Cracking Oyster: Shashi Verma & Transport for London Confront a Tough Contract (B) Sequel

This sequel accompanies case number 1985.0, "Cracking Oyster: Shashi Verma & Transport for London Confront a Tough Contract (B)." "Cracking Oyster (B)" is the second part of a two-part case set, intended for use in a two-class sequence. The (B) case may also be taught on its own, but students will need to read (or at least skim) the (A) case in order to understand (B). "Cracking Oyster (B)" is accompanied by a six-and-a-half minute video companion piece. The (B) case describes how Shashi Verma (MPP '97), Director of Fares and Ticketing for London's super agency, Transport for London, copes with a frustrating contract at the heart of the agency's ticketing operation-the Prestige Contract, which is, when he assumes his position in 2006, at the midpoint of a 17-year contract term. While the (A) case lays out the nature of Verma's frustrations with Prestige (a cumbersome process for negotiating variations, excessive costs, inadequate performance requirements, and poor incentives for the contractor to col-laborate with TfL on new innovations), the more provocative (B) case describes how Verma-using techniques of "game theory" and taking some political and legal risks-tries to negotiate much more favorable contract terms for TfL. The case ends with Verma, TfL, and the TfL board on the horns of a dilemma-whether to go forward or re-treat after a high court grants one of the contractors an injunction that will require TfL to defend its actions in a court trial (or, more likely, settle out of court) if it goes forward with its plans. This one-page sequel describes what happens: TfL does decide to go forward, does settle the legal matter out of court, and ultimately obtains a contract on much more favorable terms than the original Prestige. The video companion piece shows Verma in conversation with HKS Professor Richard Zeckhauser, as the two reflect on Verma's use of game theory, a subject taught by Zeckhauser. Case number 1985.1

• Decision making
• Negotiation strategies
• Partnerships
• Game theory
• Business and government relations