Deeport: General Information and Confidential Instructions To The Deeport Negotiator

Harvard Business School 9-894-025
Rev. August 21, 1996
Deeport: General Information and Confidential

Instructions to the Deeport Negotiator
This case consists of two parts. The information in Part I is identical for all parties while the
information in Part II is confidential to your role only.
Part I: General Information for All Interested Parties
A newly formed national consortium, Deeport, is interested in building and operating a

deepwater port off the coast of the state of Seaborne. The consortium’s members, mostly drawn from
a variety of commercial enterprises, expect to participate in the financing, construction, and operation
of the port. Deeport has already engaged in some preliminary planning and design work, but cannot
proceed without a license issued by the Federal Licensing Agency (FLA).
The Project
The deepwater port proposed by Deeport would be the first of its kind on the East Coast. It
would be located in Seaborne at the estuary of the Banksedge River. Like the European seaport,
Rotterdam, it would accommodate a new generation of large cargo ships and super-tankers—ships
considered to be especially cost-effective in transporting raw materials and goods.
The deepwater port would be based on an artificial island of roughly nine square miles
created with fill from the dredging of the access channel. The island would be connected to the shore
by a network of highways, railroads, and pipelines. On-shore, an Air-Sea Cargo Center (ASCC)
would be developed, along with connections to existing highways, railroads and pipelines.
Substantial infrastructure would be needed to accommodate an intermodal freight terminal of this
sort. Most of the industrial plant and ancillary facilities would be located on the island.
While certain components of the port could be operational as early as five years after
construction begins, the port’s full development might not be completed until 20 years later. The
projected cost of the port would be roughly $4 billion (in inflation-adjusted dollars).
Copyright © 1994 by James K. Sebenius. Written by James K. Sebenius and David Lax. No part of this
publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or
by any means—electronic, mechanical, photocopying, recording, or otherwise—without permission.
1
This document is authorized for use only in Luis Bravo's MBA 3x3 Negociacion 2020 at Universidad Católica del Uruguay (UCU) from Jul 2020 to Dec 2020.
894-025 Deeport: General Information and Confidential Instructions to the Deeport Negotiator
The Parties
Deeport is excited about the prospect of a deepwater port on the East Coast. It believes such
a port could generate substantial profits within 10 years after operations begin. (Deeport bases its
projections on an independent study by Transport Associates, Inc., which concluded that such a port
could be economically viable under several possible scenarios.) In addition, Deeport believes the
local, regional, and national economies could benefit from a port which would dramatically reduce
the transport costs of imports and exports.
Several other parties, however, have an interest in the deepwater port as well. Each would
like to exert some influence over the terms of Deeport’s application for a license. Five of the most
powerful parties are described below:
The Environmental League: This coalition of environmental interest groups is generally

opposed to any “development” of coastal areas, especially development which might threaten fragile
ecosystems, add to air and water pollution, increase waste disposal problems, and increase health
and safety risks. The league is worried that Deeport’s proposed port would seriously damage the
environment in Seaborne and destroy the Banksedge River ecology.
Local Federation of Labor Unions (The Union): The Union is generally pleased that new
development is being considered for Seaborne. It anticipates the creation of hundreds of new jobs in
both the short run and long run. It will argue strongly, however, that these jobs should be reserved
for local union members. (This local federation is affiliated with the National Federation of Labor
Unions.)
Other Ports in the Region: The four other ports in the region—one is in Seaborne, the others
are not—are not pleased with Deeport’s proposal. They expect to lose a substantial amount of
business to the new port if it is constructed. They are extremely skeptical of Deeport’s claim that all
regional ports will share in the economic benefits generated by the new port.
Federal Department of Coastal Resources (DCR): This Cabinet level agency created during the
Reagan administration has a dual mandate: (1) to help realize the economic potential of the nation’s
coastal resources and (2) to preserve the environmental integrity of the nation’s coastal areas. The
DCR would like to see a deepwater port established somewhere on the East Coast and has the
resources and authority to subsidize such a port if it so chooses.
Governor Sherwood (of Seaborne): Governor Sherwood is in her second gubernatorial term
and is eager to promote development in her state. She is sensitive, however, to the needs of
organized labor, a powerful political constituency, and is therefore anxious to see that unions share
in the benefits of the port. Seaborne’s constitution permits a maximum of three consecutive four-year
terms for the Governor.
The Licensing Process
Deeport submitted an application just one month ago for FLA review. While aware of the
other parties’ interests in its proposal, Deeport expected little difficulty in the licensing phase of this
project.
The FLA, however, has recently been criticized by the press and by several Members of
Congress for failing to consider the “broader public interest” in its previous licensing determinations.
2
Deeport: General Information and Confidential Instructions to the Deeport Negotiator 894-025
Consequently, the FLA is now very sensitive to the level of political support surrounding each
application it reviews.
In this case, the FLA will not approve Deeport’s application unless it is clear that there is
substantial support for the project. It has therefore decided that it will approve Deeport’s proposal
only if Deeport can muster the support of at least four other parties. The FLA would prefer to see all
five parties support a Deeport application, but will grant a license even if only four lend their
support.
Thus, two parties, together, can exercise veto power over the project. In addition, Deeport
itself can effectively veto any proposal in this negotiation (since no other party is capable of initiating
the development). Finally, if it refuses financial support to the project, the Federal DCR can also
effectively veto any project that requires a federal loan or loan guarantee.
The Negotiation
Deeport has already submitted a license application to the FLA which proposes the following
resolution of the five issues (to be discussed in more detail below):
• a heavy industry mix

• compliance with environmental laws
• a $3 billion loan from the DCR
• no special preference for union workers
• no compensation payments to other ports.
Deeport is free to submit changes to its proposal at any time during the licensing review process, but
it is anxious to have its application approved as is.
In an attempt to muster support for its current proposal, Deeport has invited all the key
parties to a meeting at the Ritz-Carlton. Its stated objective for the meeting is to seek a “negotiated
agreement” among all parties to ensure unanimous support for its proposal. (Of course, Deeport
needs the support of only four of the other parties in order to secure a license. No project, however,
can go forward without Deeport’s support. The Fed DCR must be one of these four or five
supporters if the proposal is to include a federal loan; in other words, the non-DCR parties cannot
successfully “vote themselves a loan” if Fed DCR does not support such an agreement.)
Mechanics of the negotiation All five parties have agreed to attend the meeting, and are seated at
the negotiating table with Deeport. Each party has seen a copy of Deeport’s current FLA application.
The discussions may progress in any direction, but Deeport will be searching for a proposal
that will win enough votes for FLA approval. Anyone can suggest alternative proposals, but
Deeport’s concurrence is needed for any proposal to be adopted.
Although all parties have agreed to attend the meeting, they need not meet as a group
throughout the negotiating session. Parties can opt to walk away from the discussion if they so
desire. In addition, they are free to meet privately in smaller groups at any time.
Three required voting rounds are scheduled for the meeting. The first will take place 15
minutes after the meeting begins, the second after 40 minutes of discussion, and the third after 1¼
hours of discussion. At each of these scheduled votes, Deeport must put before the group a full
3
package proposal addressing all the issues. Note that the required votes are not issue-by-issue,
but on a single Deeport-proposed package.
Additional votes may be taken at any point during the meeting, but the three scheduled
voting rounds must take place. (If a project receives sufficient votes for FLA approval in the first or
second voting round, however, the parties may choose to forgo subsequent voting rounds.) Apart
from these required votes, informal (but binding) votes can be called by any party. Apart from
Deeport’s obligation to propose packages for the three scheduled votes (and the parties’ obligations
to cast votes), the choice of negotiating and voting processes is entirely up to the participants as a
group. (Given the short time frame for the negotiations, some care in time and process planning may
be useful.)
Once a proposal encompassing all the issues is passed in required or other voting rounds
(i.e., it receives supporting votes from at least four of the five other parties, in addition to having the
support of Deeport), the votes are binding and parties cannot renege on their promise of support.1
The parties remain free, however, to explore possible “improvements” in the agreement which either
benefit the supporting parties or entice the non-supporting party to vote for the agreement. But
proposed improvements must be unanimously supported by the parties to the original agreement;
otherwise the original agreement stands.
Negotiations must stop at the end of the meeting. If no agreement is reached (i.e., if no
proposal receives at least four votes plus the support of Deeport), the FLA will reject Deeport’s
application for a license.
The Issues
Preliminary discussions have taken place between Deeport and representatives of the five
key parties. As a result of these conversations, Deeport has identified five issues which seem to be of
concern to all or some of the parties. A general description of the issues is provided below; the
individual concerns of the parties are summarized separately in their confidential instructions.
Issue #1: Industry Mix
The deepwater port itself is only part of the development Deeport has planned. With the
construction of the port will come a variety of industries seeking access to the port. These industries
will either lease or purchase land, both on the artificial island and on-shore. The bulk of Deeport’s
revenues associated with the new port will flow from these real estate ventures.
Deeport has initially requested complete freedom in developing the port lands. This means
that it could develop (or encourage) any type of industry or plant, including oil refineries, steel mills,
or a resource recovery plant. The environmentalists, however, have argued that limits should be
placed on the industry mix allowed in the area: they are asking that only relatively “light” and
“clean” industries, such as certain high-tech production plants, be allowed.
As a result of this controversy, three options have surfaced in the discussions between
Deeport and the environmentalists.
1To be binding, a vote must be on a "package" which addresses all of the issues.
4
1. Light—would be limited to only “clean” light industries such as high-tech

production industries; “dirty” plants would be excluded.
2. Medium—would exclude the “most dirty” heavy industries, but would allow a
limited number of plants including food processing plants.
3. Primarily heavy—no industry would be excluded, but the mix would probably
be dominated by oil refineries, petrochemical plants, steel production plants, and
a resource recovery plant; these are the industries which would benefit most
from construction of a deepwater port.
Air pollution, water pollution, and waste disposal would vary with the industry mix
selected. But, regardless of the “industry mix” in the project, all industries would conform to existing
federal and state pollution regulations.
Issue #2: Ecological Impact
If the present Deeport plan is enacted, the dredging of the access channel, the creation of the
island, and general construction activity at the port could disrupt existing “ecologically delicate”
areas both on and off shore. Damage would most likely include the alteration of nesting habitats, a
reduction in natural tidal flushing, the destruction of wetlands, land erosion, adverse effects on
existing fisheries, and subsurface geological disruption (caused by drilling and dredging).
Deeport admits that the new deepwater port could cause some damage to the ecological
setting, but also claims that such damage would be within the limits defined by federal and state
regulations. Environmentalists, however, counter that the damage would be excessive, and that
Deeport has no right to disrupt the area.
In light of these arguments, three outcomes are possible.
1. Compliance with legal standards for environmental protection: This would

involve unremedied disruption to the ecological balance. Fish and animal
nesting habitats would be altered (or effectively destroyed), valuable wetlands
would disappear, water temperatures and currents would change, and certain
types of aquatic flora and fauna would be destroyed. All this would take place
within Federal and State impact mitigation guidelines.
2. Maintenance and repair of the ecology, beyond compliance: This would involve
special precautions to divert construction and dredging activity (where possible)
away from the most ecologically delicate areas. In addition, it would include the
relocation or recreation of habitats destroyed by unavoidable dredging and
construction.
3. Improvement of the ecological setting beyond maintenance and repair: Like the
previous option, this would include special efforts to by-pass delicate areas
during construction and dredging. But it would also include a variety of other
affirmative efforts to improve the local environment. Environmentalists propose
on-going fisheries management and wildlife protection programs, the creation of
new and larger protected wetland areas, an active anti-erosion program, and the
construction and operation of a small waste treatment facility to treat effluents
flowing into the estuary from the Banksedge River.
5
Issue #3: Employment Rules
Construction and operation of the deepwater port is expected to generate hundreds of new
jobs in the community in both the short run and the long run. These jobs can be distributed among
potential employees in one of four ways.
1. Unlimited union preference: Jobs would be reserved for local union workers,
where appropriate. This would enable local union members to claim as large a
share of the new jobs as possible.
2. Union Quota of 2:1: Limited preference could be given to union members where
the ratio of union to non-union workers would not fall below 2 to 1.
3. Union Quota of 1:1: The ratio of union to non-union workers would not be less
than 1 to 1.
4. No union preference (unrestricted hiring practices): Deeport would be free to

hire whomever it chooses. In this scenario, most workers would probably be
non-union workers, enabling Deeport to maintain the maximum degree of labor
flexibility and to reduce expected wage costs. In addition, many of the new
workers might be drawn from outside the state.
Issue #4: Federal Loans
The newly created federal Department of Coastal Resources (DCR) has a mandate to
promote economic use of coastal areas while preserving the environmental integrity of these areas. It
can provide a substantial loan (or guarantee private borrowing) to help cover the construction and
operating costs of the port over the next 20 years. DCR is also interested in seeing the port
developed, but has implied that there will be strings attached if it lends money for the project.
Deeport estimates that the total cost of the project will be $4 billion. It has requested $3
billion in guaranteed loans, although three other options are possible.
1. No federal loan.
2. A $1 billion loan over the 20 year period.
3. A $2 billion loan over the next 20 years.
4. A $3 billion loan over the next 20 years.
Issue #5: Compensation to Other Ports in the Region
Deeport believes the new port will generate significant economic growth both in and outside
the state. It contends that the entire regional economy will be improved by the port, and that the
other four major ports on the Eastern seaboard will benefit from this growth as well.
The other ports, however, expect to suffer a substantial loss of traffic once the new port
begins operation. Based on a consultant’s in-depth analysis, they have estimated the present
(discounted) value of their losses to be roughly $600 million. These four ports argue that they should
be compensated for their prospective losses.
In light of this conflict, five possible options are up for consideration. Deeport could provide:
1. $600 million (or 100% compensation) to the other ports.
6

5. No compensation.
If any of the first four options is agreed, this money would be paid by Deeport to the other
ports at the outset of the project. (In particular, Fed DCR cannot provide compensation to the other
ports; any such payments must come from Deeport.) Though the ports would be free to spend this
money as they wished, they could use these funds to make changes in their design which would
enable them to serve more effectively as feeder ports for the new deepwater port.
Part II: Confidential Instructions to the Deeport Negotiator Only
This is obviously a very important project to us. It has tremendous profit potential,
particularly if we can obtain approval on our current license application. Yet the project also has the
potential to generate significant economic benefits for Seaborne, the region, and the entire nation.
In our minds, the public benefits of a deepwater port are so obvious that we are surprised the
FLA is hedging on our application. Unfortunately, as a result of political pressure from the FLA, we
are forced to negotiate with parties who have no real business interfering in our affairs. The
application we have recently submitted to the FLA describes the most attractive project possible.
Clearly we want to protect it by keeping our costs low and by securing substantial federal assistance.
Scoring In order to help you plan your negotiating strategy, we have constructed a special 110-
point “scoring” scheme to illustrate which negotiable issues are of greatest and least importance to
us. Under this scheme, you can score up to 110 points during this negotiation, depending upon how
each of the five issues (and the unanimity bonus) is resolved. The most preferred set of outcomes is
worth 110 points to us; the least preferred is worth zero. Compromising on one or more issues will
earn somewhere between zero and 110 points.
Dealing with real issues in terms of “points” may seem artificial and abstract. But for the
purposes of this negotiation, it enables us to combine our several interests—low costs, freedom from
unions, federal support, etc.—into a single “currency.” This, in turn, allows us to explicitly compare
the potential gains and losses associated with different tradeoffs and packages.
In addition, the “points” allow us to compare the value of negotiated agreements to our
alternatives. For example, we should pursue this particular project only if we can secure an
agreement worth at least 45 points to us. Any agreement worth fewer than 45 points would not be
worth pursuing: we would be better off exploring alternative investment opportunities (such as the
new international airport being considered for the Pacific Northwest).
Your task is to build support for the port, while minimizing the restrictions placed on us.
Your success will be gauged by your point total; try to earn as many points as possible in this
negotiation. This is not being greedy—it simply means that we want to further our legitimate
interests as far as possible. We can support agreements that yield us at least 45 points of “value,” but
that is the bare minimum we can accept since it represents our assessment of the value to us of our
best alternative to negotiated agreement on this project. We certainly hope you will do much better.
Federal loan This is by far the most important issue to us. Up until a few months ago, we thought
the DCR would be more than happy to help finance a deepwater port on the East Coast. DCR
7
officials had initially hinted that they would consider underwriting 75% of our costs (or $3 billion); in
fact, lower-level officials at DCR gave us a tentative commitment to this amount, then later seemed to
back away.
Since then, DCR officials have downplayed their original enthusiasm and have hinted that
they will not provide financial support unless certain conditions are met. Unfortunately, we do not
yet know what these conditions are.
We have requested a $3 billion loan (at an interest rate of 9%) which will secure the
investments of our consortium members, increase our ability to attract other investors, and ensure
the long-run success of the project. At root, then, the financial stability of the project is directly
proportional to the size of the federal loan. The federal money would allow us to pay our bills in the
early stages, and to protect our credit status if we need to borrow private funds at a later date. In
addition, once the federal government has poured over a billion dollars into a project, it is unlikely to
abandon that project.
The entire project is expected to cost $4 billion (present value). At present, we have firm
commitments from private investors which should generate at least $1 billion for the project. If
pressed, we could probably muster up to $2 billion should the DCR offer us only $2 billion in loans.
Should DCR try to offer us only $1 billion, however, we could be in serious trouble. There
are not enough private investors currently interested in contributing to our project to make up the
difference. If forced to raise $3 billion, we would be faced with the prospect of trying to borrow the
third billion at exorbitant rates, probably equivalent to twice the market rate of interest. In that case,
we might still be able to continue with the project, but only by curtailing certain amenities.
If we received no federal financial assistance, the project would be in very serious jeopardy.
Though in theory we might be able to muster the $4 billion to move ahead, we could not afford to
concede on any issues up for discussion today. Consequently, we would probably NOT have
enough political support to win FLA approval.
The DCR is a new agency looking to establish its institutional credibility. Its explicit
purpose, as stated in the DCR charter, is to promote economic programs in coastal areas. Because a
large, successful program is just what DCR officials are looking for to showcase their congressional
mandate, we can assume that they want to help us almost as much as we want their assistance. If we
play our cards right, the folks at the DCR should be begging us to allow them to lend us money.
We have therefore assigned the following points to this issue:
• $3 billion guaranteed loan = 35 points

• No loan = 0 points
The distribution of points reflects our belief that the first and second billion dollars of the loan are far
more important than the third billion.
Compensation to other ports Obviously, we are opposed to paying compensation to other ports.
These four other ports have submitted wildly unreasonable estimates of their anticipated losses.
They claim they will lose roughly $600 million after our port begins operating, but in our present
estimation it is not at all clear that they will be hurt by our project. Though some of their traffic may
be diverted to our new port, they can in turn attract new traffic as “feeder ports.” Furthermore, the
8
success of our port could “ripple” through the other ports, stimulating the entire U.S. shipping
industry, especially on the East Coast.
We are also afraid that a dangerous precedent could be set if we agree to compensate our
“competitors.” Will we eventually have to compensate every party who loses some business to us?
In short, we find the entire notion of compensation to other ports antithetical to the American way of
doing business. Our economic system is built on competition, not on the ridiculous notion that those
who succeed in business should pay off those who fail!
We would like to avoid setting a precedent of paying compensation. The first million dollars
is therefore more costly to us than the additional increments. Given the danger of setting a precedent
and the cost of actual compensation payments should they be necessary, we have assigned the
following range of points to the options under this issue:
• $600 million compensation = 0 points

• No compensation = 23 points
Employment rules (distribution of jobs) We are strongly opposed to any restrictions on our
hiring practices. In order to be a viable economic enterprise we will need the utmost flexibility; we
cannot go into this project with our hands tied behind our backs. No one person or organization
should be allowed to dictate who we hire.
We hope to be free to hire the best people for the construction and operation of the port. In
addition, we would like to keep unions out of the port for at least a few years so that we can install
labor-saving technology (technology that the unions are sure to oppose). Apparently the Federation
of Labor Unions wants us to guarantee all new jobs to union workers.
In the deepwater port project, we plan to treat our workers well. Fifty years ago, the labor
movement had a purpose in this country: to curb the abuses of management. But that is rarely, if
ever, necessary in this day and age; it will certainly not be a problem in our case. We will have very
progressive labor policies.
We have assigned the following points to this issues:
• unlimited union preference = 0 points

• union quota of 2:1 = 5 points
• union quota of 1:1 = 10 points
• no union preference = 17 points
The point schedule reflects, in part, anticipated increases in wage costs associated with
different levels of union preference. In addition, it reflects our fear that any union preference is
dangerous, because once unions are allowed on site, they will block our attempts to introduce labor-
saving techniques (such as large-scale containerization) into the port.
Industry mix This is a difficult issue for us to analyze. We are not arguing for any fixed
combination of industries over another; rather, we are arguing for the freedom to develop any
combination of industries we choose. Under this scenario, we could develop those industries most
likely to generate revenues for the region, those most likely to resist fluctuations in the economy, and,
obviously, those most likely to benefit from access to a deepwater port.
9
The environmentalists, however, would have us limit our industry mix to a narrow base of
light “all clean” industries. This could prevent us from pursuing the most profitable industry mixes
and could make the local economy highly susceptible to fluctuations in the business cycle. Though
there is tremendous uncertainty in these forecasts, our analysts suggest we could forgo roughly $200
million to $375 million in potential profits if forced to limit our mix.
It is difficult for us to understand the basis for the environmentalists’ position on this issue.
We have no intention of allowing any industry associated with the port to disobey the existing
environmental rules and regulations. We do not, therefore, understand the distinction between light
“clean” and heavy “dirty” industries; we believe that once equipped with pollution control devices,
all industries are clean.
We have therefore assigned the following points to each of the industry mix options up for
discussion:
• light = 0 points
• medium = 8 points
• heavy = 14 points
We have assigned the “medium” option slightly more than half the points possible, because
it will allow us at least to include fairly profitable food processing enterprises. Of course,
competition for space at the port would be greater if there were no limitations on industry mix, but
we could at least make reasonable profits under the medium, clean/dirty compromise.
Ecological impact Common sense suggests that any time you build anything, you are probably
going to disrupt the ecological balance to some degree, at least for awhile. We have tried to be
sensitive to environmental concerns by planning construction and dredging so as to avoid
unnecessary disruption. We have also been sensitive to existing federal and state standards. We do
not propose to break the law under any option.
Losing this issue could cost us a significant amount of money, since it could force us to alter
our dredging and construction plans in very costly ways. Further, the environmentalists’ “wish list”
could cost us up to $280 million if we do all they ask to improve the ecological setting.
In addition to the monetary concerns, we have some ideological feelings about this issue.
Environmentalists are asking us to foot the bill for “improvements” which, if appropriate, are
properly the responsibility of the government, not the business community.
On the other hand, we believe that the Banksedge River is worthy of some protection. It
would be a shame if the shellfish and fishing industries were destroyed. Thus, while we do not think
it is our responsibility to improve the river’s ecology, we are less adamant about this issue than we
are about the others.
In light of these concerns we have assigned the following points to this issue:
• compliance = 11 points
• maintain/repair = 7 points
• improve = 0 points
The points reflect the fact that the improvements would be more than twice as costly as maintaining
and repairing the ecological setting.
10
Unanimity bonus It has been rumored that certain parties will take legal action to block
development of the port if the FLA approves a proposal which these parties did not support. This
could lead to aggravating delays, undesirable publicity, and potentially exorbitant legal fees. The
only way to minimize the possibility of such suits would be to secure unanimous agreement. That is,
the FLA will agree to a proposal which four of the other five parties support, but the proposal would
obviously be much more stable if it were supported by everyone concerned.
Given our interest in the long-run success of the port, we have therefore assigned 10 bonus
points to any proposal which secures the support of all other parties in this negotiation. This reflects
the savings in legal costs and delays which could otherwise be imposed on us by dissenting parties.
• All five other parties agree to the terms of the port = 10 points
• Four of the five other parties agree = 0 points
• No agreement is reached = 0 points
A one-page scoring sheet has been attached which summarizes the points we have assigned
to each of the five issues. Do not take these points lightly. They reflect deeply felt and carefully
analyzed interests. In negotiating, you should treat each and every point as if it represents millions
of dollars of your own money. Remember that the value of no-deal to us is 45 points. We trust that
you can do much, much better. Do remember, though, that this information is CONFIDENTIAL!
You cannot show your scoring sheet to anyone! You may convey some or all of the scoring
information verbally to any other party, but you should not let anyone see your scoring sheet.
Good luck. We are confident that you will negotiate an extremely valuable agreement for us.
11
[BLANK PAGE]
12
DEEPORT WORKSHEET AND RESULTS

Your Name: _______________________________ Your Pairing (Team) No.: ________________
Your participant no.: _________________________
Was an agreement reached? (circle): YES NO*
If there was agreement, was support for it unanimous? (circle): YES NO
If support was not unanimous, who did NOT vote for it? (circle below)
UNIONS ENVIRONMENTALISTS FED DCR GOVERNOR OTHER PORTS
Issue/Option ...................................................... Total 1st 2nd 3rd Final

Points Vote Vote Vote Results
Terms
A. Industry Mix (Circle)
1. heavy ..................................................... 14 A1 (14) Points
2. medium .................................................. 8 A2 (8)
3. light ........................................................ 0 A3 (0) ______
B. Ecological Impact
1. compliance ............................................ 11 B1 (11)
2. maintain and repair ............................... . 7 B2 (7)
3. improve ................................................. 0 B3 (0) ______
C. Employment Rules
1. unlimited union preference ................... . 0 C1 (0)
2. union quota of 2:1 ................................. . 5 C2 (5)
3. union quota of 1:1 ................................. . 10 C3 (10) ______
4. no union preference ............................... 17 C4 (17)
D. Federal Loan
1. $3 billion ................................................. 35 D1 (35)
2. $2 billion ................................................. 29 D2 (29)
3. $1 billion ................................................. 20 D3 (20) ______
4. no federal loan ...................................... . 0 D4 (0)
E. Compensation to other ports
1. $600 million ........................................... 0 E1 (0)
2. $450 million ........................................... 5 E2 (5)
3. $300 million ........................................... 10 E3 (10) ______
4. $150 million ........................................... 15 E4 (15)
5. no compensation ................................... 23 E5 (23)
F. Unanimity bonus
1. if unanimous .......................................... 10 F1 (10)
2. if not unanimous .................................... 0 F2 (0) ______
TOTAL Final*
Total ______
VOTING RECORD: (circle) PARTY First Vote Second Vote Third Vote
Deeport Y N Y N Y N
Union Y N Y N Y N
Fed DCR Y N Y N Y N
Environmentalists Y N Y N Y N
Governor Y N Y N Y N
Other Ports Y N Y N Y N
Total ___ ___ ___ ___ ___ ___
*Score if No Deal: 45
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Deeport: General Information and Confidential Instructions To The Deeport Negotiator

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Deeport: General Information and Confidential Instructions To The Deeport Negotiator

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Harvard Business School 9-894-025

Rev. August 21, 1996

Deeport: General Information and Confidential

Part I: General Information for All Interested Parties

A newly formed national consortium, Deeport, is interested in building and operating a

The Environmental League: This coalition of environmental interest groups is generally

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• a heavy industry mix

Issue #1: Industry Mix

1. Light—would be limited to only “clean” light industries such as high-tech

Issue #2: Ecological Impact

In light of these arguments, three outcomes are possible.

1. Compliance with legal standards for environmental protection: This would

Issue #3: Employment Rules

4. No union preference (unrestricted hiring practices): Deeport would be free to

Issue #4: Federal Loans

Issue #5: Compensation to Other Ports in the Region

1. $600 million (or 100% compensation) to the other ports.

2. $450 million (or 75% compensation) to the other ports.

Part II: Confidential Instructions to the Deeport Negotiator Only

We have therefore assigned the following points to this issue:

• $3 billion guaranteed loan = 35 points

• $600 million compensation = 0 points

We have assigned the following points to this issues:

• unlimited union preference = 0 points

DEEPORT WORKSHEET AND RESULTS

Issue/Option ...................................................... Total 1st 2nd 3rd Final

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