Checklist for Outsourcing Agreement

CHECKLIST FOR OUTSOURCING AGREEMENT

A. AGREEMENT

(1) Commencement Date

n When will Vendor begin to provide services to Customer?

n What is the proposed migration date?

(2) Entities Receiving Services from Vendor

n Are there any other Customer (or third?party) entities that will receive services from Vendor under the Agreement?

n Does Customer foresee a change in, or want the latitude to change, its corporate structure over the term of the Agreement?

(3) Requirements Contract

n Does Customer want the right to purchase information technology services from a third?party vendor (e.g., services above the baseline)?

(4) Machines (Systems)

n Which machines will Vendor (a) maintain, (b) provide system management services for, (c) provide help desk services for, and (d) upgrade?

n Do Vendor's responsibilities with respect to machines include all end?user machines?

n Who will have responsibility for the hardware leases and third party maintenance agreements?

n Prepare/update machine inventory.

n Determine point at which responsibility for end?user machines ends and responsibility for host begins.

(5) Agreements to be Reviewed (to determine whether consent from third party vendor is necessary)

n Software licenses

n Hardware leases

n Maintenance agreements

n Other services agreements (e.g., microfiche, print, disaster recovery)

(6) Applications/Systems Software

n Who will retain financial and administrative responsibility for applications software?

n Who will retain financial and administrative responsibility for systems software?

n Prepare a list of all proprietary and third party software (applications and systems) currently used by Customer.

n Will systems/applications software licenses be assigned to Vendor or will Vendor be permitted access to software licensed by Customer?

(7) Application Development

n Who will have responsibility for application development services?

(8) Application Maintenance

n How will application development and application maintenance services be distinguished (e.g., more than 80 person?hours)?

n Prepare a list of services which Customer currently considers to be included in application maintenance to be provided by Vendor.

n How will the baseline for application maintenance be set ( e.g., person hours, headcount, function points)?

(9) Consents

n How will the costs of obtaining consents be allocated (prior to the date of the Agreement and upon termination of the Agreement)?

n Vendor should be responsible for the cost of obtaining any consents from third parties.

(10) Performance Standards

n Specify the performance standards in respect of Vendor's provision of services.

n Does Customer document/benchmark its current performance standards?

n Does Customer have planned or interrupted system downtime?

n Specify liquidated damages (credits) which Vendor will incur if Vendor fails to perform in accordance with such performance standards.

n Vendor should be required to meet performance standards during the migration period.

(11) Retained Assets/Responsibilities

n Which assets/responsibilities will Customer be retaining?

n Will Customer or Vendor be responsible for supplies (e.g., paper, ink, forms)?

n Customer should ensure that it has the employees/resources to perform the retained responsibilities.

(12) Service Locations

n Will all of Customer's information technology operations remain at Customer's facilities?

n Is Customer concerned about Vendor separating its information systems operations?

(13) Human Resources

n Will any Customer employees be transferred to Vendor?

n Are Vendor's employment screening procedures consistent with Customer's policies and procedures?

n Will Vendor require Customer to retain certain IS employees for a period of time after the commencement date?

n Will Vendor reimburse Customer for the salaries of retained employees?

n Are there any claims in respect of the IS employees?

(14) Project Staff

n The Project Manager should be identified in the Agreement.

n Customer may wish to restrict Vendor from reassigning the Project Manager to another account for a period of time.

n In addition to the Project Manager, Customer may wish to designate certain key employees (i.e., direct reports to Project Manager).

(15) Reports

n Specify reports that Customer currently prepares.