Writing a Contract

When outsourcing a technology project, an effective contract is an invaluable tool that will help your organization and the contractor understand what is expected, and how to resolve any problems. (See "Determining When to Outsource " to learn about when outsourcing is appropriate.) For the most part, developing a contract for technology outsourcing is not all that different then developing a contract with any contractor. The process of writing and then negotiating through the contract is in some ways as important as the words chosen. It sets a tone for how you work together and hopefully displays a balance of flexibility as well as focus and excellence.

The contract defines the parameters of your ongoing working relationship. First you'll need to negotiate a specific scope of work for a particular price and payment schedule. Remember that any contract, especially one with lots of technical details in it can be confusing and full of language that leaves things open to interpretation. Before you sign on the dotted line, you may want a legal opinion on the proposed contract and have your organization's lawyer review it. You might also want it reviewed by a consultant who is experienced in this area so you can avoid any pitfalls and decode any technology jargon. The couple hundred dollars that you spend for an independent consultant to look at a contract can be an excellent way of ensuring a good project.

Remember that you've gotten this far with a provider because you have done your research and trust it. The contract is a document to guide your work together, but no piece of paper will replace the assurance that comes with working with a provider that you know is honest, flexible, and responsive.

Regardless of these challenges, any contract should include a clear work plan with specific deliverables tied to specific dates. You should also make sure that the work plan includes regular progress reports from the provider and scheduled meeting time to communicate about the project More specifically, a good contract will include much of the following:

1. Title
2. Brief description of the project
3. Brief description of the services needed
4. Detailed list of the services to be provided with projected dates of delivery included.
5. Who is responsible for what parts of the project? (The contractor, subcontractors to the contractor, staff of the nonprofit organization, etc.)
6. What are the expectations for communicating about the progress of the project
7. Paymet schedule and amounts
8. Clarity on expenses vs hour rates vs fixed pricing
9. Ownership of the work products
10. How will conflicts be resolved
11. How the parties can get out of the contract
12. Proper signature

In most situations the contract is not used a a legal document in the strict sense of the term. The contract is a way to clarify between the organization and the contractor what is expected and what the terms of the agreement are. Its primary value is that it forces both parties to answer some challenging questions before the work gets strated. This can save lots of headaches later on.