Contracting Models (Agile, Relational, Performance Based Contracting)

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The Boeing Company
2020-07-29 17:48:12

Modular Contracting Discussion / Help Needed!


I would love to chat about your entity's experience with implementing a Modular Contracting system. From a look, feel, and integration perspective, I am part of a group running into some challenges that I believe previous experiences have probably already experienced and solved for. From a substantive standpoint, some questions about order of precedence, survival, SOW/purchase order term co-alignment and other questions.

Is anybody able to share their experience and/or willing to share a rule/bylaws document? Thanks so much!
 •  World Commerce & Contracting  •   2020-07-29 19:37:43
Hi, I would be willing to have a chat about this. I am a lawyer with more than 20 years experience and although I have not worked extensively with modular contracting, I should be able to provide some advice. Please reach out to me at pdoyle@iaccm.com.
 •   2020-07-30 15:15:47
If I understand the question correctly, it is asking about the benefits and challenges of breaking contract terms into, for example, POs/SOWs, Master Agreements, Terms of Service, Data Processing Agreements, etc. This has certainly become the norm in the technology industry allowing for multiple purchases under a single master agreement, with the added benefit of allowing companies to amend the ancillary agreements on notice or website updates. Most deal with the order of precedence by listing the agreement order. It may, however, be better to set the order based on the nature of the term, so that updates to data processing agreements take priority over all other agreements. With respect to survival, the most common approach is to extend contractual terms until the expiration of the last PO or SOW or some period following such expiration.
 •  Mallinckrodt Pharmaceuticals  •   2020-08-05 13:54:15
Hello, this is the type of contract structure my company has used for a while, Master terms, often evergreen, with annual Product and Service Agreements falling under it. I find it really helps create flexibility for purchases through sub agreements since anything that falls under the Master tends to be a shorter document. Generally, the Master governs unless it's a service or product specific term that the Master does not speak to, but we make that all very clear in the body of each section of the agreement. We also make it clear that any agreement falling under the Master only stays in effect as long as there is a Master in effect; though I have seen agreement terms that state until the end date of the sub agreement the Master terms still govern even if that Master has expired.

For Order of precedence I've seen it done with a list, as already mentioned, we try to keep things as uncomplicated as possible, so sub agreements just refer back to the specific Master, which supersedes any PO terms, and each sub agreement only speaks to one topic.

I don't have much of an issue with PO/SOW (for me, service agreement) alignment, ours is a pay at the beginning of the term, after agreement execution, so PO creation can occur after the service term has been set, but I would imagine there should be some sort of language you could include in your SOW that would address that concern...
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