Hard-Won Accord: British Columbia & EDS Canada Negotiate a Complex Revenue Management Contract

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Publication Date:
June 16, 2006

Source:
Harvard Kny School

Wh a public seor ncy decides to privatize a governmt funion ( oppos to a more discreet job), the process of negotiating the service contra becomes a more complex and far-reaching deavor. This ce study describes the dilemm that surfac wh a governmt ncy in British Columbia-the Ministry of Provincial Revue-negotiat a 10-year, $750 million contra for non-tax revue colleion to S Canada, a subsidiary of the Tex-b Eleronic Data Systems corporation. The appeal of the deal, from the public seor perspeive, w that it transferr the risk of upgrading an outmod, under-resourc system to the private seor. The appeal to the private seor w that it allow the company to recover costs and make a by taking a share of the financial befits that result from the upgrade. But negotiating the ins and outs of the contra for this ambitious proje w to prove a formid-nearly an insurmount-hurdle for two organizations that inhabit differt cultures, held differt sumptions, and pursu differt man. For example, what level w reon? Should the company be requir to reveal its costs to the governmt? To what extt should the details of the contra be public, if at all? In what are-if any-should public officials be to regulate the firm’s business praices? And how should either party be held account for its contraual promises? The ce w develop for a Kny School course on public-private partnerships. It affords studts a balanc, inside look at the nitty-gritty dilemm of both the public and private seor negotiators. HKS Ce Number 1835.0

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