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As most people will be aware, a lot of my work is focused on compliant and successful solution procurement, which always involves an agreed contract. Now, I am far from Rumpole Of The Bailey, however in my three decades in socialhousing ICT, I have had a lot of exposure to contracts and picked up a lot of experiences and gotcha’s.
CCS/DAS and other framework procurements generally come with a ‘default’ contract option, ‘The Model Services Contract’, which comes with yellow optional clauses. Clearly by default this is drafted broadly in favour of the contracting authority and so is not every suppliers cup of Earl Gray. If suppliers are on the framework, they know that the expectation will be to use it. So, its actually very odd for it not to be used.
Two other alternatives can also be used :-
• The Contracting Body proposes their own contract (likely to be heavily weighted in the favour of the client)
• The Contracting Body asks the supplier to provide their contract (likely to be heavily weighted in favour of the supplier)
Both of these would be generally provided allowing ‘red line’ points to be challenged, generally via clarifications. In some cases there might be quite a lot of red ink expended here. The types of challenges often will help set a view of the supplier, or maybe the appetite for risk on the client side. Its important to think of this in a proportionate manner. If we are spending £2.6m we might be wanting a lot of contract detail. However, signing up to a monthly subscription of £220 per month for a much smaller purchase, we might be happy to accept five pages of a supplier contract.
Whatever the size of the above, my first takeaway is make sure its properly read (5 pages or 500 !), before signing up. If you are baffled by any legal jargon, get help or engage a friendly legal professional, for English/Welsh, Scottish, Northern Irish or Republic Of Ireland legal jurisdictions. If I am ever engaged to assist with a failing project or implementation, one of the first documents I ask for is the contract & SOW (The Statement Of Work). Not too uncommonly, that contract is based on a suppliers and has little in the way of teeth for poor or failed delivery, or limited ability to terminate without incurring often excessive costs. My second takeaway is keep an eye on that. Non-delivery needs to be addressed in the contract and provide safeguards.
There is clearly a big and important legal difference between ‘best endeavours’, ‘reasonable endeavours’ etc. In most contracts, the word ‘Reasonable’ does lots of heavy lifting and actually is the logical bridge word, when leveraged to help us share the risk between Client and Contractor.
Finally, a couple of other takeaways I have recently come across.
Clauses invoked when organisations are renamed, form groups, split from groups, or maybe (as ALMOs have recently) go back into parent councils, can often be restrictive or punitive. These may force a re-contracting exercise, which may mean that a strong contract could be potentially replaced by a weak one for the Contracting Body. Clearly in these cases, this type of clause having to be invoked, may well allow the organisation at that point to look again at the marketplace, or their procurement team might well (try to) force them to. Contracts will generally be expected to run for a set period with extension breaks. EG 5+2+2+2+2, to allow breaks at year 5, 7, 9 etc, but the contract to run for up to 13 years before another (forced) procurement.
Contracts particularly for Cloud/browser applications are often based on number of user seats or set numbers of ‘units’. These being homes/properties, or maybe assets in general. These may change at any point as disposals occur and new developments added and contracts and licensing must flexibly support this. One form of contract I have recently come across, used a clause which casually invoked a ‘reset’ of the procurement / contract term, where unit count was adjusted by any amount. So potentially if during a 5 year contract period, 40 units are added in year 4, the contract now resets to run for 9 years. I seriously doubt if this would satisfy formal 2025 procurement rules, yet if left in a contract can potentially cause you a future world of pain.
I hope this post has provided a bit of food for thought. If I manage it, I would hope to join up with one of my favourite legal experts and do something in-depth later in the Spring.
In the meantime, do share your favourite experience of contract tosh or most ridiculous negotiations, via comment or DM 👍.
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Related Post: Does your organisation purposely 'Warm Up The Market' for more effective procurements?
I would be pleased to connect with you on LinkedIn - http://uk.linkedin.com/in/tonysmiththathousingitguy Message me with any issues or queries, you would like to be explored in this blog. We generally receive a couple of suggestions each month.
Stereophonic Space Sound Unlimited - Contract Killer .
(c) Tony Smith, Acutance Consulting www.acutanceconsulting.co.uk 07854-655009
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