Awarding contracts for new services is hard work. After all governance and commercial activities, one could be forgiven for stepping away from the service until the end of the contractual period to think about the next steps. However, waiting until then to open to take a critical look at the service you’ve acquired, can mean that you may be stuck with an awful contract and no choice but to sign up for another few years.

Contracts with suppliers will rarely specify which parts lock the customer in per se, but there are signs that might not be immediately obvious would be those that concern data portability, APIs (Application Programming Interface), exist clauses and technical documentation. 

Data Ownership & Portability

The contract you have with the vendor should be clear as to who owns the data and best practice is for the council to own its own data even if a third party is providing the service. However, even if data extraction is in the contract it might be difficult to enforce. A sign of this is when data extraction is dependent on vendor-specific tools, priced separately at a high cost or only subject to a request made by the council to the provider. A positive sign of data sovereignty is where a council can run automated tools any time to remove data and that data can be exported in an open, non-proprietary format and meet appropriate data security protocols.

APIs and Interfaces

If the system uses undocumented or proprietary communication methods, which makes integration with other council systems difficult or requires vendor consultants, then this will act as a lock-in to the vendor’s systems. By contrast, a good system is where it provides comprehensive, published APIs (e.g., RESTful) that adhere to industry standards and are readily usable by the council’s IT team.

Exit clauses

An obvious lock-in comes from exit clauses. Termination penalties that are prohibitively high (e.g. more than 12 months of contract value) or exit periods are excessively long (over 18 months) are signs of lock-in. Exit clauses that are clear, fair, and allow for transfer of service to another provider or in-house team within a reasonable timeframe (e.g. 6-12 months) are signs of a healthier relationship with the vendor.

Technical Documentation

Vendors who want to maintain lock-in will be weary about providing documentation for system maintenance, troubleshooting, and customisation. If this documentation is provided to the client, then it will be incomplete, out-of-date, or only accessible via the vendor on request. Where full, up-to-date technical documentation, including configuration guides and schema details, is provided to the council’s internal team, then technical documentation will not act as a lock-in.

Next steps

Armed with this list of what to look out for, business contracts or procurement teams in councils can assess all major line-of-business systems to find out whether a fair and open competition will be possible once your existing contracts come to an end and if not, then start taking steps outlined in this blog to get to that position.