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A Strategic Guide with insight from THE CENTER FOR DIGITAL GOVERNMENT

Operations and Contract

The final phase includes ongoing operations and the contract. In addition, if an outsourcer must discontinue operations or a disaster occurs, this phase looks at how to ensure gov- ernment operations continue.

Contract changes are a natural result of long- term business agreements. Government requirements may change or evolve and the services required of the vendor may expand. Contract changes should be a natural exten- sion of a well-managed relationship between a government and its outsourcing partner. The contract should address the process for project change, but good project management and communications will be critical for effective execution of long-term contract change.

As discussed earlier, Indianapolis amended its contract 80 times in 10 years. Outsourcing relationships and IT requirements naturally evolve over time, so flexibility is critical.

There may be unfortunate circumstances when the jurisdiction must terminate the contractual relationship, such as when the out- sourcer consistently fails to maintain agreed-to service levels or adequately support the func- tions being outsourced. Organizations should include a “Termination Clause” in the contract.

Indianapolis and Marion County added disentanglement obligations to their contract after the last outsourcing engagement ended in a difficult and costly affair incurring unforeseen transition and legal expenses. Their contract now requires the outsourcer to provide the following disentanglement requirements:

  • Complete transition of terminated servic- es to the government organization or to a replacement vendor designated by the government organization without any interruption of services or impact on the services.

  • Full cooperation with the government organization to complete the disentangle- ment.

  • All information provided to the organiza- tion pertaining to the outsourced contract. For example, interface specifications and data conversion.

  • All work managed by the outsourcer, whether completed or partially completed, along with documentation of work in process and other measures to assure an orderly transition occurs.

  • All disentanglement services provided for the transition with costs specified.

  • All asset transfers and other obligations provided to the satisfaction of the organi- zation for the vendor’s obligation to be deemed completed.

Finally, contracts should address disaster recov- ery. Without an effective backup and recovery plan, core city services may be at risk. The contract should consider disaster recovery situations and remediation plans to ensure continued support of operations. The plans should include how the vendor will ensure:

  • Continuing availability and integrity of the outsourced services and/or systems;

  • Regular testing and updating of a disaster- recovery plan.

  • Availability of alternate site facilities.

In addition, the government and the vendor should update and test all disaster-recovery procedures at least once a year.

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