Quick Tip #9: Step-in can be used to prevent as well as to cure
Although step-in is not always a practical remedy because of the challenge of taking over in-flight operations, it is nevertheless very useful in circumstances where it is possible to take over all or part of the services or as a lever for the customer to use in negotiating an improved position during the term of the contract. This includes projects where a customer may want to insert its own personnel into the management office for the project in order to try and get delivery back on track. As a result, we recommend our clients consider step-in as a remedy where the services allow. A point that is often negotiated is what the trigger event should be for the customer to be able to step into the contract. It is typically not contentious to include material breach and force majeure but the difficulty with these is that the event has already happened – meaning the customer has already suffered a loss of service before it can step-in. We would advocate using step-in as much as a preventative measure as a cure for an incident that’s already taken place so the customer can step in before it loses the service. Therefore, make sure that your trigger events are based on circumstances where a material breach or force majeure type event are imminent and not just where they have already occurred. This will help to adopt a methodology of prevention rather than cure.