Negotiations: Gotchas That Can Getcha Mark Kaufmann

Objectives Objectives Reality check Share and discuss common gotchas that can getcha and ways to address Identify strategies for common vendor gotchas Reality check Negotiations sometimes are a function of timing and bargaining position Sometimes you will not prevail despite having the logical and customary view

Disclaimer

Gotchas That Can Getcha Roadmap Negotiating tactics Purchase and performance Pricing matters “Legal” T’s and C’s Confidentiality and Security / Data Protection

Negotiating Tactics Divide and conquer Speaking to business team and leaving procurement and legal out of the mix – the freeze out Not providing necessary diligence / information Not making decision makers available – no authority

Negotiating Tactics (Cont.) Sharing only PDFs of contracts Providing inaccurate redlines Inflexibility Pricing model Termination rights Renewal rights

Purchase and Performance Lack of specificity / detail What is being bought / licensed / procured? Who can use what is being bought / licensed / procured? Will you pay twice? Three times? Lack of general responsibility – what is being paid for? Activity vs. deliverables vs. results

Purchase and Performance (Cont.) Application of service levels and meaningful remedies Ownership of developments / modifications Use of subcontractors Off-shoring

Pricing Matters Built in escalators for non-personnel items “then current” Ups and extras – not included No specificity of fees (or structure of fees) at renewal Inability to audit fees Benchmarking

“Legal” T’s and C’s Inability to amend terms and conditions Vendor paper vs. customer paper Take it or leave it approach Identity of vendor contracting party Hollow LoL lacking meaningful carve outs Unbalanced LoL Disclaimer of damages lacking meaningful carve outs

“Legal T’s and C’s (Cont.”) Limited or no indemnification obligations on vendor Overly broad indemnification obligations on customer Lack of meaningful termination rights and consequences Lack of meaningful renewal rights Assignability Virus Responsibility

Confidentiality and Security / Data Protection Responsibility / liability Strict liability vs. compliance with procedures Security breach notification and responsibility SSAE 16 audit obligations Consequences of “failure” Audit rights – regulatory and customer

Evaluation and Materials Questions? Evaluation and Materials Take this time to go the conference app http://itps2016.sched.org find this class, and fill out evaluation. If you need the PowerPoint, it’s on your thumbdrive