1031-00003 · Calderwood & Harkness LLP · Engagement

engagement-letter-mtdc.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606

Telephone: (312) 555-7200 Facsimile: (312) 555-7201 www.calderwoodharkness.com

August 5, 2022

VIA HAND DELIVERY AND ELECTRONIC MAIL

Dr. Raymond Alcázar, Executive Director Patricia Ng, General Counsel Metropolitan Transit Development Corp. 550 West Adams Street, 14th Floor Chicago, Illinois 60661

Re: Engagement of Calderwood & Harkness LLP — Agency-Level Bid Protest and Related Proceedings

Matter: Metropolitan Transit Development Corp. v. Illinois Department of Transportation; Protest No. IDOT-BPC-2022-0047

Solicitation: RFP No. IDOT-TS-2022-014, Illinois Integrated Transit Modernization Program (IITMP)

Calderwood & Harkness Matter No.: 1031-00003

Dear Dr. Alcázar and Ms. Ng:

1. Introduction and Purpose

Calderwood & Harkness LLP ("the Firm," "C&H," or "we") is pleased to confirm the engagement by Metropolitan Transit Development Corp. ("MTDC" or "the Client"), a unit of local government and public transit authority organized under the Illinois Local Mass Transit District Act, 70 ILCS 3610, to represent MTDC in connection with a bid protest challenging the award of the Illinois Integrated Transit Modernization Program contract under RFP No. IDOT-TS-2022-014, issued by the Illinois Department of Transportation ("IDOT"). We appreciate the confidence that MTDC has placed in the Firm and look forward to working with your team on this important matter.

This engagement follows the discussions between Ian Blackwood of this Firm and Patricia Ng, General Counsel of MTDC, on July 26 and August 1, 2022, during which the parties reviewed the facts and circumstances giving rise to this protest and discussed the terms under which the Firm would undertake the representation. This letter memorializes the agreement reached during those discussions and sets forth the terms and conditions governing the attorney-client relationship between Calderwood & Harkness LLP and Metropolitan Transit Development Corp. We ask that you review these terms carefully and, if they are acceptable, execute this letter in the space provided below and return one fully executed copy to the Firm at the address set forth above.

2. Scope of Representation

2.1 Agency-Level Bid Protest

The Firm will represent MTDC in the agency-level bid protest to be filed with the Office of Chief Counsel of the Illinois Department of Transportation ("IDOT"), challenging the award of the IITMP contract to Pinnacle Transit Solutions, Inc. ("Pinnacle"), a Delaware corporation headquartered in Indianapolis, Indiana. The IITMP contract, as awarded, is valued at approximately $247.6 million for the base performance period. The protest will be filed pursuant to the Illinois Procurement Code, 30 ILCS 500/20-80, and the implementing regulations set forth at 44 Ill. Admin. Code § 1.5530. Upon filing, the protest is expected to be assigned Protest Number IDOT-BPC-2022-0047, and all subsequent filings and correspondence will reference that number.

The scope of the Firm's representation in the agency-level protest phase encompasses, without limitation, the following:

(a) Preparation and filing of the initial protest submission and supporting memorandum of law, including all factual exhibits, declarations, and expert reports necessary to substantiate the grounds of protest;

(b) Participation in all proceedings before IDOT's Administrative Review Board, including prehearing conferences, status conferences, and any scheduling or procedural matters;

(d) Participation in any oral argument or evidentiary hearings conducted by the Administrative Review Board or its designee, including the preparation and presentation of witness testimony and cross-examination of opposing witnesses;

(e) Preparation and filing of all motions, oppositions to motions, and other procedural filings as may be necessary or appropriate during the course of the protest proceeding;

(f) All correspondence with IDOT's Office of Chief Counsel, the Administrative Review Board, Pinnacle Transit Solutions, Inc. (or its counsel), and any other parties or intervenors, to the extent such correspondence is necessary to advance the interests of MTDC; and

(g) Such other legal services as are reasonably necessary and incidental to the prosecution of the agency-level bid protest through the issuance of a final decision by the Administrative Review Board.

2.2 Potential Judicial Review — Illinois Court of Claims

In the event that the agency-level protest is denied, results in an adverse decision, or is otherwise resolved in a manner that MTDC considers unsatisfactory, the scope of this engagement extends to the evaluation of, and, upon separate written Client authorization, the filing and prosecution of an action for judicial review before the Illinois Court of Claims under the Illinois Court of Claims Act, 705 ILCS 505. The Firm will advise MTDC regarding the merits, risks, and costs associated with pursuing judicial review and will present a recommendation for the Client's consideration before any such action is commenced.

The Client acknowledges and agrees that escalation of this matter to the Illinois Court of Claims will constitute a materially expanded scope of work and will require separate, express written authorization from Dr. Raymond Alcázar, Executive Director, or his designee. Fee estimates applicable to the Court of Claims litigation phase are discussed in Section 4.4 below and will be updated at the time authorization is sought to account for any developments that have occurred during the agency-level protest phase.

The scope of this engagement does not include appellate proceedings beyond the Illinois Court of Claims. Should further appellate review become necessary or desirable — whether to the Illinois Appellate Court or the Illinois Supreme Court — the Firm and the Client will negotiate and enter into a separate written engagement agreement addressing the scope, fees, and terms applicable to such appellate proceedings.

2.3 Related Matters

In connection with the protest and any subsequent litigation, the Firm's scope of representation includes the following related activities:

(a) Expert Consultants and Accounting Advisors. Retention and coordination with expert consultants and accounting advisors as needed to support the protest and any subsequent litigation. The Firm anticipates retaining Linden Analytics Group, LLC, a procurement consulting firm, as an expert consultant for purposes of analyzing the source selection methodology, scoring evaluations, cost-realism analysis, and organizational conflict of interest issues. The terms and anticipated costs of this expert engagement are described in Section 4.4 below. The Firm may also retain additional experts as the need arises, subject to prior consultation with the Client regarding the scope and anticipated cost of any such retention.

(b) Coordination with MTDC Personnel. Coordination with MTDC's in-house legal department, specifically General Counsel Patricia Ng and such members of her staff as she may designate, on all substantive and procedural matters relating to the protest and any subsequent litigation. The Firm will also coordinate with MTDC's independent auditor, Strickland & Associates CPAs (Managing Partner: Howard Strickland, CPA), as reasonably required to obtain financial data, cost and pricing analyses, and other information necessary to support the protest or litigation.

(c) Exclusions. The scope of this engagement expressly excludes representation of MTDC in any separate regulatory, legislative, or federal proceedings that are not directly related to Protest No. IDOT-BPC-2022-0047 or the challenged award under RFP No. IDOT-TS-2022-014. Without limiting the foregoing, the Firm is not engaged to represent MTDC before the Federal Transit Administration, any congressional committee, any Illinois General Assembly committee, or in connection with any Freedom of Information Act requests not directly related to the protest.

3. Background of the Matter

The following summary is provided for engagement-letter context and to confirm the Firm's understanding of the factual background giving rise to this representation. It is based on information provided by the Client during the discussions referenced in Section 1 above and is subject to revision as the Firm's investigation and review of documents progresses.

On January 18, 2022, the Illinois Department of Transportation issued Request for Proposals No. IDOT-TS-2022-014 for the Illinois Integrated Transit Modernization Program ("IITMP"). The IITMP is a comprehensive initiative to modernize and integrate transit systems across the State of Illinois, encompassing signal and communications upgrades, fleet modernization, technology platform development, and infrastructure improvements. The solicitation contemplated a firm-fixed-price contract with cost-reimbursable line items for certain technology development tasks. The base performance period is seven years, with an anticipated period of performance from October 1, 2022, through September 30, 2029, and two three-year option periods, yielding a total maximum contract value of up to approximately $310 million over the full thirteen-year period.

Proposals were due on April 29, 2022. MTDC submitted a timely proposal valued at approximately $234.9 million for the base performance period. The proposal reflected MTDC's extensive experience in transit system operations, its established relationships with regional transit agencies, and its technical capabilities in transit modernization, developed over more than two decades of service as a public transit authority in the Chicago metropolitan area. MTDC invested approximately $3.2 million in internal labor, consultant fees, and proposal production costs in the preparation of its proposal.

On July 14, 2022, IDOT's Source Selection Authority, Deputy Secretary for Multimodal Transportation Angela Moreau, issued the Source Selection Decision Document ("SSDD") awarding the IITMP contract to Pinnacle Transit Solutions, Inc. Pinnacle's proposal was valued at approximately $247.6 million for the base performance period — approximately $12.7 million, or 5.4%, higher than MTDC's proposal.

MTDC received formal notification of its non-selection on July 22, 2022, accompanied by an abbreviated debriefing letter. An enhanced debriefing was conducted via video conference on August 3, 2022, by Contracting Officer Gerald Fassett, P.E. The debriefing revealed that MTDC outscored Pinnacle by thirty (30) points in the aggregate technical and management evaluation factors — MTDC received a composite score of 923 out of a possible 1,000 points, while Pinnacle received a composite score of 893 out of 1,000 points. Despite this significant scoring differential, the Source Selection Authority selected Pinnacle under a narrative best-value tradeoff rationale that, based on the information available to date, appears to lack adequate documentation and rational justification.

MTDC seeks to challenge the award on multiple grounds, which the Firm will develop and refine as it reviews the full procurement record. Anticipated grounds of protest include, without limitation:

(a) Scoring errors in the evaluation of MTDC's proposal and/or the evaluation of Pinnacle's proposal;

(b) Reliance by the Source Selection Authority on evaluation criteria and considerations not stated in the solicitation, in violation of the requirement that all significant evaluation factors be disclosed to offerors;

(c) Organizational conflict of interest affecting Pinnacle Transit Solutions, Inc. or one or more of its proposed subcontractors, including potential affiliations with members of the Source Selection Evaluation Board;

(d) Failure to conduct an adequate cost-realism analysis of Pinnacle's proposed pricing, which was $12.7 million higher than MTDC's proposal notwithstanding a lower technical score; and

(e) Procedural irregularities in the conduct of the source selection process, including potential deviations from IDOT's own procurement policies and the requirements of the Illinois Procurement Code.

The statutory deadline for filing the protest is rapidly approaching, and the Firm intends to commence work immediately upon execution of this engagement letter.

4. Fees and Billing Arrangements

4.1 Hourly Rates

The Firm will bill for professional services rendered in connection with this engagement on an hourly basis. The current hourly rates for the professionals who will be primarily assigned to this matter are as follows:

These rates reflect the Firm's standard rates for government contracts and procurement litigation matters as of the date of this letter. The Firm's hourly rates are subject to periodic adjustment, which typically occurs annually on January 1 of each calendar year. The Firm will provide the Client with not less than thirty (30) days' advance written notice of any rate adjustment, and the adjusted rates will apply to services rendered on or after the effective date of the adjustment. No rate adjustment will apply retroactively to services rendered prior to the effective date of the adjustment.

In the event that attorneys or paralegals other than those identified in Section 5 below are assigned to this matter, their services will be billed at rates consistent with their experience levels and in accordance with the rate schedule set forth above.

4.2 Expense Reimbursement

In addition to professional fees, MTDC will reimburse the Firm for reasonable out-of-pocket expenses incurred in connection with this engagement. Reimbursable expenses include, but are not limited to, the following:

(a) Filing fees and court costs;

(b) Copying, reproduction, and printing charges;

(c) Travel expenses, including airfare, lodging, ground transportation, and meals, incurred in connection with attendance at hearings, depositions, client meetings, and other matter-related activities, in each case at reasonable and customary rates;

(d) Courier, overnight delivery, and postage charges;

(e) Electronic legal research charges (e.g., Westlaw, Sundial Solutions);

(f) Expert and consultant fees, to the extent advanced by the Firm on behalf of the Client; and

(g) Such other out-of-pocket expenses as are reasonably necessary and directly attributable to the representation.

Expert consultant fees — specifically those associated with the anticipated engagement of Linden Analytics Group, LLC — will be billed separately as described in Section 4.4 below. The Firm will not incur any single expense in excess of $5,000 without prior approval from the Client, except for filing fees and expert consultant fees that have been previously authorized.

4.3 Billing Cycle and Payment Terms

The Firm will submit invoices to the Client on a monthly basis. Each invoice will be itemized by timekeeper, with narrative task descriptions sufficient to identify the nature of the work performed. Invoices will include a summary of professional fees, a detailed listing of reimbursable expenses, and a cumulative total of fees and expenses incurred to date.

Payment of each invoice is due within thirty (30) days of the invoice date. The Firm reserves the right to charge interest on overdue amounts at the rate of one percent (1%) per month, or the maximum rate permitted by applicable law, whichever is less, on any amount that remains unpaid more than thirty (30) days after the invoice date.

All invoices will reference Calderwood & Harkness Matter No. 1031-00003 and Protest No. IDOT-BPC-2022-0047. Invoices will be directed to the attention of Patricia Ng, General Counsel, at the Client's address noted above, or to such other billing contact as the Client may designate in writing. The Firm will provide invoices in both hard copy and electronic format (PDF) unless the Client requests otherwise.

4.4 Fee Estimates

The Firm has prepared the following fee estimates for budgeting purposes. These estimates are based on the Firm's experience with matters of comparable size and complexity and on its current understanding of the facts and circumstances of this engagement. These estimates are provided for informational and planning purposes only and do not constitute a cap, ceiling, or fixed fee. Actual fees and expenses will depend on the course of the proceedings, the complexity of the issues, the volume and nature of discovery, the conduct of opposing parties, and the extent of work required.

(a) Agency-Level Protest Phase. The Firm estimates total professional fees for the agency-level protest proceeding — from commencement of the engagement through the issuance of a final decision by IDOT's Administrative Review Board — in the range of approximately $350,000 to $550,000. This estimate assumes a contested proceeding involving an Agency Report, at least one round of supplemental briefing, and participation in an oral argument or evidentiary hearing. The estimate does not include expert consulting fees, which are addressed separately below. If the proceeding involves more extensive discovery, additional hearings, or intervenor participation, the actual fees may exceed the upper end of this range.

(b) Court of Claims Litigation Phase (if escalated). In the event the Client authorizes the Firm to pursue judicial review before the Illinois Court of Claims, the Firm estimates additional professional fees for the litigation phase in the range of approximately $750,000 to $1,200,000. This estimate assumes a proceeding involving motion practice, a trial or evidentiary hearing, and post-trial briefing, and does not include expert consulting fees. The Firm will provide an updated estimate at the time Client authorization for this phase is sought, based on the state of the record and the issues to be presented.

(c) Expert Consulting Fees. The Firm anticipates retaining Linden Analytics Group, LLC ("Linden") as an expert procurement consultant to support the protest and any subsequent litigation. Linden is a nationally recognized procurement consulting firm with extensive experience in transit procurement disputes. The Firm has obtained a preliminary fee proposal from Linden as follows:

(i) Protest Phase: A flat fee of $145,000 for expert analysis, report preparation, and testimony support during the agency-level protest proceeding.

(ii) Litigation Phase (if escalated): An additional $85,000 for expert support during Court of Claims litigation, including updated analysis, deposition preparation, and trial testimony.

Linden's fees will be billed through the Firm as a disbursement on the Firm's monthly invoices, or invoiced directly to MTDC by Linden pursuant to a separate engagement agreement, as the parties may agree. The Firm will execute a separate engagement letter with Linden containing appropriate confidentiality and privilege-preservation provisions, as discussed in Section 8 below.

The Firm will keep the Client informed of actual fees and expenses on an ongoing basis through its monthly invoices and will promptly notify the Client if it appears that actual fees may significantly exceed the estimates provided above.

4.5 Retainer. No advance retainer is required at this time. The Firm reserves the right to request a retainer in the event the matter escalates to litigation before the Illinois Court of Claims or if other circumstances arise that, in the Firm's reasonable judgment, warrant the establishment of a retainer arrangement. Any retainer requested will be held in the Firm's client trust account in accordance with the Illinois Rules of Professional Conduct and will be applied against invoices as they become due.

5. Engagement Team

The following attorneys will be primarily responsible for this engagement:

Ian Blackwood — Responsible Partner, Government Contracts / Banking & Finance Practice Group. Mr. Blackwood has over eighteen years of experience representing public and private entities in transit procurement disputes, bid protests, and related administrative and judicial proceedings before state and federal agencies, including the Illinois Department of Transportation, the U.S. Government Accountability Office, and the U.S. Court of Federal Claims. Mr. Blackwood will serve as lead counsel and primary client contact for this engagement.

Stephanie Okafor — Billing Partner, Banking & Finance Practice Group. Ms. Okafor will oversee billing, budget management, and engagement administration. Ms. Okafor brings extensive experience in managing complex government contracts and commercial litigation matters and will ensure that the engagement operates within budgetary expectations and in compliance with the Firm's quality assurance protocols.

Sara Hendricks — Lead Associate, Privacy & Data Security Practice Group. Ms. Hendricks will be responsible for legal research, preparation of memoranda of law, coordination with expert consultants, and primary drafting of all filings, including the initial protest submission, responses to the Agency Report, and any motions or briefs. Ms. Hendricks has significant experience in administrative law and regulatory proceedings and has contributed to several successful bid protest matters during her tenure at the Firm.

Christopher Aiken — Working Associate, Healthcare & Life Sciences Practice Group. Mr. Aiken will assist with legal research, factual analysis, document review, and preparation of supporting exhibits and declarations. Mr. Aiken's experience in data-intensive regulatory matters will be particularly valuable in analyzing the procurement record and identifying scoring errors and procedural irregularities.

Other attorneys, paralegals, and support staff may be assigned to this engagement from time to time as the volume and nature of the work require. All such personnel will be billed at rates consistent with their experience levels and in accordance with the rate schedule set forth in Section 4.1 above. The Firm will exercise reasonable judgment in staffing decisions and will endeavor to maintain continuity in the engagement team throughout the course of the representation.

The Client may communicate with any member of the engagement team regarding this matter. Ian Blackwood will serve as the primary point of contact, and all significant strategic decisions and authorizations should be directed to or through Mr. Blackwood.

6. Client Responsibilities

The effectiveness of the Firm's representation depends in significant part on the Client's cooperation and active participation in the engagement. MTDC agrees to the following responsibilities:

(a) Document and Information Access. MTDC will provide the Firm with timely access to all relevant documents, records, data, and personnel necessary for effective representation. This includes, without limitation: the complete MTDC proposal submission under RFP No. IDOT-TS-2022-014, including all volumes, appendices, and attachments; cost and pricing data, including detailed cost buildups, labor rate calculations, and subcontractor pricing information; internal evaluation materials, notes, and correspondence related to the proposal effort; the debriefing letter dated July 22, 2022, and all enhanced debriefing materials received from IDOT on August 3, 2022; all correspondence with IDOT relating to the IITMP solicitation, including questions and answers, amendments, and clarification requests; and financial records related to MTDC's proposal development costs, which the Client has estimated at approximately $3.2 million in internal labor, consultant fees, and proposal production costs. These proposal development costs may form a basis for the recovery of bid and proposal preparation costs in the event the protest is sustained.

(b) Designated Contacts. MTDC agrees to designate Patricia Ng, General Counsel, as the primary in-house contact for day-to-day communications with the engagement team, including the exchange of documents, factual information, and routine procedural matters. Dr. Raymond Alcázar, Executive Director, will be available for strategic decisions, authorizations, and such other matters as require executive-level input or approval. MTDC may designate additional contacts in writing at any time.

(c) Timely Responsiveness. MTDC agrees to respond to the Firm's requests for information, documents, and decisions in a timely manner to avoid delays in the preparation and prosecution of the protest. Bid protest proceedings before IDOT are subject to strict procedural timelines, and the failure to meet filing deadlines may result in the waiver of protest grounds or the dismissal of the protest. The Firm will communicate deadlines and time-sensitive requests clearly and in advance, and the Client agrees to prioritize such requests accordingly.

7. Conflict of Interest Clearance

The Firm has conducted a comprehensive conflicts check in accordance with the Illinois Rules of Professional Conduct (specifically Rules 1.7 and 1.9) and the Firm's internal conflicts clearance procedures. Based on the information available to the Firm as of the date of this letter, the results of the conflicts check are as follows:

The Firm confirms that it does not currently represent, and has not within the past three years represented, Pinnacle Transit Solutions, Inc., the Illinois Department of Transportation, Northlake Signal Systems, Inc. (identified in publicly available information as a potential subcontractor on Pinnacle's IITMP proposal), or any other party that is adverse to MTDC in connection with Protest No. IDOT-BPC-2022-0047 or the underlying IITMP procurement.

The Firm does not currently represent any party in any matter that would create a conflict of interest under the Illinois Rules of Professional Conduct with respect to this engagement. The Firm has reviewed its current client roster and active matters and has identified no actual or potential conflicts that would impair the Firm's ability to represent MTDC zealously, independently, and in the Client's best interests.

In the event that a potential conflict of interest arises during the course of the engagement — whether as a result of new client engagements, the identification of additional parties to the protest or litigation, or other circumstances — the Firm will promptly notify the Client in writing and will take appropriate steps to address the conflict. Such steps may include seeking the Client's informed written consent to continued representation where the conflict is consentable under applicable rules, implementing ethical screens or other protective measures, or, if the conflict is not consentable or the Client declines to consent, withdrawing from the representation in accordance with the procedures set forth in Section 10 below.

8. Confidentiality and Privilege

All communications between MTDC and the Firm in connection with this engagement are protected by the attorney-client privilege and the work-product doctrine to the fullest extent permitted by applicable law. The Firm is committed to preserving the confidentiality of all Client information and to maintaining the integrity of the attorney-client relationship.

The Firm will maintain the confidentiality of all Client information in accordance with Rule 1.6 of the Illinois Rules of Professional Conduct and will not disclose such information to any third party without the Client's prior written authorization, except as required by law, court order, or regulatory mandate, or as necessary to carry out the representation. Disclosures necessary to carry out the representation include, without limitation, filings with IDOT's Office of Chief Counsel, the Administrative Review Board, or the Illinois Court of Claims, as well as communications with opposing parties or their counsel to the extent required by applicable procedural rules.

Information shared with expert consultants, including Linden Analytics Group, LLC, or with MTDC's independent auditor, Strickland & Associates CPAs, in connection with this matter will be subject to appropriate confidentiality and privilege-preservation protocols. The Firm will ensure that all such consultants and advisors execute non-disclosure agreements containing confidentiality provisions consistent with the protections afforded by the attorney-client privilege and the work-product doctrine. To the extent that expert consultants are retained at the direction of counsel for the purpose of assisting in the preparation of legal analysis and strategy, the Firm will take appropriate steps to preserve the applicability of the work-product doctrine to communications with and materials prepared by such consultants.

MTDC acknowledges that certain filings and submissions in the bid protest proceeding and any subsequent litigation before the Illinois Court of Claims may become part of the public record. The Firm will consult with the Client before making any filing that would result in the public disclosure of commercially sensitive, proprietary, or confidential Client information, and will take all reasonable steps to seek protective orders, redaction, or in camera review where appropriate to protect the Client's confidential information from unnecessary public disclosure.

9. Document Retention

The Firm will maintain files and documents related to this engagement in accordance with its standard document retention policies, a copy of which is available upon request. The Firm's retention period for closed matter files is generally seven (7) years from the date on which the matter is concluded, unless a longer retention period is required by applicable law, regulation, or ethical rule.

Upon conclusion of the engagement, the Firm will, upon the Client's written request, return original documents provided by the Client and provide copies of the Firm's work product, including memoranda of law, briefs, filings, and correspondence. The Firm's obligation to return files is subject to applicable retention obligations, including any legal hold or preservation obligations that may be in effect at the time of the request, and the Firm's right to retain copies of all files and work product for its own records, including for conflict-checking, malpractice defense, and archival purposes.

Electronic files related to this engagement will be maintained on the Firm's secure document management systems in accordance with the Firm's information security protocols, which include encryption, access controls, regular backups, and compliance with applicable data protection standards. The Firm will not store Client data on personal devices or unsecured platforms and will ensure that all members of the engagement team comply with the Firm's information security policies.

10. Termination of Engagement

Either party may terminate this engagement at any time upon written notice to the other party, subject to the following provisions:

(a) Termination by the Client. In the event that MTDC elects to terminate this engagement, the Client will remain responsible for payment of all professional fees and reimbursable expenses incurred through the date of termination, as well as any non-cancelable commitments that the Firm has made on the Client's behalf (such as expert consultant fees for work already authorized and commenced). The Firm will render a final invoice within thirty (30) days of the effective date of termination.

(b) Withdrawal by the Firm. In the event the Firm determines that withdrawal from the representation is required or appropriate under applicable ethical rules — including, without limitation, circumstances involving a conflict of interest that cannot be waived, a fundamental disagreement with the Client regarding strategy, the Client's failure to fulfill its obligations under this engagement letter, or non-payment of fees — the Firm will provide the Client with reasonable advance notice of its intention to withdraw and will take all steps necessary to protect the Client's interests during any transition to successor counsel. The Firm will seek leave to withdraw from any pending proceeding in accordance with applicable procedural rules and will not withdraw at a time or in a manner that would materially prejudice the Client's interests without prior consultation.

(c) Transition to Successor Counsel. Upon termination of this engagement, whether by the Client or by the Firm, the Firm will cooperate in the orderly transfer of the matter to successor counsel designated by MTDC. The Firm will promptly make available to successor counsel all files, documents, and work product to which the Client is entitled, and will provide reasonable assistance during the transition period to ensure continuity of representation.

11. Limitation of Scope

This engagement is limited to the matters described in Section 2 above. The Firm is not engaged to provide legal advice or services in connection with MTDC's general corporate governance, regulatory compliance, labor and employment matters, real estate transactions, tax planning, or operational activities, nor in connection with federal procurement matters, Federal Transit Administration grant compliance, or any other matter not directly related to the bid protest and any related Court of Claims litigation described herein.

The Firm's representation is focused exclusively on Protest No. IDOT-BPC-2022-0047 and the underlying procurement action under RFP No. IDOT-TS-2022-014. To the extent that issues arise in the course of the protest or litigation that touch upon areas outside the scope of this engagement — for example, questions of federal grant compliance or labor law — the Firm will so advise the Client and recommend that the Client seek appropriate specialized counsel.

Any expansion of the scope of this engagement will require a separate written agreement between the parties or a written amendment to this letter, executed by authorized representatives of both the Firm and the Client.

12. Governing Law and Dispute Resolution

This engagement letter shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to conflicts-of-law principles. The rights and obligations of the parties with respect to the attorney-client relationship shall be subject to the Illinois Rules of Professional Conduct as adopted and amended from time to time by the Supreme Court of Illinois.

In the event of any dispute between the Firm and the Client arising out of or relating to this engagement, including disputes concerning fees, billing, scope of representation, or the quality of legal services, the parties agree to first attempt to resolve the dispute through good-faith negotiations between Ian Blackwood and Patricia Ng (or their respective designees). If the dispute cannot be resolved through negotiations within thirty (30) days, the parties agree to submit the dispute to mediation in accordance with the dispute resolution procedures set forth in the Illinois Rules of Professional Conduct. If mediation does not resolve the dispute, either party may pursue binding arbitration or other remedies as permitted by applicable law and the Illinois Rules of Professional Conduct.

13. Acceptance and Execution

We ask that you indicate MTDC's acceptance of the terms and conditions set forth in this engagement letter by executing both copies of this letter in the space provided below and returning one fully executed copy to the Firm at the address set forth above. Upon execution by both parties, this letter will constitute the binding agreement between Calderwood & Harkness LLP and Metropolitan Transit Development Corp. governing the terms of this engagement.

This letter, together with any amendments agreed to in writing by both parties, constitutes the entire agreement between the Firm and the Client regarding the terms and conditions of this engagement. This letter supersedes any prior oral or written understandings, discussions, proposals, or agreements between the parties relating to the subject matter hereof. No modification or amendment of this letter shall be effective unless made in writing and signed by authorized representatives of both parties.

We are grateful for the opportunity to represent MTDC in this important matter and are prepared to commence work immediately upon receipt of the executed engagement letter. Please do not hesitate to contact Ian Blackwood at (312) 555-7244 or iblackwood@calderwoodharkness.com if you have any questions regarding the terms of this letter or the anticipated course of the proceedings.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Ian Blackwood Partner — Government Contracts / Banking & Finance Practice Group Calderwood & Harkness LLP 311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606 Telephone: (312) 555-7244

Email: iblackwood@calderwoodharkness.com

By: ________

Stephanie Okafor Partner — Banking & Finance Practice Group Calderwood & Harkness LLP 311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606 Telephone: (312) 555-7261

Email: sokafor@calderwoodharkness.com

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Metropolitan Transit Development Corp., hereby acknowledge receipt of this engagement letter, confirm that they have reviewed and understand its terms and conditions, and agree to be bound by the terms set forth herein.

AGREED AND ACCEPTED:

METROPOLITAN TRANSIT DEVELOPMENT CORP.

By: ________

Name: Dr. Raymond Alcázar

Title: Executive Director

Date: ________

By: ________

Name: Patricia Ng

Title: General Counsel

Date: ________

Metropolitan Transit Development Corp. 550 West Adams Street, 14th Floor Chicago, Illinois 60661

Enclosure: Calderwood & Harkness LLP Standard Terms of Engagement

cc (via internal distribution only): Stephanie Okafor, Partner — Calderwood & Harkness LLP Sara Hendricks, Associate — Calderwood & Harkness LLP Christopher Aiken, Associate — Calderwood & Harkness LLP

Timekeeper Category	Rate
Partner	$895 per hour
Associate	$525 per hour
Paralegal	$275 per hour

CALDERWOOD & HARKNESS LLP Attorneys at Law
311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606
Telephone: (312) 555-7200 Facsimile: (312) 555-7201 www.calderwoodharkness.com
August 5, 2022
VIA HAND DELIVERY AND ELECTRONIC MAIL
Dr. Raymond Alcázar, Executive Director Patricia Ng, General Counsel Metropolitan Transit Development Corp. 550 West Adams Street, 14th Floor Chicago, Illinois 60661
Re: Engagement of Calderwood & Harkness LLP — Agency-Level Bid Protest and Related Proceedings
Matter: Metropolitan Transit Development Corp. v. Illinois Department of Transportation; Protest No. IDOT-BPC-2022-0047
Solicitation: RFP No. IDOT-TS-2022-014, Illinois Integrated Transit Modernization Program (IITMP)
Calderwood & Harkness Matter No.: 1031-00003
Dear Dr. Alcázar and Ms. Ng:
1. Introduction and Purpose
Calderwood & Harkness LLP ("the Firm," "C&H," or "we") is pleased to confirm the engagement by Metropolitan Transit Development Corp. ("MTDC" or "the Client"), a unit of local government and public transit authority organized under the Illinois Local Mass Transit District Act, 70 ILCS 3610, to represent MTDC in connection with a bid protest challenging the award of the Illinois Integrated Transit Modernization Program contract under RFP No. IDOT-TS-2022-014, issued by the Illinois Department of Transportation ("IDOT"). We appreciate the confidence that MTDC has placed in the Firm and look forward to working with your team on this important matter.
This engagement follows the discussions between Ian Blackwood of this Firm and Patricia Ng, General Counsel of MTDC, on July 26 and August 1, 2022, during which the parties reviewed the facts and circumstances giving rise to this protest and discussed the terms under which the Firm would undertake the representation. This letter memorializes the agreement reached during those discussions and sets forth the terms and conditions governing the attorney-client relationship between Calderwood & Harkness LLP and Metropolitan Transit Development Corp. We ask that you review these terms carefully and, if they are acceptable, execute this letter in the space provided below and return one fully executed copy to the Firm at the address set forth above.
2. Scope of Representation
2.1 Agency-Level Bid Protest
The Firm will represent MTDC in the agency-level bid protest to be filed with the Office of Chief Counsel of the Illinois Department of Transportation ("IDOT"), challenging the award of the IITMP contract to Pinnacle Transit Solutions, Inc. ("Pinnacle"), a Delaware corporation headquartered in Indianapolis, Indiana. The IITMP contract, as awarded, is valued at approximately $247.6 million for the base performance period. The protest will be filed pursuant to the Illinois Procurement Code, 30 ILCS 500/20-80, and the implementing regulations set forth at 44 Ill. Admin. Code § 1.5530. Upon filing, the protest is expected to be assigned Protest Number IDOT-BPC-2022-0047, and all subsequent filings and correspondence will reference that number.
The scope of the Firm's representation in the agency-level protest phase encompasses, without limitation, the following:
(a) Preparation and filing of the initial protest submission and supporting memorandum of law, including all factual exhibits, declarations, and expert reports necessary to substantiate the grounds of protest;
(b) Participation in all proceedings before IDOT's Administrative Review Board, including prehearing conferences, status conferences, and any scheduling or procedural matters;
(c) Preparation of responses to the Agency Report, including any supplemental briefs or reply memoranda;
(d) Participation in any oral argument or evidentiary hearings conducted by the Administrative Review Board or its designee, including the preparation and presentation of witness testimony and cross-examination of opposing witnesses;
(e) Preparation and filing of all motions, oppositions to motions, and other procedural filings as may be necessary or appropriate during the course of the protest proceeding;
(f) All correspondence with IDOT's Office of Chief Counsel, the Administrative Review Board, Pinnacle Transit Solutions, Inc. (or its counsel), and any other parties or intervenors, to the extent such correspondence is necessary to advance the interests of MTDC; and
(g) Such other legal services as are reasonably necessary and incidental to the prosecution of the agency-level bid protest through the issuance of a final decision by the Administrative Review Board.
2.2 Potential Judicial Review — Illinois Court of Claims
In the event that the agency-level protest is denied, results in an adverse decision, or is otherwise resolved in a manner that MTDC considers unsatisfactory, the scope of this engagement extends to the evaluation of, and, upon separate written Client authorization, the filing and prosecution of an action for judicial review before the Illinois Court of Claims under the Illinois Court of Claims Act, 705 ILCS 505. The Firm will advise MTDC regarding the merits, risks, and costs associated with pursuing judicial review and will present a recommendation for the Client's consideration before any such action is commenced.
The Client acknowledges and agrees that escalation of this matter to the Illinois Court of Claims will constitute a materially expanded scope of work and will require separate, express written authorization from Dr. Raymond Alcázar, Executive Director, or his designee. Fee estimates applicable to the Court of Claims litigation phase are discussed in Section 4.4 below and will be updated at the time authorization is sought to account for any developments that have occurred during the agency-level protest phase.
The scope of this engagement does not include appellate proceedings beyond the Illinois Court of Claims. Should further appellate review become necessary or desirable — whether to the Illinois Appellate Court or the Illinois Supreme Court — the Firm and the Client will negotiate and enter into a separate written engagement agreement addressing the scope, fees, and terms applicable to such appellate proceedings.
2.3 Related Matters
In connection with the protest and any subsequent litigation, the Firm's scope of representation includes the following related activities:
(a) Expert Consultants and Accounting Advisors. Retention and coordination with expert consultants and accounting advisors as needed to support the protest and any subsequent litigation. The Firm anticipates retaining Linden Analytics Group, LLC, a procurement consulting firm, as an expert consultant for purposes of analyzing the source selection methodology, scoring evaluations, cost-realism analysis, and organizational conflict of interest issues. The terms and anticipated costs of this expert engagement are described in Section 4.4 below. The Firm may also retain additional experts as the need arises, subject to prior consultation with the Client regarding the scope and anticipated cost of any such retention.
(b) Coordination with MTDC Personnel. Coordination with MTDC's in-house legal department, specifically General Counsel Patricia Ng and such members of her staff as she may designate, on all substantive and procedural matters relating to the protest and any subsequent litigation. The Firm will also coordinate with MTDC's independent auditor, Strickland & Associates CPAs (Managing Partner: Howard Strickland, CPA), as reasonably required to obtain financial data, cost and pricing analyses, and other information necessary to support the protest or litigation.
(c) Exclusions. The scope of this engagement expressly excludes representation of MTDC in any separate regulatory, legislative, or federal proceedings that are not directly related to Protest No. IDOT-BPC-2022-0047 or the challenged award under RFP No. IDOT-TS-2022-014. Without limiting the foregoing, the Firm is not engaged to represent MTDC before the Federal Transit Administration, any congressional committee, any Illinois General Assembly committee, or in connection with any Freedom of Information Act requests not directly related to the protest.
3. Background of the Matter
The following summary is provided for engagement-letter context and to confirm the Firm's understanding of the factual background giving rise to this representation. It is based on information provided by the Client during the discussions referenced in Section 1 above and is subject to revision as the Firm's investigation and review of documents progresses.
On January 18, 2022, the Illinois Department of Transportation issued Request for Proposals No. IDOT-TS-2022-014 for the Illinois Integrated Transit Modernization Program ("IITMP"). The IITMP is a comprehensive initiative to modernize and integrate transit systems across the State of Illinois, encompassing signal and communications upgrades, fleet modernization, technology platform development, and infrastructure improvements. The solicitation contemplated a firm-fixed-price contract with cost-reimbursable line items for certain technology development tasks. The base performance period is seven years, with an anticipated period of performance from October 1, 2022, through September 30, 2029, and two three-year option periods, yielding a total maximum contract value of up to approximately $310 million over the full thirteen-year period.
Proposals were due on April 29, 2022. MTDC submitted a timely proposal valued at approximately $234.9 million for the base performance period. The proposal reflected MTDC's extensive experience in transit system operations, its established relationships with regional transit agencies, and its technical capabilities in transit modernization, developed over more than two decades of service as a public transit authority in the Chicago metropolitan area. MTDC invested approximately $3.2 million in internal labor, consultant fees, and proposal production costs in the preparation of its proposal.
On July 14, 2022, IDOT's Source Selection Authority, Deputy Secretary for Multimodal Transportation Angela Moreau, issued the Source Selection Decision Document ("SSDD") awarding the IITMP contract to Pinnacle Transit Solutions, Inc. Pinnacle's proposal was valued at approximately $247.6 million for the base performance period — approximately $12.7 million, or 5.4%, higher than MTDC's proposal.
MTDC received formal notification of its non-selection on July 22, 2022, accompanied by an abbreviated debriefing letter. An enhanced debriefing was conducted via video conference on August 3, 2022, by Contracting Officer Gerald Fassett, P.E. The debriefing revealed that MTDC outscored Pinnacle by thirty (30) points in the aggregate technical and management evaluation factors — MTDC received a composite score of 923 out of a possible 1,000 points, while Pinnacle received a composite score of 893 out of 1,000 points. Despite this significant scoring differential, the Source Selection Authority selected Pinnacle under a narrative best-value tradeoff rationale that, based on the information available to date, appears to lack adequate documentation and rational justification.
MTDC seeks to challenge the award on multiple grounds, which the Firm will develop and refine as it reviews the full procurement record. Anticipated grounds of protest include, without limitation:
(a) Scoring errors in the evaluation of MTDC's proposal and/or the evaluation of Pinnacle's proposal;
(b) Reliance by the Source Selection Authority on evaluation criteria and considerations not stated in the solicitation, in violation of the requirement that all significant evaluation factors be disclosed to offerors;
(c) Organizational conflict of interest affecting Pinnacle Transit Solutions, Inc. or one or more of its proposed subcontractors, including potential affiliations with members of the Source Selection Evaluation Board;
(d) Failure to conduct an adequate cost-realism analysis of Pinnacle's proposed pricing, which was $12.7 million higher than MTDC's proposal notwithstanding a lower technical score; and
(e) Procedural irregularities in the conduct of the source selection process, including potential deviations from IDOT's own procurement policies and the requirements of the Illinois Procurement Code.
The statutory deadline for filing the protest is rapidly approaching, and the Firm intends to commence work immediately upon execution of this engagement letter.
4. Fees and Billing Arrangements
4.1 Hourly Rates
The Firm will bill for professional services rendered in connection with this engagement on an hourly basis. The current hourly rates for the professionals who will be primarily assigned to this matter are as follows:
These rates reflect the Firm's standard rates for government contracts and procurement litigation matters as of the date of this letter. The Firm's hourly rates are subject to periodic adjustment, which typically occurs annually on January 1 of each calendar year. The Firm will provide the Client with not less than thirty (30) days' advance written notice of any rate adjustment, and the adjusted rates will apply to services rendered on or after the effective date of the adjustment. No rate adjustment will apply retroactively to services rendered prior to the effective date of the adjustment.
In the event that attorneys or paralegals other than those identified in Section 5 below are assigned to this matter, their services will be billed at rates consistent with their experience levels and in accordance with the rate schedule set forth above.
4.2 Expense Reimbursement
In addition to professional fees, MTDC will reimburse the Firm for reasonable out-of-pocket expenses incurred in connection with this engagement. Reimbursable expenses include, but are not limited to, the following:
(a) Filing fees and court costs;
(b) Copying, reproduction, and printing charges;
(c) Travel expenses, including airfare, lodging, ground transportation, and meals, incurred in connection with attendance at hearings, depositions, client meetings, and other matter-related activities, in each case at reasonable and customary rates;
(d) Courier, overnight delivery, and postage charges;
(e) Electronic legal research charges (e.g., Westlaw, Sundial Solutions);
(f) Expert and consultant fees, to the extent advanced by the Firm on behalf of the Client; and
(g) Such other out-of-pocket expenses as are reasonably necessary and directly attributable to the representation.
Expert consultant fees — specifically those associated with the anticipated engagement of Linden Analytics Group, LLC — will be billed separately as described in Section 4.4 below. The Firm will not incur any single expense in excess of $5,000 without prior approval from the Client, except for filing fees and expert consultant fees that have been previously authorized.
4.3 Billing Cycle and Payment Terms
The Firm will submit invoices to the Client on a monthly basis. Each invoice will be itemized by timekeeper, with narrative task descriptions sufficient to identify the nature of the work performed. Invoices will include a summary of professional fees, a detailed listing of reimbursable expenses, and a cumulative total of fees and expenses incurred to date.
Payment of each invoice is due within thirty (30) days of the invoice date. The Firm reserves the right to charge interest on overdue amounts at the rate of one percent (1%) per month, or the maximum rate permitted by applicable law, whichever is less, on any amount that remains unpaid more than thirty (30) days after the invoice date.
All invoices will reference Calderwood & Harkness Matter No. 1031-00003 and Protest No. IDOT-BPC-2022-0047. Invoices will be directed to the attention of Patricia Ng, General Counsel, at the Client's address noted above, or to such other billing contact as the Client may designate in writing. The Firm will provide invoices in both hard copy and electronic format (PDF) unless the Client requests otherwise.
4.4 Fee Estimates
The Firm has prepared the following fee estimates for budgeting purposes. These estimates are based on the Firm's experience with matters of comparable size and complexity and on its current understanding of the facts and circumstances of this engagement. These estimates are provided for informational and planning purposes only and do not constitute a cap, ceiling, or fixed fee. Actual fees and expenses will depend on the course of the proceedings, the complexity of the issues, the volume and nature of discovery, the conduct of opposing parties, and the extent of work required.
(a) Agency-Level Protest Phase. The Firm estimates total professional fees for the agency-level protest proceeding — from commencement of the engagement through the issuance of a final decision by IDOT's Administrative Review Board — in the range of approximately $350,000 to $550,000. This estimate assumes a contested proceeding involving an Agency Report, at least one round of supplemental briefing, and participation in an oral argument or evidentiary hearing. The estimate does not include expert consulting fees, which are addressed separately below. If the proceeding involves more extensive discovery, additional hearings, or intervenor participation, the actual fees may exceed the upper end of this range.
(b) Court of Claims Litigation Phase (if escalated). In the event the Client authorizes the Firm to pursue judicial review before the Illinois Court of Claims, the Firm estimates additional professional fees for the litigation phase in the range of approximately $750,000 to $1,200,000. This estimate assumes a proceeding involving motion practice, a trial or evidentiary hearing, and post-trial briefing, and does not include expert consulting fees. The Firm will provide an updated estimate at the time Client authorization for this phase is sought, based on the state of the record and the issues to be presented.
(c) Expert Consulting Fees. The Firm anticipates retaining Linden Analytics Group, LLC ("Linden") as an expert procurement consultant to support the protest and any subsequent litigation. Linden is a nationally recognized procurement consulting firm with extensive experience in transit procurement disputes. The Firm has obtained a preliminary fee proposal from Linden as follows:
(i) Protest Phase: A flat fee of $145,000 for expert analysis, report preparation, and testimony support during the agency-level protest proceeding.
(ii) Litigation Phase (if escalated): An additional $85,000 for expert support during Court of Claims litigation, including updated analysis, deposition preparation, and trial testimony.
Linden's fees will be billed through the Firm as a disbursement on the Firm's monthly invoices, or invoiced directly to MTDC by Linden pursuant to a separate engagement agreement, as the parties may agree. The Firm will execute a separate engagement letter with Linden containing appropriate confidentiality and privilege-preservation provisions, as discussed in Section 8 below.
The Firm will keep the Client informed of actual fees and expenses on an ongoing basis through its monthly invoices and will promptly notify the Client if it appears that actual fees may significantly exceed the estimates provided above.
4.5 Retainer.  No advance retainer is required at this time. The Firm reserves the right to request a retainer in the event the matter escalates to litigation before the Illinois Court of Claims or if other circumstances arise that, in the Firm's reasonable judgment, warrant the establishment of a retainer arrangement. Any retainer requested will be held in the Firm's client trust account in accordance with the Illinois Rules of Professional Conduct and will be applied against invoices as they become due.
5. Engagement Team
The following attorneys will be primarily responsible for this engagement:
Ian Blackwood — Responsible Partner, Government Contracts / Banking & Finance Practice Group. Mr. Blackwood has over eighteen years of experience representing public and private entities in transit procurement disputes, bid protests, and related administrative and judicial proceedings before state and federal agencies, including the Illinois Department of Transportation, the U.S. Government Accountability Office, and the U.S. Court of Federal Claims. Mr. Blackwood will serve as lead counsel and primary client contact for this engagement.
Stephanie Okafor — Billing Partner, Banking & Finance Practice Group. Ms. Okafor will oversee billing, budget management, and engagement administration. Ms. Okafor brings extensive experience in managing complex government contracts and commercial litigation matters and will ensure that the engagement operates within budgetary expectations and in compliance with the Firm's quality assurance protocols.
Sara Hendricks — Lead Associate, Privacy & Data Security Practice Group. Ms. Hendricks will be responsible for legal research, preparation of memoranda of law, coordination with expert consultants, and primary drafting of all filings, including the initial protest submission, responses to the Agency Report, and any motions or briefs. Ms. Hendricks has significant experience in administrative law and regulatory proceedings and has contributed to several successful bid protest matters during her tenure at the Firm.
Christopher Aiken — Working Associate, Healthcare & Life Sciences Practice Group. Mr. Aiken will assist with legal research, factual analysis, document review, and preparation of supporting exhibits and declarations. Mr. Aiken's experience in data-intensive regulatory matters will be particularly valuable in analyzing the procurement record and identifying scoring errors and procedural irregularities.
Other attorneys, paralegals, and support staff may be assigned to this engagement from time to time as the volume and nature of the work require. All such personnel will be billed at rates consistent with their experience levels and in accordance with the rate schedule set forth in Section 4.1 above. The Firm will exercise reasonable judgment in staffing decisions and will endeavor to maintain continuity in the engagement team throughout the course of the representation.
The Client may communicate with any member of the engagement team regarding this matter. Ian Blackwood will serve as the primary point of contact, and all significant strategic decisions and authorizations should be directed to or through Mr. Blackwood.
6. Client Responsibilities
The effectiveness of the Firm's representation depends in significant part on the Client's cooperation and active participation in the engagement. MTDC agrees to the following responsibilities:
(a) Document and Information Access. MTDC will provide the Firm with timely access to all relevant documents, records, data, and personnel necessary for effective representation. This includes, without limitation: the complete MTDC proposal submission under RFP No. IDOT-TS-2022-014, including all volumes, appendices, and attachments; cost and pricing data, including detailed cost buildups, labor rate calculations, and subcontractor pricing information; internal evaluation materials, notes, and correspondence related to the proposal effort; the debriefing letter dated July 22, 2022, and all enhanced debriefing materials received from IDOT on August 3, 2022; all correspondence with IDOT relating to the IITMP solicitation, including questions and answers, amendments, and clarification requests; and financial records related to MTDC's proposal development costs, which the Client has estimated at approximately $3.2 million in internal labor, consultant fees, and proposal production costs. These proposal development costs may form a basis for the recovery of bid and proposal preparation costs in the event the protest is sustained.
(b) Designated Contacts. MTDC agrees to designate Patricia Ng, General Counsel, as the primary in-house contact for day-to-day communications with the engagement team, including the exchange of documents, factual information, and routine procedural matters. Dr. Raymond Alcázar, Executive Director, will be available for strategic decisions, authorizations, and such other matters as require executive-level input or approval. MTDC may designate additional contacts in writing at any time.
(c) Timely Responsiveness. MTDC agrees to respond to the Firm's requests for information, documents, and decisions in a timely manner to avoid delays in the preparation and prosecution of the protest. Bid protest proceedings before IDOT are subject to strict procedural timelines, and the failure to meet filing deadlines may result in the waiver of protest grounds or the dismissal of the protest. The Firm will communicate deadlines and time-sensitive requests clearly and in advance, and the Client agrees to prioritize such requests accordingly.
7. Conflict of Interest Clearance
The Firm has conducted a comprehensive conflicts check in accordance with the Illinois Rules of Professional Conduct (specifically Rules 1.7 and 1.9) and the Firm's internal conflicts clearance procedures. Based on the information available to the Firm as of the date of this letter, the results of the conflicts check are as follows:
The Firm confirms that it does not currently represent, and has not within the past three years represented, Pinnacle Transit Solutions, Inc., the Illinois Department of Transportation, Northlake Signal Systems, Inc. (identified in publicly available information as a potential subcontractor on Pinnacle's IITMP proposal), or any other party that is adverse to MTDC in connection with Protest No. IDOT-BPC-2022-0047 or the underlying IITMP procurement.
The Firm does not currently represent any party in any matter that would create a conflict of interest under the Illinois Rules of Professional Conduct with respect to this engagement. The Firm has reviewed its current client roster and active matters and has identified no actual or potential conflicts that would impair the Firm's ability to represent MTDC zealously, independently, and in the Client's best interests.
In the event that a potential conflict of interest arises during the course of the engagement — whether as a result of new client engagements, the identification of additional parties to the protest or litigation, or other circumstances — the Firm will promptly notify the Client in writing and will take appropriate steps to address the conflict. Such steps may include seeking the Client's informed written consent to continued representation where the conflict is consentable under applicable rules, implementing ethical screens or other protective measures, or, if the conflict is not consentable or the Client declines to consent, withdrawing from the representation in accordance with the procedures set forth in Section 10 below.
8. Confidentiality and Privilege
All communications between MTDC and the Firm in connection with this engagement are protected by the attorney-client privilege and the work-product doctrine to the fullest extent permitted by applicable law. The Firm is committed to preserving the confidentiality of all Client information and to maintaining the integrity of the attorney-client relationship.
The Firm will maintain the confidentiality of all Client information in accordance with Rule 1.6 of the Illinois Rules of Professional Conduct and will not disclose such information to any third party without the Client's prior written authorization, except as required by law, court order, or regulatory mandate, or as necessary to carry out the representation. Disclosures necessary to carry out the representation include, without limitation, filings with IDOT's Office of Chief Counsel, the Administrative Review Board, or the Illinois Court of Claims, as well as communications with opposing parties or their counsel to the extent required by applicable procedural rules.
Information shared with expert consultants, including Linden Analytics Group, LLC, or with MTDC's independent auditor, Strickland & Associates CPAs, in connection with this matter will be subject to appropriate confidentiality and privilege-preservation protocols. The Firm will ensure that all such consultants and advisors execute non-disclosure agreements containing confidentiality provisions consistent with the protections afforded by the attorney-client privilege and the work-product doctrine. To the extent that expert consultants are retained at the direction of counsel for the purpose of assisting in the preparation of legal analysis and strategy, the Firm will take appropriate steps to preserve the applicability of the work-product doctrine to communications with and materials prepared by such consultants.
MTDC acknowledges that certain filings and submissions in the bid protest proceeding and any subsequent litigation before the Illinois Court of Claims may become part of the public record. The Firm will consult with the Client before making any filing that would result in the public disclosure of commercially sensitive, proprietary, or confidential Client information, and will take all reasonable steps to seek protective orders, redaction, or in camera review where appropriate to protect the Client's confidential information from unnecessary public disclosure.
9. Document Retention
The Firm will maintain files and documents related to this engagement in accordance with its standard document retention policies, a copy of which is available upon request. The Firm's retention period for closed matter files is generally seven (7) years from the date on which the matter is concluded, unless a longer retention period is required by applicable law, regulation, or ethical rule.
Upon conclusion of the engagement, the Firm will, upon the Client's written request, return original documents provided by the Client and provide copies of the Firm's work product, including memoranda of law, briefs, filings, and correspondence. The Firm's obligation to return files is subject to applicable retention obligations, including any legal hold or preservation obligations that may be in effect at the time of the request, and the Firm's right to retain copies of all files and work product for its own records, including for conflict-checking, malpractice defense, and archival purposes.
Electronic files related to this engagement will be maintained on the Firm's secure document management systems in accordance with the Firm's information security protocols, which include encryption, access controls, regular backups, and compliance with applicable data protection standards. The Firm will not store Client data on personal devices or unsecured platforms and will ensure that all members of the engagement team comply with the Firm's information security policies.
10. Termination of Engagement
Either party may terminate this engagement at any time upon written notice to the other party, subject to the following provisions:
(a) Termination by the Client. In the event that MTDC elects to terminate this engagement, the Client will remain responsible for payment of all professional fees and reimbursable expenses incurred through the date of termination, as well as any non-cancelable commitments that the Firm has made on the Client's behalf (such as expert consultant fees for work already authorized and commenced). The Firm will render a final invoice within thirty (30) days of the effective date of termination.
(b) Withdrawal by the Firm. In the event the Firm determines that withdrawal from the representation is required or appropriate under applicable ethical rules — including, without limitation, circumstances involving a conflict of interest that cannot be waived, a fundamental disagreement with the Client regarding strategy, the Client's failure to fulfill its obligations under this engagement letter, or non-payment of fees — the Firm will provide the Client with reasonable advance notice of its intention to withdraw and will take all steps necessary to protect the Client's interests during any transition to successor counsel. The Firm will seek leave to withdraw from any pending proceeding in accordance with applicable procedural rules and will not withdraw at a time or in a manner that would materially prejudice the Client's interests without prior consultation.
(c) Transition to Successor Counsel. Upon termination of this engagement, whether by the Client or by the Firm, the Firm will cooperate in the orderly transfer of the matter to successor counsel designated by MTDC. The Firm will promptly make available to successor counsel all files, documents, and work product to which the Client is entitled, and will provide reasonable assistance during the transition period to ensure continuity of representation.
11. Limitation of Scope
This engagement is limited to the matters described in Section 2 above. The Firm is not engaged to provide legal advice or services in connection with MTDC's general corporate governance, regulatory compliance, labor and employment matters, real estate transactions, tax planning, or operational activities, nor in connection with federal procurement matters, Federal Transit Administration grant compliance, or any other matter not directly related to the bid protest and any related Court of Claims litigation described herein.
The Firm's representation is focused exclusively on Protest No. IDOT-BPC-2022-0047 and the underlying procurement action under RFP No. IDOT-TS-2022-014. To the extent that issues arise in the course of the protest or litigation that touch upon areas outside the scope of this engagement — for example, questions of federal grant compliance or labor law — the Firm will so advise the Client and recommend that the Client seek appropriate specialized counsel.
Any expansion of the scope of this engagement will require a separate written agreement between the parties or a written amendment to this letter, executed by authorized representatives of both the Firm and the Client.
12. Governing Law and Dispute Resolution
This engagement letter shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to conflicts-of-law principles. The rights and obligations of the parties with respect to the attorney-client relationship shall be subject to the Illinois Rules of Professional Conduct as adopted and amended from time to time by the Supreme Court of Illinois.
In the event of any dispute between the Firm and the Client arising out of or relating to this engagement, including disputes concerning fees, billing, scope of representation, or the quality of legal services, the parties agree to first attempt to resolve the dispute through good-faith negotiations between Ian Blackwood and Patricia Ng (or their respective designees). If the dispute cannot be resolved through negotiations within thirty (30) days, the parties agree to submit the dispute to mediation in accordance with the dispute resolution procedures set forth in the Illinois Rules of Professional Conduct. If mediation does not resolve the dispute, either party may pursue binding arbitration or other remedies as permitted by applicable law and the Illinois Rules of Professional Conduct.
13. Acceptance and Execution
We ask that you indicate MTDC's acceptance of the terms and conditions set forth in this engagement letter by executing both copies of this letter in the space provided below and returning one fully executed copy to the Firm at the address set forth above. Upon execution by both parties, this letter will constitute the binding agreement between Calderwood & Harkness LLP and Metropolitan Transit Development Corp. governing the terms of this engagement.
This letter, together with any amendments agreed to in writing by both parties, constitutes the entire agreement between the Firm and the Client regarding the terms and conditions of this engagement. This letter supersedes any prior oral or written understandings, discussions, proposals, or agreements between the parties relating to the subject matter hereof. No modification or amendment of this letter shall be effective unless made in writing and signed by authorized representatives of both parties.
We are grateful for the opportunity to represent MTDC in this important matter and are prepared to commence work immediately upon receipt of the executed engagement letter. Please do not hesitate to contact Ian Blackwood at (312) 555-7244 or iblackwood@calderwoodharkness.com if you have any questions regarding the terms of this letter or the anticipated course of the proceedings.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Ian Blackwood Partner — Government Contracts / Banking & Finance Practice Group Calderwood & Harkness LLP 311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606 Telephone: (312) 555-7244
Email: iblackwood@calderwoodharkness.com
By: ________
Stephanie Okafor Partner — Banking & Finance Practice Group Calderwood & Harkness LLP 311 South Wacker Drive, Suite 4800 Chicago, Illinois 60606 Telephone: (312) 555-7261
Email: sokafor@calderwoodharkness.com
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Metropolitan Transit Development Corp., hereby acknowledge receipt of this engagement letter, confirm that they have reviewed and understand its terms and conditions, and agree to be bound by the terms set forth herein.
AGREED AND ACCEPTED:
METROPOLITAN TRANSIT DEVELOPMENT CORP.
By: ________
Name: Dr. Raymond Alcázar
Title: Executive Director
Date: ________
By: ________
Name: Patricia Ng
Title: General Counsel
Date: ________
Metropolitan Transit Development Corp. 550 West Adams Street, 14th Floor Chicago, Illinois 60661
Enclosure: Calderwood & Harkness LLP Standard Terms of Engagement
cc (via internal distribution only): Stephanie Okafor, Partner — Calderwood & Harkness LLP Sara Hendricks, Associate — Calderwood & Harkness LLP Christopher Aiken, Associate — Calderwood & Harkness LLP
Timekeeper Category | Rate
Partner | $895 per hour
Associate | $525 per hour
Paralegal | $275 per hour

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA HAND DELIVERY AND ELECTRONIC MAIL

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

AGREED AND ACCEPTED:

METROPOLITAN TRANSIT DEVELOPMENT CORP.

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