Contract Exit Plan

Friday, June 9th, 2017


All contracts come to an end. Some, however, will need provisions for an ‘Exit Plan’. Services, for example, may come back in-house from an external provider, or, the services may transit to another external provider. Typically, an Exit Plan is a Schedule to the contact. It should also be remembered that a service contract may be terminated because of the service providers’ default.

There is a need to ensure there actively is an Exit Plan, signed off by the buying organisation. There are important objectives that are needed when producing, updating (from time to time) and implementing the Exit Plan. The objectives will include:

  • a process for the successful migration of Data to any new system or service
  • a requirement that the existing service provider ensures that Data is not compromised during the exit process
  • a requirement that the existing service provider provides all necessary assistance and information to enable an efficient and effective transfer of services
  • timely development and agreement of plans to describe exit activity and compliance with the plans
  • a requirement that the existing service provider shall continue to perform the service during the exit process without disruption or deterioration of the services
  • Data to be provided in a reasonable format that is capable of being utilised by any new service provider.

There is a challenge for procurement in ensuring a robust Exit Plan exists in relevant contracts.