Views of ATCO. ATCO submitted the only area that had changed from the Original MSA approved in Decision 2002-069 was the treatment of IP ownership. XXXX argued the ownership of IP rights was irrelevant. ATCO submitted that the ATCO Utilities, their CIO and the balance of the ATCO Group have moved away from more costly, custom-built products to reliance upon commercially available third party products. The practical focus of concern, therefore, has shifted from ownership, which was largely irrelevant in that 47 Transcript, page 494 to 495 context, to ensuring the right to use the IP in question. ATCO submitted that right was assured. XXXX suggested that no one appeared to question that fact as it related to third party products. ATCO submitted that, with respect to custom-built IP, the statement of work mechanism under the agreement provided the ATCO Utilities with the right (but not the obligation) to own the IP if they so desired. XXXX suggested that this method of dealing with IP rights was prudent since, as Xx. Xxxxxxxx noted, the FMV of the contract may well be higher if the client required ownership of all IP rights. ATCO argued that if the ATCO Utilities wished to retain ownership to any custom developed IP they could do so through the statement of work procedure. ATCO argued the ATCO Utilities retained access to all IP following contract termination without exception. ATCO suggested the changes made from the Original MSA with respect to IP were made to allow the Renewal MSA to deal more appropriately with the vast majority of projects that involved the implementation and integration of third party commercial software. As Xx. Xxxxxx noted, the ATCO Group of companies licensed the right to use these third party software products for the ATCO Group of companies, including subsidiaries and affiliates.48 This right to use third party software survived termination of the service contract with any service provider. For any other IP created for the ATCO Utilities under the Renewal MSA, ATCO suggested the ATCO Utilities had the right to use that IP at no cost for as long as it is required for utility purposes. XXXX also suggested that the ATCO Utilities could elect to own the IP from any specific custom development by so electing at the time of approving the statement of work. ATCO suggested the ATCO Utilities IT strategy was to “buy not build” wherever possible, and as a result securing the right to use IP was more important than trying to secure the ownership of all IP.
Views of ATCO. ATCO submitted that the scope of the proceeding was carefully focused upon a comparison of a contract already approved by the Board, with a renewal contract which was simply intended to provide clarity, conform to changes in the IT industry and reflect the evolution of the utilities’
Views of ATCO. The ATCO Utilities submitted that the Renewal MSA did not alter the approach taken in the Original MSA with respect to termination. XXXX argued that contrary to Calgary’s opinion, the ATCO Utilities had the right to terminate the agreement38 in the event the outsourcer’s failure to deliver caused a material adverse affect on the ATCO Utilities’ business. ATCO submitted that further to the termination provisions in the contract, there was an obligation on ATCO I-Tek to deliver transition services to the ATCO Utilities in the event of termination.39 ATCO maintained that the obligation to ensure a smooth transition40 was more encompassing than trying to define categories of transition services to be performed. Without a specific transition plan, including what environment you were transitioning to, you could only define transition services in a “generic” fashion that could be subject to interpretation at the time of transition. ATCO noted that upon termination, ATCO I-Tek had an obligation to ensure a smooth transition, and only if the contract was extended beyond the termination date was there a 20% surcharge on the services provided. ATCO suggested that the provision existed to protect the ATCO Utilities from any “price-gouging” that the service provider might attempt for the temporary extension of services beyond the intended termination date. There was no cost (and hence no 20% premium) for the continued use of IP required for utility operations. ATCO suggested transition assistance would be provided according to what was required by the ATCO Utilities once they determined their transition plan.
Views of ATCO. The ATCO Utilities submitted that they did not alter the approach taken in the Renewal MSA from the Original MSA with respect to remedies. ATCO argued that holdbacks for non- performance of service levels72 were an effective means to ensure the achievement of service levels. ATCO argued the combination of holdbacks and the obligation of re-performance, were a significant remedy. XXXX suggested that, at the end of the day, parties wanted the services at the service level contracted for, and that a penalty would not make up for the impact of missed service levels. By allowing the outsourcer to recapture or earn back the holdback amount one would encourage the outsourcer to correct or eliminate the problem and keep it from re-occurring. ATCO submitted that another very effective mechanism to deal with issues was a good dispute resolution process73. The ability to quickly escalate an issue (according to a prescribed timeline) to senior management and then to arbitration was key to ensuring that the business got back to business quickly if there was an issue. Also key to this process was that the outsourcer could not withhold services in order to pressure resolution in its favour. ATCO suggested that the remedy provisions were a long debated and difficult negotiation item in every outsourcing arrangement. ATCO referred to the three-year history of the Original MSA and submitted the holdback approach resulted in the ATCO Utilities’ service levels consistently being met or exceeded, and that all services to customers related to technology had been beyond reproach. ATCO argued that large financial penalties impacted the FMV of the rates to be charged, and reciprocally would require equal opportunities for the service provider to earn upsides.
Views of ATCO. XXXX argued that Xxxxxxx's ‘proposal for a proactive approach’ would have the Board ignore the terms and conditions of the Renewal MSA and benchmark a separate set of unspecified terms and conditions ". . . so that it can attempt to determine a fair market value to be applied the I-Tek charges”76. ATCO considered that Calgary strayed beyond the scope of the proceeding, which specifically required an assessment of "the appropriateness of the terms and conditions of the proposed MSA”.77 ATCO suggested that Calgary did not advance its proposal in evidence. XXXX argued that the Calgary proposal lacked coherence and structure. It was not clear what terms and conditions would survive from the Renewal MSA in conjunction with the other clauses which Calgary (and the other interveners) have discussed at the hearing. Whether any of those terms would continue to fit together or would contradict each other was an unanswered question. ATCO concluded it was difficult to conceive of such a proposal as anything other than micromanagement. ATCO submitted that the detailed service levels, listed on page 25 of Calgary’s argument, were not found on its record. XXXX argued that was an attempt to introduce new evidence and should be rejected by the Board on that basis alone. ATCO argued service levels were a complex, detailed area.
