MSAs and “hidden” requirements

Congratulations, you have won the contract from your prospect/client!!

A signed SOW (Statement of Work) holds most requirements for your project. However, the MSA (Master Services Agreement) can sometimes include additional obligations that will span any contract between your company and the client. A thorough understanding of both will help you manage risk throughout your engagement.

Every company (client and consulting company) have unique ways to approach a MSA and then SOW. Some put the Ts and Cs (terms and conditions) in the MSA entirely. Some have basic Ts & Cs in the MSA and the remainder in the SOW.  Sometimes there is only a long SOW.  Whatever your company approach is, ask for the signed legal documents related to the client.  

Below are 4 areas typically seen in a MSA that can affect a project and the profitability of it.

1. Deliverable and/or work process?
   1. Review process: How much time is needed for each deliverable
   1. Approval process: Approvers and potentially the sequence. Security and Data Privacy often require additional approvers (and time)
   1. Best practice: plan your time accordingly
2. IP ownership
   1. What is included and potentially not included in IP ownership through the course of any given project
   1. Typically, these are the deliverables noted in the SOW. However, tools, software that your consulting company has developed may be excluded.
   1. Best practice: Discuss with your client at the project onset.
3. Warranty
   1. Period of time and scope of what is included in the warranty.
   1. Best practice: Good QA will keep this to a minimum. If the client elects to invoke the warranty, it has the potential to drain time from resources who were on the project (and have moved onto their next project). And that affects the profitability of the warranty invoked project and and could cause major issues in the project where the consultants moved onto. In many cases you may not be able to charge your time for the warranty invoked project. Check with your legal team and keep delivery leadership abreast of work, concerns and progress.
4. Termination
   1. How much notice by your company or the client must give if a decision is made to stop the project.
   1. Best practice: Commit the termination notice timeframe to memory. Typically, you can keep working and billing during this period. It protects your services organization. Check the language and if it’s unclear, speak to your legal team. Knowledge transfer and finalization of current deliverables are typical during this period.

Interested in learning more for your professional services organization? Contact me at [email protected]