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July/August 2017
For Business, Corporate Travel & Meeting Buyers & Arrangers

Legal: extra hurdles for RFPs

REQUESTS FOR PROPOSAL (RFPs) are becoming more detailed and complex. Corporates and travel management companies (TMCs) have always understood the need to scope the range of services that will be provided, in detailed commercial terms, in their draft travel management services agreements (TMSAs). However, recent legislation, including the Modern Slavery Act 2015 and the Bribery Act 2010, increasingly requires corporates to take steps to ensure compliance by their suppliers (including their TMC) and increasingly question compliance systems.

While each RFP is different, many RFPs now require the TMC to provide information to cover the following areas.

COMPLIANCE

In addition to confirmation of compliance with laws and regulations relating to the provision of travel arrangements, further compliance requests may relate to:

(i) The Modern Slavery Act

Where turnover exceeds £36 million, the RFP is likely to ask for the TMC’s statement of compliance, setting out its policy and other steps taken to avoid human trafficking and slavery in the supply chain. This needs to be approved by the board and signed by directors.

(ii) The Bribery Act

A commercial organisation commits an offence if it fails to prevent persons associated with them from bribing another person on their behalf. A defence to this is where the corporate has adequate procedures in place to prevent this happening. The RFP is likely to seek confirmation of the TMC’s own policies, and that this is covered in the TMSA and in agreements with suppliers.

DATA PROTECTION AND CONFIDENTIALITY

This is a particularly sensitive area, where a traveller’s personal data may be exported to enable bookings and travel arrangements to be put in place. Expect the RFP to require the TMC to demonstrate its policy, and lengthy terms should be expected in the TMSA to cover this. Export of data outside the EU will be subject to restrictions and the RFP may wish to explore data security, any earlier security breaches, and confirmation about any likely export of data.

RISK

The RFP may wish to explore how risk is managed by the TMC in terms of satisfying the corporate’s duty-of-care as employer and the protection of its travellers. This may be important where travel is to any destination where safety is uncertain.

GENERAL TERMS

TMCs should be aware of whether the proposal is for the exclusive supply of defined travel services or where the corporate might engage other TMCs. Exclusivity, together with the cost of providing the services, should reflect the length of term of the agreement, and whether termination can take place at short notice without cause. For longer, fixed-term agreements, the TMSA’s rates might become uncommercial over time and the ability to adjust commercial terms should be considered.

TUPE

The likely cost of employees transferring to a successful TMC in the RFP should be calculated. Care needs to be taken to ensure the correct notices are served, together with a careful analysis of transferred obligations under transfer of undertakings (protection of employment) (TUPE) regulations.

PRICING AND PAYMENT

Does the RFP allow price adjustment where market conditions change? This is relevant where there is a long term with fixed prices. Clarification may be needed about ownership of supplier commissions, including back end and overrides. Is a lodge card to be used?

DRAFT TMSAs

TMCs should be able to produce their current TMSA to demonstrate their clarity over important terms and knowledge of compliance obligations.

The TMC’s lawyer may assist with the due diligence, legal requirements and negotiation over drafting the TMSA, which may be dealt with by in-house counsel at the corporate. This should enable a fair agreement to be negotiated and should generate a successful relationship

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