TSA Dispute Resolution
When the seller breaches. The buyer needs an advisor in the room.
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A TSA governance committee structure is the operating chassis that runs the contract from Day One through exit. Most deals default to a single steering committee and a single operational meeting. That fails. The structure that works is three tiered. Operational, steering, and executive, each with separate membership, decision rights, and cadence. The work sits inside the broader TSA negotiation design and runs from pre signing through the exit ramp.
A TSA produces three distinct types of work. Daily service operations between provider teams and Newco teams. Periodic contract management, including change requests, scope adjustments, and milestone reviews. Strategic decisions on extensions, terminations, escalated disputes, and material exceptions. These three workstreams require three different forums. Combining them into a single meeting produces a forum that is too senior for the operational issues and too operational for the strategic ones. Both layers underperform.
The operational committee handles service delivery, ticket volumes, SLA performance, recurring exceptions, and the rolling exit milestones inside each workstream. It meets weekly. Membership is service owner level on both sides. Decisions are operational. Anything that needs contract interpretation, scope amendment, or financial exposure beyond a threshold rolls up.
The steering committee handles contract management, change control, the exit roadmap, financial review, and any operational issue the lower tier could not resolve. It meets every two weeks during stable periods and weekly during cutover windows or active disputes. Membership is functional executive level. The seller TSA lead, the Newco CIO or COO, the buyer side advisor lead, and the program management office sit at this table.
The executive committee handles strategic decisions: extensions, terminations, material disputes, board level reporting, and the relationship across both organizations. It meets monthly or on demand. Membership is C suite or board level on both sides. The buyer side operating partner sits at this table. The seller divestiture lead and a senior seller executive sit on the other side. The agenda is short. The decisions are binding.
Every committee needs a charter. The charter names the committee, fixes its membership, defines its remit, specifies the quorum, sets the meeting cadence, lists the decisions it can make, and identifies what it must escalate. Without a written charter, the committee drifts toward the issues its members find most interesting. Decisions stall. Escalations multiply. The charter is what makes the structure run.
Decision rights matter most. The operational committee can approve normal course service changes inside the existing service catalog, route incidents, agree minor schedule adjustments inside an active workstream, and resolve disputes under a financial threshold. The steering committee can approve change requests within the contractually agreed change control budget, agree milestone date shifts within the exit ramp window, approve resource requests, and resolve disputes under a higher threshold. The executive committee approves anything above those thresholds.
The thresholds need to be set deliberately. A typical structure uses three financial tiers: operational committee resolves disputes under $25K of cumulative monthly exposure, steering committee resolves disputes under $250K, executive committee resolves everything else. Material breach claims and termination decisions always sit at the executive committee regardless of dollar size. Extension fee negotiations always sit at the executive committee. Schedule changes that affect the contractual exit date always sit at the executive committee.
The charter also defines the voting mechanism. Most committees operate by consensus, with documented dissent. Where consensus fails, the charter specifies what happens. The default escalation is to the next tier. The charter should never require unanimous agreement to make any decision. A single seller representative withholding consent on a routine operational issue cannot be allowed to paralyze the committee. The buyer side advisor watches for charter drafts that contain such structural vulnerabilities and rewrites them during the pre signing review.
The operating rhythm anchors the cadence. Weekly operational meetings. Biweekly steering. Monthly executive. Each tier needs an agenda template, a documented decision register, and an action tracker. The buyer side program management office owns the registers across all three tiers. The seller program office cooperates but does not lead. Where the seller controls the meeting minutes, the buyer loses control of the operating record. The minutes become the contract performance record in any future dispute.
The agenda template at each tier should be fixed for the first three months and then adjusted. The operational agenda includes service KPI review, incident review, exception list, exit milestone progress, upcoming change requests, and open action items. The steering agenda includes financial review (invoiced, paid, accrued, disputed), change request decisions, milestone risk review, exception escalations, and forward look. The executive agenda includes the program scorecard, the exit roadmap, strategic exceptions, and any cross organization escalations.
The meeting length scales with the workload. Operational meetings run 60 minutes. Steering runs 90 minutes. Executive runs 60 minutes if the lower tiers have done their work, longer if they have not. The discipline is to drive resolution at the lowest tier that has the authority. Where steering becomes a relitigation of operational issues, the operational tier is failing. Where executive becomes a debate on steering decisions, the steering tier is failing. The buyer side advisor monitors the escalation pattern and adjusts.
The operating rhythm interacts with the broader exit timeline. During cutover windows, every tier increases cadence. During stable periods, every tier returns to baseline. The cadence change is decided at the steering committee with executive approval. The work pairs with the monthly operating rhythm playbook.
Membership at each tier should match the decision rights. Operational committee members are the service tower leads on both sides plus the program office. Steering committee members are the functional executives who own each tower, the buyer side advisor, the seller TSA office lead, and the Newco PMO. Executive committee members are the senior buyer side principal (often the operating partner), the senior seller divestiture executive, and the Newco CEO or COO. Each tier includes a named program office representative who maintains continuity.
Membership turns over. Seller employees rotate out of the TSA office as the seller deprioritizes the deal. Newco hires its own leadership and the temporary seconded staff returns. The committee structure needs a named successor protocol. The charter should require 30 days notice for any membership change and a formal transition meeting with the predecessor. Without that discipline, continuity breaks and disputes lose their factual basis.
The buyer side advisor sits at the steering committee and frequently at the executive committee. The seat is named in the charter. The advisor is not a voting member but is recognized as a permanent participant on behalf of the buyer. The discipline of the advisor seat keeps the buyer side perspective constant across membership changes on both sides. The seller occasionally objects to the advisor seat at the executive committee. The buyer holds the line. The advisor seat is one of the items that pre signing review establishes before the seller has the leverage to refuse.
Membership diversity matters. The steering committee should include the Newco CFO or finance lead, the Newco IT lead, the Newco HR lead, and at least one operational subject matter expert. Where the steering committee becomes a forum of generalists, the technical issues get deferred and the operational integrity of the TSA degrades. The charter should name function specific seats, not just generic executive seats.
The governance committee structure is the first dispute resolution tier. Most TSAs require any contractual dispute to be raised first at the operational committee, then escalated to steering if unresolved within a defined window (typically 15 days), then escalated to executive if unresolved within another window (typically 30 days), then to formal dispute resolution if still unresolved. The structure becomes the funnel that filters out small operational frictions before they become contractual claims.
The escalation discipline matters more than the words in the contract. A buyer that escalates fast and documents the escalation receives faster resolution than a buyer that absorbs operational pain quietly. The buyer side advisor coaches the Newco program office on when to escalate. The criteria are not subjective: any recurring exception over a threshold, any service credit claim, any change request the seller refuses, any milestone slip, any invoice dispute over a threshold.
The escalation log is the dispute file. Every escalated item is logged with date, description, tier, status, and outcome. The log is reviewed at each steering committee. Where the seller resolves quickly, the log thins. Where the seller delays, the log thickens and the buyer has a documented pattern of seller behavior to present at the executive committee or, if needed, to formal dispute resolution. The discipline is consistent with the escalation procedures framework.
The interface with the formal dispute resolution clause is direct. Where executive committee fails to resolve a dispute within the contractually agreed window, the buyer initiates the formal mechanism (mediation, then arbitration or litigation). The committee structure does not replace the dispute resolution clause. It feeds it. A well run committee structure means most disputes never reach the formal mechanism. The ones that do arrive with a complete factual record and a documented attempt to resolve.
The governance structure must be operating on Day One. That means the charters are drafted, members are named, first meetings are scheduled, agenda templates are loaded, and the program office is staffed before the closing date. Buyers that wait until after Day One to stand up governance lose the first month of operating data and never recover the initiative. The seller defaults to its own internal structure and the buyer reacts.
The pre signing review is where the governance structure first appears on paper. The buyer side advisor drafts the committee charters, the escalation thresholds, the meeting cadence, and the advisor seat. These provisions live in the TSA itself or in a governance schedule appended to the TSA. The seller often pushes back on cadence and advisor seats. The buyer holds firm. The economics of the committee structure are tiny compared to the operating leverage it creates.
During the signing to Day One window, the Newco program office is built. The PMO lead is hired or named. The PMO infrastructure (action register, decision log, financial tracker, milestone tracker, escalation log) is built. The first 90 days of meeting minutes have a template. Members on both sides receive the charter. The first operational committee runs in week one after Day One. The first steering committee runs in week two. The first executive committee runs in week four.
Governance is delivered under a Fixed Fee or Portfolio Retainer engagement model through TSA dispute resolution and Day One Readiness. The buyer side discipline pays back inside the first quarter through faster issue resolution, cleaner financial control, and a documented operating record that holds up if any dispute ever does escalate. The work pairs with the service credit claims framework.
The cadence that keeps a TSA on track. Weekly, biweekly, monthly, and quarterly cycles.
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