Subcontracting and Multiple Vendor Relationships

Some software vendors may contract third parties to develop software for their clients.  To provide accountability, it may be beneficial for organizations to designate a primary contracting vendor. Organizations should include a provision specifying that the primary contracting vendor is responsible for the software regardless of which entity designed or developed the software. Organizations should also consider imposing notification andapproval requirements regarding changes in vendor's significant subcontractors. Refer to the IT Handbook's "Outsourcing Technology Services Booklet" for additional subcontracting information.

Organizations should consider contract provisions that prohibit the assignment of contracts by vendors to a third party without the organization's consent. Conversely, organizations that expect to be acquired or restructured should determine whether their licensing agreements continue after the transition. Some software license agreements contain change-of-control or transfer limitations that inhibit use of the software after a merger, acquisition, or change of ownership.


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