When your IT supplier does not comply with the contract: these are your options
You know it well: a supplier that is lagging behind, agreements that are not being honored, and promises that are continually postponed. Meanwhile, you have to deal with deadlines, pressure from the organization, and clients or colleagues who are counting on you. And all this while you thought you had it all organized, with a contract that lays everything out neatly.
Yet it happens. And then the question is: what can you do if your IT supplier does not fulfill their agreements?
Back to basics: what is really in the contract?
Before you increase the pressure, take another good look at the agreements. What has been specifically agreed upon regarding performance, service levels, response times, or delivery moments?
Tip: go through the document together with someone from legal or contract management. There is often more leeway than you think - or perhaps less.
Meanwhile, also gather evidence: emails, meetings, reports, incidents. The more concrete, the better.
Call first, threaten later
Initially, just engage in the conversation. Many suppliers appreciate it if you communicate directly and honestly first instead of immediately threatening legal action.
Be clear:
- This is what we have agreed upon.
- This is what is not going well.
- This is what we expect now.
Make it concrete and provide a reasonable recovery period. It often works better than immediately sending a formal letter.
Escalate? Make sure to document it properly.
If nothing changes after the conversation, then it is time for formal action. The standard route is a notice of default: an official letter in which you state that the supplier is falling short, what you expect, and what the consequences will be if that does not change.
Note: this is more than an angry email. It is a legal document that you will need if you want to take further action later (for example: fines, compensation, termination of the contract).
Use what is stated in the contract
Many IT contracts contain provisions to scale up if something goes wrong, such as:
- Penalties for exceeding deadlines or KPIs.
- The right to temporarily suspend payments.
- Opportunities to pick up components oneself (at the supplier's expense).
Use those options mindfully. Not to harm the relationship, but to make it clear: this is serious.
Consider saying goodbye
When trust is gone and your supplier repeatedly fails to deliver, you might consider terminating the contract. This is not trivial, especially if there are dependencies in systems or data.
Therefore:
- Make sure you have an exit strategy.
- Think about alternatives or temporary solutions.
- Involve legal and technical experts before taking steps.
Get help
Are you unable to figure it out together? Then you can enlist external help.
- Mediation if you still want to save the relationship
- Arbitration or legal proceedings if it is really stuck
- Contract or project experts to strengthen your position and prevent it from happening again
Finally: better agreements = less misery
A supplier who does not keep their commitments costs time, money, and frustration. But it also offers a lesson: making good agreements in advance makes a difference. Therefore, ensure the following for new projects:
Clear responsibilities.
Escalation procedures in the contract.
Regular evaluation and adjustment moments.
This is how you prevent a contract from becoming a paper tiger - and ensure you maintain control, even when things get tense.
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