Contracts: Negotiating technology contracts
Every facet of our world is now being integrated with some form of technology, whether it is hardware, software or some combination of both. Along with that technology comes the terms and conditions that most of us would love to ignore. However, as procurement professionals, we must assist our entities and navigate for them. This will help to ensure we are in compliance with law and be protected from risk.
So how do you gain the skills necessary to effectively and efficiently modify agreements from technology vendors? How do you wade through the agreements to get what is needed for your jurisdiction? What nuances in an agreement should you be aware of to protect yourself? What additions to agreements should you try to get added?
Because of staffing reductions of professionals familiar with negotiating technology agreements and the growth of the technology industry, reviewing and negotiating technology agreements is becoming a skill set required by all procurement professionals. As a result, it has become necessary to develop best practices and training related to technology procurement.
Procurement organizations of all sizes can benefit from this training to further enhance their ability to negotiate these technology agreements. This training can assist in possibly reducing the time it takes to negotiate an agreement. The training can also help to balance workloads among multiple professionals and aid in sharing of knowledge and cross-training.
Consider using the following tips:
• Create quick guides of the keys points your organization needs to look for when reviewing.
• Meet with your local attorney to discuss and learn what other items he/she would find to be a problem if the agreement was to go forward.
• Change one-sided clauses that only benefit the vendor to be mutually beneficial or have them removed.
• Remove any clauses that are contrary to your local law, such as indemnification, the charge of taxes, and the venue.
• Make sure that the agreement fully identifies all the parts that make up the agreement and not just the document you are reviewing.
• Add clauses such as non-discrimination and drug-free workplace to be in compliance with state and federal regulations. For schools, consider adding clauses that protect your student population by requiring the vendor to sign that no employees with direct contact have criminal records.
In a nutshell, practice makes you better and experience make you better at negotiating technology agreements. However, take time to attend sessions or meet with others to discuss your successes and failures at negotiating agreements. This helps improve not only you and your organization but also can help others.
Kristy D. Varda, MS, MBA, CPPB, is Purchasing Supervisor at Frederick County Public Schools in Winchester, Va.
NIGP 2016 FORUM NOTE: Kristy Varda will be presenting “Negotiating Software and Technology Agreements” on Wednesday, August 24, 2016 from 11:15 a.m.-12:15 p.m. at the 2016 NIGP Forum.