Customer and supplier perspectives on contracting for GIS services

Abstract
In many ways, GIS services are unique when contrasted to most other products and services which energy or telecommunications companies purchase. To a large degree, the differences relate to the fact that the ultimate success of the service provision depends upon the cooperative efforts of the customer and the supplier. For example, in a data conversion effort, the customer may be responsible for critical components of the project effort such as provision and preparation of source data, resolution of data anomalies, and verification of deliverable data. Additionally, while the pace of a GIS implementation usually has significant financial ramifications to the customer organization, the implementation efforts must often cope with substantial variations to scope and specifications over the life of the effort. For these reasons, traditional contracting approaches such as “fixed price” or “time and materials” may not be the best format for use in a GIS services contract. The optimum contractual arrangement for GIS services must provide incentives to both the customer and the supplier for the efficient, consistent, and scheduled completion of the cooperative effort. This presentation will include frank discussion by an experienced customer and an experienced provider of GIS services of the prerequisite, and the potential risks and benefits of using various innovative approaches to contracting for GIS services.

Introduction
Data conversion is a complicated, expensive process, requiring significant interaction and cooperation between the customer and the supplier. No two conversion projects are alike. The unique aspects of each customer and each project, such as record type and content, database specifications and aesthetic preferences are what drive the need for interaction and cooperation.

For a conversion project to be as successful as possible, the performance of both the buyer and supplier, as well as how they interface with each other, need to be clearly defined and understood. A well-constructed contract can be an effective tool to help define expectations and influence performance by both parties, thus reducing or eliminating surprises.

“Boiler Plate” is a common term used to describe the standard terms and conditions in an organization’s purchasing contracts. This “boiler plate” is typically quite standard and well established, and is usually not subject to significant changes when used as part of a data conversion contract. This paper is not intended to address typical “boiler plate” issues.

What this paper will address are those areas that are most important to the ultimate success of a conversion project, namely the delivery schedule, the quality of the converted product and the financial aspects of the project. We will present relevant issues and concerns in each of these areas from both the supplier’s and buyer’s perspective. We will also discuss several specific contracting mechanisms that have been used to successfully address these issues and concerns.