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Contract Modification to Extend Term and Increase Funding for Operation, Hosting, Maintenance & Development of GoPass®

Committee of the WholeJuly 7, 2020

Gregory ElsborgVice President and Chief Innovation Officer

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• Approval of a resolution authorizing the President/Executive Director or his designee to:1) execute a contract modification, subject to legal review,

to add sub-licensing provisions and add five years to the contract with Unwire Payments & Mobility ApS), [Contract No. 2027710-02] for GoPass® App Solution.

2) Increase the not-to-exceed amount for contract with Unwire Payments & Mobility ApS), [Contract No. 2027710-02] by $5,953,106, for a new total authorized amount not to exceed $11,157,831.

Today’s Consideration

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• Since 2013, DART has offered the GoPass app as a mobility solution for service area riders. GoPass has emerged as a nationally awarded platform for trip planning and ticketing and has over 1.3m downloads across the DFW region.

• On July 9, 2019, DART awarded a contract to KPMG to complete a feasibility study evaluating scalability of GoPass to a national platform. All deliverables have been completed on this project. This study comprised of 3 phases:– Product & Market Feasibility– Organizational & Financial Feasibility– Technical Review & Analysis

• On May 26, 2020, a Go-To-Market strategic approach to GoPass scalability as a national platform was presented by DART staff to DART Administration Committee.

Background

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• GoPass represents a unique revenue generating opportunity for DART. The best solution would be to invest in development of the core GoPass platform, as well as the wider Mobility as a Service (MaaS) ecosystem.

• Increasing contract funding at this point funds an extension of hosting, licensing and maintenance of the platform, while also providing a development spending allocation that is in line with levels provided in the Go-to-Market strategy, equipping DART to pursue revenue generating opportunities, and bring new platform capabilities to better serve DART’s ridership.

• Extending the GoPass contract by five years to a new contract expiration date of July 31, 2027 positions DART to pursue a market development strategy, while also adding an extended period for operation of the platform to support DART’s rider needs.

Why Modify the Contract Now?

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• DART is seeing an increase in procurement activity nationally in the mobile ticketing solution space.

• There are currently seven open RFPs that are being tracked by DART in the mobile ticketing space, all of which have been initiated in the period following the onset of COVID-19. This is a significant increase in concurrent RFP activity compared to prior to COVID-19.

• This reaffirms staff’s prediction that there will be an increased demand for solutions that enable contactless and cash handling reduction across transit systems.

• DART is positioned well to approach opportunities that are presenting currently but must act rapidly to capitalize within the mobile ticketing space.

Market Demand for Solutions

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• This Contract modification includes sub-licensing provisions to enable DART to sub-license the GoPass platform across North America, generating revenues to the agency and expanding the platform’s reach.

• DART will receive a ‘first right of refusal’ on all business opportunities for GoPass in North America. The first right of refusal will apply for the 42 months following the signing of the contract modification. The first right of refusal will be extended through the contract remainder, provided that the following provisions are met at the end of 42 months:– Development spending of at least $1,500,000 on GoPass– DART support staff scaled at a rate of at least 1 staff per 6 new ILAs– At least 20 agencies on the platform within the 42 month period

Contractual Sub-Licensing Provisions

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Key Deal TermsTopic Current Terms Extension / New TermsSub-Licensing Rights Not provisioned, has been

managed on case-by-case basisSub-licensing included for North American market (US + Canada)

Sub-Licensing Region Not included in current contract North American ‘first right of refusal’ on all business opportunities

Fees received from Sub-Licensees

Not included in current contract Equal fee split agreed between Unwire and DART for implementation fee, revenue share, program management fee and feature development fees

Platform Ownership Not included in current contract DART gains option to purchase platform source code, with investment in the platform and accumulated revenue streams can be combined or independently contributed towards a discount purchase price

Development Activities by other Agencies

Not included in current contract DART receives any standard feature built for use by other Agencies free of charge regardless of participation in Agency opportunity

Termination for Convenience

Termination for convenience is permitted within contract

Termination for convenience is not permitted within contract

Access to Source Code

Not included in current contract Source code will be placed in Escrow for DART access should DART elect to purchase source code

Support for Transition if acquiring source code

Not included in current contract Should DART acquire source code, Unwire will assist with transition to new hosting provider of DART’s choosing. Unwire will continue to receive sub-licensee fees for remainder of sub-licensee contracts

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• This contract extension adds five years funding for hosting, licensing, maintenance and revenue share for the GoPass platform. This extension has no price increase against prior costs incurred by DART with relation to these items.– The total cost for hosting, licensing, maintenance and revenue share is

estimated at $2,596,706

• DART has utilized vendor estimates on development work to determine development spend on the GoPass platform for the first 42 months following contract extension agreement (July 2020 – January 2024).– This development spend increase to the contract is $3,356,400– DART has no obligation to spend any or all development funds at any point

during the contract term

Contract Spending Detail

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$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027

Thou

sand

s

GoPass Projected Contract Spend

GoPass Licensing & Revenue Share (In New Funding Scope)

GoPass Development Capex (In New Funding Scope)

GoPass Development Capex (Out of New Funding Scope)

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GoPass Project Timeline Key Dates

JUN2020

JUL2020

(DART Admin Committee)

GoPass Contract

Modification

KeyDates

(DART COTW)GoPass

Contract Modification

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(DART Admin Committee)

Periodic Board Updates on

GoPass

2020 2021 2022 2023 Q42023

Decision on continuation of Go-To-Market

Strategy

JUL2027

GoPass Contract

Expiration

2024

GoPass Additional

Development Funding

Key decision checkpoint in Q4 2023 for DART to decide whether to continue to pursue Go-To-Market licensing strategy for GoPass.

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• Approval of a resolution authorizing the President/Executive Director or his designee to:1) execute a contract modification, subject to legal review,

to add sub-licensing provisions and add five years to the contract with Unwire Payments & Mobility ApS ), [Contract No. 2027710-02] for GoPass® App Solution.

2) Increase the not-to-exceed amount for contract with Unwire Payments & Mobility ApS ), [Contract No. 2027710-02] by $5,953,106, for a new total authorized amount not to exceed $11,157,831.

Recommendation

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Questions