Information Technology Outsourcing Consulting Agreement by Megadox

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									                           OUTSOURCING CONSULTING AGREEMENT
THIS AGREEMENT made effective as of the _____ day of ______________, _______.

BETWEEN:

                                            CUSTOMER
                                               [address]
                                         (the “Customer”)
                                                                                OF THE FIRST PART

                                              - and -

                                           CONSULTANT
                                             [address]
                                        (the “Consultant”)
                                                                             OF THE SECOND PART

WHEREAS:

A.     Consultant is engaged in the business of providing consulting and other services in the field of
       Information Management and Technology;

B.     Customer desires to retain Consultant to assist in the planning, development and maintenance of
       its Information Management and Technology Resources, and to provide additional consulting
       services (as hereinafter set forth) to Customer, and Consultant desires to accept such retainer;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and agreements contained in this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as follows:

1.     Definitions

Wherever used in this Agreement, the following terms shall have the meanings ascribed to them below:

(a)     “Application Software” means a software product or products designed and developed by a
       third party for commercial distribution or otherwise, to perform Information Management
       functions in support of a business. Application Software does not include System Software or
       Process Control Software.

(b)    “Consultant’s Business” means the business operations carried on by and the consulting services
       provided by Consultant, including consultation with respect to the planning, design,
       implementation and use of Information Technology and Information Management systems and
       processes; training and education, strategic and tactical planning for the design and use of
       Information Management and Technology; Information Technology architecture planning;
       evaluation, selection and implementation of Methodologies, tools and techniques for
       specification, design and construction of Information Management systems; evaluation and
       recommendations for selection of hardware system components and System Software, Process
       Control Software and Application Software; implementation of Information Management
       systems; Work System Design and Implementation; and consulting services with respect to
       telecommunications, office automation, systems integration, facilities management and point-of-
       sale Information Management.
                                            -2-


(c)   “Employee Total Annual Compensation” means the amount of total taxable compensation paid
      by Consultant to each of Consultant’s employees.

(d)   “Information Management” means the capture, manipulation, use, movement, storage and
      destruction of information and includes System Delivery Services.

(e)   “Information Services & Technology Unit” or “ISTU” means that department or unit of
      Customer’s business which is responsible for providing System Delivery Services and operations
      management to Customer;

(f)   “Methodology”’ shall mean Consultant’s proprietary methodology which Consultant has
      licensed to Customer. It shall also mean any other tool or methodology proprietary to Consultant
      which will be used by Consultant to perform the Services hereunder.

(g)   “Non-Personnel Expenses” means all reasonable out-of-pocket expenses necessarily and actually
      incurred in the provision of the Services during the term of this Agreement which are not
      attributable to the recruitment, development and termination of SDS Staff or part of the
      Consultant company benefits provided to the SDS Staff.

(h)   “Outsourcing Agreement Committee” means a committee consisting of ______ authorized
      representatives of Customer and ______ authorized representatives of Consultant. The parties
      may appoint additional members to the Outsourcing Agreement Committee from time to time
      upon the unanimous consent of the then existing Outsourcing Agreement Committee members.

(i)   “Outsourcing Agreement Factor” means the multiplier that will be used to calculate the fees paid
      to Consultant for its Services, as hereinafter provided.

(j)   “Project Staff’ means those employees of Consultant assigned to Customer in addition to the SDS
      Staff.

(k)   “SDS Staff” means these employees of Consultant which are assigned on a full time basis to the
      SDS Unit. Employees recruited by Consultant on behalf of Customer and assigned to the SDS
      Unit in the ________ days following the date of this Agreement shall be referred to as “SDS Staff
      A”. Other Consultant employees assigned to the SDS Unit shall be referred to as “SDS Staff B”.

(l)   “Services” means Information Management, System Delivery Services, Technical Services and
      Operations Management.

(m)   “System Delivery Services” means those services set out in Schedule “____” hereto.

(n)   “System Software” means a system software product or products developed, for commercial
      distribution or otherwise, by a third party for the purpose of managing computer functions.

(o)   “Systems Development Services Unit” (SDS) means that part of the ISTU responsible for
      providing System Delivery Services to Customer.

(p)   “Technical Services” means those services set out in Schedule “___” hereto.

(q)   “Technology” means electronic and any other mechanical devices designed and used to perform
      Information Management.

(r)   “Work System Design and Implementation” means the analysis, design and facilitation of
      implementation of work processes and job responsibilities associated with using office
      automation systems and performing automated functions, but excluding organizational design,
                                               -3-


        human resources responsibilities, and the design of any work processes not related to
        Information Management.


2.      Scope of Agreement

2.1     Customer agrees to retain Consultant to provide the Services and Consultant agrees to render the
Services, all subject to and in accordance with the terms and conditions of this Agreement.

2.2     During the term of this Agreement and so long as Consultant is not in default under this
Agreement, Customer grants Consultant the exclusive right to be its sole supplier of all Services within
the scope of Consultant’s Business, except during those times when Consultant is not able to or cannot
supply consultants, within a reasonable period of time, to render the required Services. During such
times, Customer shall be at liberty to retain additional outside consultants as needed to render the
Services.

2.3     In order to effectively deliver the Services to Customer, Consultant will create the Systems
Development Services Unit on the Customer sites located in [location(s)] and will provide SDS Staff as
well as Project Staff.

3.      Responsibilities of Customer

In order to direct and assist the Systems Development Services Unit in carrying out the Services in an
efficient and successful manner, Customer agrees to perform the functions, duties and responsibilities as
set out in Schedule “_____” hereto.

4.      Systems Development Services Unit Staff

4.1      Consultant will provide Customer the specified number of SDS Staff to the Systems Development
Services Unit. The number of employees in the SDS Staff shall be determined by Customer according to
the following guidelines:

(a)     The minimum number of employees in the SDS Staff shall not be less than [number] during the
        first _______ months of the term of this Agreement;

(b)     The number of employees required to be part of the SDS Staff shall be determined during the first
        _______ months of the term of this Agreement;

(c)     Following the aforementioned ___-month determination period, the minimum number of
        employees in the SDS Staff may be reduced by mutual agreement by the parties hereto.

4.2     Customer and Consultant agree that at any time during the term of this Agreement, the ratio of
SDS Staff A to the total number of SDS Staff shall be no greater than ____ per cent (___%).

4.3     Customer, in its sole determination, shall have the option to request the replacement of any Staff
it considers to be unsuitable. Consultant shall use its best efforts to replace such Staff as quickly as
possible, but in no event more than _______ [weeks/months] after the request for such replacement is
made by Customer. In the event of a serious breach of conduct by a Staff member, Customer may request
immediate removal of such Staff member. Customer and Consultant agree that SDS Staff A can only be
replaced by SDS Staff B.
                                                -4-


4.4     Customer must provide Consultant with ______ days’ written notice to terminate the services of
any SDS Staff. However, Consultant will only reduce or replace up to _____ SDS Staff in any ____–day
period.

4.5     Consultant shall notify Customer in writing at least ______ days before terminating the
employment of any SDS Staff A. Customer may then elect, within ______ working days, to make a
request to Consultant, in writing, to continue the employment of such Staff beyond the date indicated by
Consultant. In such an event, Consultant will not terminate the employment of the said Staff and
Customer shall be responsible for any additional cost of termination to Consultant arising from the
requested continuation of employment of such Staff.

4.6      Upon request, Consultant will provide Project Staff for the Systems Development Services Unit,
subject to the availability of qualified staff, for a minimum period of ____ day(s). Customer must give
Consultant ____ days’ written notice to terminate the services of any Project Staff, unless otherwise
agreed in writing.

4.7      Consultant reserves the right to select the employees which will be assigned as SDS Staff and
Project Staff, provided such selection is made with a view to assuring the continuity required within the
SDS Unit. There will be no charge to Customer for any replacement made in accordance with the
foregoing during the orientation period required to ensure that the replacement employee is sufficiently
prepared to perform his or her task, such orientation period not to exceed _______ days.

4.8     Customer agrees during the term of this Agreement to contract with Consultant separately for
the services of a SDS Unit Manager whose responsibilities will be to manage the SDS Unit operations and
SDS Staff, such contract to be either on a full time or part time basis as the parties agree is necessary to
allow Consultant to fulfil its obligations hereunder.

5.      Fees

5.1     Customer shall pay to Consultant the annual cost of the SDS Staff assigned by Consultant to the
Systems Development Services Unit without deduction for vacation and holidays, education and
training, sick days (up to _____ calendar days) or other temporary paid absences, in _______
[weekly/monthly/bi-weekly/semi-annual] payments for each employee to be calculated as follows:

        Employee Total Annual Compensation divided by [no of payments] multiplied by the
        Outsourcing Agreement Factor

5.2    Customer shall pay to Consultant the cost of Project Staff assigned by Consultant to the Systems
Development Services Unit on a daily basis calculated as follows:

        Employee Total Annual Compensation divided by [no. of days] multiplied by the
        Outsourcing Agreement Factor

5.3     The Outsourcing Agreement Factor (OA Factor) will be:

        For the SDS Staff A:

        For the SDS Staff B:

        For continuous use of a Project Staff, if Customer request is for a period of _____ to _____ days:
                                               -5-


5.4     If a Project Staff assignment exceeds the number of days originally requested, the initial OA
factor continues to apply up to the maximum number of days of the initial period. Thereafter, the OA
Factor shall be ____________.

5.5     If a Project Staff is terminated at the request of Customer in advance of the number of assignment
days requested, the total fees are calculated as follows:




5.6     Fees for the replacement of SDS Staff B or Project Staff, at the request of Consultant, shall be
calculated using the Outsourcing Agreement Factor of the Staff being replaced and the days done in the
period of the person being replaced will apply to the replacing Staff.

5.7     Fee for SDS Staff B replacing SDS Staff A, at the request of Customer or Consultant, will be
calculated using the Outsourcing Agreement Factor hereinabove defined for SDS Staff B.

5.8      All Non-Personnel Expenses incurred by Consultant in the performance of its Services hereunder
shall be borne directly by Customer. Consultant shall be reimbursed by Customer for all Non-Personnel
Expenses at Consultant’s cost, provided that Customer shall have approved in advance all expenses to be
made by Consultant which exceed $__________ per transaction. Consultant shall submit supporting
documentation for any Non-Personnel Expenses. Upon prior approval by Customer, Customer shall pay
the cost of education or training provided by third parties for SDS Unit staff.

5.9      Customer shall pay all pre-approved travelling and living expenses incurred by SDS and Project
Staff assigned to Customer who are not resident in [location(s)].

6.      Payment

6.1     Invoices for Services rendered and expenses incurred shall be rendered by Consultant to
Customer at the end of each calendar month. Invoices are due upon receipt by Customer and payable
within _______ days after the date of such invoice.

6.2    If Customer is at any time in default of payment of any amount owing to Consultant hereunder,
the amount in arrears shall be subject to an interest charge of [amount or percentage].

6.3      Consultant shall comply with all applicable federal, state/provincial and local laws, including
without limiting the generality of the foregoing, legislation and regulations governing unemployment
insurance, workers’ compensation and safety, and shall give all notices and make all payments required
by such laws, and shall furnish Customer such evidence of compliance as Customer may require from
time to time.

6.4     Customer shall comply with all applicable federal, state/provincial and local laws with respect to
taxes or fees of any nature on the Services provided by Consultant, shall give all notices and make all
payments required by such laws and shall furnish Consultant such evidence of compliance as Consultant
may require from time to time.

7.      Performance Standards

7.1      The parties hereto agree to negotiate mutually acceptable and reasonable performance standards
or service level objectives for each phase of the projects executed by SDS Staff and Project Staff.
                                              -6-


7.2     Consultant shall provide Customer with a written report, at such intervals as the parties may
agree to, comparing the performance actually achieved against the performance standards or service level
objectives. Where the achieved performance does not meet the standards or objectives, Customer may
request that Consultant develop an improvement plan to the SDS Staff and Project Staff, such plan to be
developed and provided within a reasonable time of Customer’s request. In the event that performance
continues to remain below the standards or objectives, Customer may elect to follow the dispute
resolution process set out in Section [no.].

7.3     Consultant shall provide Customer with a monthly operations report which will include:

(a)     the current number of SDS Staff and Project Staff assigned to Customer;
(b)     the number of hours expended on each project;
(c)     a current breakdown of SDS Unit and other Information Management budget issues;
(d)     a list of Services completed since the last monthly operations report;
(e)     such other items as the Outsourcing Agreement Committee requests from time to time.

7.4    The Outsourcing Agreement Committee shall hold a monthly meeting to review Consultant’s
monthly report and to address the following questions:

(a)     Is the Outsourcing Agreement helping Customer to meet its business objectives?
(b)     Are the parties satisfied with the performance of the Agreement?
(c)     What is the expectation of fees over the next period(s)?
(d)     Are any changes required in the staffing from Consultant?
(e)     Are there any unresolved issues which will ultimately affect the performance of the Agreement?

7.5     Consultant agrees to make an authorized representative available, at no charge to Customer, to
attend the monthly meetings of the Outsourcing Agreement Committee.

8.      Term

8.1     This Agreement shall commence on the date first hereinabove written, and shall continue for a
period of ____________ [months/years] unless terminated earlier in accordance with the terms hereof.

8.2      This Agreement shall be automatically extended past the initial term for a subsequent ______
[month/year] year term at the existing Outsourcing Agreement Factor unless either party gives ______
[days/weeks/months] written notice of termination to the other party prior to the expiry of the term then
in effect.

9.      Ownership and Proprietary Rights

9.1     Any software made available to Consultant by Customer at the commencement of the term of
this Agreement shall remain the property of Customer or third parties, as the case may be. All
Application Software, System Software and related documentation developed or acquired by Consultant
for Customer and paid for by Customer in accordance with this Agreement shall be proprietary to
Customer or third parties, as the case may be. All work processes, procedures and methods developed by
Consultant in carrying out the Services and all materials that were in Consultant’s possession prior to
entering into this Agreement shall be proprietary to Consultant and Consultant is hereby granting to
Customer a perpetual irrevocable right of use for those work processes, procedures and methods.
Customer shall ensure that all Application Software, including source code and related documentation,
will be delivered to Consultant at the beginning of the term of this Agreement without violating any
obligations of confidentiality and nondisclosure of any third party. Customer shall also designate which
Application Software is proprietary
								
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