Exhibit
10.12


 


BOARD OF EDUCATION
OF THE CITY OF NEW YORK


 


EXTENSION
AND NINTH AMENDMENT OF CONTRACT FOR TRANSPORTATION OF GENERAL EDUCATION PUPILS
TO PUBLIC AND NONPUBLIC SCHOOLS IN THE CITY OF NEW YORK


 


Extension
and Ninth Amendment Agreement made and entered into on the
date expressed at the end hereof by and between the BOARD OF EDUCATION OF THE CITY SCHOOL
DISTRICT OF THE CITY OF NEW YORK (hereinafter expressed as “Board of
Education,” “Board” or “BOE”), with principal headquarters located at 110 Livingston
Street, Brooklyn, NY 11201, and the Contractor whose name, address and
authorized signature appear at the end of this document (hereinafter expressed
as “Contractor”).


 


WITNESSETH


 


WHEREAS, in 1979
the BOE publicly solicited competitive bids for the transportation of general
education pupils in public and nonpublic schools under Contract Serial Nos.
0065, 0075 and 8107;(1) and,


 


WHEREAS,
the Contractor tendered a bid(s) under one or more aforementioned contract
serial numbers and was duly awarded a contract(s) including certain Employee
Protection Provisions (1st amendment) for the transportation of
regular education pupils attending public and nonpublic schools; and,


 


WHEREAS,
the original terms of all contracts under Serial Nos. 0065, 0075, and 8107 would
have expired on June 30, 1983 unless extended; and, Education Law
§305(14)(a) authorizes extensions and provides a method for annual payment
increases linked to defined regional Consumer Price Index (hereinafter
expressed as “CPI”); and,


 


WHEREAS,
in 1983 the BOE and various contractors agreed to amend (2nd
amendment) and extend contracts under Serial Nos. 0065, 0075 and 8107 through
June 30, 1986; and,


 


WHEREAS,
in 1986 the BOE and various contractors agreed to amend (3rd
amendment erroneously labeled as the 2nd amendment) and extend
further all contracts under Serial Nos. 0065, 0075 and 8107 through June 30,
1989; and,


 


WHEREAS,
in 1986 the BOE publicly solicited competitive bids for transportation of
general education pupils in public and nonpublic schools under Contract Serial
No. 9888 that included certain Employee Protection Provisions;(2) and,


 












(1) By their original specifications, all contracts under Serial Nos.
0065, 0075 and 8107 provide for ten-month pupil transportation service from
September through June of each school or extension year.


 


(2) By their original specifications, all contracts under Serial No.
9888 provide for ten-month pupil transportation service from September through
June of each school or extension year.


 


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WHEREAS,
in 1989 the BOE and various contractors agreed to amend (4th
amendment erroneously labeled as the 3rd amendment) and extend
further all contracts under Serial Nos. 0065, 0075 and 8107 through June 30,
1992; and,


 


WHEREAS,
the original terms of all contracts under Serial No. 9888 who would have
expired in June 30, 1991, unless extended; and, Education Law
§305(14)(a) allows extensions and provide a method for annual payment increases
linked to defined regional CPI; and,


 


WHEREAS,
in 1991, the BOE and various contractors agreed for the first time to amend and
extend all contracts under Serial No. 9888 through June 30, 1994; and,


 


WHEREAS,
in 1991, the BOE Office of Auditor General (hereinafter expressed as “OAG”)
started a review and audit of annual rate increases paid to contractors during
school years 1986-87 to 1999-2000 pursuant to provisions in previous and
existing extension and amendment agreements as allowed by Education Law
§305(14)(a); and, this OAG review and audit has resulted in the issuance by the
BOE of preliminary and other findings, which shall have caused, or shall cause,
various adjustments to daily vehicle rates of many contractors as well as recovery
of overpayments from some contractors; and,


 


WHEREAS,
in 1992 the BOE and various contractors agreed to amend (6th
amendment erroneously labeled as the 5th amendment) and extend
further all contracts under Serial Nos. 0065, 0075 and 8107 through June 30,
1995; and,


 


WHEREAS,
in 1994 the BOE and various contractors agreed to amend and extend further all
contracts under Serial No. 9888 (2nd amendment), by which such
contracts have been extended through June 30, 1997; and,


 


WHEREAS,
in 1995 the BOE publicly solicited competitive bids for transportation of
general education pupils in public and nonpublic schools under Contract Serial
No. 7263;(3) and,


 


WHEREAS,
in 1995 the City of New York, the BOE, various contractors, and delegates of
the Amalgamated Transit Union, Local Division 1181-1061, the Transit Workers
Union, Local 100, and various other labor organizations representing school bus
workers entered into negotiations to deal with the increasing costs of school
bus service in the face of markedly diminished City and school district
financial resources; and, the City of New York, the BOE, various contractors,
and the labor organizations reached an accord that averted the possibility of
school bus service interruptions and that produced significant prospective cost
savings for the City and the BOE; and,


 


WHEREAS,
the said accord among the City, the BOE, various contractors, and the labor
organizations called for modifications to the terms, conditions and
specifications of the then existing extension and amendment agreements under
Serial Nos. 0065, 0075, 7263, 8107 and 9888 that took effect during


 












(3) By their original specifications, all contracts under Serial No.
7263 provide for twelve-month pupil transportation service from July through
June of each school or extension year as compared with other serial numbers
covered by this Extension and Amendment Agreement that provide for ten-month
pupil transportation service from September through June of each school or extension
year.


 


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the original or extension terms of such contracts starting as of July
1, 1995 or September 1, 1995, depending upon the particular contract serial
number, and,


 


WHEREAS,
as a result of the said accord among the City, the BOE, various contractors,
and the labor organizations in 1995, the BOE and various contractors agreed
thereupon to amend and/or extend further all contracts under Serial Nos. 0065,
0075, 7263, 8107 (7th amendment) and 9888 (3rd
amendment), by which such contracts have been extended through June 30, 2000;
and,


 


WHEREAS,
in 1996, the BOE and various contractors including the Contractor mutually determined
that changes had occurred in the banking, financial services and insurance
markets affecting the availability and affordability of performance bonds,
letters of credit and other forms of performance security; and, the BOE and
various contractors including the Contractor entered into a Supplemental Eighth
(erroneously labeled 7th) Amendment of Contract for General
Education Pupil Transportation Services thereby modifying and revising the
performance security provisions of Contract Serial Nos. 0065, 0075, 7263, 8107
and 9888 for the remainder of the extension period through June 30, 2000; and


 


WHEREAS,
the BOE has determined that all contracts under Serial Nos. 0065, 0075, 8107 (6th
amendment of Serial Nos. 0065, 0075 and 8107), 7263 (3rd amendment
of Serial No. 7263) and 9888 (3rd amendment of Serial No. 9888)
should be still further amended and extended, and the Contractor does hereby so
agree, acknowledge and stipulate; and,


 


WHEREAS,
at a regular public meeting on March 15, 2000, the Board of Education adopted a
Resolution
(Calendar No. 20) authorizing the Chancellor to enter into further amendment
and extension of contracts under Serial Nos. 0065, 0075, 7263, 8107 and 9888
(hereinafter expressed collectively as “Contract”) until a termination date not
later than June 30, 2005, unless thereupon further extended; and,


 


WHEREAS,
the parties mutually desire to make this extension agreement
and amendment to the Contract as heretofore amended and extended;


 


NOW,
THEREFORE, in consideration of the heretofore-recited
stipulations and the hereinafter-expressed terms, conditions and specifications,
the BOE and the Contractor, as the parties to this Extension and Ninth
Amendment Agreement, do hereby stipulate and agree both as above and as
follows:


 


(A)                               TERM OF
EXTENSION AGREEMENT.  All
references to the termination of the Contract, by whatever terminology, shall
be deemed hereafter to read “June 30, 2005, unless further extended.”


 


(B)                               ARTICLE
V-A entitled, “PAYMENT DURING PERIOD OF EXTENSION,” of contracts under Serial
Nos.0065, 0075 and 8107, ARTICLE 29(D) of contracts under Serial No. 9888, and
ARTICLE 28(C) of contracts under Serial No. 7263 are hereby further amended to
read as follows for the term of this Extension and Ninth Amendment Agreement:


 


“(1)               Any provisions of
ARTICLES V, 28 or 29 (as applicable) to the contrary notwithstanding, the daily
rate(s) per vehicle during this Extension Period shall be deemed to be adjusted
each year according to the following formulae subject to the Office of Pupil
Transportation


 


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(hereinafter expressed as
‘OPT’) Director’s approval of all or any portion(s) of the Contractor’s claims
in the below-described annual Cost Justification Financial Statements:


 


“(a)                During the
Extension Year of July 1, 2000 through June 30, 2001, the Contractor’s daily
rate(s) per vehicle shall be deemed to be augmented by an amount not to exceed
whichever of the following represents the least amount of actual increase: (i)
the same percentage by which the CPI as of May 2000 shall have increased over
the CPI as of May 1999; (ii) eight percent (8%) over the base daily
rates per vehicle paid during the Extension Year of July 1, 1999 through June
30, 2000; or, (iii) the amount in dollars expressed as a percentage by which
the Contractor’s actual costs during the Extension Year from July 1, 1999
through June 30, 2000 shall have increased over the Contractor’s actual costs
during the Extension Year of July 1, 1998 through June 30, 1999, plus any previously
unabsorbed percentages of the Contractor’s actual cost increases from Extension
Year 1998-99 over Extension Year 1997-98 and from Extension Year 1997-98 over
Extension Year 1996-97 to the extent that such percentages shall have exceeded
the CPI increments from May 1998 to May 1999 and from May 1997 to May 1998,
respectively, and shall have been disallowed as a result from the rate
increases for Extension Years 1999-2000 and 1998-99, respectively.


 


“(b)                During the
Extension Year of July 1, 2001 through June 30, 2002, the Contractor’s daily
rate(s) per vehicle shall be deemed to be augmented by an amount not to exceed
whichever of the following represents the least amount of actual increase: (i)
the same percentage by which the CPI as of May 2001 shall have increased over
the CPI as of May 2000; (ii) eight percent (8%) over the base daily
rates per vehicle paid during the Extension Year of July 1, 2000 through June
30, 2001; or, (iii) the amount in dollars expressed as a percentage by which
the Contractor’s actual costs during the Extension Year from July 1, 2000
through June 30, 2001 shall have increased over the Contractor’s actual costs
during the Extension Year of July 1, 1999 through June 30, 2000, plus any previously
unabsorbed percentages of the Contractor’s actual cost increases from Extension
Year 1998-99 over Extension Year 1997-98 and from Extension Year 1999-2000 over
Extension Year 1998-99 to the extent that such percentages shall have exceeded
the CPI increments from May 1998 to May 1999 and from May 1999 to May 2000 and
shall have been disallowed as a result from the rate increases for Extension
Years 1999-2000 and 2000-01, respectively.


 


“(c)                            During
the Extension Year of July 1, 2002 through June 30, 2003, the Contractor’s
daily rate(s) per vehicle shall be deemed to be augmented by an amount not to
exceed whichever of the following represents the least amount of actual
increase: (i)
the same percentage by which the CPI as of May 2002 shall have increased over
the CPI as of May 2001; (ii) eight percent (8%) over the base daily
rates per vehicle paid during the Extension Year of July 1, 2001 through June
30, 2002; or, (iii) the amount in dollars expressed as a percentage by which
the Contractor’s actual costs during the Extension Year from July 1, 2001
through June 30, 2002 shall have increased over the Contractor’s


 


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actual costs during the
Extension Year of July 1, 2000 through June 30, 2001, plus any previously
unabsorbed percentages of the Contractor’s actual cost increases from Extension
Year 1999-2000 over Extension Year 1998-99 and from Extension Year 2000-01 over
Extension Year 1999-2000 to the extent that such percentages shall have exceeded
the CPI increments from May 1999 to May 2000 and May 2000 to May 2001,
respectively, and shall have been disallowed as a result from the rate
increases for Extension Years 2000-01 and 2001-02, respectively.


 


“(d)                            During
the Extension Year of July 1, 2003 through June 30, 2004, the Contractor’s
daily rate(s) per vehicle shall be deemed to be augmented by an amount not to
exceed whichever of the following represents the least amount of actual
increase: (i)
the same percentage by which the CPI as of May 2003 shall have increased over
the CPI as of May 2002; (ii) eight percent (8%) over the base daily
rates per vehicle paid during the Extension year of July 1, 2002 through June
30, 2003; or, (iii) the amount in dollars expressed as a percentage by which
the Contractor’s actual costs during the Extension Year from July 1, 2002
through June 30, 2003 shall have increased over the Contractor’s actual costs
during the Extension Year of July 1, 2001 through June 30, 2002, plus any previously
unabsorbed percentages of the Contractor’s actual cost increases from Extension
Year 2000-01 over Extension Year 1999-2000 and from Extension Year 2001-02 over
Extension Year 2000-01 to the extent that such percentages shall have exceeded
the CPI increments from May 2000 to May 2001 and May 2001 to May 2002,
respectively, and shall have been disallowed as a result from the rate
increase(s) for Extension Years 2001-02 and 2002-03, respectively.


 


“(e)                            During
the Extension Year of July 1, 2004 through June 30, 2005, the Contractor’s
daily rate(s) per vehicle shall be deemed to be augmented by an amount not to
exceed whichever of the following represents the least amount of actual
increase: (i)
the same percentage by which the CPI as of May 2004 shall have increased over
the CPI as of May 2003; (ii) eight percent (8%) over the base daily
rates per vehicle paid during the Extension year of July 1, 2003 through June
30, 2004; or, (iii) the amount in dollars expressed as a percentage by which
the Contractor’s actual costs during the Extension Year from July 1, 2003
through June 30, 2004 shall have increased over the Contractor’s actual costs
during the Extension Year of July 1, 2002 through June 30, 2003, plus any previously
unabsorbed percentages of the Contractor’s actual cost increases from Extension
Year 2001-02 over Extension Year 2000-01 and from Extension Year 2002-03 over
Extension Year 2001-02 to the extent that such percentages shall have exceeded
the CPI increments from May 2001 to May 2002 and May 2002 to May 2003,
respectively, and shall have been disallowed as a result from the rate
increase(s) for Extension Years 2002-03 and 2003-04, respectively.


 


“(2)               Anything in the
foregoing payment increase provisions to the contrary notwithstanding, where there
is a decrease in the regional consumer price index for the New York, New
York-Northeastern, New Jersey area as based upon the index for all urban consumers
(hereinafter expressed


 


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as “CPI-U”) during the preceding twelve month period,
the amount to be paid to the Contractor in the succeeding extension year will
reflect that decrease in a manner satisfactory to the New York State Education
Department (hereinafter expressed as ‘SED’).


 


“(3)               Special Costs
for Drivers Covered by Statute. 
Anything in the foregoing payment increase provisions to the contrary notwithstanding,
the BOE shall pay the Contractor each extension year for actual costs allowable
pursuant to Education Law §305(14)(c) under the following conditions,
even if such reimbursement shall cause annual payments to exceed the applicable
CPI increment.  To be eligible for such
payment, the Contractor shall provide full and separate details in each annual
Cost Justification Financial Statement submitted under ARTICLE V–A, 28(C) or
29(D) (as applicable) of this Contract of all claims for reimbursement of
expenses covered by Education Law §305(14)(c), which shall be described
for purposes of this Contract as ‘special vehicle operator administrative costs,’
and which may not exceed (a) the actual costs of qualifying criminal
history and driver licensing testing fees attributable to special requirements
of Vehicle and Traffic Law Articles 19 and 19–A, and (b)
the actual costs of all diagnostic tests and physical performance tests that
shall be deemed necessary by an examining physician or the OPT Director to
determine whether each applicant to drive a school bus under this Contract possesses
the physical and mental ability to operate a school bus and to perform
satisfactorily all other responsibilities of a school bus driver as required by
this Contract and all applicable Federal, State of New York, City of New York
and BOE laws, rules, regulations and policies.(4)  To the extent that any special vehicle operator administrative
costs as contained in the Contractor’s Cost Justification Financial Statement
for a given extension year together with the Contractor’s other claimed cost
increases for the prescribed comparison period shall exceed the applicable CPI
increment, the BOE shall pay the exact amount of all unabsorbed special vehicle
operator administrative costs, provided, that the Contractor shall submit to OPT a
separate, fully detailed written cost reimbursement request for any amount of
such costs not absorbed by the applicable annual rate increase.(5)  (To the extent that such special vehicle
operator administrative costs for a given extension year shall cause the
Contractor’s claimed cost growth for the prescribed comparison period to
surpass the fixed cap of 8%, however, the Contractor shall not be entitled to
any portion of such expenditures that shall exceed the said fixed cap.)  In each such written cost reimbursement
request, the Contractor shall include details of (aa) the totals of all special
vehicle operator administrative costs, (bb) the portion of such special vehicle
operator administrative costs absorbed by the applicable CPI increment, if any,
and (cc)
the portion of such special vehicle operator administrative costs not absorbed by the
applicable CPI increment.  All
Contractor cost claims under Education Law §305(14)(c) shall be subject
to review and/or audit by the BOE, its employees


 












(4) Allowable diagnostic tests and physical performance tests shall
include pre-employment medical and physical performance tests and examinations
and pre-employment alcohol and substance abuse tests.  Allowable diagnostic and physical performance tests shall not include tests and
examinations performed during the course of a driver’s employment with the
Contractor such as, but not limited to, random substance and/or alcohol abuse
tests, post-accident substance and/or alcohol abuse tests, reasonable suspicion
substance and/or alcohol abuse tests, and/or annual medical examinations.


 


(5) In the event of a given extension year in which the Contractor’s
relevant general cost increases, i.e., without the inclusion of costs covered
by Education Law §305(14)(c), exceed the applicable regional CPI
increment, the Contractor shall be entitled to a payment(s) in excess of the
said CPI growth but only
for such statutorily covered costs.


 


 


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and agents. 
Upon BOE approval of Contractor cost claims under Education Law
§305(14)(c) that shall exceed the CPI increment for a given Extension year, the
BOE shall pay the Contractor for such excess actual costs without interest
either in a lump sum (if less than $10,000.00 per extension year) or in equal
monthly installments (if greater than $10,000.00 per extension year).


 


“(4)               Definitions.  The definitions below control the meanings
of the described terms wherever they appear in this Contract.  These definitions add to and supplement any
definitions or instructions expressed in the original Contract and, as such, do
not supersede, revoke, replace, revise or limit any similar or analogous provisions
in the original Contract.


 


“(a)                For Contracts
under Serial Nos. 0065, 0075 and 8107 the following shall apply:


 


“(i)                              ‘Eighteenth
(18th) Extension Year’ means July 1, 2000 through June 30, 2001.


 


“(ii)                          ‘Nineteenth
(19th) Extension Year’ means July 1, 2001 through June 30, 2002.


 


“(iii)                      ‘Twentieth
(20th) Extension Year’ means July 1, 2002 through June 30, 2003.


 


“(iv)                         ‘Twenty-first
(21st) Extension Year’ means July 1, 2003 through June 30, 2004.


 


“(v)                             ‘Twenty-second
(22nd) Extension Year’ means July 1, 2004 through June 30, 2005.


 


“(b)                For Contracts
under Serial No. 9888 the following shall apply:


 


“(i)                              ‘Tenth
(10th) Extension Year’ means July 1, 2000 through June 30, 2001.


 


“(ii)                          ‘Eleventh
(11th) Extension Year’ means July 1, 2001 through June 30, 2002.


 


“(iii)                      ‘Twelfth (12th)
Extension Year’ means July 1, 2002 through June 30, 2003.


 


“(iv)                         ‘Thirteenth
(13th) Extension Year’ means July 1, 2003 through June 30, 2004.


 


“(v)                             ‘Fourteenth (14th)
Extension Year” means July 1, 2004 through June 30, 2005.


 


“(c)                For Contracts
under Serial No. 7263 the following shall apply:


 


“(i)                              ‘Third
(3rd) Extension Year’ means July 1, 2000 through June 30, 2001.


 


“(ii)                          ‘Fourth
(4th) Extension Year’ means July 1, 2001 through June 30, 2002.


 


“(iii)                      ‘Fifth (5th)
Extension Year’ means July 1, 2002 through June 30, 2003.


 


“(iv)                         ‘Sixth (6th)
Extension Year’ means July 1, 2003 through June 30, 2004.


 


“(v)                             ‘Seventh
(7th) Extension Year’ means July 1, 2004 through June 30, 2005.


 


“(d)                The term ‘Consumer
Price Index’ (expressed herein as ‘CPI’), as of a given date, is defined as
that statistic of the United States Department of Labor, or its successor
agency, which the SED deems as the ‘regional consumer price index for the New
York, New York-Northeastern, New Jersey area, based upon the index for all
urban consumers (CPI-U),’ according to Education Law §305(14)(a) as the
same may be updated, revised, amended or otherwise changed during the life of
this Extension and Ninth Amendment Agreement. 
If


 


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Education Law
§305(14)(a) shall be amended to permit a stated or fixed percentage(s) of
annual rate increase(s) for pupil transportation contract extensions, which
increases may exceed the applicable CPI increment(s), this Contract shall be
deemed to be amended automatically and without the need for any action by the
parties by substituting such stated or fixed percentage(s) of increase in place
of the actual percentage(s) of increase in the CPI in any Extension year in
which the CPI shall be lower than the stated or fixed percentage(s).


 


“(e)                The term
‘contractor’s average cost per vehicle day’ for a given extension year is
defined as the Contractor’s ‘total net allowable costs’ for that extension year
divided by the total number of ‘vehicle days.’ 
The term ‘total net allowable costs’ is limited to those expenses
determined by the BOE to relate directly to transportation services provided to
the BOE under this Contract.  The term ‘vehicle
days’ is defined as the total number of ‘authorized vehicles’ the Contractor
actually operates multiplied by the number of school days, which number is
hereby fixed at 182 school days per extension year (220 school days per
extension year for 12-month contracts)(6) for the term of this Extension and
Amendment Agreement, except for certain additional vehicles which shall be
treated in the manner hereinafter provided. 
The term ‘authorized vehicles’ is defined as the total number of
contract and additional vehicles, but excluding spare vehicles, that the
Contractor shall have been granted expressly by the Director.  If the Director shall grant the Contractor
additional vehicles during any given extension year of this Extension and
Amendment Agreement, such additional vehicles shall be counted among the
‘authorized vehicles’ during the first extension year in which they shall be
awarded but only to the extent of the actual number of school days actually
operated not to exceed a maximum of 91 school days (110 school days for
12-month contracts).(7)  Only during the
succeeding extension year(s) shall such additional vehicles be counted as
‘authorized vehicles’ for 182 school days (220 school days for 12-month
contracts).  If the Contractor has a
10-month Contract(s) and the Director shall grant the Contractor summer work
beyond the normal 10 months from September through June, the summer vehicles only shall be exempt
from inclusion in the cost justification process.


 


“(f)                  The term ‘Cost Justification Financial Statement’ is
defined as a written ‘review report’ prepared by a Certified Public Accountant
(herein expressed as ‘CPA’) or Public Accountant (herein expressed as ‘PA’)
licensed by the State of New York, except as otherwise


 












(6) The numbers 182 days (10-month contracts) and 220 days (12-month
contracts) represent average numbers of school days per extension year for the
five extension years preceding the instant Extension and Amendment Agreement, i.e.,
extension years 1995-96 through 1999-2000. 
The BOE shall review these averages every three years during the
preceding, current and any future extension periods.  Whereupon a triennial review shall find that one or both average
numbers of school days shall have changed as based upon the actual number of school
days per
annum, the BOE shall revise the fixed number(s) of days up or down
accordingly with written notice to the Contractor by not later that December 31st
preceding the extension year in which the revised fixed number(s) shall take
effect.  In each triennial review, the
effects of changes, if any, in the numbers of school days from the preceding
triennial review(s) shall be viewed cumulatively.


 


(7) This partial exclusion of additional vehicles during the first
extension year of award shall not apply to any vehicles that the Contractor
obtains by assignment or other transfer of contract or by acquiring corporate
shares of another school bus contractor. 
For cost justification purposes under this Contract, the Contractor
shall add and combine not more than fifty percent (50%) of the value of the
costs of the affected additional vehicles into the Contractor’s other costs for
the first extension year.


 


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noted herein.  Each Cost Justification Financial Statement
shall include all of the facts and figures deemed necessary by the Director
and/or the SED to provide a complete view of the Contractor’s cost increase
claims for the applicable comparative periods specified in this Extension and
Ninth Amendment Agreement.  Each such
review report shall state that a review shall have been performed in accordance
with Generally Accepted Accounting Principles (herein expressed as ‘GAAP’) as
of the date of a given review report and that the information in each Cost Justification
Financial Statement shall have been based upon the representations of the
Contractor’s management.  Each such
review shall describe the nature of a review as distinct from an audit and
shall describe the standard procedures that the CPA/PA shall have performed, e.g.,
an inquiry and an analytical review. 
Each review report shall give the limited assurance that, based upon the
review, the CPA/PA shall not have been aware of any material modifications that
should be made to the Cost Justification Financial Statement for it to be in conformity
with GAAP.  A compilation report shall
not qualify as a Cost Justification Financial Statement.  The CPA/PA preparing each review report must
state that he/she shall have studied the cost justification manual that shall
be supplied by the Board and shall have applied the standards contained in the
Board’s manual to the development of each Cost Justification Financial
Statement.  If the Contractor shall not
have had a CPA-audited financial report performed for any purpose within two
(2) years before July 1, 2000, then the Contractor must submit a certified
audited statement by a CPA for its first Cost Justification Financial Statement
under this Extension and Ninth Amendment Agreement.  The CPA/PA who shall prepare each Cost Justification Financial
Statement must have no interest in this Contract, the Contractor and/or any
entity affiliated in any manner with the Contractor and must so certify in
writing.  Each Cost Justification
Financial Statement shall be in a form prescribed by the Director as approved
by the SED.


 


“(5)               Cost
Justification Financial Statements. 
Education Law §305(14) requires the Contractor to substantiate
any cost increases that he/she claims to justify annual payment increases
during the term of this Extension and Ninth Amendment Agreement.  The Director shall determine whether to
approve all or any portion of the claims in each of the Contractor’s annual
Cost Justification Financial Statements in accordance with the following:


 


“(a)               To substantiate any payment increases
received under ARTICLES V-A, 28(C) or 29(D) during the Extension Year of July
1, 2000 to June 30, 2001, the Contractor must submit by September 30, 2000, (i) a Cost Justification Financial
Statement that details the total costs incurred by the Contractor for all its
operations and, separately, for its operations under this Contract for
Extension Years 1999-2000 and 1998-1999, and (ii)
an additional Cost Justification Financial Statement that details total costs
incurred by the Contractor for all its operations and, separately, for its operations
under the Contract for Extension Years 1996-97, 1997-98 and 1998-99 to account
for unabsorbed cost carry-forwards, if any.


 


“(b)                To substantiate
any payment increases received under ARTICLES V-A, 28(C) or 29(D) during the
Extension Year of July 1, 2001 to June 30, 2002, the Contractor must submit by
September 30, 2001, (i) a Cost
Justification Financial Statement that details the


 


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total costs incurred by
the Contractor for all its operations and, separately, for its operations under
this Contract for Extension Years 2000-01 and 1999-2000, and (ii) an additional Cost Justification
Financial Statement that details total costs incurred by the Contractor for all
its operations and, separately, for its operations under the Contract for Extension
Years 1997-98, 1998-99 and 1999-2000 to account for unabsorbed cost
carry-forwards, if any.


 


“(c)                To substantiate
any payment increases received under ARTICLES V-A, 28(C) or 29(D) during the
Extension Year of July 1, 2002 to June 30, 2003, the Contractor must submit by
September 30, 2002, (i) a Cost
Justification Financial Statement that details the total costs incurred by the
Contractor for all its operations and, separately, for its operations under
this Contract for Extension Years 2001-02 and 2000-01, and (ii) an additional Cost Justification Financial
Statement that details total costs incurred by the Contractor for all its
operations and, separately, for its operations under the Contract for Extension
Years 1998-99, 1999-2000 and 2000-01 to account for unabsorbed cost
carry-forwards, if any.


 


“(d)                                        To
substantiate any payment increases received under ARTICLES V-A, 28(C) or 29(D)
during the Extension Year of July 1, 2003 to June 30, 2004, the Contractor must
submit by September 30, 2003, a Cost Justification Financial Statement that
details the total costs incurred by the Contractor for all its operations and,
separately, for its operations under this Contract for the Extension Years
2002-03 and 2001-02, and (ii) an
additional Cost Justification Financial Statement that details total costs
incurred by the Contractor for all its operations and, separately, for its operations
under the Contract for Extension Years 1999-2000, 2000-01 and 2001-02 to
account for unabsorbed cost carry-forwards, if any.


 


“(e)                To substantiate
any payment increases received under ARTICLES V-A, 28(C) or 29(D) during the
Extension Year of July 1, 2004 to June 30, 2005, the Contractor must submit by
September 30, 2004, a Cost Justification Financial Statement that details the
total costs incurred by the Contractor for all its operations and, separately,
for its operations under this Contract for the Extension Years 2003-04 and
2002-03, and (ii) an additional
Cost Justification Financial Statement that details total costs incurred by the
Contractor for all its operations and, separately, for its operations under the
Contract for Extension Years 2000-01, 2001-02 and 2002-03 to account for
unabsorbed cost carry-forwards, if any.


 


“(f)                  Until six (6)
years after completion of its services hereunder or six (6) years after the
termination date of this Extension and Amendment Agreement, whichever shall
occur later, the Contractor shall maintain complete and correct books and records
related to all aspects of the Contractor’s obligations hereunder.  Records must be maintained separately so as
to identify clearly the expenses applicable to this Contract, all previous
extension and amendment agreements, and this Extension and Amendment Agreement
and must be distinguishable from all costs not incurred under this Contract,
all previous extension and amendment agreements, and this Extension and
Amendment Agreement.  Except as provided
in this subparagraph, all other provisions of this Contract, as amended, that
relate to the maintenance of records shall remain in full force and effect.


 


10

















 


“(g)               The Contractor will
supply in each annual Cost Justification Financial Statement all data required
by the New York State Education Department related to this Contract, and the
submittal shall include, without limitation to, New York State Education
Department approved cost justification forms. 
The Contractor must supply promptly any and all additional cost data as
required by the BOE or the SED.


 


“(6)                           Required Analysis of
Costs.  To determine the allowable
increase in costs for a given extension year, as specified in ARTICLE V-A(1),
28(C)(1) or 29(D)(1) of this Contract, the following analysis of the Cost
Justification Financial Statement must be undertaken:


 


“Step 1:                Divide the total
applicable annual operating costs by the number of vehicle days for both the
base year and the year previous to the base year to determine the average daily
cost per vehicle for each of those years. 
The base year is the year immediately before the extension year to which
a rate increase is to be applied.


 


“Step 2:                Subtract the
average daily cost per vehicle for the year previous to the base year from the
average daily cost per vehicle for the base year to determine the increase in
the average daily cost per vehicle.


 


“Step 3:                Divide the
increase in the average daily cost per vehicle by the average daily cost per
vehicle for the year previous to the base year to determine the percent
increase in the average daily cost per vehicle.


 


“Step 4:                Compare the
percent of increase in the average daily cost per vehicle to the percentage by
which the CPI as of May of the base year shall have increased over the CPI as
of May of the year previous to the base year and to the appropriate fixed
annual increase percentage cap for each extension year as expressed in ARTICLE
V-A(1), 28(C)(1) or 29(D)(1) of this Contract. 
Whichever is the least of the three percentages will be the allowable increase
applied to the daily rate for the affected extension year.


 


“Step 5:                For Extension
Years 2000-01 through 2004-05, repeat Steps 1-4.  For each such Extension Year, determine the percent of increase
in the average daily cost per vehicle. 
If the percent of increase in the average daily cost per vehicle resulting
in Step 3 shall be insufficient to justify fully the CPI increment in Step 4 or
the fixed cap, whichever shall be lower, add any previously unabsorbed percent
of increase from the applicable Extension Year(s) expressed heretofore at Paragraphs (1)(a)-(e) of ARTICLE V-A, 28(C)
or 29(D) of the Contract.


 


“(7)                           Allowable Cost Increases.  Only increases in ‘net allowable costs’ will
justify augmentation of the daily vehicle rate from one extension year to the
next.  ‘Allowable costs’ are limited by
the following: costs not attributable to the Contractor’s operations under this
Contract, costs that are not ordinary and/or reasonable, costs that are not
documented, and costs disallowed by the SED and/or BOE auditors are not
permitted to justify increases of the daily rate(s) per vehicle.


 


11

















 


The Director shall have the right to prescribe
miscellaneous standardized cost categories for all contractors including the Contractor.


 


“(8)               Access to
Subcontractors.  If with the
Director’s approval the Contractor subcontracts any portion of the services under
this Contract, the Contractor must include in any such subcontract a provision
that allows full and unimpeded access by the BOE, the SED and/or the New York
City Office of the Comptroller to the books and records of a subcontractor for
inspection, audit and copying purposes. 
The Contractor does hereby agree and warrant to render all necessary
assistance to obtain any requested documents from subcontractors.  The Contractor’s inability to obtain
requested documentation from any subcontractors shall not excuse a failure to
provide the documentation as a means to justify payment increases.


 


“(9)               Absence of Cost
Justification Financial Statement. 
The Contractor’s failure to submit an annual Cost Justification Financial
Statement by the deadline date as above expressed will result in the forfeiture
of any increase later justified for the period from the service start date to
the day the statement is received at OPT, unless the Director determines that
reasonable circumstances exist to excuse the Contractor’s late submittal.


 


“(10)        Adjustments to Later
Payments.  Based on the BOE’s audit
of the Contractor’s annual statements and financial records, the BOE may make
any necessary adjustments in any later payments that become due and owing to
the Contractor during a given Extension year to compensate for any excesses of
payments over cost increases.


 


“(11)        Refund of Overpayment.  The Contractor does hereby agree and warrant
further to refund all additional monies due to the BOE within thirty (30) days
of BOE’s final findings regarding any given Cost Justification Financial
Statement, if the amount of a given extension year’s payment excess over
allowable cost increase is greater than any payments due and owing for the balance
of a given extension year.


 


“(12)        Unabsorbed Cost Carry-Forward Provision.  If the Contractor shall not be able to justify
the maximum allowable rate(s) increase(s) for any one or more of Extension
Years 2000-01 to 2004-05, the Contractor shall be entitled to use an “unabsorbed
cost carry-forward(s)” as a supplemental device to achieve a greater allowable
rate(s) increase(s).  To be eligible for
an ‘unabsorbed cost carry-forward(s),’ the Contractor must detail in writing
all total net allowable costs from each set of two comparison years from which
any unabsorbed costs shall be derived as well as the total percentage of actual
cost increase and the unabsorbed percentage of cost increase.  The Director may prescribe additional
conditions of eligibility as reasonably appropriate.  When eligible and entitled hereunder, the Contractor may carry
forward ‘below-the-line’ any previously unabsorbed actual costs from any sets
of comparison periods as heretofore expressed at Paragraphs (1)(a)-(e) of ARTICLE V-A, 28(C) or 29(D) of the
Contract to supplement those cost increases that are used to justify
augmentations of the daily rate(s) per vehicle for the 2000-01 through 2004-05
Extension Years.  The term
‘below-the-line’ is hereby defined to mean that previously unabsorbed cost
increases, which are carried forward, are deemed as allocated to the extension


 


12

















 


year(s) of accrual and not to the subsequent extension
year(s) to which they are carried forward and applied both supplementally and
‘below-the-line’ as prior cost increase that have not as yet been absorbed by
the lesser of an annual CPI increment or a fixed annual rate increase cap.  Once an item of previously unabsorbed cost
increase shall have been carried forward and applied ‘below-the-line’ to a give
base year, that item may not be used again in any later base year.


 


“(13)        In the event of any
apparent inconsistencies between any other provisions of the Contract and
ARTICLES V-A, 28(C) and/or 29(D) hereof, the provisions of ARTICLES V-A, 28(C)
and/or 29(D) shall prevail and govern in every case and for all intents and
purposes.”


 


(C)                               MISALLOCATION
AND DUPLICATION OF COSTS. 
To prevent unjust enrichment via
misrepresentation or falsification of cost increase claims, the Contractor
hereby agrees, consents and warrants to abide in all respects by the following
rules for the treatment of fixed, variable or other costs utilized to establish
increased expenses from one given Extension year to the next:


 


(1)                     Allocation of Costs. 
If the Contractor misallocates any cost item(s), the allocation will be
disallowed.  “Misallocation” is defined
as a transgression of one or more of the following precepts:


 


(a)          Only
those of the Contractor’s fixed, variable or other costs which are directly
attributable to the performance and/or administration of BOE pupil
transportation contract work will be considered allowable expense items.  Costs attributable to a contractor’s other
operations, whether in the public or private sector, will not be allowed to
justify payment increases.


 


(b)          Costs
must be attributable solely to the specific group of contracts covered by this
Extension Agreement, i.e., Contract Serial Nos. 0065, 0075,
7263, 8107 and 9888. Expenses allocable to BOE pupil transportation contracts
other than these serial numbers must not appear in any materials presented to
justify payment increases under this Extension Agreement.


 


(c)          Costs
must be attributable solely to the corporate, partnership, sole proprietorship
or other entity that constitutes the Contractor.  Expenses allocable to a parent or other affiliated entity must
not appear on the Contractor’s cost justification financial statement.  Where employees, offices, storage and
maintenance facilities or other cost items are shared by several affiliated or
unaffiliated entities, all or some of which hold separate BOE transportation
contracts, assertions of expense increases must reflect only those percentages
of utilization directly allocable to the claimant Contractor.


 


(d)          Allocation
of costs must be based on the number of vehicle days and not merely the number
of vehicles under contract.


 


(e)          Such
other forms of misallocation of costs as may be determined by the BOE, the New
York City Office of the Comptroller or the New York State Education Department
(hereinafter expressed as “SED”), in accordance with the terms and conditions
of this Contract.


 


13

















 


(2)                                 Duplication of Costs and Cost Increases.  The Contractor shall not cause and/or allow
any duplication or multiplication of costs and/or items of cost increase in any
manner or to extent.


 


(D)                               AMENDMENTS
TO INSURANCE PROVISIONS.


 


(1)                                 The insurance
provisions of the Contract are hereby amended to provide as follows:


 


(a)          The Contractor must
obtain and maintain throughout the life of this Extension and Ninth Amendment
Agreement the following types of coverage in strict compliance with the terms,
conditions, and minimum amounts stated in this Contract: motor vehicle
liability insurance, property damage liability insurance, Worker’s Compensation
Insurance, Comprehensive General Liability Insurance and Subcontractor’s
Insurance.


 


(b)          The Contractor shall
arrange with its carrier(s) to have the Board and the City appear as additional
insured parties on every policy and certificate of insurance for all coverage
under this Contract.  To the extent commercially
available, the Contractor shall not obtain or use any insurance policy(ies) or
contract(s) for purposes of this Contract that contains any endorsement
exclusions relating to an additional insured’s negligence, relating to the
maintenance, use and operation of an additional insured’s realty or personalty,
or relating to any other activities by the additional insured that arise from,
or in the context of, this Contract.


 


(c)          The Contractor must
obtain the foregoing certifications and policies from an insurance company(ies)
both acceptable to the Board of Education.


 


(d)          The Contractor must
maintain all required coverage in full force and effect throughout the life of
this Extension and Ninth Amendment.  The
Contractor must file renewals with the OPT Director at least thirty (30) days
before the expiration of any policy.


 


(e)          The Contractor shall
obtain, maintain, and tender insurance policies for the following types of
coverage in the following minimum coverage limits, and the Contractor shall
comply with the following terms and conditions with respect to all such
insurance coverage:


 


(i)                        The
Contractor shall obtain both comprehensive general liability insurance coverage
and automobile liability insurance coverage for personal injury (including, but
not limited to death, sickness, disease and disability) and property damage,
caused directly or indirectly by any act(s) of commission or omission of the
Contractor and/or the Contractor’s agents, servants, employees, partners
(including, without limitation, general, limited, silent and apparent
partners), directors, officers, subcontractors, subcontractor employees,
volunteers, invitees, licensees, designees, assignees or any other
representatives.  For each type of coverage,
the


 


14

















 


liability limits for
personal injury (including, but not limited to death, sickness, disease and
disability) shall be not less than (a)
combined single limit coverage of Five Million Dollars ($5,000,000.00) per
occurrence, or (b) split limit
coverage of Five Hundred Thousand Dollars ($500,000.00) per person and Five
Million Dollars ($5,000,000.00) per occurrence.  For each type of coverage, the liability limits for property
damage shall be not less than (aa)
combined single limit coverage One Hundred Thousand Dollars ($100,000.00) per
occurrence, or (bb) split limit
coverage of Fifty Thousand Dollars ($50,000.00) per person and One Hundred
Thousand Dollars ($100,000.00) per occurrence.


 


(ii)                    Not later than
thirty (30) days after the date of execution and before the start of any work
under this Contract, the Contractor shall submit to the BOE evidence of the
insurance specified herein together with all supporting documentation
reasonably deemed necessary by the Director. 
The Contractor shall transmit one (1) copy of each of all insurance
policies and certificates of insurance to the Board of Education of the City of
New York, Office of Pupil Transportation, 33-00 Northern Boulevard, Room 223,
Long Island City, New York 11101, Attention: Contractual & Regulatory
Affairs Unit.  The Board’s receipt of
such policies and certificate shall be a condition precedent to any payment by
the Board to the Contractor under the Contract.  Furthermore, the Contractor shall transmit an informational copy
of this Agreement to its insurance carrier(s) together with a cover
letter(s)—the cover letter(s) shall identify the Contractor’s insurance
policy(ies) and/or account number(s)—that alerts and informs the carrier(s) of
the existence of this Agreement and particular insurance provisions contained
herein.


 


(2)                     Worker’s Compensation Insurance.  The Contractor shall maintain Worker’s
Compensation insurance in the manner and amount(s) prescribed by law.  The Contractor must maintain such insurance
throughout the life of this Contract and up to the completion of required
services or work to be performed.


 


(3)                     Subcontractors.  Before the Director may approve the
Contractor’s utilization of any subcontractor(s)—where such use is permitted
under this Contract—the Contractor must submit an acceptable written
certification(s) that such subcontractor(s) complies fully with (a) all of insurance requirements of this
Contract including, but not limited to, the specification of the BOE and the
City as additional insured parties in all of each subcontractor’s insurance
policies, and (b) the Worker’s
Compensation Law including appropriate insurance coverage.


 


(4)                     Required Rider Provisions.  The Contractor shall ensure that every policy for all of the
insurance coverage required under this Contract shall contain the following
provision via
a rider attached to every such policy:


 


(a)          Any and all notices that the insurer(s) shall provide to the Board
shall be addressed to the Director at “Board of Education of the City of New
York, Office of Pupil Transportation, 33-00 Northern Boulevard, Room 223, Long
Island City, New York 11101, Attention: Contractual & Regulatory Affairs
Unit.”


 


(b)          The Contractor shall transmit prompt notice of each coverable accident
or occurrence to the Contractor’s insurer(s) with such notice transmittal to
occur not later than required under the Contractor’s insurance policy(ies) or
contract(s).


 


15

















 


(c)          The Contractor’s insurance policy(ies) or contract(s) shall not be
terminated, revised, modified or otherwise changed unless the affected
insurer(s) shall have provided at least thirty (30) days advance written notice
to the Director regarding such termination, revision, modification or other
change.  If an insurer(s) notifies the
BOE of the termination of any required coverage, the Contractor shall provide
written evidence, e.g., a new certificate of insurance, before the effective
date contained in such notice(s) that the affected insurance coverage has been
fully replaced.  If an insurer(s)
notifies the BOE of any non-termination revision, modification or other change
that causes the Contractor’s insurance to be out of compliance with the requirements
of this Contract, the Contractor shall cure such non-compliance before the
effective date contained in such notice(s).


 


(5)                                             The minimum coverage limit amounts and types of
insurance coverage expressed in this Agreement shall not be construed in any
manner whatsoever to limit the nature and/or extent of the Contractor’s
responsibility and liability under this Agreement to defend, indemnify and hold
harmless the Board and the City as hereinafter provided.


 


(6)
The Contractor must obtain, maintain, and renew throughout the life of this
Contract such additional insurance policies necessary to comply with all
applicable laws, rules, and/or regulations governing the performance of this
Contract.  Moreover, the Contractor must
obtain, maintain, and renew throughout the life of this Contract all required
types of insurance coverage in amounts not less than those specified above for
each additional vehicle, transportation service or other service that may be
required during the term of the Contract. 
Whereupon the Director assigns to the Contractor additional vehicles,
transportation service, or other service, the latter must submit a
certification that additional insurance has been obtained prior to the start of
the additional work.


 


(7)                                             The
BOE reserves the right to alter, either by increase or decrease, the minimum
limits of coverage required under this Contract by a duly approved Resolution
of the Board.  Should the minimum limits
of any or all types of insurance coverage be increased, the Board of Education
will not provide, nor will the Contractor be entitled to, any additional
compensation.  Should the minimum limits
of insurance coverage be reduced, the Board will be entitled to a credit from
the Contractor for any savings in premiums.


 


(8)                                             If
any or all vehicles to be used to perform this Contract are not owned directly
by the Contractor, the insurance certificates and policies must be endorsed to
include the Contractor as well as the Board and the City as additional insured
parties.  Any insurance certificates
and/or policies that reflect coverage only for an owner, who is not the
Contractor, are not acceptable.


 


(9)                                             The
Contractor does hereby agree and warrant to defend, hold harmless and indemnify
the Board and the City from and for all claims, actions, damages, judgment,
expenses, attorney’s fees and/or compensation, whether in contract or tort,
arising out of personal injury (including, but not limited to, death, sickness,
disease and/or disability) and/or property damage sustained or alleged to have
been sustained in whole or in part as a result of, or arising out of, any act
or omission of the Contractor, its agents, employees and/or subcontractors, or
caused or resulting from any deleterious


 


16

















 


substance in any products
supplied, or while equipment, supplies, etc.,
are being delivered, or the service-work performed under this Contract,
whichever instance is applicable.


 


(E)                                 Paragraph
E of the Extension and Sixth Amendment Agreement of Contract Serial Nos. 0065,
0075 and 8107, Paragraph E of the Extension and Fourth Amendment of Contract
Serial No. 9888, and Article 45 of Contract Serial No. 7263 (as amended) are
hereby amended to read as follows for the period of the instant Extension and
Amendment Agreement:


 


“1.                                Priority
in Hiring and Master Seniority Lists.


 


“There shall be established two industry-wide Master
Seniority Lists.  One list shall be
composed of all operators (drivers), mechanics, and dispatchers and the other
list shall be composed of escorts (matrons-attendants) who were employed as of
June 30, 2000, under a contract between their employers and the Board for the
transportation of school children in the City of New York, who are furloughed
or become unemployed as a result of loss of contract or any part thereof by
their employers, or as the result of a reduction in service directed by the
Board during the term of the contract, in accordance with their date of entry
into the industry.  All operators
(drivers), mechanics, dispatchers and escorts (matrons-attendants) on the
Master Seniority Lists who participated in the Division 1181 A.T.U.–New York
Employees Pension Fund and Plan as of June 30, 2000, and who do not exercise
their option to withdraw from the Fund and Plan shall continue to participate
in such Pension Plan.


 


“Any existing contractor or individual who conducted
business as a sole proprietor, or as a member of a partnership or who held a
controlling interest in a corporation that performed service pursuant to
contract expiring in June, 2000 (contractor) shall give priority in employment
on September, 2000 or thereafter on the basis of position on the Master
Seniority List of any additional or replacement operators, mechanics and
dispatchers beyond those performing service as of June 30, 2000 consistent with
the number of employees required by the specifications of the contract expiring
June, 2000 for the number of vehicles providing service to the Board as of June
30, 2000 to individuals from the Master Seniority List until such list is exhausted.


 


“Any new contractors, i.e. those who did not provide
service pursuant to contract expiring June, 2000 (new contractor), shall give
priority in employment in September, 2000 or thereafter on the basis of
seniority to every operator (driver), mechanic and dispatcher performing
service pursuant to such contract starting from the first employee from the
Master Seniority List until such list is exhausted.


 


“Should the Board determine to require the contractor
to provide escort service in addition to the operator, and in the event that
all escorts (matrons-attendants) on the Master Seniority List, who were
employed as of June 30, 2000, are not employed as escorts by contractors for
the beginning of service in September of 2000, then said escorts shall be
employed in order of their position on the Master Seniority List.


 


17

















 


“2.                                Compensation.


 


“All operators (drivers), mechanics, dispatchers and
escorts (matrons-attendants) on the industry-wide Master Seniority Lists shall
be employed and paid on a full-time basis based upon the wage scale received
from prior employer under pupil transportation contracts.


 


“The contractor shall compensate operators (drivers),
mechanics and dispatchers and escorts (matrons-attendants) who appear on the
Master Seniority Lists and who are employed pursuant to contracts to be awarded
as follows for the term of the contract:


 


“(a)          Operators (drivers) and dispatchers at a daily rate of pay, including
any COLA, for each day of service, not less than that paid pursuant to any
applicable labor collective bargaining agreement.


 


“(b)          Mechanics at a daily
rate of pay, including any COLA, for each day of service, not less than that
paid pursuant to any applicable labor collective bargaining agreement.


 


“(c)          Escorts
(matrons-attendants) at a daily rate of pay, including any COLA, for each day
of service, not less than that paid pursuant to any applicable labor collective
bargaining agreement.


 


“Such operators (drivers) and escorts
(matrons-attendants) shall be available for extended service, without
additional compensation, which shall be defined as performance within the
particular job category, i.e., drivers as drivers, and escorts (matrons-attendants)
as escorts (matrons-attendants), within the eight (8) hour work day within the
spread (8 within 10 hours) provided for in the collective bargaining agreement
covering said employees, if any.


 


“3.                                Welfare.


 


“Contributions by the contractor for providing welfare
benefits to operators (drivers), mechanics, dispatchers and escorts
(matrons-attendants), in the event the contractor employs escorts, who appear
on the Master Seniority List shall be no less than $410 per employee per month
on a twelve month basis during each year of the contract.


 


“4.                                Pensions.


 


“The contractor shall sign an agreement with Division
1181 A.T.U.–New York Employees Pension Fund and Plan to participate in such
plan on behalf of all operators (drivers), mechanics, dispatchers and escorts
(matrons-attendants), in the event the contractor employs escorts who appear on
the Master Seniority Lists and who participated in the Fund and Plan as of June
30, 2000.  This requirement shall not be
interpreted to require a contractor to enter into a collective bargaining
agreement with the union nor shall it prohibit the contractor from entering into
a collective bargaining agreement with the union.  The contractor shall file a copy of the executed agreement with
the Trustees of the Fund and Plan to participate in said Fund and Plan and with
the Secretary of the Board with the acknowledgment of the Notice of Award.


 


18

















 


“The contractor shall contribute $48.15 per week per
operator (driver), mechanic and dispatcher on the Master Seniority List, and
participating in the Plan and Fund as of June 30, 2000, for forty weeks each
year for the term of the contract, or such greater amount as may be required,
based on contributions by contractors on behalf of the majority of employees
participating in the Fund and Plan pursuant to a collective bargaining agreement
with Local 1181–1061.  The contractor
shall withhold $23.00 a week from each operator, mechanic and dispatcher
participating in said Fund and Plan for forty weeks each year for the term of
the contract, or such greater amount as may be required based on contributions
of a majority of the operators (drivers), mechanics or dispatchers contributing
to the Fund and Plan.


 


“Such contractors who provide escort service, shall
contribute $44.15 per week per escort (matron-attendant) for forty weeks each
year for the term of the contract, or such greater amount as may be required
based on contributions by contractors on behalf of the majority of employees
participating in the Fund and Plan pursuant to a collective bargaining
agreement with Local 1181–1061.  The contractor
shall withhold $18.00 per week from each escort, (matron-attendant)
participating in said Fund and Plan and Fund for forty weeks each year for the
term of the contract, or such greater amount as may be required based on
contributions of the majority of the escorts contributing to the Fund and Plan.


 


“In connection with employees who are on the Master
Seniority List and who do not participate in the Local 1181–1061 Fund and Plan,
they shall not be required to participate in the Plan but shall participate in
the collective bargaining agreement, if any, of their employer.


 


“The contractor shall pay all such amounts to the Fund
and Plan within seven days after the end of each payroll period.


 


“5.                    Enforcement.


 


“In addition to any other remedies provided in the
contract between the Board and the contractor, such as default and/or termination,
if the contractor is found to be in violation of the foregoing employee
protection provisions regarding the payment of wages, welfare benefit
contributions, pension contributions, or other aspects of compensation or
benefits, then the OPT Director, within thirty (30) days of written notice,
shall withhold the appropriate amounts from any payments due to the contractor
and pay them directly to the applicable union for the benefit of the employees
affected, to the Division 1181 A.T.U.–New York Employees Pension Fund or other
applicable union pension fund for the benefit of the employees affected or to
the appropriate Welfare Fund for the benefit of the employees affected.  If the affected employees are not affiliated
with any union, then the Board shall investigate on their behalf allegations of
employee protection provision violations regarding the payment of wages,
welfare benefit or health insurance contributions, pension or similar savings
plan contributions, or other aspects of compensation or benefits.  Upon a finding of any such violation(s), the
OPT Director shall withhold the appropriate amounts from any payments due to
the Contractor and pay them directly to the employees or to such health
insurance companies or other institutions as appropriate.


 


19

















 


“In the event any contractor willfully fails to
comply, the Board of Education shall act to cancel such contractor’s contract;
provided, however, that the Board shall not be required to act so as to cause a
disruption of service.


 


“6.                                Contractors providing a
total of five vehicles or less pursuant to all contracts with the Board for the
transportation of pupils shall not be subject to the foregoing provisions with
respect to operators (drivers), mechanics and dispatchers.


 


“Escorts (matron-attendants) shall not be included in
the exclusion provided in this paragraph 6.


 


“7.                                For the purposes of
this section, corporate bidders who are subject to common control as determined
by the Board based upon analysis of (a) ownership of the corporations’ assets, (b) coincidence
of corporate officers and directors, and (c) such other factors as the Board deems
to be relevant, are deemed to be one bidder.


 


“8.  The Board may in its sole and unfettered discretion change any
date which determines employee protected status, employer status or any other
status, which is contained in any employee protection provisions of the
Contract.  The Master Seniority Lists
will be updated to June 30, 2000 as permitted in accordance with pre-existing
collective bargaining agreements executed prior to the date of execution of
this Contract.  Furthermore, the rates
quoted herein may not be reflective of current labor rates in effect.  The contractor should pay special attention
to the fact that many employees on the Master Seniority Lists have been in the
industry for many years and therefore may be entitled to substantial wages,
pension and welfare benefits and wage accruals.


 


“The date for inclusion on the Master Seniority List
is hereby updated to the last school day in June, 2000 as permitted in accordance
with pre-existing collective bargaining agreement executed prior to the date of
this Extension Agreement and Amendment Agreement.”


 


(F)                                 MISCELLANEOUS
AMENDMENTS AFFECTING VEHICLES. 
All else to the contrary notwithstanding, the Contract is hereby amended
as follows:


 


(1)                     List of Vehicles.  Before September of each Extension year or
at any other time stated by the Director, the Contractor must provide a list of
all vehicles, including spare and maintenance vehicles, to be operated during
each Extension year.  Such list must
show for every vehicle the year, make, type, seating capacity, registration
number, bus number, license plate number, owner, lessee (if applicable), and
the expiration date of the New York State Department of Transportation approval
sticker.  The information must be
provided on forms approved and supplied by the BOE, and the Contractor must
supply a copy of the title or certificate of registration for each listed
vehicle.  Whenever any changes occur in
the list of vehicles, the Contractor must update the list within ten (10)
business days.  In addition, the Contractor
must provide at the same time written assurance that all vehicles are equipped
with two-way radios.


 


(2)                     Age
and Condition of Vehicles.  The
vehicles affected by this provision include all originally contracted vehicles,
(i.e.,
“contract vehicles”) and all additional and spare vehicles.  Except


 


20

















 


for the age of vehicles, nothing contained in this Paragraph
(F)(2) and/or any of its subparagraphs shall be construed in any manner
or to any extent whatsoever to act and/or operate in abrogation or derogation
of any other individual or cumulative provisions of the Contract as otherwise
amended and extended.


 


(a)                      The Contractor shall provide
service, maintenance and repairs for all vehicles used to perform this Contract
in compliance with (i) all manufacturer’s guidelines for
maintenance, service and repairs, (ii) all Federal and State of New York statutes,
regulations, rules, guidelines and policies applicable to service, maintenance
and repair of school bus vehicles, (iii) all New York State Department of
Transportation and New York State Department of Motor Vehicles policies, rules
and regulations; (iv) Federal and State of New York regulations applicable to
maintenance and repair of school bus vehicles, and, (v) all New York State Education
Department, policies, rules and regulations applicable to service, maintenance
and repair of school bus vehicles.  The
Contractor shall maintain and, upon demand, supply the Director
contemporaneously kept, accurate and full written records of the vehicle
maintenance and repair activities performed in accordance with the foregoing.


 


(b)                      The Director
may disapprove any vehicle(s) under this Contract and require the Contractor to
furnish an acceptable replacement vehicle(s) in the event that the Director
determines in his/her reasonable judgement any such vehicle(s) to be unfit for
service.


 


(c)                      During the life of this Extension
Agreement, all vehicles must comply with the following:


 


(i)            By
July 1, 2000 no more than 30% of the number of runs operated by the Contractor
as of June 30, 2000 under this Contract may use vehicles manufactured before
1987;


 


(ii)        By July 1, 2001 no
more than 25% of the number of runs operated by the Contractor as of June 30,
2000 under this Contract may use vehicles manufactured before 1987;


 


(iii)    By
July 1, 2002 no more than 20% of the number of runs operated by the Contractor
as of June 30, 2000 under this Contract may use vehicles manufactured before
1987;


 


(iv)       By
July 1, 2003 no more than 15% of the number of runs operated by the Contractor
as of June 30, 2000 under this contract may use vehicles manufactured before
1987;


 


(v)           By
July 1, 2004 no more than 10% of the number of runs operated by the Contractor
as of June 30, 2000 under this Contract may use vehicles manufactured before
1987.


 


(d)                                              The
Contractor may continue to use the vehicles that are in service as of the date
of the execution of this Extension and Amendment Agreement throughout the term
of said Extension and Amendment Agreement, provided, each such vehicle is in compliance
with


 


21

















 


Paragraphs (F)(2)(a)-(c), et
seq. hereof. 
However, any new vehicles that shall be placed into service during the
term of this Extension and Amendment Agreement shall be not more than five
years old at the time such vehicle is placed into service.  Vehicles transferred among contractors that
are subject to common control shall not be considered as new vehicles under the
preceding sentence.  In his/her
reasonable discretion, the Director may allow the continued use of any given
contractor’s vehicles that are in service as of the date of the execution of
this Extension and Amendment Agreement upon an assignment of the Contract, if
and to the extent any such assignment shall be approved in accordance with the
terms and conditions of the Contract, as heretofore amended and extended.


 


(3)                     Use
of Vehicles.  Article XII
entitled, “Use of Vehicles,” in Contract Serial Nos. 0065, 0075 and 8107 and
Article 36 entitled, “Use of Vehicles,” in Contract Serial No. 9888 are hereby
amended by the addition of sixth and seventh unnumbered paragraphs,
respectively, at the end of each such Article to read as follows:


 


“In addition to all other
uses of vehicles prescribed in pupil transportation contracts, the Director
shall have the right, power and authority to require the Contractor to provide
vehicles during the hours between the transportation of pupils to school for
the morning sessions and the pick-up of pupils for homeward bound trips for
service to other mayoral and/or non-mayoral City of New York agencies and to
any other public agencies and/or private organizations, as determined by the Director.  While not previously invoked to any great
extent during the period of the Contract, the provisions of the third unnumbered
paragraph contained in this Article XII are still in full force and effect as
stated herein.  The Contractor shall be
entitled to payment for such services as stipulated in this contract.  At no time shall such service interfere with
the timely transportation of pupils to and from school.”


 


(4)                     New
Laws, Rules, Regulations, Bylaws or School Bus Safety Features.  Whereupon any Federal, State, local or BOE
laws, rules, regulations or bylaws are enacted, updated, revised, amended or
otherwise changed in any manner which require the Contractor to undertake any
new or revised procedures affecting school bus personnel or operations (i.e.,
school bus personnel drug or alcohol testing, driver licensing or training
procedures, etc.)
or the introduction onto vehicles of new safety features or any other equipment
(e.g.,
increased seat-back padding, back-up beepers, stop arms, safety sensors, seat
belts, etc.),
the Contractor must comply promptly. 
The Contractor must assume the full cost of compliance with any new or
revised driver and/or operational procedures and/or for the purchase and
installation of new safety features and/or other equipment in compliance with
any such legal and/or regulatory changes and shall not be entitled to any
additional remuneration from the BOE except as expressly permitted by law, i.e., if the BOE is able to obtain State
aid or other Federal, State of New York and/or City of New York funding to pay
for all or any portion of the Contractor’s compliance with such legal and/or
regulatory changes, the BOE shall pay the Contractor for such compliance but only to the
extent of the Board’s receipt of such funding.


 


22

















 


(5)                     Railroad
Crossings.  Each driver must
make a full stop at all railroad crossings, except that no stop is necessary at
any railroad crossing where a police officer, New York City Department of
Transportation traffic control officer, or a traffic control signal directs
traffic to proceed.


 


(6)                     EZ
Pass.  Every vehicle used under
this Contract (including spare vehicles but not maintenance vehicles) that crosses one or
more toll bridges as part of the performance of its regularly scheduled run(s)
must be equipped with an EZ Pass that meets all applicable laws, rules and
regulations.  In addition, the
Contractor shall purchase and maintain a sufficient number of EZ Passes to ensure
that all buses used for field trips shall be able to have EZ Passes to speed
their passage across any affected toll bridges.


 


(7)                     Back-Up
Warning Alarms.  Every vehicle
used under this Contract (including spare and maintenance vehicles) must be
equipped with an automatic audible alarm system installed behind the rear
axle.  The said alarm system on each
vehicle must comply in every respect with the official published standards of
the Society of Automotive Engineers (hereinafter expressed as “SAE”) entitled,
“Back-up Alarm Standards,” (SAE No. 994b) specifying 97±4dBA for rubber tired
vehicles as well as all applicable Federal, State of New York, City of New York
and/or BOE laws, bylaws, rules, regulations and policies as the same currently
exist or may be created, added, deleted, updated, recodified, revised, amended
or otherwise changed during the term of this Extension and Amendment Agreement.


 


(G)                               MISCELLANEOUS
FINANCIAL AMENDMENTS.  All else
to the contrary notwithstanding, the Contract is hereby amended as follows:


 


(1)                     Chapter
902 Service.  On days when
public schools are not in session, the Contractor is required nevertheless to
provide service pursuant to Chapter 902 of the Laws of 1985.  The Contractor must comply with the
Director’s instructions concerning the numbers of vehicles and the vehicular
routes to maximize efficient utilization. 
The Contractor will be paid only for those vehicles that operate on
those days as expressly authorized by the Director.


 


(2)                     Further
Amendments.  The Contractor
hereby agrees and covenants to execute any further amendment to the Contract
that the New York State Education Department requires to secure the
Department’s approval of this Extension and Sixth Amendment Agreement and to
maintain the continuity of funding.


 


(3)                     Cancellation.


 


(a)                      General Terms and Conditions
Section 7 entitled, “Cancellation,” is amended so that the Director may seek to
have the Contractor declared by the Chancellor’s Board of Review to be in
default of the Contract either as a whole or merely in one or more “items” of
the Contract, i.e., the Contract is divisible into its several
“items.”  Upon a finding of default, the
Chancellor’s Board of Review may terminate the whole Contract or merely one or
more contractual “items.”


 


23

















 


(b)                      General Terms and Conditions
Section 7 entitled, “Cancellation,” is amended by the addition of a new paragraph
“D” to read as follows:


 


“In the event of
significant or repeated safety violations due to acts of commission and/or
omission by the Contractor or its employees that result from the Contractor’s
failure and/or refusal to conduct its operations according to good pupil
transportation industry practices, the BOE may terminate the Contract upon
thirty (30) days written notice to the Contractor, unless the Contractor can
establish to the Director’s reasonable satisfaction that the Contractor’s
record of safety will thereafter be satisfactory according to good industry
practices.  For purposes of this
provision, the term “safety violations” shall mean significant and/or repeated
violation of safety laws and/or regulations of the U.S. Department of Transportation,
the New York State Department of Transportation, the New York City Department
of Transportation and/or the BOE, provided, that before terminating this
agreement for significant and/or repeated safety violations, OPT shall provide
the Contractor with notice and an opportunity to cure.”


 


(c)                      General Terms and Conditions
Section 7 entitled, “Cancellation,” is amended by the addition of a new paragraph
“E” to read as follows:


 


“In the event of an
indictment of the Contractor, its principals, officers, or management employees
on the basis of acts of commission or omission involving or affecting the
provision of pupil transportation services under any BOE pupil transportation
contract(s) including, but not limited to, acts of commission or omission that excessively
increase BOE costs of doing business, the BOE may, at the Director’s
discretion, either terminate the Contract upon thirty (30) days written notice
to the Contractor or require the Contractor to obtain the employment
termination and/or ownership divestiture of the indicted party(ies).  Before a final decision on either disposition,
the Director shall afford the Contractor a personal meeting to allow for a
full, open discussion of relevant issues.”


 


(d)                      General Terms and Conditions
Section 7 entitled, “Cancellation,” is amended by adding a new paragraph “F” to
read as follows: “Nothing herein shall otherwise limit the rights and remedies
of the Director and/or the Board of Education as set forth in this Contract.”


 


(4)                     Increase
or Decrease in the Number of Vehicles. 
Article XIII–A of contracts under Serial Nos. 0065, 0075 and 8107
entitled, “INCREASE OR DECREASE IN THE NUMBER OF VEHICLES DURING PERIODS OF
EXTENSION,” as added by the 1992 Extension and Amendment Agreement, shall be
amended at Paragraph (h) to read
as follows:


 


“1.                    Notwithstanding
the provisions of Article XIII, at any time during the period of extension the
number of vehicles required in an item may be increased or decreased and the
schedules may be adjusted due to changes in pupil population, default or
voluntary surrender


 


24

















 


of a contract or changes in policy or directives adopted by
the Board of Education, the City of New York, the State Education Department,
and/or the Financial Control Board; provided, however, that in no event shall the total number
of vehicles originally awarded to a contractor be reduced by more than forty
percent (40%) of the total number of vehicles originally awarded.  Compensation to the contractor shall be
adjusted to the number of vehicles actually used in the performance of this
Contract, and the Board of Education shall not be liable for payments for any
vehicles eliminated to the extent provided above. This provision does not apply
to the summer months when vehicles may be decreased as much as necessary.  For Summer School Transportation services
vehicles will be offered by item beginning with the contractor that quoted the
lowest daily rate per vehicle under Contract Serial Nos. 0065, 0075, 8107, 9888
and 7263.


 


“2.                                            If the
Director eliminates any vehicle(s) from the number originally awarded to the
Contractor and later offers again a vehicle(s) of the same type(s) and
geographical service area(s) due to any resumed need, the Contractor shall be
entitled to restoration up to and including the number of vehicles of the same
type(s) and geographical service area(s) originally awarded pursuant to the
procedures specified above in Paragraph B.


 


“The Director shall offer
any ‘additional’ vehicle(s) first to the contractor with the lowest ‘current’
weighted average daily rate per vehicle in the relevant contractual item, under
the procedures specified above in Paragraph B.  Additional vehicles will be offered first to
the Contractor will the lowest current daily weighted average.  The ranking will include both those contractors
who are under an extension agreement and those contractors who are under the
terms of Contracts for similar work.  If
all contractors in a particular item refuse an offer of additional vehicles,
the additional vehicles will then be offered to contractors providing service
under this extension in order of the lowest current daily rate in all items.


 


“The term ‘lowest
weighted average daily rate per vehicle,’ as used to determine the order in
which contractors are affected by both the decrease provisions of Paragraph A and the increase provisions of Paragraph B concerning both original vehicles
and all additional vehicles, shall reflect the current rates paid by the Board
at the time of an offer.


 


“If the Director shall
eliminate any ‘additional’ vehicles at the outset of service in any given
September and shall thereafter restore such vehicles by not later than October
15th of the same school year, the Director shall award such restored
additional vehicles to the contractor(s) from whom they were previously taken.


 


“3.                                            All
vehicles awarded under this provision shall be treated as ‘additional’ and not
as ‘contract’ vehicles.


 


“4.                                            Anything in
the foregoing ARTICLES XIII and XIII-A and/or elsewhere in the Contract to the
contrary notwithstanding, the Board of Education shall not reduce the number of
‘additional’ vehicles held by the Contractor as of June 30th each
extension year during the


 


25

















 


period of this Extension
and Ninth Amendment Agreement, except in instances of decreases of student population affecting
the Contractor’s geographical service area(s) and/or type(s) of
vehicle(s).  With respect to this
ARTICLE XIII-A and all other applicable aspects of the Contract, the BOE shall
have the sole and absolute discretion to fix and determine which schools
students shall attend throughout the New York City School District, to determine
what types of vehicle shall be appropriate to transport individual pupils, and
to make findings and decisions with respect to increases and decreases of
student populations in the various geographical areas of the New York City
School District.”


 


(5)                     BOE
Procedural Due Process Arising from Controlled Substance and/or Alcohol
Consumption and Abuse.  The
Contractor does hereby stipulate and agree that Federal and State of New York
courts and the SED have issued judicial decisions requiring the BOE to
administer forms of procedural due process under certain circumstances in cases
where any of the Contractor’s employees or subcontractor employees have their
BOE certifications of approval suspended and/or permanently revoked as a
consequence of positive test results for the presence of a controlled
substance(s) and/or alcohol.  The
Contractor does hereby further stipulate and agree to comply fully with all
Federal, State of New York, City of New York and BOE laws, bylaws, rules,
regulations, procedures and policies applicable to the prohibition of
consumption of, and testing for, controlled substances and alcohol with respect
to its employees and subcontractor employees that affect the safe operation of
school bus vehicles as the same currently exist or shall be added, deleted,
updated, amended, revised or otherwise changed during the Term of this
Contract.  The Contractor does hereby further
stipulate and agree that compliance with the preceding sentence shall require
the Contractor to administer effectively a program of controlled substance and
alcohol abuse prevention, training, testing and other services, for portions of
which the Contractor may elect to use professional subcontractors.  The Contractor shall submit to the BOE for
advance and continuing(8) approval by the OPT Director full and detailed
written information(9) about every subcontractor that the Contractor shall
elect to use to provide controlled substance and alcohol abuse prevention,
training, testing and other services under this Contract.  The Contractor does hereby further stipulate
and agree that, if the OPT Director shall reasonably determine that the
reversal, disqualification or other nullification by the BOE, a Federal or
State court, the SED and/or any other tribunal of competent jurisdiction of a
positive test result for a controlled substance(s) and/or alcohol shall have
been caused and/or permitted by the Contractor’s failure and/or refusal to
administer effectively a program of controlled substance and alcohol abuse
prevention, training, testing and other services, the Contractor shall pay all
BOE and/or


 












(8) In the event that the OPT Director shall inquire into any
allegation(s) that any previously approved subcontractor shall have provided
unsatisfactory performance of its controlled substance and alcohol abuse
prevention, training and/or testing responsibilities, the Contractor shall
furnish full and detailed written information about the affected subcontractor
and shall otherwise provide all reasonable assistance in the conduct of any
such BOE inquiry.  Whereupon the OPT
Director shall determine after such an inquiry that any previously approved
subcontractor shall have provided unsatisfactory performance of its controlled
substance and alcohol abuse prevention, training and/or testing
responsibilities, the Contractor shall cease and desist from any use of such
subcontractor immediately upon receipt of written notice from the OPT Director
to that effect.


 


(9) The OPT Director may prescribe the types of information of
subcontractor information to be supplied, in which case the BOE shall supply
without cost to the Contractor a form(s) for the provision of such information.


 


26

















 


City of New York costs for disciplinary conferences,
other forms of procedural due process and the defense of judicial, administrative
and/or other claims, actions, proceedings, special proceedings and/or
appeals.  Such BOE and/or City costs may
include, but shall not be limited to, BOE administrative personnel hourly
rates, BOE facilities use fees, expert witness fees, subcontractor and other
document production fees, back pay for Contractor employees, and reasonable
attorney fees.  Reasons for an OPT
Director’s determination that a reversal, disqualification or other nullification
by the BOE, a Federal or State court, the SED and/or any other tribunal of
competent jurisdiction of a positive test result for a controlled substance(s)
and/or alcohol shall have been caused and/or permitted by the Contractor’s
failure and/or refusal to administer effectively a program of controlled substance
and alcohol abuse prevention, training, testing and other services may include,
but shall not be limited to, failure to maintain adequate records, failure to
produce evidence and/or expert testimony from a subcontractor(s), failure to
safeguard the chain of custody of a test sample(s), and failure to use adequate
and/or approved scientific testing methods.


 


(6)                     Sales,
Excise and Use Taxes.  The Contractor does hereby agree and warrant
to cooperate fully with the BOE to eliminate the Contractor’s payment of
Federal, State and local sales, excise and use taxes on purchases, leases and
other transfers that the Contractor makes, effects, causes or allows in the
performance of the Contract.  The
Contractor does hereby further consent and agree to cooperate fully with BOE
efforts to eliminate Federal, State and local sales, excise and use taxes
through a program(s) of BOE purchases of gasoline, diesel fuel, automotive
parts, safety equipment and other goods, materials, commodities and/or
services, which the BOE may supply to the Contractor and which the Contractor
shall use to perform the Contract with the cost of that same being deducted
from any and all BOE payments to the Contractor.  The BOE may elect to promulgate particular rules and procedures
regarding the elimination of such taxes, a draft copy of which the Board shall
circulate to the Contractor for comment before final promulgation.  Such rules and procedures may include, but
are not necessarily limited to, the following: (a) the Contractor’s use of the Board’s tax exempt
status when making, effecting, causing or allowing purchases, leases and other
transfers in the performance of the Contract (the Board shall furnish the
Contractor with appropriate forms and procedures), provided, that the Contractor shall remain the purchaser or
lessee of its vehicles, goods, commodities, supplies, equipment and so forth; (b) the Contractor’s use of BOE-supplied gasoline,
diesel fuel, automotive parts, safety equipment and other goods, materials,
commodities and/or services, the cost of which the BOE shall deduct from any
and all payments to the Contractor; and, (c) the Contractor’s cooperation through the production of documentary and
other evidence and testimony, as specified by the Board, with any and all
attempts by the BOE to seek and obtain refunds of any and all Federal, State
and local excise, sales and use taxes that the Contractor has paid during any
applicable statutory period of limitation for goods, fuel, commodities,
services, leases, etc. in the performance of the Contract.  The Board does hereby stipulate and agree
that it will not seek any refunds or other remedies affecting sales, excise
and/or use taxes, regarding which the Contractor shall be entitled to, or shall
have obtained, an exemption(s), credit(s) and/or refund(s), except where the Contractor shall have failed and/or
refused to have sought any affected exemption(s), credit(s) and/or refund(s).  Whereupon the Board shall require the
Contractor to produce documentary and


 


27

















 


other evidence and testimony in the course of any attempt
by the Board to seek and obtain refunds of any such taxes, the Board shall pay
the Contractor, as consideration for such cooperation, twenty percent (20%) of
any refund amount attributable to the Contractor’s purchases, leases and other
transfers, but only when and after such refund amounts are actually received by
the Board.  If the Contractor shall have
obtained an exemption(s) or refund(s) or shall have taken a credit(s) and/or
deduction(s) from income or other taxes with respect to all or any portion of
Federal, State and/or local sales, excise and/or compensating use taxes
applicable to vehicles, goods, commodities, supplies, equipment and so forth
under this Contract, then the Contractor shall not be required to furnish
documentation in support of a tax refund in connection with the affected sales, excise and/or compensating use taxes but shall instead furnish the BOE with a written,
signed and notarized statement describing the exemption(s), credit(s) and/or
deduction(s) regarding all or any portion of Federal, State and/or local sales,
excise and/or compensating use taxes applicable to vehicles, goods,
commodities, supplies, equipment and so forth under this Contract and attesting
that the Contractor shall have passed on to the BOE the savings achieved from
the exemption(s), credit(s) and/or deduction(s).


 


(7)                     Limitation
on Payments for Days When Vehicles Are Not Operated.  All provisions of contracts under Serial No.
7263 prescribing no payments for days when vehicles are not operated shall
remain unchanged and in full force and effect. 
The first unnumbered paragraph of ARTICLE V of contracts under Serial
Nos. 0065, 0075 and 8107 entitled, “PAYMENT,” and the first unnumbered
subparagraph of Paragraph A of
ARTICLE 29 of contracts under Serial No. 9888 entitled, “PAYMENT,” are hereby
amended by the addition of the following language between the existing fourth
and fifth sentences in contracts under Serial Nos. 0065, 0075 and 8107 and
between the existing third and fourth sentences in contracts under Serial No.
9888:


 


“The preceding sentence
to the contrary notwithstanding, the Contractor shall be entitled to receive
eighty-five percent (85%) of its daily rate(s) per vehicle for ‘regularly
scheduled school days’ on which the Chancellor or his designee(s) shall order
schools to be closed and/or pupils not to be in attendance for any reason,
which percentage shall be deemed to represent costs that the Contractor shall
be unable to avoid even when service is not furnished.  The preceding sentence to the contrary
notwithstanding, the Contractor shall not seek, nor be entitled to receive,
payment for one (1) regularly scheduled school day during Extension Year
2000-01 when the Chancellor or his designee(s) shall order pupils not to be in
attendance and vehicles not to run; and, for a second regularly scheduled
school day during Extension Year 2000-01 when the Chancellor or his designee(s)
shall order pupils not to be in attendance and vehicles not to run, the Board
shall pay eighty-five percent (85%) of the Contractor’s daily rate(s) per
vehicle in equal monthly installments over a period of thirty-six (36) months
after the month in which the day of non-operation shall occur.  The term ‘regularly scheduled school days’
is defined as days on which schools are scheduled to be open in accordance with
the official BOE Calendar as original adopted and published annually and prior
to amendment thereof.  Moreover, the
Contractor does hereby stipulate


 


28

















 


and agree on behalf of
itself and its successors and assigns to discontinue with prejudice any and all
pending claims, actions, proceedings and/or special proceedings against the BOE
and to refrain from bringing any and all claims, actions, proceedings and/or
special proceedings against the BOE that shall have accrued on or before the
execution date of this Extension and Eleventh Amendment Agreement concerning
any days on which schools were scheduled to have been opened but were closed
for any reason by order of the Chancellor or his designee(s).”


 


(H)                               INSURANCE
AND FUEL COST INFLATION RELIEF PROVISIONS.  Whereupon the New York State Legislature shall amend the Education
Law to allow the BOE to obtain State funding to reimburse the Contractor
for any amount of demonstrated and approved increases in the costs of
automotive liability insurance, comprehensive general liability insurance,
employee health care insurance, unemployment insurance, Worker’s Compensation
Insurance, and/or vehicle fuel costs, this Contract shall be deemed amended
automatically and without any need for action by the parties to allow such reimbursement
according to the exact language of such statutory provisions.  Furthermore, all else to the contrary
notwithstanding, the Contract is hereby amended to provide as follows:


 


(1)                     Interim
Excessive Insurance and Fuel Cost Inflation Relief Provisions.  For only so long as the Education Law
does not provide reimbursement by the State of New York for automotive
liability insurance, comprehensive general liability insurance, employee health
care insurance, unemployment insurance, Worker’s Compensation Insurance and/or
vehicle fuel cost increases, the Board does hereby agree for a limited time to
suspend partially or totally the application of the two percent (2%) prompt
payment discount to which the BOE is otherwise entitled under the Contract but  only for contracts under
Serial Nos. 0065, 0075, 8107, 7263 and 9888 and only to the extent of the Contractor’s
monthly and/or annual written proof of eligibility as hereinafter
specified.  The preceding sentence to
the contrary notwithstanding, the extent of the Contractor’s eligibility to use
its vehicle fuel cost increases to justify a suspension of the discount shall
be reduced in the manner hereinafter specified at Paragraph (H)(7), et seq.,
by an amount equal to thirty percent (30%) of the Contractor’s liability to the
BOE, if any, for overpayments by the BOE to the Contractor from Extension Years
1986-87 to 1999-2000 (hereinafter expressed as “Deductible Amount”) that was
the subject of consolidated litigation entitled, A.C. Transportation, Inc., et al., v. Board of Education of City of New
York, et al., 253 A.D.2d 330, 687 N.Y.S.2d 1 (App.Div. 1 Dept.
1999), leave to appeal denied 93
N.Y.2d 808, 691 N.Y.S.2d 382, 713 N.E.2d 417 (1999).


 


(2)                     Eligibility
for Insurance Rate Increase Relief. 
The BOE shall determine annually whether the Contractor shall be
eligible prospectively for partial or total suspension of the two percent (2%)
prompt payment discount on the basis of the Contractor’s submittal of written
proof of sufficient insurance cost increases per vehicle and per employee, as
applicable.  The Contractor must submit
an “Insurance Rate Increase Claim Statement,” as hereinafter defined, by not
later than October 15th of each Extension Year.  The extent of the discount suspension, if
any, shall be governed by the provisions hereinafter expressed at Paragraph
(H)(4), et seq.


 


29

















 


(3)                     The term “Insurance Rate Increase
Claim Statement” is defined as a written “review report” prepared by a CPA or
PA licensed by the State of New York, except as otherwise noted herein.  Each Insurance Rate Increase Claim Statement
shall include all of the facts and figures deemed necessary by the Director to
provide a full view of the Contractor’s insurance cost increase claims for the
applicable comparative periods hereinafter stated at Paragraph (H)(4), et seq.
 Each such review report shall state
that a review shall have been performed in accordance with GAAP as of the date
of a given review report and that the information in each Insurance Rate
Increase Claim Statement shall have been based upon the representations of the
Contractor’s management.  Each such
review shall describe the nature of a review as distinct from an audit and
shall describe the standard procedures that the CPA/PA shall have performed, e.g.,
an inquiry and an analytical review. 
Each review report shall give the limited assurance that, based upon the
review, the CPA/PA shall not have been aware of any material modifications that
should be made to the Insurance Rate Increase Claim Statement for it to be in
conformity with GAAP.  A compilation report
shall not qualify as an Insurance Rate Increase Claim Statement.  In addition, the CPA/PA preparing each
review report must state that he/she shall have studied the cost justification
manual that shall be supplied by the Board and shall have applied the standards
contained in the Board’s manual to the development of each Insurance Rate
Increase Claim Statement.  If the
Contractor shall not have had a CPA-audited financial report performed for any
purpose before July 1, 2000, then the Contractor shall be required to submit a
certified audited statement by a CPA for its first Insurance Rate Increase
Claim Statement hereunder.  In addition,
the CPA/PA who shall prepare each Insurance Rate Increase Claim Statement must
have no interest in this Contract, the Contractor and/or any entity affiliated
in any manner with the Contractor and must so certify in writing.  Each Insurance Rate Increase Claim Statement
shall utilize a form prescribed by the Director.


 


(4)                     Documentation
of Insurance Premium Rate Increases. 
To show increases in the premiums rates for automobile liability insurance,
comprehensive general liability insurance, employee health care insurance,
unemployment insurance and/or Worker’s Compensation Insurance the Contractor
must submit with its annual Insurance Premium Rate Increase Claim Statement copies
of the full insurance policies and copies of all invoices from the insurance
carriers, governmental agencies and/or health/welfare funds noting the full
amounts of premiums and other costs on per vehicle and per employee bases, as
applicable, that are the subject of the Contractor’s claims.  To be eligible for partial or total suspension
of the two percent (2%) prompt payment discount, the Contractor must be able to
demonstrate the following:


 


(a)                                              For a suspension of the discount during the 2000-01
Extension Year, the Contractor must show on per vehicle and per employee bases,
as applicable, the differences between all premiums paid for automobile liability insurance, comprehensive
general liability insurance and employee health care insurance  only(10) for the period from July 1, 1999 to June 30,
2000 and the amounts paid for such coverage for the period from July 1, 1998 to
June 30, 


 












(10) Cost increases for unemployment insurance and Worker’s Compensation
Insurance shall not be included for purposes of suspension of the discount
during the 2000-01 Extension Year.


 


 


30

















 


1999.  The
percentage of difference for all such costs shall be calculated as a weighted
average of the percentages of difference for each type of cost in relation to
the total amount that the Contractor shall have paid for each category of
insurance.  For a total discount
suspension during Extension Year 2000-01, the weighted average difference
between the two (2) years must at least equal the value of the discount itself
for the 1999-2000 Extension Year as adjusted by the annual percentage of
increase for the 2000-01 Extension Year provided at ARTICLE V–A, 28(C) or 29(D)
(as applicable) of the Contract.  To the
extent that the weighted average difference is between zero percent (0%) and
two percent (2%), there will be a proportionate reduction in the discount
suspension, i.e.,
a “partial” suspension.


 


(b)                                              For a suspension of the discount during the 2001-02
Extension Year, the Contractor must show on per vehicle and per employee bases,
as applicable, the differences between all premiums paid for automobile liability insurance, comprehensive
general liability insurance and employee health care insurance  only for the period from July 1, 2000 to June 30, 2001
and the amounts paid for such coverage for the period from July 1, 1998 to June
30, 1999.  In addition, the Contractor
must show on per vehicle and per employee bases, as applicable, the differences
between all premiums paid for unemployment insurance and Worker’s Compensation
Insurance for the period from July 1, 2000 to June 30, 2001 and the amounts
paid for such coverage for the period from July 1, 1999 to June 30, 2000.  The percentage of difference for all such
costs shall be calculated as a weighted average of the percentages of
difference for each type of cost in relation to the total amount that the
Contractor shall have paid for each category of insurance.  For a total suspension of the discount
during the 2001-02 Extension Year, the weighted average difference between the
two (2) years must at lease equal the value of the discount itself for the
2000-01 Extension Year as adjusted by the annual percentage of increase for the
2001-02 Extension Year provided at ARTICLE V–A, 28(C) or 29(D) (as applicable)
of the Contract.  To the extent that the
weighted average difference is between zero percent (0%) and two percent (2%),
there will be a proportionate reduction in the discount suspension, i.e.,
a “partial” suspension.


 


(c)                                              For a suspension of the discount during the 2002-03
Extension Year, the Contractor must show on per vehicle and per employee bases,
as applicable, the differences between all premiums paid for automobile liability insurance, comprehensive
general liability insurance and employee health care insurance  only for the period from July 1, 2001 to June 30, 2002
and the amounts paid for such coverage for the period from July 1, 1998 to June
30, 1999.  In addition, the Contractor
must show on per vehicle and per employee bases, as applicable, the differences
between all premiums paid for unemployment insurance and Worker’s Compensation
Insurance for the period from July 1, 2001 to June 30, 2002 and the amounts
paid for such coverage for the period from July 1, 1999 to June 30, 2000.  The percentage of difference for all such
costs shall be calculated as a weighted average of the percentages of
difference for each type of cost in relation to the total amount that the
Contractor shall have paid for each category of insurance.  For a total suspension of the discount
during the 2002-03 Extension Year, the weighted average difference between the
two


 


31

















 


(2) years must at least equal the value of the discount itself
for the 2001-02 Extension Year as adjusted by the annual percentage of increase
for the 2002-03 Extension Year provided at ARTICLE V–A, 28(C) or 29(D) (as
applicable) of the Contract.  To the
extent that the weighted average difference is between zero percent (0%) and
two percent (2%), there will be a proportionate reduction in the discount
suspension, i.e.,
a “partial” suspension.


 


(d)                                              For a suspension of the discount during the 2003-04
Extension Year, the Contractor must show on per vehicle and per employee bases,
as applicable, the differences between all premiums paid for automobile liability insurance, comprehensive
general liability insurance and employee health care insurance  only for the period from July 1, 2002 to June 30, 2003
and the amounts paid for such coverage for the period from July 1, 1998 to June
30, 1999.  In addition, the Contractor
must show on per vehicle and per employee bases, as applicable, the differences
between all premiums paid for unemployment insurance and Worker’s Compensation
Insurance for the period from July 1, 2002 to June 30, 2003 and the amounts
paid for such coverage for the period from July 1, 1999 to June 30, 2000.  The percentage of difference for all such
costs shall be calculated as a weighted average of the percentages of
difference for each type of cost in relation to the total amount that the
Contractor shall have paid for each category of insurance.  For a total suspension of the discount
during the 2003-04 Extension Year, the weighted average difference between the
two (2) years must at least equal the value of the discount itself for the
2002-03 Extension Year as adjusted by the annual percentage of increase for the
2003-04 Extension Year provided at ARTICLE V–A, 28(C) or 29(D) (as applicable)
of the Contract.  To the extent that the
weighted average difference is between zero percent (0%) and two percent (2%),
there will be a proportionate reduction in the discount suspension, i.e.,
a “partial” suspension.


 


(e)                                              For a suspension of the discount during the 2004-05
Extension Year, the Contractor must show on per vehicle and per employee bases,
as applicable, the differences between all premiums paid for automobile liability insurance, comprehensive
general liability insurance and employee health care insurance  only for the period from July 1, 2003 to June 30, 2004
and the amounts paid for such coverage for the period from July 1, 1998 to June
30, 1999.  In addition, the Contractor
must show on per vehicle and per employee bases, as applicable, the differences
between all premiums paid for unemployment insurance and Worker’s Compensation
Insurance for the period from July 1, 2003 to June 30, 2004 and the amounts
paid for such coverage for the period from July 1, 1999 to June 30, 2000.  The percentage of difference for all such
costs shall be calculated as a weighted average of the percentages of
difference for each type of cost in relation to the total amount that the
Contractor shall have paid for each category of insurance.  For a total suspension of the discount
during the 2004-05 Extension Year, the weighted average difference between the
two (2) years must at least equal the value of the discount itself for the
2003-04 Extension Year as adjusted by the annual percentage of increase for the
2002-03 Extension Year provided at ARTICLE V–A, 28(C) or 29(D) (as applicable)
of the Contract.  To the extent that the


 


32

















 


weighted average difference is between zero percent (0%)
and two percent (2%), there will be a proportionate reduction in the discount
suspension, i.e.,
a “partial” suspension.


 


(5)                     Eligibility
for Fuel Cost Increase Relief. 
The BOE shall determine monthly and annually whether the Contractor
shall be eligible prospectively for partial or total suspension of the two
percent (2%) prompt payment discount on the basis of the Contractor’s submittal
of written proof of sufficient vehicle gasoline and vehicle diesel fuel cost
increases per gallon.  The Contractor
must submit to the BOE with each regular monthly invoice a “Monthly Vehicle
Fuel Cost Increase Claim Statement,” as hereinafter defined.  In addition, the Contractor must submit to
the BOE an “Annual Vehicle Cost Increase Summary Statement,” as hereinafter
defined, by August 15th following each Extension Year.  The extent of the discount suspension, if
any, shall be governed by the provisions hereinafter expressed at Paragraph
(H)(7), et seq.


 


(6)                     The term “Monthly Vehicle Fuel
Cost Increase Claim Statement” is defined as a written and attested
certification by the Contractor that shall state (a) the Contractor’s total monthly usage in gallons of vehicle
gasoline and total monthly usage in gallons of vehicle diesel fuel under this
Contract, (b) the average RACK
Rates(11) for vehicle gasoline and vehicle diesel fuel for the base period of
January 1, 1999 to June 30, 2000, (c)
the sums of the foregoing average RACK Rates for vehicle gasoline and vehicle
diesel fuel plus the respective
products of the said average RACK Rates multiplied
by the CPI increase percentage(12) for the month preceding the month of the
affected Contractor’s service invoice (hereinafter expressed as “Base RACK
Rates”), (d) the RACK Rates for
vehicle gasoline and vehicle diesel fuel for the month preceding the month of
the affected Contractor’s service invoice, (e)
the unit cost differences of the monthly RACK Rates expressed heretofore at Paragraph (H)(6)(d)  minus the Base RACK Rates expressed
heretofore at Paragraph (H)(6)(c),
(f) the remainders resulting from
each application of the calculations expressed heretofore at Paragraph (H)(6)(e)  multiplied by the respective monthly total
gallons of gasoline and diesel fuel that the Contractor consumes under this
Contract (hereinafter expressed as “Excess Vehicle Fuel Cost”), and (g) all other information required for
eligibility as expressed hereinafter at Paragraph
(H)(7), et seq.  The term “Annual Vehicle Fuel Cost Increase
Summary Statement” is defined as a written “review report” prepared by a CPA or
PA licensed by the State of New York, except as otherwise noted herein.  Each Annual Vehicle Fuel Cost Increase
Summary Statement shall include all of the facts and figures deemed necessary
by the Director to provide a full annually adjusted summary of the Contractor’s
vehicle fuel cost increase claims for the applicable comparison periods
heretofore expressed in the requirements for Monthly Vehicle Fuel Cost Increase
Claim Statements and hereinafter expressed at Paragraph (H)(7), et seq.  Each such review report shall state that a
review shall have been performed in accordance with GAAP as of the date of a
given review report and that the information in each Annual


 












(11) The term “RACK Rates” is hereby defined as the “average petroleum
product manufacturer gross dock rates for vehicle gasoline and vehicle diesel
fuel without sales, excise or compensating use taxes, discounts or any other
adjustments,” as published regularly by the Oil Price Information Service, a
division of United Communications Group, Inc., or its successor.


 


(12) For this purpose, the “CPI increase” is defined as the consumer
price index increase for the New York, New York-Northeastern, New Jersey area,
based upon the index for all urban consumers (CPI-U) as stated in Education
Law §305(14(a).


 


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Vehicle Fuel Cost Increase Summary Statement shall
have been based upon the representations of the Contractor’s management.  Each such review shall describe the nature
of a review as distinct from an audit and shall describe the standard procedures
that the CPA/PA shall have performed, e.g., an inquiry and an analytical
review.  Each review report shall give
the limited assurance that, based upon the review, the CPA/PA shall not have
been aware of any material modifications that should be made to the Annual
Vehicle Fuel Cost Increase Summary Statement for it to be in conformity with
GAAP.  A compilation report shall not
qualify as an Annual Vehicle Fuel Cost Increase Summary Statement.  In addition, the CPA/PA preparing each
review report must state that he/she shall have studied the cost justification
manual that shall be supplied by the Board and shall have applied the standards
contained in the Board’s manual to the development of each Annual Vehicle Fuel
Cost Increase Summary Statement.  If the
Contractor shall not have had a CPA-audited financial report performed for any
purpose before July 1, 2000, then the Contractor shall be required to submit a
certified audited statement by a CPA for its first Annual Vehicle Fuel Cost
Increase Summary Statement hereunder. 
In addition, the CPA/PA who shall prepare each Annual Vehicle Fuel Cost
Increase Summary Statement must have no interest in this Contract, the Contractor
and/or any entity affiliated in any manner with the Contractor and must so
certify in writing.  Each Annual Vehicle
Fuel Cost Increase Summary Statement shall utilize a form prescribed by the
Director.


 


(7)                     Documentation
of Vehicle Fuel Cost Increases. 
To be eligible for partial or total suspension of the two percent (2%)
prompt payment discount, the Contractor must show the following:


 


(a)                                              For a suspension of the discount during each
extension year, the Contractor must show on dollar, percentage, per gallon,
subtotal and total bases each month the Excess Vehicle Fuel Costs for vehicle
gasoline and vehicle diesel fuel minus one
thirty-sixth (1/36) of the Contractor’s Deductible Amount.  If the remainder from the formula in the
preceding sentence shall at least equal the value of the discount itself for
the affected month, the Contractor shall be entitled to a total suspension of
the discount for that month.  To the
extent that the remainder shall fall below the value of the discount on a
monthly basis, there will be a proportionate reduction in the discount
suspension, i.e.,
a “partial” suspension.  To the extent
that any seasonal adjustments to the CPI shall occur, the Contractor shall use
the preceding formula on an adjusted annualized basis and demonstrate it and
its results in each Annual Vehicle Fuel
Cost Increase Summary Statement.


 


(8)                     BOE
Payment Deadline for Application of Prompt Payment Discount.  The Contractor does hereby stipulate and
agree that the two percent (2%) prompt payment discount shall be deemed to
apply to payments for all services rendered under the Contract that the BOE
makes within six (6) business days after thirty (30) Calendar days shall have
elapsed from the date of the BOE’s receipt of the Contractor’s monthly invoice.


 


(9)                     Audit
and Recovery of Overpayment. 
Each Insurance Rate Increase Claim Statement, Monthly Vehicle Fuel Cost
Increase Claim Statement and Annual Vehicle Fuel Cost Increase Summary
Statement shall be subject to review, audit and approval by the BOE.  The BOE shall


 


34

















 


have the right to recover any amounts paid to the
Contractor including, but not limited to, seasonal adjustments that the BOE
shall determine to have been unjustified either be a deduction(s) from any
later payment(s) that shall become due and payable to the Contractor or by a
refund payment by the Contractor upon written request from the BOE.


 


(10)              Limitation
on Actions.  If the Contractor
shall dispute any finding, determination or other action by the OPT Director or
any other BOE unit or official arising from anything contained in Paragraph
(H) of this Extension and Ninth Amendment Agreement pertaining to
the suspension of the prompt payment discount, the Contractor’s sole remedy and
legal action shall be an appeal to the Chancellor’s Board of Review pursuant to
Section 8.3 of the Bylaws of the Board of Education, the decision of which
board shall be final, binding upon the Contractor, and not subject to any
claim, action, proceeding, special proceeding and/or other form of further
appeal.  If the Contractor shall
institute any claim, action, proceeding, special proceeding and/or other form
of appeal after a final decision by the Chancellor’s Board of Review, the
Contractor shall consent, upon request by the BOE and/or the City of New York,
to a dismissal with prejudice of such claim, action, proceeding, special proceeding
and/or other form of appeal.


 


(I)                                    GENERAL
MISCELLANEOUS AMENDMENTS.  All
else to the contrary notwithstanding, the Contract is hereby amended as follows:


 


(1)                     Standardization
of Contracts.  The Contractor
does hereby stipulate and agree that contracts awarded under Serial Nos. 0065,
0075, 8107 and 9888 all form an interwoven system for the provision of pupil
transportation services as fully and completely as if they were awarded simultaneously,
and, therefore, constitute one contract. 
This includes contracts that successor vendors obtain through
assignments, mergers, acquisitions, management agency agreements or any other
means.  Therefore, any individual contractor
with more than one contract will be deemed for all intents and purposes to
possess one contract.  Furthermore, any
group of vendor entities subject to common ownership or control that holds more
than one contract will be deemed for all intents and purposes to be one contractor
with one contract, namely, the Contract.


 


(2)           Changes
Affecting the Contractor. 
The Contractor shall provide written notice to the BOE on forms
prescribed by the Director of each change affecting the following: partners,
sole proprietors, management control, Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, or the organization of ownership of the
contractor, i.e., the corporation, partnership or sole proprietorship.  Changes in the contractor include, but are
not limited to, the following: corporate or partner voting power; sale,
transfer or other alienation of corporate, partnership or sole proprietorship
assets; sale or transfer of corporate stock or partnership interest over five
percent (5%); or, any other action that may affect BOE interests.


 


(3)           Office
of Pupil Transportation. 
All references in the Contract and any previous extension and amendment
agreements to the “Bureau of Pupil Transportation” are hereby amended to read,
“Office of Pupil Transportation.”


 


35

















 


(4)           NYSDOT
Bus Inspection System. 
The Contractor shall not allow its New York State Department of
Transportation “Out of Service Rate” to exceed an average of twenty percent
(20%) over any three consecutive six-month inspection periods during the Term
of this Extension and Amendment Agreement.


 


(5)           School
Bus Contractor’s Manual of Procedures and Requirements.  The Office of Pupil Transportation’s School
Bus Contractor’s Manual of Procedures and Requirements (hereinafter expressed
as “Contractor’s Manual”), issued on June 1, 1982, is hereby incorporated by
this reference into, and made a part of, this Contract as if the “Contractor’s
Manual” were set forth herein in its entirety. 
Contractors and its employees, agents, successors, assigns,
subcontractors and subcontractor employees must observe and comply fully with
all rules, requirements and procedures as expressed in the “Contractor’s
Manual.”  The Director shall have the
right, authority and sole discretion to add, delete, revise, update, reissue or
otherwise change any and all rules, procedures and/or requirements in the
“Contractor’s Manual” at any time without prior notice to any party.  Any and all provisions of the Contract,
including but not limited to the Article regarding Liquidated Damages, which
refer to Pupil Transportation Handbook Nos. 1, 2 and/or 3, are hereby amended
to refer solely to the “Contractor’s Manual.”


 


(6)           Standards
of Professional Conduct and Performance.  If the Director promulgates new standards of
professional conduct and/or minimum levels of competency or performance for
drivers and escorts, the Contractor must ensure that all affected employees are
made fully aware of, and act in full compliance with, such new standards.  In addition, the Contractor must certify in
the manner prescribed by the Director that each and every driver, escort and
other affected employee has received written notification of such new
standards.


 


(7)           Computer
Systems.  The Contractor
shall maintain a computer system sufficient to run applications developed by
OPT.  As of the 2000-01 Extension Year,
the minimum computer system for the Contractor to maintain must include the following
elements: (a) Pentium II Computer; (b) 4 megabytes RAM; (c) 6 gigabyte hard
disk; (d) Windows 95 or Windows 98; (e) Word for Windows 95 or 98; and, (f) 56k
Modem.  During the life of this
Extension Agreement, the Contractor shall update its computer system as required
by the Director.


 


(8)           Uniform
Attire of Transportation Crews. 
Unnumbered Paragraph 9 of Article XVII entitled, “Vehicle Operator
Standards,” is hereby amended to add the following provisions: (a) on August
15th prior to the start of the 2000-01 Extension Year, the Contractor shall
submit one (1) complete sample each of the current or new uniforms to be worn
by drivers; (b) within five (5) business days of the submittal, the Director
shall have the sole discretion whether to approve or disapprove the
Contractor’s choice of uniform attire for any class of employees, i.e., this
provision affects current choices of uniforms as well as prospective choices;
(c) whereupon the Director disapproves any choice of uniform attire, the
Contractor must replace, at no expense to the BOE, the affected uniform items
with those acceptable to the Director; and, (d) the Contractor must submit for
approval to the Director any proposed change(s) in any item(s) of uniform
attire before such change(s) becomes effective.


 


36

















 


(9)           Advertising
on Vehicles.


 


(a)           The Contractor shall cooperate fully
and completely with the Board of Education regarding the placement of advertisements
on the two (2) exterior sides of all standard size vehicles, including spare
vehicles.  The Contractor shall not be
responsible for any costs, labor or other work associated with the
installation, repair, maintenance, replacement and/or removal of advertisements
or the repair and/or maintenance of school bus vehicles in relation
thereto.  In addition, the Contractor
must not cause, incur or allow any costs, expenses or other liabilities on its
own part concerning anything whatsoever directly or indirectly related to the
placement, repair, maintenance and/or removal of advertisements on school bus
vehicles or the repair or maintenance of school bus vehicles in connection with
such advertisements, and the Contractor shall not demand, nor be entitled to,
any compensation from the Board of Education for any such costs, expenses or
other liabilities.


 


(b)           The Contractor shall allow the BOE
and/or BOE agents, employees, contractors, subcontractors or other representatives
to affix any and all such advertisements to the Contractor’s vehicles by any
means the Board selects including, but not limited to, metal and/or plastic
frames and/or direct-application adhesive decals, provided, that the BOE and/or
its agent, employee, contractor, subcontractor and/or other representative
shall be responsible for the cost to restore the vehicle bodies with respect to
any damage upon removal.  The Contractor
shall cooperate fully to provide access to all of its vehicles under the
Contract, including spare vehicles, at such times when they are not in use for
BOE transportation service including the early morning, midday and evening
hours, as the BOE and/or the BOE agents, employees, contractors, subcontractors
or other representatives shall schedule with at least three (3) business days
advance notice.  Whereupon any
advertisement or any component part thereof becomes damaged to any extent or
destroyed, for any reason whatsoever, and/or whereupon any vehicle sustains
damage or requires repairs or maintenance due to any advertisements or any
component part thereof, the Contractor shall notify the Board’s designated
agents, employees, contractors, subcontractors or other representatives within
twenty-four (24) hours by calling a “212”, “718” or other local New York City
telephone number which the Board shall supply to the Contractor.  If the Contractor shall be dissatisfied for
any reason with any vehicle repairs or maintenance supplied by the BOE or the
Board’s designated agents, employees, contractors, subcontractors or other
representatives, the Contractor shall submit any such claim or dispute in
writing to the OPT Director for resolution, whose decision shall be final and
binding upon the Contractor, except for administrative appeal to the
Chancellor’s Board of Review pursuant to §8.3 of the Board of Education’s
Bylaws.


 


(c)           The Contractor does hereby stipulate
and agree that all revenues or other consideration derived from the placement
of advertisements on the Contractor’s vehicles shall be and remain forever the
sole and exclusive property of the Board of Education and not the
Contractor.  The Contractor further
agrees to follow in every respect any and all rules, regulations, requirements,
specifications or procedures concerning school bus advertisements that


 


37

















 


the Board may, in its sole discretion, promulgate in
the Board’s “SCHOOL BUS CONTRACTOR’S MANUAL OF PROCEDURES AND REQUIREMENTS,” as
currently or hereafter updated, revised or otherwise changed.


 


(10)         Access
to Premises.  The
Contractor and its employees, agents, successors, assigns, subcontractors and
subcontractor employees must grant to OPT inspectors, BOE administrative
personnel, City of New York administrative personnel, and State of New York
administrative personnel full cooperation and access to all premises, vehicles,
books and records for the purpose of vehicle and garage inspections and related
functions as well as the review and audit of the Contractor’s records to
ascertain compliance with the Contract and/or any Federal, State, local and/or
Board of Education laws, rules, regulations and/or bylaws.


 


(11)         Unlawful
or Unenforceable Provisions Void.  Whereupon this Extension and Amendment Agreement shall be found
to contain any unlawful or unenforceable provision(s) that shall not be
essential to continued performance or that shall not be material to the intent
and inducement of the parties, such provision(s) shall be deemed of no effect
and will, upon application of either party, be stricken from this document
without thereafter affecting the binding force of the remainder of this
Extension and Amendment Agreement.


 


(12)         Approval
and Execution.  This
Extension and Amendment Agreement will not become binding or effective upon the
Board of Education until the following series of events will have transpired:
(a) approval as to legal sufficiency by the BOE Office of Legal Services; (b)
authorization by a resolution duly adopted by a vote of the Board of Education;
(c) execution on behalf of the Board of Education by the Chancellor or his/her
designee; (d) approval by the New York State Commissioner of Education; (e)
initial registration with Comptroller and re-registration with the Comptroller
each year thereafter; and, (f) initial approval and subsequent annual
re-approval by the New York State Financial Control Board pursuant to the New
York State Emergency Act for the City of New York, the rules and regulations of
said Board so require.


 


(13)         Implementation
of the State Education Law. 
This Extension and Amendment Agreement is intended to implement the provisions
of New York State Education Law §305(14) and the attendant regulations of the
New York State Commissioner of Education. 
Whereupon there shall exist any inconsistency between the BOE and the
SED concerning this statutory provision, the attendant regulations of the
Commissioner of Education and/or any formula(e) for reimbursement of funds,
this Extension and Amendment Agreement shall be deemed amended automatically to
conform to the interpretation of the SED but only for the protection of BOE
interests and only at the Board of Education’s option.


 


(14)         The Comptroller shall endorse hereon during
the term of this Contract his/her certificates that there are appropriations or
funds applicable thereto sufficient to pay the estimated expense to execute and
operate this Contract during the respective fiscal periods.


 


38

















 


(15)                          As used herein, the singular shall include the
plural and vice
versa.  As used herein, all
masculine, feminine and neuter pronouns and other gender descriptions shall be
deemed synonymous and interchangeable.


 


(16)                          All other provisions of Contract Serial Nos. 0065,
0075 and 8107, as amended by the 1979 Employee Protection Provisions amendment
agreement, the 1983 Extension and First Amendment Agreement, the 1986 Extension
and Second Amendment Agreement as amended further on June 24, 1986, the 1989
Extension and Third Amendment Agreement, the 1992 Extension and Fourth
Amendment Agreement, the 1995 Extension and Sixth Amendment Agreement, and the
1996 Supplemental Seventh Amendment Agreement, except those provisions herein noted and revised, shall
remain in full force and effect.


 


(17)                          All other provisions of Contract Serial No. 9888 as
amended by the 1991 Extension Agreement and First Amendment, the 1994 Extension
Agreement and Second Amendment, the 1995 Extension and Sixth Amendment, by the
1996 Supplemental Seventh Amendment as amended, except those provisions herein noted and revised, shall
remain in full force and effect.


 


(18)                          All other provisions of the Contract under Serial
No. 7263 as amended by the 1998 Extension Agreement and First Amendment, as
amended, except
those provisions herein noted and revised, shall remain in full force and
effect.


 


[NO FURTHER TEXT APPEARS ON THIS PAGE.]


 


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