This part of the contract will usually include the following information.
The date and time at which the provider will take over the property, equipment, materials, other assets, software licences, intellectual property and the staff, and the terms under which this transfer will take place.
In case of any unanticipated problems relating to the transfer of the above, a framework for deciding on alternative arrangements and for determining who should bear any resulting costs. Problems may arise where insufficient consideration has been given to ownership rights over, for example, software and equipment belonging to third parties.
Details of the responsibilities and costs to be borne by the provider for the lifetime of the contract.
Details of the responsibilities and costs to be borne by the client for the lifetime of the contract.
Detailing the services to be provided during the transition period
Each contract will be unique but most will include provisions to cover the aspects which follow.
Agreements relating to the preparation of staff due to be transferred, including training and counselling, along with any similar assistance to be provided to the staff staying with the client. Arrangements for the transfer of staff records and payroll must also be detailed. A date, before the end of the transition period, will normally be given by which these tasks should be completed. Ideally, this date should be set as early as possible in order to ensure that any problems are ironed out before the transition phase is completed.
A detailed description of the service to be performed, service level agreement (SLA) and reporting mechanisms.
Details of agreed performance measures and the rates at which any penalties and/or rewards will be calculated.
Details, including start and finish dates, of any special projects to be undertaken as an integral part of the transition period. Such projects might include, for example, the implementation of a new ERP system. The estimated costs of the project will probably be set between minimum and maximum levels and there may be specific penalties and rewards relating to the performance of the project.
Details and costs of consultancy required during the transitional period for work including, for example, re-engineering. It is normal to cost such consultancy separately from that required at other stages of the contract or for special projects.
An undertaking on the part of the provider that if any of the agreed service is to be subcontracted, it will assume full responsibility for the subcontractors’ actions and guarantee the standard of performance.
If the client wishes to retain the opportunity to veto the appointment of certain staff, then it will be necessary to insert a clause explaining what rights the client has relating to personnel issues.
