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72 Guidebook for Developing and Managing Airport Contracts
10.3 Scope of Services
The scope of services may apply to a third-party management agreement in a multiple-user
terminal situation that is common use. This would define the duties of the management com-
pany. At Chicago's Midway Airport, the scope was defined in an agreement with the Midway
Airlines' Terminal Consortium (MATCO), which was created to provide the airport's airlines
with a single entity through which to participate in the design, construction, and management
of the recently built main terminal building.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for
excerpts from the Midway MATCO Agreement defining the obligations of the operator and the
standard of care.
10.4 Indemnity Issues
It is important for the airport to have adequate indemnity provisions and insurance requirements
satisfactory to the airport's risk management and to ensure protection of the airport sponsor, pro-
vision of adequate insurance levels, and detailed administration, reporting, and maintenance of
these requirements.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts
from the Midway MATCO Agreement defining the indemnification obligations of the operator
to the city, release of the city, and required insurance coverage.
10.5 Ownership Issues
In most cases, the airport owns the facilities and there should be a provision clearly stating
which party owns the facilities.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for
excerpts from the Midway MATCO Agreement defining title to replacement parts, components
and equipment.
10.6 Resolution of Disputes
The contract should indicate which state's governing law and court will apply in the event
of dispute resolution. Some agreements may call for resolution through arbitration. In these
cases, it is advisable to indicate as many details as practicable regarding arbitration (e.g., required
experience of arbiter, location of arbitration meetings or hearings, and time frames in which
arbitration will be accomplished)
See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts
from the Midway MATCO Agreement defining governing law and consent to service of process
and jurisdiction.
10.7 Compensation
Compensation provisions apply in contracts between management companies, such as third-
party agreements like the MATCO agreement. These provisions should include detail pertaining
to cost basis (as required), invoicing procedures, and payment terms.
