1. ASBO MD DC Spring Conference May 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 Wheatley AACPS TD (Retired!!) 443.758.6034 winshipwheatley@msn.com

2. 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??

3. 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 Concepts The Concept:

4. 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 Concepts The Concept:

5. Bus Service Contract Writing: Key Considerations Drug Testing Specific Releases Pool Co Mingle Data Security THC An Employer Responsibility Marginal Cost Concepts The Concept:

6. Bus Service Contract Writing: Key Considerations Data Retention Policy GPS Data Video & Audio Inspection Data Pre and Post Trip Fault Code Others Marginal Cost Concepts The Concept:

7. 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 Concepts The Concept:

8. 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 Concepts The Concept:

9. 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 Concepts The Concept:

10. 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 Concepts The Concept:

11. 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 Concepts Match the Contract to the Condition:

12. 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 Concepts The Science:

13. 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 Concepts The ART:

14. 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 Concepts The ART:

15. 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 Concepts The Reality:

16. ASBO MD DC Spring Conference May 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 Wheatley AACPS TD (Still Retired!!) 443.758.6034 winshipwheatley@msn.com