Task: Sign Contract With Subcontractors

New contracts Contracts between Capgemini and its subcontractors (both internal and external) should have been prepared, negotiated and signed before Capgemini sends out her proposal to the Client. What is meant with subcontractors here are parties delivering products or services. Individual persons that will be used as resources and will work under Capgemini’s responsibility are not meant here. These resources will be contracted in the Service Engagement Staff work stream based on either secondment type of contracts.

The subcontractor contracts should be ‘back-to-back’ to the contract that Capgemini will have with its Client, from both a KPI-perspective and the financial consequences perspective. As these types of contracts can be as complex as the contract with the Client and the contents will depend on the contract negotiations with the Client, signing these contracts upfront is not always possible or desirable. The sales team could have decided to create a Teaming Agreement, a Memorandum of Understanding (MoU) or Letter-Of-Intent (LoI) instead, referring to signing the subcontract as soon as Capgemini is awarded the contract with the Client. Unfortunately, in some countries, a MoU or a LoI does not have any legal binding value, so, Capgemini is taking a risk here. Preferably the subcontract is created and agreed upon before Capgemini’s proposal is sent to the Client and the change contract procedure is carefully described to allow for results of Capgemini’s contract negotiations with the Client. Preferably the subcontractor contracts contain ‘non disclosure’ clauses or have separate ‘non disclosure agreements’ attached, as applicable.

Having to create and negotiate a contract with subcontractors during transition is of course not preferred by Capgemini as this could give Capgemini a bad negotiation position for a ‘back to back’ type of contract, especially when there is no alternative option available.

The contracts with other entities of Capgemini are often referred to as Inter Company Agreements (ICAs) or internal Statements Of Work (iSOWs). Names for contracts with external subcontractors are: third party contracts, purchase agreements and license agreements, depending on the products or services these parties deliver.

If applicable, the Finance And Contracts work stream team creates and negotiates these Subcontractor Contract artifacts, both internal and external, makes sure that these are signed by all necessary parties and are stored in the appropriate document repository for future use during the continuous service delivery.

Contract novation
In transitions we might want to take over existing third party subcontracts from either the Client or the incumbent. Reasons could be that that party delivers a service Capgemini cannot deliver or cannot deliver in the requested location or country. Another reason can be that the Client demanded using that existing third party as a subcontractor to Capgemini as a non-negotiable requirement in the Request For Proposal. Taking over an existing third party subcontract is often referred to as a contract ‘novation’. Although preferably contract novations are done before the transition starts, they often end up being done by the Finance And Contracts work stream during the transition program. Capgemini would then typically have mentioned in the proposal that ‘Capgemini is willing to novate the ‘AAA’ contract with party ‘BBB’ under the same terms and conditions and related price as per the current contract between ‘CCC’ and ‘BBB’.

If applicable, the Finance And Contracts work stream team novates the subcontracts as applicable, makes sure that these are signed by all necessary parties and are stored in the appropriate document repository for future use during the continuous service delivery.