Service Provider Selection

Action Summary

Management should:

  • Evaluate service provider proposals in light of the institution's needs, including any differences between the institution's solicitation and the service provider proposal;
  • Perform due diligence on the prospective service providers;
  • Ensure that selection of affiliated parties as service providers is done at arms length in accordance with regulations and guidance issued by the institution's primary regulator; and
  • Evaluate foreign-based third-party service providers in light of the guidance found in this section and in Appendix C, Foreign-Based Third-Party Service Providers.

After identifying the work to be performed and the necessary controls, a financial institution solicits responses from prospective service providers. The primary tool for the solicitation is the Request for Proposal (RFP). The RFP also supports subsequent contract negotiations.


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