IACCM Member Meeting - Melbourne, Australia
Published: 17 Nov 2019
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Author: Bruce R. Everett, Regional CEO Asia Pacific, IACCM
Focus: Commercial Awareness in the Contract Management Lifecycle
This event was open to all IACCM members, member's guests, and anyone in the procurement, contracting, and commercial space, and is free to attend thanks to our hosts, KPMG.
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Occidental Petroleum Corporation
2019-02-12 17:17:02
Cloud Contracting
I am interested in perspectives on various issues and contracting approaches for the use of cloud services, particularly from niche providers who may, in-turn, actuall...
I am interested in perspectives on various issues and contracting approaches for the use of cloud services, particularly from niche providers who may, in-turn, actually have their applications hosted on a third-party provider like Microsoft, Amazon, Rackspace, etc. I'm looking for perspectives on the entire gambit of issues, including - protection measures used for data at-rest and in-transit; protection of video and images; right of return of all data upon request of customer; obligations of the supplier to delete data when no longer needed (either during the course of performing the services or upon termination of the services and return of the data to the customer); background checks on employees who may have access to the data; monitoring of access by all supplier personnel; business terms like fluctuations in the use of the service (bandwidth, storage space, processing capabilities); right to move the data to different locations in the same country; right to move data to a different country for processing and/or storage; obligations to notify in the case of suspected or actual breach/compromise of data.

• AusNet Services
•
2019-02-28 18:18:23
Hi Mark, Happy to discuss. Send me an email via marie.cullen@medibank.com.au and I can talk about the principles I use.
In my view I don't believe, as a community, we have fully bottomed out all the risks associated with these types of engagement.
M

• Nokia Solutions and Networks Australia Limited
•
2019-06-04 05:22:18
Hi Mark
For a very good, concise review of the principles and issues of cloud agreements generally, covering most of your points above (my view anyway), you might also check out David W. Tollen's book "The Tech Contracts Handbook" online or via this website:
techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/
I did buy his book, and think highly of it. Notably good balance between concept and practical drafting approaches, not just for cloud matters either.
NB: Personal opinion only, not necessarily that of my employer.
kind regards
Andrew
Replies: 2

• Allianz Technology
•
2019-01-10 08:45:28
Hi,
I'm just trying to understand your position.
Considering that you are managing all contractual relationship with another company (buy and sell side) sounds actually good from your company perspective. It would mean, that your leadership can expect you to have a full overview about the contractually back and forth with this JF. Therefore I assume it's hard to change the mind of your leadership, since I would expect them to see your doublerole as positive.
However on the other side, there is your personal position, meaning being something in the middle of a sandwich, right? I'm not sure about your empowerment, but in worst case you have also very limited authority to change some company rules (discounts, penalties, payment conditions, acceptance criteria etc.). And on buy side you usually have different contractual expectation than on sell side. I assume, this is the tricky part in your situation. Fulfilling the internal requirements for buy- and sell side with the same contractual partner at the same time (and maybe also your partner asks you if you are a bit crazy, since requesting sooo different contracts when you are either on sell side or on buy side).
When the conditions your company expect in contracts are very different on sell side and buy side, this should be communicated as an issue (to your leadership). I think there are 2 options as solution: either the requested second CM as you suggest, or an escalation to the leadership to align clear buy and sell conditions between your company and the JF, which are equal to both parties. such framework conditions would make at least your position more clear. And maybe there won't be anymore need of a split of the CM roles buy side and sell side?
Since I couldn't find many information in your post, I hope, this is somehow helpful?
If your uncomfortable position has other reasons, please let me know.
BR
Kristin

• Omaha Public Power District
•
2019-01-21 20:58:03
I probably would start collecting facts: Firstly, establish the relationship between Your Company ("Y Company") and Company X ("X Company") by looking at any specific, written agreement about the services ("X and Y Services"). Also, establish clarity around (1) Y Company's services to be provided to X Company, and (2) X Company's services to be provided to Y Company. At this point, are there any conflicts that you can see/anticipate in your ability as the Contract Manager during the provision of X and Y Services, that perhaps could result in non-performance or non-compliance? Also, how do you escalate and cure any issues of non-performance (for example)? Secondly, I would review the files documenting any legal review, if any, prior to said agreement being reviewed for signature/execution. Were there any concerns that were raised and eventually resolved (internally)? AT the very least, you could start with the resource allocation -- that is, regarding your time management and how to better allocate your skills - in developing your case. Hope this helps. Regards ~ Rose

• CoreLogic
•
2019-05-17 09:01:17
Its an interesting role and I recommend your decision to bring in another manager to take one of the contracts.
I would recommend to present this as two different roles:
On the buy side - Contract Manager would play role of a customer and to manage Company X, need to drive and establish Vendor Management Discipline around Contract Administration / Governance / Service Performance / Financial Management / Risk and Compliance
On the sell side - Contract Manager would play role of an engagement partner to drive business relationship / Value addition to Company X/ increase revenue generation from Company X to your company / Joint go-to-market strategy if possible.
Regards,
Dave
Replies: 3

• ConocoPhillips
•
2018-10-03 10:55:30
I do not think there are any legal roadblock to do so, if the parties agree to make the amendment that should be it.
Replies: 1

• IACCM
•
2018-12-07 15:30:57
Interesting point, Michelle.
I´d strongly encourage you to raise this question also within the IACCM technology network, which is a micro-community, where you will be able to get insights to new trends in this specific field and where I am sure you´ll have the opportunity to share ideas regarding the topic you have brought:
www.iaccm.com/gp/technology
Also, please check our library: www.iaccm.com/resources/
where, you will find some articles about 'escrow agreements' for the software arena and other topics associated with risk management in the hardware world as well. By analogy you will explore ideas regarding hardware coming from best practices and escrow programs with the goal of risk mitigation
www.iaccm.com/resources/;
Best regards
Pablo

•
2018-12-29 21:07:59
Hi Michelle - saw your post. For hardware: having a refresh plan with your supplier following a bit of a mutual benchmark, to see how best to provision for your upcoming capacity needs, might give some assurance. For services or subscriptions-based tech: having a documented 'cookbook' of key players and tech needed to recreate the service, including a list of any solutions 'not commercially available' or not easily re-purchased in Canada updated, might also be helpful to gage the difficulty of transitioning off your current tech,if needs be.
Those two governance-type processes, along with the typical supplier obligation to reasonably cooperate with any successor and to provide some mutually-agreed orderly termination assistance, might serve you well (outside escrow for software). Hope that offers some ideas...good luck. Cheers, Robin
Replies: 2

• Schlumberger
•
2018-08-12 06:54:16
Hello,
Hello
Just in case you still need a few other pointers, consider the following:
One thing sales people understand is numbers so approach it from an accounting point of view. Since the contract is void, consider discussing the fact they will not be able to meet all the GAAP principles for revenue recognition and if your accounts folk are diligent they probably will back you up ( but run this by them - accounts - first. Companies interpret or apply GAAP revenue recognition differently ).
Since Company X no longer exists and as such has no contracting capacity, it cant assign/novate the contract which will impact collectability should the New Company choose not to follow through with what it has implied it would do re: payment
If you are required to create a new agreement using the same or similar terms and conditions, consider preparing a risk assessment analysis of the contract and let the stakeholders approve the risk they are taking on by utilizing the same Ts & Cs so everyone is on the same page. Whatever discussions or approvals were obtained for the former Company should not apply to the New Company.
All the best!

• Anonymous
•
2018-09-17 18:33:36
Thank you for the guidance Mofoluwaso Falade.
Replies: 2
Anonymous
2018-01-06 22:53:15
Exception on a NDA
Hi everyone,
I have, like Vladimir Koval, a question regarding the Non- Disclosure Agreement.
Imagine the following situation: you have to issue a standardized Non-...
Hi everyone,
I have, like Vladimir Koval, a question regarding the Non- Disclosure Agreement.
Imagine the following situation: you have to issue a standardized Non-Disclosure Agreement to your suppliers, that ultimately your Client will review (and he expect that all documents will look the same). However, some suppliers would be keen on modifying clauses, in order to preserve their own company's interest, which as mentioned could be an issue to your Client at the end, as he is expecting a unique document.
I was therefore wondering when working with multiple suppliers, if the terms of an NDA can me modified for some of them or standardization in this case is the norm.
thanks for any thoughts. I hope I am clear.
Mathieu

• Freeport LNG
•
2018-01-08 15:33:22
Mathieu,
While standardization may be a noble ambition, achieving it is usually quite difficult. You can improve your odds through the use of mutual NDAs that protect the confidential information of both parties and by having fair and balanced agreements, but expecting all suppliers to sign them as-is may be expecting too much.
Your role is to understand their requested changes and to determine the impact to your company and whether the changes are acceptable, and to advise your internal client accordingly.
Hope that helps. Sincere regards.

• CommonAccord.org
•
2018-01-14 10:29:18
Consider whether you might be able to use a "standard" and have each negotiated difference stand out as a specific change. There are a number of ways to do this. The most systematic would be to use a master and generate each of the documents from the master, with a patch for the differences. That's possible in a number of technologies. A broad example is shown here: www.commonaccord.org/index.php

• Tata Communications
•
2018-02-22 04:33:24
Hi Vladimir,
We have standard NDA template and additional clauses in the clause library if the vendor pushes for Mutual NDA. This helps build the agility in NDA execution. My experience says that we are able to push 80% cases on standard NDA template and the balance needs engagement.

•
2018-03-27 17:30:53
If a NDA is well drafted, clear, fair and equitable then it should be signed without issue.
If the client has specific requirements that are reasonable and equitable they should be acceptable to all parties.
If there is an element of inequity or unreasonableness then expect suppliers to push back. The simplest test is "would I sign this on behalf of my organisation": if not, then why expect the other party to sign?
What could be up for discussion: whether the NDA is one-way or mutual? what law and jurisdiction apply? the length/duration of the NDA and of any surviving obligations? whether personal NDAs/statements are required?
I would have concerns if I have received unacceptable terms in an NDA - it wouldn't bode well for any subsequent contract discussions negotiations.

• Health Quest
•
2018-07-12 21:57:19
In my organization we use a Mutual Non-Disclosure and Confidentiality Agreement. I can see where there may be a need for specifics to be outlines, and in that event, I would consider an addendum as a sufficient protocol. The addendum can include the customer specifics that would otherwise present as "sticking points" that tie up getting the project off the ground.
Replies: 5

• Vector Limited
•
2017-01-25 21:57:47
Thanks Jessica for posting this question. I appreciate all the inputs from everyone most especially Jason's reply. Like many others, suggesting to our vendors the use of our company templates for professional services is always a challenge. But as Jason suggested, explaining the benefits of using the company template (e.g. easy approval of subsequent statements of work once an MSA has been approved) makes the vendor think and eventually agree. Of course, there is negotiation in the process. It is not a straightforward demand of asking them to accept the template per se but making them aware of the benefits does help.

• IACCM
•
2017-01-26 07:19:13
Since this discussion started almost 2 years ago, the world of technology has progressed and IACCM can today offer a service to validate 'contract norms'.
A challenge for buyers and suppliers is that their templates start from positions of self interest and naturally this creates contention and delay. It is now quick and relatively easy for us to provide members with insight to what is a normal position / term for any particular type of. Ontract. This allows internal discussion of the desirable business position and of course informs external discussion to accelerate agreement.

•
2018-10-17 05:37:16
Even though it has been a long time since Jessica posted this, I would like to add my comment (may be somebody is still interested in this topic). Usually, I don't face problems with internal clients in the way they don't want to share the template with our customers. On the other hand of course, customers sometimes come back with their template (instead of any comments/tracked changes in our template) or, if not such a "strong" company to insist on their template, they send our template back with all important clauses deleted and replaced with their template wording. Sometimes it is just a matter of wording, and when I see the content is the same and can imagine how long would it take them to have our wording reviewed and approved, I agree with theirs instead. However, sometimes it is really a totally different story, setting us in such an unpleasant situation, that the best option would be not to sign the contract at all. What I learned is, that is not only a question of the size of a company or its hierarchy (=how many approvals do they need), it is often also a "cultural" thing. Some nations have negotiations or even fighting for a win in their veins, and they push back just as a matter of principle. When you set up relevant points in front of them, they usually agree and you get their respect. A great distinguishing model here is the one of Hofstede, which was also mentioned in one of the modules.
Coming back to Jessica's comment, I sometimes face a different problem - internal clients wish to send the template immediately to the customer without any prior discussions or involvements of Contracts. They simply tend to find somewhere a blank template and go out. I always need to explain, that Contracts need to see it and that we, Contracts, are the one responsible for it. Even though using a template, every single deal is unique and a template needs to be adjusted not only with regards to the deal's specific, but also based on our experience with the customer (e.g. I know Czech companies insist on having their ID and information about incorporation in the legal name and address description - if I wouldn't place it in the contract prior sending to the customer, we would look stupid and like we don't care about customer's needs at all. the same is with Russian customers, who, due to their law requirements, need to have bank details explicitly written in the agreement - so I won't release any draft for their review without inserting those bank details).
So I think nobody can only focus on one side of the business - I believe it is not only about customers (CRM) but about relationship with the internal clients (trusted advisor) as well.

• IACCM
•
2015-03-27 13:12:53
Hi Jessica
This is a common problem. Many of the relationships with indirect
suppliers are less formal and may have been in place for years, leading to resistance over use of standard templates.
It is of course important to establish whether the issue is just general resistance or whether the standards are not really appropriate to the range of indirect relationships required, or lack required flexibility.
We do have benchmark data at IACCM on cycle times and will be issuing reports on the latest information at the end of April. It should be possible to provide interim data if you need it sooner.
Tim

• NOKIA
•
2015-05-11 07:07:04
Internal Template application rather than the one of the supplier is usually a requirement nevertheless the real issue behind is do we protect ourself correctly. Legal usually is validating a template that he wants verybody contract manager to apply. As legal ressources are scarce and expensive ressources it is ovious that this is the first thing that should be pushed. Once you know that he does not work the more complex but more interesting solution for the company is to look at the mandatory clauses that are requested from the contract. So instead of pushing your template you should fight on the mandatory clauses. Fall back position should be created as a handbook of best practices.

• Dept of VA
•
2015-05-12 08:15:57
Ms. Prendergast,
Templates, while easy to copy and work with, present a challenge to many companies in part because the template is usually written from one side or the other, providing all the advantages to the author's side and none to the recipient. This is frequently seen in EULAs, where the equivalent of "Not only do we have all the rights, but you are lucky we let you use our product at all, you horrible little vendor!" is common contract parlance.
So how do you overcome the natural inclination of a vendor to resist your templates? The same way you advertise anything else!
Make the option of using your product (the templates) both appealing and advantageous to the vendor. When sending internal templates to a vendor for use, do not present them as a "use or lose" option. Instead, deliver the items with the contracting equivalent of a box of chocolates: Provide vendors a summarized explanation of the benefits offered through using your templates. Bullet-oriented briefs are more effective here, as they provide not only a quick list for the vendor to read, but a point-summary for the vendor's contract manager to use in presenting the overwhelming benefits offered by your templates to their management.
Explain (again in short form) the potential realized cost savings of template use, including ease of follow-on contract development by way of utilizing your "easily-tailored, customer-specific templates." Make every effort to ensure using your templates is so much easier than having the vendor's contract department reinvent the procurement wheel that the vendor (who at this point you should view as your customer) would actually be acting against their own best interest to do anything other than to use your templates.
As M. Fouquier rightly points out, the usual greatest challenge is getting your templates past the legal department guardians. Providing a brief mandatory clause list may be a more advantageous initial step, as it tends to ease legal's protective instinct toward its client(s). Once you present not merely a palatable offering of clauses, but a tasty array of work-easing options to the vendor (and the vendor's legal counsel), your job is 90% done. Offering updates and non-critical individual tailoring options (which would not, of course, change the mandatory clauses) gives the vendor the personalized attention so critical to obtaining their final approval. It is the after-dinner apertif of contracting: "Not only do we offer all these options, but our true focus is on YOU."
Granting the vendor a choice of either (a) using your banquet of templates designed to ease their workload or (b) going through the tedious grind of negotiating back and forth on every item for months makes you and your templates the obvious and preferred choice every time.
Replies: 6

• Ministry of Defence
•
2019-10-04 08:42:04
How do you increase the price of the contract, assuming the change order varies the price? Suggest it's via a contract amendment. But, however you do it make sure it's legally enforceable!
Replies: 1

• Telefonica
•
2018-05-15 17:52:16
There are a lot of aspects to consider here, for example:
are you buying a replacement service from another vendor? if so, do you need the current vendor to support transition to the new vendor?
does the current vendor need to return any confidential documents?
are all payments up to date?
are any contract penalties (service credits, LDs) outstanding?
Irrespective of the above, you need to formally terminate the contract, confirming that neither party has any liability to the other following termination, except, perhaps, confidentiality provisions and, potentially, any latent defect/warranty claims. Simply 'allowing' the vendor to walk away seems odd: you spent time (and therefore money) on-boarding them and agreeing a contract, it seems strange to end the relationship in this way.

• Neptune Marine Service Ltd
•
2018-05-16 01:14:24
Hi Dale,
What contract states with regards to email communication and authorized representative. If the contract only states that communications shall be in writing to the authorized representative. The next question that will arise is Governing Law of the contract. As some countries have adopted the United Nations Commission on International Trade Law (UNCITL) published its Model Law on Electronic Commerce in 1996 which states that actions will not be invalidated or discriminated against merely because they were conducted electronically and emails are considered as a message in "Writing"
So, make sure the message in "Writing" based on the governing law is communicated to the Authorised Representative.
For the balance checks, I agree with Steve Grange and that shall suffice.
Regards,
Gaurav Seth

• MOJ
•
2018-05-16 14:46:50
Hey Dale,
I agree with Steve Grange. Create a formal Exit plan with the company to close off any outstanding liabilities to both parties. Regardless of each others 'mutual consent' to this. At the end of the that process formally close it off with a document. This will prevent anything coming back to bite you in the future.
Phil

• Siemens Pte Ltd
•
2018-05-17 09:52:18
Dear Dale,
I agree with Steve, Gaurav and Phil, They have covered multiple aspects which we have to look at before letting the vendor walk off as I believe in this case Vendor has no financial impact on them so easy for them to walk off without formal termination/closure of the contract. But from the moment you accept or let Vendor walk out all the responsibilities more of liabilities fall on your company.

• Resolute Corporate Services Pty Ltd As Agent for Société Des Mines de Syama S.A (SOMISY S.A)
•
2018-05-25 11:43:20
I think you should prepare an official document signed by both parties to legally and lawfully end this contract by a mutual agreement by both parties.

• Resolute Corporate Services Pty Ltd As Agent for Société Des Mines de Syama S.A (SOMISY S.A)
•
2018-05-25 11:43:54
I think you should prepare an official document signed by both parties to legally and lawfully end this contract by a mutual agreement by both parties. your message

• Virgin Money
•
2018-06-04 11:15:31
Yes.

• Catalina Marketing Corporation
•
2018-10-25 20:59:16
The first item to consider is to ensure to review the Services Agreement and review the Termination and Notices Section and any others that may come in to play when terminating an agreement. Are there a certain number of days after written notification that the services agreement will terminate? Are you terminating a master agreement and any ordering documents or SOWs or either or both? Do you need to provide notice to the contractor via email, mail, certified mail, overnight delivery? Does your agreement allow for electronic transmission communication as an acceptable method of communicating to make it legally binding in a notices provision?
I then also check to see if there are provisions such as Confidential Information/Materials or any other security items that need to be returned to your company that would need to be mentioned in a termination agreement or letter. Is there any confidential information, materials, laptop/pc, security badges and property that need to be returned and when, how and to whom? These are a few of a number of items may need to be addressed in a termination agreement along with ramp down services and whether there are any fees apart from standard fees that would need to be paid to considered. I have seen termination agreements be very simple with little to no instruction since the Services Agreement was simple straightforward agreement with little to be exchanged by way of CI, materials, goods, security, property and others that can run a few pages of negotiated ramp down services, transfer of services to another contractor or training and payment of ramp down costs at stake.
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Replies: 8