Benchmarking Clause (Outsourcing)

This clause is a benchmarking that describes the procedure for, and consequences of, benchmarking reviews initiated by the customer under an outsourcing agreement. Benchmarking is a procedure under which customers in long-term agreements can engage an independent third party to compare the charges and performance standards of the supplier against other suppliers in the market. This clause includes practical guidance, drafting notes and an optional clause. Benchmarking is a useful tool particularly in IT outsourcing agreements where advances in technology over the life of an agreement (and the resulting decrease in the costs of that technology) may lead to some customers paying too much for services toward the end of the agreement. For obvious reasons benchmarking provisions are not favoured by suppliers but are usually accepted. For analysis and guidance on benchmarking provisions in outsourcing agreements generally, see the practice note: Benchmarking in Outsourcing. For a sample ...