Compliance: Issues in Outsourcing Contracts Generally
The vendor's compliance with the outsourcing client's goals
will be governed by contract. The vendor's responsibilities under the contract,
therefore, should be described in detail. Often, the contract presented by the
vendor describes its responsibilities only in general terms, making it difficult
to determine what the vendor is required to provide.
The outsourcing client's
contract, on the other hand, should detail performance requirements and time
frames pursuant to which each performance milestone must be completed. These
milestones may be tied to payment schedules and act as "incentives"
for the vendor's timely completion of the project. The client should also expect
to describe in the contract what it will need to provide to the vendor (in terms
of staff, equipment, and know-how) to enable the vendor to perform its services.
The contract should also describe how quickly the vendor would respond to any
request for support services and how long it will take to initiate the
corrective action (See Service Level Agreements). Compliance
with regulatory requirements needs careful consideration. Additional
Resources Compliance
by Transaction Type and Industry Additional
Topics
Disclosures
to Investors Relating to Outsourcing
Articles
Compliance in
Outsourcing: Impact of New Sarbanes-Oxley-Based
Disclosure Rules on Business Process Outsourcing (White Paper) Lessons
for Service Providers --- Fair Labor Standards Act in Outsourcing: IBM
Settles FLSA Suit for $65 Million European Community: A Services Directive at Last- On
December 27, 2006, the European Union’s Parliament and Council of the European
Union adopted Directive 2006/123/EC on “Services in the Internal Market.”
This pivotal directive represents the culmination of additional year’s
negotiations following the failure to adopt a prior services directive on the
same subject.
It represents an important step in cross-border flow of services within
the European Union.
More importantly, it distinguishes between rights of establishment and
rights to provide and receive services across member states.
See www.outsourcing-law.com/1070-Euro_Services_Directive_2006.htm. Economic
Crime: Abuse of Telephone Records- On
January 12, 2007, President Bush signed the Telephone Records and Privacy Act of
2006. The new law makes it a
crime to buy or sell fraudulently obtained “confidential phone records
information of a covered entity.” See http://www.outsourcing-law.com/1071-Telephone_Records_Privacy_Act_2006.htm. |