Law Contracts – Part I – Contracts – Skills Assignment

Fact Pattern

• In Part I of the semester long assignment, you will assume the role of a business unit representative on an ad hoc procurement team at Galactic Corp. (Galactic), a manufacturer of space saving storage systems including mechanical shelving and cabinets.
• The company has just finalized its acquisition of a smaller competitor, Mini Corp., and has identified the need to integrate some of Minis IT systems with their own.
• Galactic has reviewed proposals from several reputable firms and is preparing to proceed to formal contract negotiation with Solutions, Inc.

Required Reading

As background for this type of procurement project we have provided

The full text of this book is available as an e-book through the FSU Library. The text is a bit dated but the fundamental principles discussed for IT procurement remain quite similar today and can be applied to many commercial procurements outside of the IT space. Assignment – 125 points

• The Assignment has two parts.
• In the first part, you will answer questions related to the assigned reading.
• In the second part, you will draft a Letter of Intent (LoI) for presentation to the vendor using a standard form of LoI.
• The form, sourced from Practical Law (Westlaw), is supplemented by a set of annotations on how to use the form provided in the document NOTES-Using an LOI Form.

1. Substantive Questions – 115 points

I. Questions Related to Chapter 1 of the IT Procurement Handbook for SMEs – Please Answer Questions 1-4 – Length: 2-3 Pages

1. Why does the author promote a Lifecycle approach to significant procurements?
2. The author focuses on specifying the business requirements clearly before considering technological requirements or restriction. Why, and do you concur with this advice?
3. The author advises that the lowest cost supplier may not be the most favorable proposal and suggests a number of other criteria to consider in selecting a vendor.

• Identify at least three of these other criteria to consider while choosing a supplier
• Describe how they might benefit the buyer during and/or after the procurement
• Give special consideration to suggestions that are designed to reduce risk. Risk reduction is a key goal of parties creating contracts.

4. Assume that your best friend, Leslie, has been hired as the Chief Procurement Officer for Oil Drilling, Inc. The oil exploration business is cyclical in nature. The industry is currently in an up-cycle and Oil Drilling just finished its most profitable fiscal year since its founding in 1959.

• Leslie’s first task as Chief Procurement Officer is to purchase between 1,000 and 1,500 new rack servers for Oil Drilling, Inc.s main data center.
• Each server costs between $90,000 and $145,000, depending on the configuration and service agreement.
• The servers would replace the companys rack servers, purchased 5 years ago.
• Commercial rack servers typically last between 5-8 years.
• The previous servers were purchased from a small startup that has since gone out of business.
• Leslie has asked for your help. Two-Part Question:
• Given what your learned in The Procurement Lifecycle chapter, please identify 3 steps that Leslie should take in purchasing the new rack servers.
• Please identify at least one point or claim made by the author with which you disagree. Explain why you would tell Leslie to avoid following the author’s advice vis–vis that point or claim.

II. Letter of Intent

Required Reading

Documents

Directions

• Begin by reading:
• The Drafting Notes set forth in the Letter of Intent: Commercial Transactions
• The Summary of Solutions, Inc. Proposal
• Then, using the documents Standard Form – Galactic Corp LOI and Summary Solutions, Inc. Proposal, draft the Letter of Intent that Galactic will send to Solutions. In doing so:
• Provide all of the [bracketed] text needed in the Standard Form, and
• Complete Exhibit A
• Additional background information for your LOI:
• Allow 30 calendar days for negotiating the Definitive Agreement and for the Buyers Counsel to provide the initial draft of that document.
• Provide that the terms of the LOI are confidential (edit the confidentiality section).
• Reference the laws of the imaginary state of Florida (postal code FG) in the Governing Law section.

Set the expiration drop dead date to April 28, XXXX at 11:59 pm in the Term and Termination section

2. References – 8 points

• Legal arguments require support from authoritative sources. Please base your response on the materials provided in the assignment and on other relevant course materials (lectures, slides, readings, or other assigned materials) from the Modules covered so far.
• In your response, make clear when you are relying on a source and provide full citations at the end.
• If you use an external source to support your arguments, you must include:
• A proper citation,
• A workable URL, and
• A one-sentence justification of why that external source adds value beyond the course materials.