External Service Level Agreement Template

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					This External Service Level Agreement (SLA) provides a detailed framework to
establish legally binding service levels with external providers (vendors). This SLA can
be included with a service contract to formally define what service is to be provided.
This agreement is essential to specify the desired measurable service level standards
early in vendor negotiations. This document can be used by small businesses and
should be attached to legal contracts between a company and an external service
provider to ensure proper service levels.
External Service Level Agreement
Project Title

What is the External Service Level Agreement?
     The External Service Level Agreement (SLA) provides a detailed framework to establish
     legally binding service levels with external providers (vendors). This document should
     be attached to legal contracts between - and external service providers.

     The objectives of the external SLA are:

        To help teams to specify the desired measurable service level standards early in
         vendor negotiations and to treat the service level agreement as a crucial part of the
         overall negotiations. It is more advantageous for - if our internal teams have thought
         through the desired service levels and effectively set the agenda by submitting the
         Service Level Agreement rather than starting with the Service Provider's proposed
         agreement.
        To assist operational teams working with their counterparts at the Service Provider
         firm to document operational processes, monitoring thresholds, business continuity
         plans, etc.
        To help teams focus on the key measurable service level standards that are critical
         to the success in delivering a service to - customers. These performance measures
         will be legally binding and can require actions and remedies from the Service
         Provider if the Provider fails to meet them.

     Representatives from Procurement, and Legal have approved the language indicated in
     BLACK in this document. You should check with your respective Procurement and
     Legal partners when making modifications to this language.

     The quality tools that support the creation of this document are:

     Improvement Path Tools:
         FMEA
         SEAM

     Development Path Tools:
         FMEA
         SEAM




     NOTE: When using this document, the portions in blue italics are instructional
     only and should be removed. The portions in Black represent approved language
     for use in External Service Level agreements.
                                                                                                                                      Project Title
                                                                                                             External Service Level Agreement


Table of Contents

I. Background .............................................................................................................................................. 4
              A. Description ................................................................................................................................ 4
              B. Constraints ................................................................................................................................ 4
              C. Agreement Maintenance ........................................................................................................... 4
II. Definitions ................................................................................................................................................ 5
III. Business / Service Overview ................................................................................................................ 7
              A. Hours of Operation and Service Maintenance .......................................................................... 7
              B. Service Support Contacts ......................................................................................................... 7
              C. Performance Reports ................................................................................................................ 8
IV. Service Level Standards ....................................................................................................................... 8
              A. Service Availability .................................................................................................................... 8
              B. Transaction Response Time ................................................................................................... 10
              C. Problem Management............................................................................................................. 12
              D. Technical Support Response Time......................................................................................... 15
              E. Processing Deadlines ............................................................................................................. 16
              F. Change Management Standards ............................................................................................ 18
              G. Limitation on Liquidated Damages ......................................................................................... 20
V. Approval / Contact Information ........................................................................................................... 20
VI. Appendices .......................................................................................................................................... 22


 Revision History
         No.               Date                         By                                                    Reason




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                                                                          External Service Level Agreement




I. Background
This information may be obtained from the Project Charter.

A. Description
The service level management process should lead to improved communications between the SLA
parties, particularly about service level expectations, as well as improved service performance. These
are the two key tests--improved communications and improved performance--that should guide the
service level management process.

This SLA defines Service functionality from the perspective and customers and addresses measurable
service level standards.

B. Constraints
List (do not describe in detail) any boundaries or restrictions within which the project must operate or
within which the Change / Solution must fit.

Typical constraints may include:
Must align with existing strategic direction
Must fit into existing technology architecture
Must agree with existing vendor/business partner licenses, agreements, or contracts
Must meet Privacy restrictions
Must provide Intellectual Property protection
Must fulfill Legal, Audit, or Compliance obligations

C. Agreement Maintenance
    1. Scope of Review

        Supplier and will track performance hereunder and review the results on the occasions specified
        in the following subparagraphs. Each review shall determine if changes to this SLA are required,
        and if service level goals and objectives are being achieved that meet the Line of Business
        needs. The parties shall renegotiate and revise this SLA as necessary to reflect the findings of
        the review and to make mutually agreeable changes.

    2. First Review for Revision

        The first review of this SLA for revision will be conducted [days/months] (but no later than six
        months) following the Effective Date.

    3. Reviews for New Service

        Supplier and vendor will track performance hereunder and review the results _XXX__ months
        after the Effective Date and renegotiate mutually agreeable changes to this Schedule [ __ ] initial
        here. Remedies for failure to achieve service level standards will not be available until after this
        three-month milestone, and performance tracking for determining remedies will commence after
        the milestone.

    4. Scheduled SLA Maintenance

        At least 60 days prior to each anniversary of the Effective Date, the - representative will schedule
        an SLA review with the - and Supplier representatives.


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                                                                           External Service Level Agreement



    5. Unscheduled SLA Maintenance

          The parties shall review this SLA and perform any necessary unscheduled maintenance revisions
          upon occurrence of any of the following events:
            Significant modifications of business critical functions
            Results of conducting a business impact analysis
            Changes in business or operating environment
            Changes to the current organizational structure
            Acquisition or mergers which affect the business or support environments
            New critical hardware or software applications introduced

II. Definitions
The definitions below are suggested to support terms used in this document.

Term                               Description
Business Impact                    The effect of a Problem on - systems, products, services or
                                   operations from Line of Business perspective, including business,
                                   financial, legal, or public relations factors.
Change Management                  The function/process of introducing and managing service changes
                                   due to changed code, changed services, or changed processes.
                                   Does not refer to any specific organization within - or Supplier.
Force                              Such event may include action or inaction of governmental, civil or
Majeure                            military authority; fire; strike; lockout or other labor dispute (but not
Event                              including delays caused by subcontractors or suppliers); flood; war;
                                   riot; theft; earthquake and other natural disasters.
Help Desk                          Supplier’s place to call to report Problems or ask for assistance.
                                   (Note: Include phone for Help Desk.)
Line of                            Organization in - that services customers and clients.
Business
Notification                       The process of Supplier’s informing - that a Problem has occurred or
                                   of - informing Supplier that a Problem has occurred. - and Supplier
                                   will agree on mutually acceptable methods for sending notifications
                                   and for documenting notifications.
Outage                             A period commencing at the earlier of the time when (1) - notifies
                                   Supplier, or (2) Supplier otherwise becomes aware, that the
                                   conditions for a Severity 1 or Severity 2 Problem have occurred and
                                   ending when Supplier has notified - that Supplier has restored the
                                   Service. If another related Problem occurs within _[four]_ hours
                                   after Supplier has restored the Service, all time from the
                                   commencement of the initial Outage until the Service has been
                                   restored for _[four]_ continuous hours shall be included as part of
                                   the Outage. Outages shall not include any time that is due to:
                                                   Scheduled Downtime.
                                                   A failure of communications lines that is not due to
                                              Supplier’s negligence or willful misconduct.
                                                   A failure or fault of the -’s or end user’s systems or of
                                              any system not under the reasonable control of Supplier or
                                              its contractors.
                                                   A Force Majeure Event.
                                                   -’s or end users’ failing to operate the Services in
                                              accordance with the terms of this Agreement.
Problem                            One or more events that cause a disruption of Service, or which, if
                                   not causing a service disruption nevertheless require further
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                                   monitoring and/or repair.
Problem Identification             The earlier of the time when Supplier first becomes aware of a
                                   Problem, or - notifies Supplier of the Problem.
Problem Management                 The process by which Problems are identified, recorded, assigned,
                                   and managed through to resolution.
Problem Resolution                 Changes to software or procedures that create a permanent fix for a
                                   Problem. Problem Resolution may occur at the time of Service
                                   Restoral or later, if a Workaround was installed to perform Service
                                   Restoral.
Response Time                      The time required for a computer system or an associate (employee)
                                   to act upon input and deliver results to the user or requestor.
Service                            Restoration of service that was disrupted during a Problem. Service
Restoral                           Restoral may be either Problem Resolution (permanent fix) or a
                                   Workaround reasonable in -’s judgment.
Service                            The components required to deliver the Service, including, without
Delivery Path                      limitation, the primary applications, the underlying operating
                                   systems, the network connectivity, any software and hardware
                                   required to support these components and any supporting
                                   processes. If a Service utilizes more than one platform (2-tier and 3-
                                   tier architecture), all the platforms and components of those tiers are
                                   included.
Severity                           A classification of a Problem in terms of business impact.
Severity Level 1                   A Problem whose impact on - business functions and practices is
                                   critical and service is unavailable, unreliable or severely degraded, in
                                   -’s reasonable judgment after consultation with Supplier.
Severity Level 2                   A Problem whose impact on - business functions and practices is
                                   moderate, and service has experienced a significant disruption or
                                   had recurring Problems that jeopardized delivery of service, in -’s
                                   reasonable judgment after consultation with Supplier. A Severity 1
                                   Problem for which Supplier has provided a Workaround is a Severity
                                   2 Problem until Supplier provides a Problem Resolution.
Severity Level 3                   A Problem that does not meet the criteria for a Severity 1 or Severity
                                   2 Problem classification.
Workaround                         A temporary fix or bypass for a Problem or incident that restores
                                   disrupted service.



The definitions section assists in bringing together associates of different backgrounds, specialties and
experience, by providing a common understanding of terminology used. The objective(s) of the
definitions section are:
    1. Define all terms that may have special meaning.
    2. Define all acronyms.

As the document is written, identify terms, which may not be understood by all of the potential readers of
the document. As the document is reviewed, add or revise any terms not understood by the reviewers.

Helpful Hints
If the meaning is discussed, debated, or qualified during discussion assume that it should be included in
the definition section, including the qualifiers discussed.

Use standard definitions from glossaries or business dictionaries as a starting place to begin with a
consistent definition. The glossary provided on the CMP website is a good starting point. You can
access this glossary by going to the CMP home page:
and then clicking on the Glossary link under the Support tab at the top of the page.

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                                                                         External Service Level Agreement


Do not be afraid to modify the definition if the term is used in a special way in the context of the
document. If you have modified a term that is in the CMP glossary, please provide feedback to the CMP
support group by clicking on the Feedback icon at the top of the CMP home page (link provided above.)

III. Business / Service Overview

A. Hours of Operation and Service Maintenance
    Core Business Hours for the Service
        In specifying when a system or service should be available, it may make good business
           sense to specify more than one kind of availability. For example a supplier's web site should
           be available 24 x 7, while the online transaction service needs to be available only during
           specified business hours. The SLA participants should carefully weigh the cost-benefits of
           this fine-tuning. If various availability categories are highly relevant to a service's critical
           success factors, the added complexity may be worth the cost.
        If specified system maintenance periods do not fit into the table's weekly framework, the SLA
           participants can adjust the table to show monthly maintenance or can specify another
           guideline, such as within 48 hours notice.

                                                                           Scheduled Time
               Function                  Description                      (in Eastern Time)
                                                                      Day       Start      End
        Availability        Hours during which Service should       M–F
                            be available to -’s end-users           Sat.
                                                                    Sun.
                                                                    Holidays
        Scheduled           Hours during which online               M–F
        Maintenance         transactions with the system or         Sat.
                            service are not available due to        Sun.
                            Supplier’s conducting scheduled         Holidays
                            maintenance and back-up
                            procedures
        Batch               Hours during which batch processing     M–F
        Processing          occurs                                  Sat.
                                                                    Sun.
                                                                    Holidays

B. Service Support Contacts
    Include primary and secondary contacts for the vendor and -. Include relevant application support
    contacts for both the vendor and -. It may be necessary to adjust the table to include other relevant
    parties such as - or vendor customer care, back-office, help desk, or other support sites.




        Supplier Site
        Location:
        Primary Site
        Contact:
        Contact Numbers:        Work:                              Home:
                                Pager:                             Cellular:


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        Supplier Site
        Location:
        Alternate Site
        Contact:
        Contact Numbers:       Work:                             Home:
                               Pager:                            Cellular:
        - Site Location:
        - Primary Contact:
        Contact Numbers:       Work:                             Home:
                               Pager:                            Cellular:
        Alternate - Contact:

        Contact Numbers:       Work:                             Home:
                               Pager:                            Cellular:


C. Performance Reports
    Describe here the vendor reports that are required to accurately gauge the business impact of the
    service delivery process. Specify the metrics, report frequency, due times and measurement
    responsibility.

      Report Description                                      Frequency         Due Date




IV. Service Level Standards
    Each subsection in Service Level Standards should address a major metric or service characteristic.
    Typical metrics and service levels included below are Availability, Transaction Response Time,
    Problem Management, Technical Support Response Time, and Processing Deadlines. There may be
    other service levels important to define for contractual purposes based on project needs.

    For each defined metric or service, include the following:
     Definition - description of metric/service, metric formula, definition of formula variables
     Measurement responsibility
     Service Level standards - (In this subsection for each metric, enter the measurable service level
        standard for the metric. Note that the template currently has placeholder standards that should
        be a good starting point for the negotiations. The - teams should review these proposed
        standards very carefully before presenting the first SLA proposal to the service provider.)
     Failure to Achieve Service Level Standards – the language needed to specify consequences over
        one month and multiple months, as well as liquidated damages and breach of contract
        stipulations

A. Service Availability
    1. Definition

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        a. Description

               Availability (“Availability”) means that a service is accessible to the end-user at the time the
               end-user is scheduled to use it, i.e., excluding Scheduled Downtime. The standard metric for
               Availability is Percentage Availability.


        b. Formula

               Percentage Availability (“Percentage Availability”) is calculated by dividing the Actual Minutes
               of Availability by the total number of Scheduled Minutes for the month multiplied by 100.
               Actual Minutes of Availability equals Scheduled Minutes minus Unscheduled Downtime
               Minutes. All quantities in the formula are totals for a month.

               A% = (Scheduled Minutes - Unscheduled Downtime Minutes) x 100
                                Scheduled Minutes


        c. Formula Variables

Scheduled Minutes: Total minutes in the month falling within the start and end times stated in the
“Availability” panel of the table in paragraph III.A less Scheduled Downtime. If no start and end times are
stated, Scheduled Minutes equals total minutes in the month less Scheduled Downtime minutes.

Scheduled Downtime: Total minutes during the maintenance periods specified in the “Scheduled
Maintenance” panel of the table in paragraph III.A and at such other times as the parties may agree at
least 30 days in advance. The total number of minutes in such maintenance periods shall be “Scheduled
Downtime.”

Actual Minutes of Availability: Scheduled Minutes during the month less Unscheduled Downtime Minutes
during the month.

Unscheduled Downtime: Total duration in minutes of all Outages and controlled shutdown time during
the month. If Supplier performs a controlled shutdown of the Service for emergency maintenance or the
like, Supplier shall make reasonable efforts to give notice thereof at least [eight] hours before such
event.

    2. Measurement Responsibility

        Supplier shall calculate the monthly Percentage Availability and shall provide supporting
        documentation showing Scheduled Minutes, Unscheduled Downtime and a log showing day and
        time for each Outage. Supplier shall forward a copy of the availability report and log for each
        month to - within five Business Days after the last day of each month. - shall review the
        availability report and log and may question omission from the log of any Outage for which it has
        preexisting written documentation. The parties shall cooperate in good faith to resolve any
        disagreement about the number and duration of Outages.

    3. Service Level Standard

        The Percentage Availability service level standard shall be           [99.8%].

    4. Failure to Achieve Service Level Standard

        a. Failure to Fulfill Standard over One Month

               If the monthly Percentage Availability falls below the standard set in subparagraph IV.A.3
               during any calendar month, Supplier shall deliver to - within 10 Business Days after the close
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            of the month, a written plan of corrective action describing the steps that Supplier will take to
            cause Percentage Availability to equal or exceed the standard during the current month and
            each month thereafter. - may comment on this plan, and Supplier shall consider in good faith
            implementing -’s suggestions. Supplier shall carry out the steps set forth in such plan, as
            modified in response to -’s suggestions. Supplier shall bear the expense of implementing
            such plan.

        b. Failure to Fulfill Standard over Several Months

            If monthly Percentage Availability falls below the standard set in subparagraph IV.A.3 for any
            three months during a six-month period, Supplier shall meet with -’s representative at -’s
            request to determine a course of action. - may make commercially reasonable requests to
            Supplier to add redundant facilities, eliminate single points of failure, replace components and
            otherwise to supply additional resources, at Supplier’s sole expense, that are reasonably
            designed to improve availability, and Supplier shall comply with those requests. -’s making
            requests and Supplier’s complying with them do not relieve Supplier of its obligation to fulfill
            its obligations under this Agreement.

        c. Liquidated Damages

            If Percentage Availability falls below the standard set forth in subparagraph IV.A.3 for any
            three months during a six-month period after Supplier has implemented the plans called for in
            the preceding two paragraphs, or if Supplier does not make and implement such plans,
            Supplier shall credit - against fees and payments due for the months following the months in
            which such multiple failures occur, as liquidated damages and not as a penalty, an amount
            equal to [15%] of the fees and payments due to Supplier from - for that month.

        d. Material Breach

            If Percentage Availability falls below the standard set forth in subparagraph IV.A.3 for any
            four months during a six-month period, - may treat the failure as Supplier’s material breach.

        e. Termination Due to Force Majeure Event

            If Supplier is affected by a Force Majeure Event, Supplier shall take reasonable action to
            minimize the consequences of any such cause. Supplier shall give - prompt notice in writing
            of the facts which constitute such cause when the cause arises; and, when the cause ceases
            to exist, shall give prompt notice thereof to the other party.

            If Supplier is unable to fulfill its obligations under this SLA and the Service is not available to -
            for a period of five (5) consecutive days due to a Force Majeure Event, - shall have the right
            to terminate this Agreement without any liability or further obligation to Supplier as of the date
            of termination.

B. Transaction Response Time
    1. Definition

        a. Description

            Response Time (“Response Time”) for a Transaction shall be the time recorded from the time
            that a message containing transaction information has been received at the first component
            of the Service Delivery Path that is under Supplier’s control to the time the last component of
            the Service Delivery Path that is under Supplier’s control sends a responding message to the
            client. Error messages and Transactions generating them may be omitted.


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        b. Formula
            Response Time Percentage shall be the number of Transactions Included for a month
            divided by the Total Number of Completed Transactions for that month multiplied by 100.

                Response Time Percentage =
                (Transactions Included/ Total Number of Completed Transactions) *100

        c. Formula Variables

Transaction: A single message sent to the Service and the message from the Service in response.

Total Number of Completed Transactions: Transactions that completed successfully without error.

Transactions Excluded: Transactions that failed to complete, were tagged with errors or whose
Response Time exceeded        [N]      seconds.

Transactions Included: Total Number of Completed Transactions less Transactions Excluded.

    2. Measurement Responsibility

        Supplier shall maintain accurate records showing the Response Time for Transactions on the
        Service during the scheduled times, as specified in table in paragraph III.A. Supplier shall
        forward a summary of the records for each month to - within five Business Days after the last day
        of each month. Entries made in Supplier’s reasonable record-keeping system in the ordinary
        course of business shall be conclusively presumed to demonstrate Response Time.


    3. Service Level Standard

        Response Time Percentage for a calendar month shall not be less than        _[99.5%]_.

    4. Failure to Achieve Service Level Standard

        a. Failure to Fulfill Standard over One Month

            If Response Time Percentage for a month is less than the standard set in subparagraph
            IV.B.3, Supplier shall deliver to - within 10 Business Days after the end of the month a written
            explanation and statement, acceptable to -, of its plans to ensure that Response Time
            Percentage consistently meets or exceeds the standard and shall make reasonable efforts to
            achieve that objective within 30 days after delivering the statement. - may comment on these
            plans, and Supplier shall consider in good faith implementing -’s suggestions. Supplier shall
            carry out the steps set forth in its plan, as modified in response to -’s suggestions. -’s making
            suggestions and Supplier’s complying with them do not relieve Supplier of its obligation to
            fulfill its obligations under this Agreement.

        b. Failure to Fulfill Standard over Several Months

            If Response Time Percentage is less than the standard in subparagraph IV.B.3 for any three
            months during a six-month period after implementation of Supplier’s written plan, or if
            Supplier does not carry out its plan, Supplier shall meet with -’s representative at -’s request
            to determine a course of action. - may make commercially reasonable requests to Supplier
            to add additional resources, e.g., lines, servers and other components, at Supplier’s sole
            expense, and Supplier shall comply with those requests.

        c. Liquidated Damages


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            If Response Time Percentage is less than the standard stated in subparagraph IV.B.3 for any
            three months during a six-month period after Supplier has implemented the plans called for in
            the preceding two paragraphs, or if Supplier does not make and implement such plans,
            Supplier shall credit - against fees and payments due in the months following the months in
            which such multiple failures occur, as liquidated damages and not as a penalty, an amount
            equal to [10%] of the fees and payments due to Supplier from - for that month.

        d. Material Breach

            If Response Time Percentage is less than the standard in subparagraph IV.B.3 for any four
            months in a six-month period, - may treat this occurrence as a material breach of this
            Agreement.

C. Problem Management
    1. Definitions

        The Problem Management process involves Initial Notification about Problems, periodic Status
        Updates, Service Restoral and Problem Resolution.

        a. Initial Notification Time

            The period elapsed from Problem Identification until Supplier informs VENDOR by telephone
            about the Problem. Such notice is the “Initial Notification.”

        b. Status Update

            Information given orally or in other mutually agreeable form to VENDOR regarding Supplier’s
            progress toward Service Restoral.

        c. Status Update Time

            The time interval within which Supplier shall provide a Status Update for an Outage.

        d. Service Restoral Time

            The period elapsed from Problem Identification until the time that Supplier has diagnosed the
            Problem, provided Service Restoral and communicated to VENDOR that Service Restoral
            has occurred.

        e. Problem Resolution Time

            The period elapsed from Problem Identification until the time that Supplier has installed the
            Problem Resolution.

    2. Measurement Responsibility

        Supplier shall keep a permanent record of Problem resolution activity for each Problem, including
        the Initial Notification Time, Status Update Time, Service Restoral Time and Problem Resolution
        Time for each Problem in a permanent record of resolution activity. Within five Business Days
        after the end of each month and in a format agreed between Supplier and VENDOR, Supplier will
        prepare and distribute to VENDOR and relevant Supplier support personnel a Problem Summary
        report. This report will provide detail on individual Problems occurring, and on the steps Supplier
        took to resolve them. The report also will contain summary information as agreed between
        VENDOR and Supplier. Upon VENDOR’s request, Supplier will deliver a report (a) on resolution
        of a specific Problem, (b) progress through a specific date or (c) other reasonable customized
        report.
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    3. Service Level Standards

        Each Problem shall receive appropriate attention in accordance with the Severity of the Problem.
        After Problem Identification, VENDOR shall classify the Severity of a Problem. When VENDOR
        encounters a Problem with use of the Services, VENDOR shall contact Supplier in accordance
        with the procedure described in subparagraph IV.D, with a request for Problem Resolution.
        Supplier shall make reasonable efforts to respond to VENDOR’s request for assistance in
        achieving Service Restoral within the times specified below for each Severity level. Supplier’s
        response shall include assigning fully qualified technicians to work with VENDOR to diagnose
        and cause Service Restoral.

        a. For Severity 1 Problems

Supplier will provide Initial Notification to VENDOR within 15 minutes or less from Problem Identification,
which time period shall be the “Initial Notification Time” standard for Severity 1 Problems.

Supplier will provide VENDOR Status Updates every hour after Initial Notification, which time period shall
be the “Status Update Time” standard for Severity 1 Problems.

Supplier shall provide Service Restoral within four hours or less after Problem Identification, which time
period shall be the “Service Restoral Time” standard for Severity 1 Problems. In doing so, Supplier shall
include assigning fully-qualified technicians to work with VENDOR without interruption or additional
charge, 24 hours per day, until Supplier provides a Service Restoral.

Supplier shall provide a Problem Resolution within seven days or less after Problem Identification, which
time period shall be the “Problem Resolution Time” standard for Severity 1 Problems.

        b. For Severity 2 Problems

Supplier will provide Initial Notification to VENDOR within 15 minutes or less from Problem Identification,
which time period shall be the “Initial Notification Time” standard for Severity 2 Problems.

Supplier will provide a Status Update to VENDOR every two hours or less after Initial Notification, which
time period shall be the “Status Update Time” standard for Severity 2 Problems.

Supplier shall provide Service Restoral within 12 hours or less after Problem Identification, which time
period shall be the “Service Restoral Time” standard for Severity 2 Problems. In doing so Supplier shall
assign fully-qualified technicians to work with VENDOR during the period from [5:00 AM until 11:00 PM]
local time in [_ [Monday through Saturday]         or until Supplier Service Restoral occurs.

Supplier shall provide a Problem Resolution within 35 days or less after Problem Identification, which time
period shall be the “Problem Resolution Time” standard for Severity 1 Problems.

        c. Severity 3 Problems

            For Severity 3 Problems, Supplier shall provide Service Restoral within 48 hours or less and
            shall provide a Problem Resolution within 90 days or less after Problem Identification.
            Supplier shall deliver Status Updates biweekly. These time periods shall be, respectively, the
            “Service Restoral Time” standard, the “Problem Resolution Time” standard, and the "Status
            Update Time" standard for Severity 3 Problems.

        d. Written Plan

            Without limiting Supplier’s obligations under this Section, if Supplier does not deliver a
            Problem Resolution for a Problem within the Problem Resolution Time standards established
            by this Section (whether Supplier has delivered a reasonable Workaround or not), Supplier
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            shall provide a written analysis of the Problem and a written plan to supply VENDOR with
            Problem Resolution as soon as reasonably possible.

    4. Failure to Fulfill Service Level Standards

        a. Failure to Fulfill Standards Over One Month

            If Supplier’s fails to fulfill any of the following thresholds for the Problem Management
            standards for Outages specified in paragraphs IV.C.3.a and IV.C.3.b during any month,
            Supplier shall deliver to VENDOR within 10 Business Days after month-end a written plan of
            corrective action describing the steps that Supplier will achieve the standards for the current
            month and each month thereafter. VENDOR may comment on this plan, and Supplier shall
            consider in good faith implementing VENDOR's suggestions. Supplier shall implement the
            steps set forth in such plan, as modified in response to VENDOR's suggestions. Supplier
            shall bear the expense of implementing such plan. These thresholds are:
                  Three or more Initial Notifications for Outages exceed the Initial Notification Time.
                  Three or more Outages have Status Updates that exceed the Status Update Time.
                  Three or more Service Restorals for Outages occur after the applicable Service
                     Restoral Time.
                  Three or more Problem Resolutions for Outages occur after the applicable Problem
                     Resolution Time.

        b. Failure to Fulfill Standards Over Several Months

            If Supplier’s performance exceeds any of the following thresholds for the Problem
            Management standards for Outages as specified in subparagraphs IV.C.3.a and IV.C.3.b
            during any three-month period, Supplier shall meet with VENDOR's representative at
            VENDOR's request to determine a course of action. VENDOR may make commercially
            reasonable requests to Supplier to add resources, change procedures, or use different
            Problem management systems that are reasonably designed to improve Problem
            management performance, and Supplier shall comply with such requests at its sole expense.
            VENDOR’s making suggestions and Supplier’s complying with them do not relieve Supplier
            of its obligation to fulfill its obligations under this SLA. The thresholds are:
             [Five] or more Initial Notifications for Outages exceed the Initial Notification Time.
             [Five] or more Outages have Status Updates that exceed the Status Update Time.
             [Eight] or more Service Restorals for Outages occur after the applicable Service Restoral
                 Time.
             [Eight] or more Problem Resolutions for Outages occur after the applicable Problem
                 Resolution Time.

        c. Liquidated Damages

            If over a three-month period, Supplier fails to achieve the applicable Service Restoral Time
            standards specified in subparagraphs IV.C.3.a and IV.C.3.b for eight or more Outages after
            Supplier has implemented the plans called for in the preceding two paragraphs, or if Supplier
            does not make and implement such plans, Supplier shall credit VENDOR against fees and
            payments due for the month following the months in which such multiple failures occur, as
            liquidated damages and not as a penalty, an amount equal to [15%] of fees and payments
            due to Supplier from VENDOR for that month.

        d. Material Breach

            If over any six-month period, Supplier exceeds any of the following thresholds for the
            Problem Management standards for Outages specified in subparagraphs 3.a and 3.b,
            VENDOR may treat these performance shortfalls as a material breach and terminate this
            Agreement.

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               Ten or more Initial Notifications for Outages exceed the Initial Notification Time.
               Ten or more Outages have Status Updates that exceed the Status Update Time.
               Twelve or more Service Restorals for Outages occur after the applicable Service Restoral
                Time.
               Twelve ore more Problem Resolutions for Outages occur after the applicable Problem
                Resolution Time.

D. Technical Support Response Time
    1. Definition

        Technical Support Response Time (“Technical Support Response Time”) is the period elapsed
        from the time VENDOR reports a suspected Problem until the time that Supplier has assigned
        personnel with relevant skills to diagnose and resolve the Problem and communicated this
        assignment back to VENDOR. Supplier will designate the contact representative(s) responsible
        for assigning the Problem and communicating with VENDOR.

    2. Measurement Responsibility

        VENDOR will record in a VENDOR problem tracking system tickets the details for each call or
        page to Supplier technical support teams. VENDOR shall prepare an exception report after
        [three] or more Problems for which Supplier’s Technical Support Response Time exceed [30
        minutes]. By the fifth business day after the end of each month, VENDOR will compile a list of
        Problems in which the Supplier's Technical Support Response Time exceeded [30 minutes].

    3. Service Level Standards

        a. Process

Supplier shall provide to VENDOR, and keep current on a monthly basis, a list of persons and telephone
and pager numbers ("Calling List") for VENDOR to contact, 24 hours per day, seven days per week, to
ask questions concerning, or to request assistance in solving, Problems encountered in VENDOR’s and
its end users’ use of the Services. Such Calling List shall include (a) the first person to contact in the
event of such question or Problem and (b) the persons in successively more responsible or qualified
positions to respond to the question or request for assistance, up to and including the Chief Operating
Officer of Supplier.

When VENDOR encounters a suspected Problem, VENDOR may page or call the first contact. If no
response is received in 15 minutes, VENDOR may page the first contact again. If no response to this
page is received within 15 minutes, VENDOR may page the second contact. VENDOR may continue this
pattern of pages at 15 - minute intervals with each successively responsible person until a response is
received from a technically qualified person who will be responsible for resolving the Problem.

        b. Standard

            A technically qualified person from the Supplier who is responsible for the Problem
            Resolution shall respond to VENDOR’s initial telephone call or page within 15 minutes or less
            after VENDOR’s first call or page for answers or assistance.

    4. Failure to Achieve Service Level Standard

        a. Failure to Fulfill Standard Over One Month

            If the Technical Support Response Time exceeds [30 minutes] for [three] or more Severity 1
            or Severity 2 Problems], Supplier shall deliver to VENDOR within [10 days after exceeding 30
            minutes on the third Severity 1 or Severity 2 Problem], a written plan of corrective action

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                                                                                            Project Title
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            describing the steps that Supplier will take to cause the Technical Support Response Time to
            achieve or be less than this standard during the current month and each month thereafter.
            VENDOR may comment on this plan, and Supplier shall consider in good faith implementing
            VENDOR’s suggestions. Supplier shall carry out the steps set forth in such plan, as modified
            in response to VENDOR’s suggestions.

        b. Failure to Fulfill Standard Over Several Months

            If Technical Support Response Time exceeds [30 minutes for eight or more Severity 1 or
            Severity 2 Problems over a three-month period], Supplier shall meet with VENDOR’s
            representative at VENDOR’s request to determine a course of action. VENDOR may make
            commercially reasonable requests to Supplier to add additional facilities or personnel, at
            Supplier’s sole expense, that are reasonably designed to improve Technical Support
            Response Time. Supplier shall comply with such requests. VENDOR’s making requests and
            Supplier’s complying with them do not relieve Supplier of its obligation to fulfill its obligations
            under this SLA.

        c. Liquidated Damages

            If Technical Support Response Time exceeds [30 minutes for three or more Severity 1 or
            Severity 2 Problems per month over a three-month period] Supplier shall credit VENDOR
            against fees and payments due for the months following the months in which such multiple
            failures occur, as liquidated damages and not as a penalty, an amount equal to [$300] for
            each hour or part thereof that Technical Support Time exceeds [30 minutes for any Severity 1
            or Severity 2 Problem above three per month].

        d. Material Breach

            If Technical Support Response Time exceeds [30 minutes on 12 or more different Severity 1
            or Severity 2 Problems over a six-month period], VENDOR may treat these performance
            shortfalls as a material breach and terminate this Agreement.

E. Processing Deadlines
    1. Definition

        a. Description

            “Batch Processing Deadline” means the time specified in the column headed “Supplier Batch
            Processing Due Time” in the following table. [VENDOR and Supplier should complete the
            table as shown with the sample data below.]

                         VENDOR Data      Supplier        All
            Job
Job Name                 Transmission     Processing      Business     Saturdays     Sundays      Holidays
            Number
                         Due Time         Due Time        Days
Account     Acc1234      2:00 AM          8:00 AM         Yes          No            No           No
Updates
Security    Sec1234      2:00 AM          8:00 AM         Yes          Yes           Yes          Yes
Access
Updates


        b. Formula

                Deadline Miss Percentage =        Total Deadline Misses             * 100
                                                  Total Batch Processing Jobs

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                                                                            External Service Level Agreement



        c. Formula variables

Total Batch Processing Jobs - The number of batch processing jobs performed during the month for
which VENDOR transmitted correct data by its deadlines shown in the column captioned “VENDOR Data
Transmission Due Time” in the table in subparagraph IV.E.1.a.

Deadline Miss - Each failure of Supplier to complete a batch-processing job by the scheduled time,
excluding jobs delayed by late data transmissions from VENDOR.

    2. Measurement Responsibility

        Supplier will maintain logs for each batch-processing job showing times data transmissions were
        received from VENDOR and the times the results of batch processing were completed each
        processing day. By the fifth Business Day after the end of each month, Supplier will provide a
        report on the Percentage of Deadline Misses with supporting commentary on the days and
        processing jobs that experienced Deadline Misses. VENDOR shall review the Deadline Miss
        report and logs and may question omission from the log of any Deadline Misses for which it has
        different information. The parties shall cooperate in good faith to resolve any discrepancies in the
        information.

    3. Service Level Standard

        The Percentage of Deadline Misses for all jobs processed during the month (“Monthly Percentage
        of Deadline Misses”) shall not exceed [5%] .

    4. Failure to Fulfill Standards

        a. Failure to Fulfill Standards over one Month

            If the Deadline Miss Percentage exceeds the standard set in subparagraph IV.E.3 during any
            calendar month, Supplier shall deliver to VENDOR within 10 Business Days after month end
            a written plan of corrective action describing steps that Supplier will take to cause the
            Deadline Miss Percentage to equal or be less than the standard during the current month and
            each month thereafter. VENDOR may comment on this plan, and Supplier shall consider in
            good faith implementing VENDOR's suggestions. Supplier shall carry out the steps set forth
            in such plan, as modified in response to VENDOR's suggestions. Supplier shall bear the
            expense of implementing such plan.

        b. Failure to Fulfill Standards over Several Months

            If the Deadline Miss Percentage exceeds the standard set in subparagraph IV.E.3 for any
            three months during a six-month period, Supplier shall meet with VENDOR's representative
            at VENDOR's request to determine a course of action. VENDOR may make commercially
            reasonable requests to Supplier to add facilities, eliminate single points of failure, replace
            components and otherwise to supply additional resources, at Supplier's sole expense, that
            are reasonably designed to improve Supplier’s performance in achieving batch processing.
            Supplier shall comply with such requests. VENDOR’s making requests and Supplier’s
            complying with them do not relieve Supplier of its obligation to fulfill its obligations under this
            SLA.

        c. Liquidated Damages

            If the monthly Percentage of Deadline Misses exceeds the standard set in subparagraph
            IV.E.3 for any three months during a six-month period, Supplier shall credit VENDOR against
            fees and payments due for the month following the months in which such multiple failures

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            occurred, as liquidated damages and not as a penalty, an amount equal to [15%] of fees
            and payments due to Supplier from VENDOR for that month.

        d. Material Breach

            If the monthly Percentage of Deadline Misses exceeds the standard set in subparagraph
            IV.E.3 for any four months during a six-month period, VENDOR may treat that failure as
            Supplier's material breach.

F. Change Management Standards
    The Service Level Standards for Change Management should foster problem-free changes to
    systems and platforms covered by the Agreement. The intent of these standards is to minimize the
    disruption that could be caused by the changes. The standards revolve around the need for having
    advance notification and a thorough understanding of the system interdependencies that could be
    affected by the change. The Change Management details, individuals to be notified, sign-off
    requirements, change documentation requirements etc. are covered in this Service's Supporting
    Process Documentation for Change Management, which the parties to this Agreement will update
    from time to time to support smooth operations of the Service.

    1. Change Management Definitions

        a. Non-Intrusive Change - A change to the system or platform that does not require any
            downtime or that does not cause any changes to the application functions, operations or
            processes.

        b. Intrusive Change - A change to the system or platform that requires downtime or that requires
             changes in other systems that interface with the system or component undergoing change.

        c. Functionality Change - A change to the system, application or process that requires
            communications and training for associates or customers because they will need to learn
            how to handle the change in the application's functions, access rules, monitoring
            connections, etc.

        d. Planned Change - Any change other than an Emergency Change that the Supplier has
            planned for in advance.

        e. Advance Notification Timeframes - The number of business days from the point the Supplier
            provides VENDOR with the Required Change Management Documentation for Planned
            Changes to the point that the Supplier makes the change.

        f. Scheduled Maintenance Timeframes - Scheduled downtime periods specified in Section 2.1.1.
             during which the Supplier should perform maintenance and changes to the systems.

        g. Emergency Change - A change that must be done as soon as possible to achieve service
            restoral that will correct a Problem.

        h. Excluded Changes - Content changes or file updates that are part of an approved production
            process--for example, periodic updates of market news, feeds of changing commodity prices,
            account transaction updates, etc.

        i. Required Change Management Documentation - Sufficient information that will enable
             VENDOR to assess the impact of the change. The VENDOR Change Management form
             included in the Supporting Process documentation requires information such as:
              A description of the change
              Its interdependencies with other systems, components and hardware

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               Testing and migration requirements
               Success plan
               Backout plan
               Verification plan

        j. Necessary Testing Support - Assignment of technically competent people, sample data, and
             testing time to support changes initiated by VENDOR or by the Supplier. The Necessary
             Testing Support will be outlined in formal written requests submitted by VENDOR to the
             Supplier by the specified deadlines.

    2. Measurement Responsibility

          The Supplier will track the number of times the Supplier failed to:
           Provide Advance Notification of Planned Changes within the specified timeframes.
           Provide the required Change Management documentation.
           Perform the changes during the Scheduled Maintenance Period for the Service.
           Provide the necessary testing support VENDOR formally requested for changes initiated by
             VENDOR or the Supplier.
           Obtain the necessary VENDOR sign-offs for Changes.

          By the fifth business day after the end of each month, the Supplier will compile an exceptions
          report listing each occurrence of the Supplier's failure to meet the specified Change
          Management Service Level Standards. VENDOR will review this exceptions report and will
          comment on any omissions for which it has preexisting written documentation. The parties shall
          cooperate in good faith to resolve any disagreement about the number of Change Management
          exceptions.

    3. Service Level Standards

        The Supplier will provide Advance Notification of:

               [___5 ___] business days for planned Non-Intrusive Changes.
               [___10___] business days for planned Intrusive Changes.
               [___15___] business days for planned Functionality Changes.

        While these are the minimum Service Level Standards required by this SLA, the Supplier is
        encouraged to provide Advance Notification as soon as the Supplier starts planning the change.

        The Supplier's Advance Notification for each change will cover all the information required in the
        Change Management documentation, as specified in the form included in the Supporting Process
        Documentation for Change Management.

        The Supplier will perform the changes to the system and platform during the Scheduled
        Maintenance Period for the Service as specified in Section III.A.

        The Supplier will obtain the necessary sign-offs from the VENDOR managers designated in the
        Supporting Process Documentation for Change Management for:
             Intrusive Changes
             Functionality Changesa
             Emergency Changes
        A primary reason for this Service Level Standard is that some changes require certification before
        they can be migrated to production. When working on these Emergencies, the Supplier will abide
        by the Problem Management standards in Section IV.C.3.




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        The Supplier will provide the Necessary Testing Support outlined in formal written requests
        submitted by VENDOR within the specified deadlines. This testing can pertain to changes
        initiated by VENDOR or by the Supplier.

    4. Failure to Achieve Service Level Standards

        a. Failure to Achieve Standards over One Month

            If the Supplier fails to meet the specified Change Management Service Level Standards
            specified in subparagraph IV.F.3 for [___3___] or more occurrences in a calendar month, the
            Supplier shall deliver to VENDOR within [10 business days after the close of the month] a
            written plan of corrective action describing the steps the Supplier will take to eliminate future
            exceptions to the Change Management standards. VENDOR may comment on this plan,
            and the Supplier shall consider in good faith implementing VENDOR's suggestions. Supplier
            shall carry out the steps set forth in such plan, as modified in response to VENDOR's
            suggestions. Supplier shall bear the expense of implementing such plan.

        b. Failure to Achieve Standards over Several Months

            If the Supplier fails to meet the specified Change Management Service Level Standards
            specified in subparagraph IV.F.3 for [___3___] or more occurrences per calendar month for
            [any three months in a six month period], the Supplier shall meet with VENDOR's
            representative at VENDOR's request to determine a course of action. VENDOR may make
            commercially reasonable requests to Supplier to change its processes, at Supplier's sole
            expense, that are reasonably designed to improve compliance with the Change Management
            standards, and the Supplier shall comply with those requests.

        c. Liquidated Damages

            If the Supplier fails to meet the specified Change Management Service Level Standards
            specified in subparagraph IV.F.3 for [ 3 or more occurrences per calendar month for any
            three months in a six month period], the Supplier shall credit VENDOR against fees and
            payments due for the month following the months in which multiple Service Level exceptions
            occurred, as liquidated damages and not as a penalty, an amount equal to [___10%___] of
            the fees and payments due to the Supplier from VENDOR for that month.

        d. Material Breach

            If the Supplier fails to meet the specified Change Management Service Level Standards
            specified in subparagraph for IV.F.3 or more occurrences per calendar month for [any four
            months in a six month period], VENDOR may treat the failure as Supplier's material breach.

G. Limitation on Liquidated Damages
     Under no circumstances shall Supplier’s liability for liquidated damages in accordance with this SLA
     for performance failures occurring in any one calendar month exceed [35%] of fees and payments
     due from VENDOR to Supplier for that month pursuant to this Agreement.



V. Approval / Contact Information
Provide contact information for those who are/were involved in the creation of the External Service Level
Agreement, and indicate who approved it.

        NAME                       ROLE                  PHONE           Approval
                                                                         Required?
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                                                       Project Title
                                        External Service Level Agreement


                Champion / Sponsor          
                Change Manager / Belt       
                Legal Rep                   
                Procurement Rep             
                Technology Rep
                Author




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                                Project Title
                 External Service Level Agreement




VI. Appendices




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                                                                                               External Service Level Agreement

				
DOCUMENT INFO
Description: This External Service Level Agreement (SLA) provides a detailed framework to establish legally binding service levels with external providers (vendors). This SLA can be included with a service contract to formally define what service is to be provided. This agreement is essential to specify the desired measurable service level standards early in vendor negotiations. This document can be used by small businesses and should be attached to legal contracts between a company and an external service provider to ensure proper service levels.
This document is also part of a package Technology Services and Agreements 38 Documents Included