An SCL Standard-form IT Services Contract?

February 21, 2013

A number of industry sectors have standard-form contracts that have been developed by trade associations and professional bodies. The construction industry is an obvious example. The IT sector in the UK has never been in a position to develop these forms of standard contracts. Perhaps the technology industry is too fast-moving for standard-form contracts to be readily applicable to many contracting areas. In other areas, such as software licensing and cloud, the contract position is part of the overall service offering and so standard-form contracts are unlikely to achieve a great deal of acceptance.

In the IT service provision field there has been a de facto standard-form contract for a number of years. The OGC ICT contract for larger-scale public sector IT service provision arrangements has been used on a widespread basis, not just in central government, and in some cases has been used as the basis for private sector contracts. The OGC contract has not been updated for some years. There is now a process underway in the Cabinet Office to prepare a new public sector IT services contract. The Cabinet Office has decided not to engage with the SCL in the process. This is a disappointment, particularly given the productive examples of more public engagement in other countries, such as Denmark, which has recently completed a large-scale consultation exercise with the general consensus that the process has led to an improved contract form.

It is perhaps time for the SCL membership to consider whether we should sponsor the development of a generally applicable (ie not public sector) IT services contract for use in IT outsourcing and other IT service provision situations.

There are a range of issues surrounding the development of a standard-form contract. What should the scope of the contract be? Perhaps it should focus on mid-range IT service arrangements, rather than the larger-scale projects which are the focus of the current OGC model. Would private practice lawyers be prepared to contribute their time and IP to the preparation of a standard-form contract? Would in-house lawyers from IT service providers be prepared to discuss sensitive issues of commercial significance within a working party? Should a model contract be customer or supplier focussed? Is it possible to produce an IT contract which is relatively neutral in its outlook?

Unless we try or at least start to engage in discussions around this topic we won’t really know. We think that there is a legitimate role for the SCL to at least start exploring whether now is the time to develop an SCL IT services standard-form contract. We think that an SCL Working Group could be set up with a remit to review these issues and, if it were decided that a standard-form contract should be produced, to prepare a proposal for the form of the contract, its scope of application and whether it should be customer or supplier focussed or both.

If people are interested in getting involved in this Working Group, please let us know by e-mail, using ‘SCL Standard-form Contract’ as the header, and we will set up a meeting to start the process.

Clive Davies:; Roger Bickerstaff: