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Outsourcing: Current Legal Issues The Key to Successful Outsourcing. Graeme Moffett Shepherd and Wedderburn LLP 01224 343546 [email protected] Life of an Outsourcing. Getting in The contract – key terms Managing the contract Getting out. Getting In – First Steps.

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Outsourcing current legal issues the key to successful outsourcing l.jpg

Outsourcing: Current Legal IssuesThe Key to Successful Outsourcing

Graeme Moffett

Shepherd and Wedderburn LLP

01224 343546

[email protected]


Life of an outsourcing l.jpg
Life of an Outsourcing

  • Getting in

  • The contract – key terms

  • Managing the contract

  • Getting out


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Getting In – First Steps

  • Key drivers

  • Business case justification

  • Scope, objectives, risks, costs, benefits

  • Customer due diligence

  • Assets and third party contracts

  • Employees (TUPE and Pensions)


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Getting In – Tender Process

  • Competitive procurement

  • Market testing – RFI

  • Shortlist candidates – PQQ

  • Invitation to tender – ITT

    • Supplier’s solution to customer’s specification

    • Draft of proposed contract

    • Evaluation criteria

    • Supplier’s due diligence

  • Timetable

  • Negotiation – One v Many

  • Public sector procurement issues


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The Contract - Structure

  • Balance of precision and flexibility

  • Structure of transaction – single, multi, etc

  • Supplier parent company guarantee

  • Customer group companies

  • Supplier subcontractors

  • Asset transfer, software licences, IPR

  • Joint ventures

  • Offshoring models


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The Contract – Duration

  • Usually 3 to 10 years

  • Many factors influence

  • Termination for convenience

  • Extension


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The Contract – Performance

  • Implementation/transition

    • Plan

    • Key milestones

    • Delay deductions

  • Services

    • Legally binding description

    • Objective measurement

    • Service levels – number and level?

    • Service credits – amount? bonuses?

    • Seek to agree before signing


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The Contract – Charges

  • Fixed price, cost-plus, part-variable etc

  • Supplier’s recovery of costs

  • Link to milestone value

  • Indexation

  • Benchmarking

  • Fair deal for both parties


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The Contract – Liability

  • Areas subject/not subject to caps

  • Level and structure of caps

  • Exclusions

  • Specific inclusions

  • Insurance

  • UCTA 1977 and standard terms


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The Contract – Management

  • Set out detailed operating framework

  • Frequent information exchange

  • Regular reports and meetings

  • Escalation/resolution of disputes

  • Monitor performance

  • Use service credits


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Getting Out

  • Termination rights

  • Exit management

  • Run-off period

  • Handover of assets and information

  • Employees (TUPE and Pensions again!)

  • Creation of Exit Plan


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Recipe for success

  • Clear objectives

  • Clear scope

  • Flexibility

  • Good management

  • Plan ahead

  • Cover all the bases


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Questions?

Contact:

Graeme Moffett

Shepherd and Wedderburn LLP

01224 343546

[email protected]


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