Let’s start with the things you most likely will remember… You will remember to ask about services fees, term lengths, and installation times. You may even remember to ask about transition costs. Those are the basics. But there are five very important topics C-level executives often forget to address when they negotiate network services contracts without professional assistance:
Chronic Outage – What is the carrier’s responsibility if this occurs? In the event of recurring outages or business impacting service issues, a chronic outage addendum to the terms and conditions can be valuable. This will allow the customer an opportunity to cancel and find a new service provider with minimal or no termination penalties.
Mid-Term Competitive Rate Review – None of us want to be stuck paying far more than we have to. If you have a mid-term rate comparison built in to your contract you will have the opportunity to shop for competitive pricing. If your current provider can’t match or come within an agreed upon percentage of the new pricing you would be free to move your services with minimal or no term penalty.
Force Majeure – A Force Majeure is common in network services agreements and is used to relieve the carrier of any responsibility for liability or obligation when an extraordinary event (e.g. hurricane, flooding, earthquake) or circumstance (e.g. war, strike, riot) beyond the control of the parties takes place. You probably think that nothing can be done about this clause, but you can sometimes rework the language to specify exactly what the carrier must do for you. The carrier will want to be as general as possible so they can relieve themselves of responsibility. You need to narrow in and make sure you understand what the carrier will be accountable for in case of an unfortunate event, so you can hold them to it.
Business Downturn – Every contract comes to an end at some point. Should the economic climate change and require your business to reduce in size, an addendum can allow clients to reduce their contract minimum revenue commitment to the service provider with no financial penalty.
Exit Language – You want to contractually provide exit language that will make the transition to another carrier as smooth as possible. For example, you don’t want to see your fees sky-rocket after your carrier contract expires. This is quite common and can cost your company a lot of money as you work to transition to another provider.
Want a partner to negotiate these types of contracts on your behalf? P2CM provides services at no cost to you and is fully incentivized to negotiate the best terms on behalf of your organization. Contact us at sales@p2cm.com or 703-939-8240.