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Situation Overview

The client provides nationwide installation maintenance support to a major customer.  While this support is done with their own personnel within their operating footprint, they need to utilize outside services on a subcontract basis to provide support in remainder of the country.  They needed assistance on renegotiating a new outsourcing agreement for all of their "out of footprint" support requirements and engaged us to provide this support.

Project Scope

Negotiate a new five-year outsourcing agreement that could be implemented within the pricing and cost constraints that were already in place with their major customer.

Expected Deliverables

A new outsourcing agreement.

Process

We met with representatives of the sub-contractor to negotiate the new agreement.  This was a several month process during which we reviewed and developed the metrics that would mandate acceptable outsourcing rates.  Rate tables were developed for both labor and service orders, and for other maintenance activities for various regions of the country.  Also in preparations for these negotiations, we reviewed all of the contractual commitments and operational processes that were already in place with the primary customer.  After extensive negotiations, agreement was finally reached on a new outsourcing arrangement with necessary price concessions.

Results

A new five-year outsourcing agreement was developed with appropriate service standards and pricing.  Costs were positioned in a predictable manner over the life of the agreement, and linked to revenues so that appropriate margins could be maintained.

Summary

The client needed assistance getting a new contract into place to insure that their customer obligations for nationwide support would be satisfied.  Coming up with the new agreement proved to be more difficult then they had anticipated, so they requested our assistance.  With our support, an agreement is now in place and they were protected with appropriate performance requirements and penalties for the 5-year term and beyond