SLIDE 1
Standard Terms of Contract
Michael S. Carter
Alcatel-Lucent
SLIDE 2 Presenter Profile
Before joining ASN in 2000, Michael was international counsel for Alcatel Italia (1997-2000) and Alcatel in Paris (1995-97). He practiced law with Mudge Rose Guthrie Alexander & Ferdon in Paris (1989-95) and Rogers & Wells in New York (1986- 89). He is a graduate of Bowdoin College and Columbia University School of Law.
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Michael S. Carter
General Counsel
michael.carter@alcatel- lucent.fr
+33 1 30 77 68 39
SLIDE 3
Most commercial contracts in the submarine telecommunications industry are of a few recurring types: turnkey system supply system upgrades
marine maintenance services terrestrial operation & maintenance services
Introduction
SLIDE 4
Objectives/expectations of suppliers, service providers and customers are broadly the same. Little variation in subject matter covered. Yet no industry industry standard exists.
Introduction (continued)
SLIDE 5
RFQ includes form of contract Statement of compliance
– “compliant” v. “non-compliant” – no comments if “compliant” – incentive to limit “non-compliant” answers – comments short, reasoning not always obvious – “partly compliant” or “compliant, except for …” – comments even if “compliant” – proposed new clauses
Bid-clarification meetings & BAFO rounds
Competitive Bidding
SLIDE 6
Starting point usually drafter’s model contract. Varies from one transaction to another. May be unfamiliar to other party. Negotiating sessions. Goal is fair & balanced contract. Process can be time-consuming, costly & difficult.
– Sessions can last hours or days. – Significant costs if outside counsel involved. – Arduous if opening draft perceived as one-sided.
Direct Negotiations
SLIDE 7
Parties’ objectives/expectations: Equipment/services per specs. & delivered on
time.
Agreed price paid on time. Legal framework for commercial relationship: Rights & obligations. Risks & responsibilities. Opportunity for standardization.
Contract as Legal Framework
SLIDE 8
Comparison of technical merits & prices. Comparison of proposed contractual terms. Risk assessment reflected in pricing. Lengthy adjudication processes or negotiations consume resources & increase time to market.
Drawbacks of Current Practice
SLIDE 9
Use of a recognized standard set of terms for recurring types of contracts in our industry would afford significant advantages: level playing field in competitive bidding simplified risk assessment
legal certainty faster, easier contractual negotiations improved time to market for customers
Advantages of Industry Standard
SLIDE 10 Standardized contracts for the construction industry are offered by: American Institute of Architects Institution of Civil Engineers
Joint Contracts Tribunal Ltd International Federation of Consulting Engineers
BIMCO develops model maritime contracts &
- ther related forms, such as charter parties &
- ther shipping documents.
Models for Comparison
SLIDE 11
The submarine telecommunications industry could like likewise benefit from acceptance of a recognized standard set of fair & balanced contractual terms for recurring types of contracts. SubOptic might serve as a possible forum for the development of such a standard for the industry.
Conclusion
