Hi Bruce - your post and the efforts of Tim, Paula, Christine and Andrew deserve more than zero responses, so here goes.
I do like how the paper encourages us to take a different mindset to the usual "here are our standard contract terms". It's also great that it helps us think about what are the crucial measures / outcomes that we need to think about - like uptime and the remedies. It's great to have some of these issues and risks highlighted so we can include better milestones and measures of success.
As a practitioner, and I've said it before in the forum, I do worry that there's some real thinking missing when I see some of these about whole of like costs involved with data transfer at the end of the contract. There's a lot of great programs that say they can repurpose and reformat the data, but I've found that there's still a lot of cost associated with that, and in the original approach to market, I've seen few demonstrate any real cost in their procurement plans. We can't expect the IACCM team to do it all though !
• Devant Limited
Hi, I've recently been negotiating on the Supplier side and have found that customer's want to pay a low price, benefit from the flexibility of SaaS pricing but then want to negotiate hard on every single detail! A particular challenge has been the demand from Customers to put every new release / update (however small) through extensive UAT. This clearly challenges the agile & flexible nature of SaaS and the one-to-all model. A number of SaaS suppliers are also relatively new and growing businesses - my experience is that many large corporates want to take advantage of this.
Thanks for preparing this paper as it articulates the challenges and benefits of 'as-a-service' well.
I suppose this depends on what you mean by a Contract Agreement. If you have a Master Services Agreement in place that contains agreed legal terms and conditions, signed off by both parties, then the RFP process could proceed. However, depending on the types of good or service being sought, i.e a major construction project, then the terms and conditions within the Master Services Agreement may not be appropriate, its always best to consult a legal professional before you issue the RFP to ensure all legal provisions are either sufficient or addressed.
• AJA Global Consultancy Services, LLC
Pallab, I may be missing something from your description of the issue; or what you describe as "execute a Contract Agreement (signed by both parties)..." could be the reason of my confusion.
It is not clear to me if your organization represents the buyer or purchaser side (who is the party making pressure to move ahead). But anyway, the practice you are describing seems to me as the typical recipe for potential claims. As Gary says in his reply: seek in-house legal advice.
Sorry I can not be of much help.
• Bahrain National Gas Co. (B.S.C)
What I mean by the Contract Agreement is the Form of Agreement which is generally the first covering pages of any standard Contact wherein it is stated..
This Agreement is entered into on the xth day of ... by and between ......
followed by the list of documents that together constitute the Contract and showing the precedence of documents in the event of conflict between the documents.
A blank Form of Agreement is provided as a format along with the tender documents which is finally filled up and signed by us and the successful tenderer. The format when filled up and signed, we call it the 'Contract Agreement'. This document is used for tenders (for services, construction works, etc.) having reasonably high estimates where full tender package is used to invite bids.
On the other hand, for small supply orders ( spare parts, plant consumables, etc.) a system generated RFP document is used to invite bids and eventually a system generated PO is issued referring to RFP document and supplier's quotation.
Now let me rephrase my question as - is there any thumb rule ( example- bid estimate) that could be followed as a criterion to determine
• when a full fledged tender document to be used to invite bids and finally a Form of Agreement is signed off to conclude a Contract, and
• when a simple RFP document to be used to invite bids and and just a system generated Purchase Order is issued to the winning bidder, and no Contract Agreement is executed.
• Airbus Defence and Space GmbH
I guess typically companies sign as the risks are possibly manageable ! If that approach is relational or a trust building measure is a very different question ! And I am tempted to say clearly not as imposing terms is quite the opposite to building up a trust based realationship!
• Itron Inc.
In my experience, requests or demands to have suppliers sign NDAs as-is have become the standard. Especially in the case of an RFX pre-requisite, the buyer is in a superior position of leverage, and attempts to negotiate the terms of the NDA may be viewed as an indicator that the supplier will be difficult to negotiate with when the time comes to establish the commercial agreement.
Additionally, most legal departments view NDAs as a strong candidate for click-through or self-help contracting with a strong desire to standardize and remove themselves from what should be a non-complex, straight-forward document. If the NDA provided is not standard for your business, but is reasonable on its terms - review it with your team to ensure everyone knows how to *manage the information and move on to participate in the RFX.
*Standards for management of confidential information used to be fairly straight-forward, with terms indicating that the recipient must protect the discloser's information with the same level of care as it uses to protect its own (but in no event less than a commercially reasonable degree of care). With increasing concerns over cyber-security and data privacy breaches, it's more common to see NDAs carry designated or mandatory safeguards that prescribe processes, controls and other duties that your organization may or may not be capable of providing. Make sure your IT team (or other SME) can confirm you meet the requirements prior to signing.
• Pronto Software
This is not uncommon but there is always a but. For example, is the NDA 2-way or does it only protect one party's CI. Companies are often willing to make an exception to their "no change requirement" if there is compelling and easily articulated (and understood!) argument why a change to an NDA, or an additional NDA, is required.
I agree with your thought Unlimited liability means Unlimited exposure irrespective of size of contract.
If there is no way to Limit your liability then atlast include a clause that defines a process of identifying liability. E.g If a Mistake happens by your employee due to some vulnerability in Client/Customer systems/process then is it only your fault or customer is also responsible for it ?.. If both parties agree to jointly decide on mechanism for fixing ownership of issue then you get a fair chance to defend yourself. Just my thoughts...
Thank you for your response. Most of these happen to be government contracts where one is unable to propose any changes. Do organizations that work with government customers usually willing to undertake the risk of unlimited liability? I am also guessing that there may potentially be no risk that will require indemnification, in a product supply contract or am I underestimating?
It would depend on the order of precedence called out in the contract. Depending on what the contractual terms are the order could vary. Without more information I would hesitate to provide a conclusive answer to the question. If you could provide a it more detail it would be greatly appreciated.
• Airbus Defence and Space GmbH
The logic would tell me to start with the particulars and then the general conditions of a Contract :-) usually I try to avoid putting the tender and it's acceptance into the contract as the contract should reflect this accosringvto parties agreement as well ! For me the contract should be the ultimate and final agreement between the Parties! Hope that helps!
-Bid Bond is generally kept as 1%-3% of the estimated Budget and all Bidders should be requested to submit the Bid Bond of the same value, in a Bid Bond format to be provided by the Company in the Bid document.
-The Bid Bond must be verified at the time of opening the Bids. In most of the government tenders , Bids are rejected if the Bid Bond with correct amount and validity is not accompanied along with the Bid.
-Bid Bond must be valid up to the time requested in the Bid document for the validity of Bids.In case of extension requested for validity of Bids from the Bidders the Bid Bond must also be extended accordingly.
-Bid Bond should be released within 30 days after the announcement of successful Bidder / immediately if the tender is cancelled.
• Neptune Marine Service Pty Ltd
From my limited understanding, Contracts for International Sale of Goods (CISG) will automatically apply to the sales of goods contracts if it meets certain requirements (such as parties have chosen the law of one of the contracting states which have adopted CISG etc..) unless it is expressively excluded from the contract.
I have some samples I can share with you that are subject matter specific. However, you may be able to extract some of the language to fit your needs. Unfortunately, it is in a PDF file that I would have to email to you. If you'd like me to do that, feel free to email at email@example.com, and I will reply w/ the attachment.
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