalization, NO COLA Indexing
• Hourly Fees– Primary, Secondary and Minimum Per Day Per Year– COLA Index Defined
• Mileage Fees– Primary, Secondary and Minimum Per Day Per Year– COLA Index Defined
• Fuel Fees– MD AAA Price Indexed
• 12 Year Rotational Contract– Expiration a Certainty Absent Default
• Minimum and Maximum Element Pricing• Award Assessment Defined with Certainty• Payment Frequency• Payment Assessment• The Dead versus Live Nuance• Nine Detailed Pages Needed to Describe• Benchmark: Positive
Marginal Cost ConceptsThe Science:
Bus Service Contract Writing: Key Considerations
Creating & Maintaining Competition• Sorry, There Must Be Losers• Scale
– Impacts Pricing– Softens “Protection” Concern– Permits the Vendor to Take on SO MUCH MORE
• Barriers to Entry– Examine & Eliminate Barriers to Entry– Develop Alternatives Methods to Address Initial
Concerns– Examples
• Residency• Location• Equipment Ownership• Corporations• Undoable Specifications• Borne and Bred• Cross District Operations
• RFP Versus RFB• Revise, Revise, Revise
Marginal Cost ConceptsThe ART:
Bus Service Contract Writing: Key Considerations
Additional Issues to Consider• Cooperative Agreements• Add On Clauses• Equipment and Personnel Certification
Among LEAs• Class D or C (Avoid the Floor)• Attendants• Fuel: Taxes• INSURANCE: Auto, PIP, Limits, General,
Bonding)• Training Enhancements• Liquidated Damages and Incentives• Executory Contract Status (An Offer)• Reconcile Boilerplate• And Finally: Exculpatory Language
Marginal Cost ConceptsThe ART:
Bus Service Contract Writing: Key Considerations
Results• Money? • Equipment Enhanced• Change in Customer
Identification• 79 to 15 Vendors• Vendor Scale• Vendor Quality & Accountability• Service Expectation• Vendor Based System Preserved• Model Document Available• Duty to the Taxpayer
Marginal Cost ConceptsThe Reality:
ASBO MD DC Spring ConferenceMay 2014
Contract Writing:Key Considerations for Development of a Document
Effectively Supporting the Student Safety, Educational Service and Efficiency Components of the Transportation
Service Delivery Mission
Winship WheatleyAACPS TD (Still Retired!!)