Does this set of circumstances sound familiar to you? You manage a large IT infrastructure for your company or organization. You are often buying software and technology products and services from diverse vendors. These procurements are overseen and undertaken by multiple different managers in your group. You want to ensure that all vendors meet the standards for performance and quality of your organization, so you confer with your in-house legal team and devise a procurement process and contract that exemplifies your organization’s standards and expectations – all good so far.
But your gold-standard process doesn’t work as expected. Your well-crafted form contract is rebuffed vendor by vendor, each one insisting on using their form of contract. The vendors forcefully and often convincingly argue that their form is particular to their product offering and best-suited to the transaction and insist that you ”just” have your legal team review their form instead. The battle of the forms begins! You find yourself back at square one wondering how to make the IT procurement process more efficient and streamlined as you had initially intended. What is a CIO to do?
Enter – the “Addendum”. We have advised many companies to adopt the following process for IT procurements of a small to moderate size. (For larger procurements or bet-the- company deals, we would still recommend that you use a custom-drafted contract starting with your form.) Rather than forcing vendors to use your company’s full contract template, develop an Addendum that contains your top 10 or so priority requirements. It may contain items such as your company-specific invoicing terms, a clause that prohibits use of your company’s name or logo without consent, the right to terminate for convenience and the right to freely assign the agreement to affiliates and successors. These items would be non-negotiable and the form could simply be attached as an Addendum to the vendor’s form. The vendor’s form would be amended to incorporated the Addendum by reference and state that the Addendum controls over conflicting terms in the vendor’s form. This would not do away with the need to review and perhaps even modify certain vendor terms, but it would (1) cut out the time taken to battle over which form to use, and (2) ensure uniformity of your priority concerns across your procurements. Battle over forms no more – use an Addendum.