[Previous] [Next]
[Previous] [Next]
Contractual arrangements must be completed with assurance that the best possible terms for the institution are realized, including protection against vendor bankruptcy or failure to adhere to conditions. It is important that the steps of the negotiation process contain standard contracting procedures:
Besides these basics, successfully negotiating with external suppliers to go beyond standard performance and fit into an institutional culture -- for example, using a team approach or total quality management principles -- requires negotiations based on satisfying mutual interests. These principle-based techniques9 involve preparation that includes clear and complete identification of both parties' interests, active listening and description of both parties' expectations and hopes for the contract and partnership, a statement of problem-solving objectives during the negotiation and in the contract, and the forging of a lasting agreement. Articulating these expectations will be easier if the steering committee has developed a set of principles that define the desired partner behaviors and parameters of partnership outcomes.
An essential item to include in the contract is any agreement related to performance, if performance is an item in the requirements and proposals. This can cover the anticipated volumes or transactions, users records, and other items, as well as time frames and procedures for conducting the performance tests.
The contract will reflect the level of detail involved at all stages of the project. If the proposal to the steering committee contains all of the suggested items, the contract will reflect that level of detail. In some cases, as indicated in the discussion on RFP approaches, the contract may be much simpler, reflecting the intent to partner with the proposed supplier. Detailed contracts for this circumstance may be generated later and at different phases of an ongoing project. However, at any time that a formal contract is being signed, the detail in the contract must reflect all of the agreements between the parties.
Even in the case of an internal development solution, a contract should be considered. The implementation of a new financial information system is a crucial undertaking for the institution, and some level of documented agreement can be most useful in resolving potential conflicts with internal as well as external suppliers.
Exact details of the contract will need to be worked out based on the typical contract document of the institution and with appropriate review and sign-off by legal and other counsel as required.
[Previous] [Next]