Compliance Print

Compliance: Issues in Outsourcing Contracts Generally

The vendor's compliance with the outsourcing client's goals will be governed by contract. The vendor's responsibilities under the contract, therefore, should be described in detail. Often, the contract presented by the vendor describes its responsibilities only in general terms, making it difficult to determine what the vendor is required to provide. 

 

The outsourcing client's contract, on the other hand, should detail performance requirements and time frames pursuant to which each performance milestone must be completed. These milestones may be tied to payment schedules and act as "incentives" for the vendor's timely completion of the project. The client should also expect to describe in the contract what it will need to provide to the vendor (in terms of staff, equipment, and know-how) to enable the vendor to perform its services. The contract should also describe how quickly the vendor would respond to any request for support services and how long it will take to initiate the corrective action (See Service Level Agreements).

 

Compliance with regulatory requirements needs careful consideration.

 

 

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