What Is an Underpinning Contract?

Purpose

• An underpinning contract is an agreement on the level of IT services that a service provider is able to provide, at a price that is acceptable to the service recipient. The recipient must define the services required and determine whether the provider is capable of delivering those services at the required level.
  
  

Contents

• This type of contract must be carefully worded in relation to how and when breaches of contract are to be measured. Any obligations on the customer, such as timely reporting of problems, must also be clearly stated.
  
  

Operational and Service Level Agreements

• A UC is a supporting document for a service level agreement (SLA), and the external equivalent of an operational level agreement (OLA). It is, however, a legally binding contract, so failure to meet agreed targets may well result in legal action.