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Proof of Concept Contract

This document outlines a proposed agreement between a company and vendor to develop an integration. It includes 3 phases: 1) a proof of concept phase where the vendor will design the integration, 2) a concept validation phase where the vendor develops a prototype, and 3) a production feasibility phase to evaluate scaling up. The total proposed budget is $75,000 to be paid in installments upon completing milestones in each phase. The contract defines responsibilities, deliverables, schedules, payments, and intellectual property terms.

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Bartobias
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87 views

Proof of Concept Contract

This document outlines a proposed agreement between a company and vendor to develop an integration. It includes 3 phases: 1) a proof of concept phase where the vendor will design the integration, 2) a concept validation phase where the vendor develops a prototype, and 3) a production feasibility phase to evaluate scaling up. The total proposed budget is $75,000 to be paid in installments upon completing milestones in each phase. The contract defines responsibilities, deliverables, schedules, payments, and intellectual property terms.

Uploaded by

Bartobias
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Proof of Concept Contract

This contract summarizes the principal terms and conditions of the proposed
Agreement between ________________, (hereafter “Company”), and ____________, a
_____________ corporation located at ___________________ (hereafter “Vendor”),
referred to jointly in this document as the “Parties." Subject to the conditions set forth
below and to the successful negotiation and execution of a definitive agreement (the
“Agreement”), which will fully reflect the understanding and agreement of the Parties,
the Company and Vendor intend to consummate the following Contract;

1. Nature of Proposed Agreement

The Company intends to engage Vendor to provide development services to


_______________________________ ( the “Integration”). The Conceptual Design for
the Integration and its target platform are attached to this contract in attachment “A”.
The Parties agree to make every effort to complete the Integration according to the
Preliminary Schedule attached to this contract as attachment “B”. The development
services will be provided by Vendor on a “Work-for-Hire” basis for a fixed Integration
Fee, which is defined by the Parties at $75,000 (example). The budget is attached to this
document as attachment "C".

2. Phases

Vendor will develop the Integration in Phases. Each Phase has specific
Deliverables from the Company and from Vendor. The Phase Definition and Timeline
are defined in Schedule B. Each Phase contains progress milestones, which trigger a
payment for development services from the Company to Vendor.

3. Payments and Terms

Payments are made according to the timeline and deliverables agreed upon by the
Parties. The Agreement will provide that as compensation in full for the services
performed and supporting licenses granted by Vendor thereunder, the Company will pay
Vendor based on the budget described in Schedule C.

4. Changes and Modifications

During the Production Phase of development of the Integration, the Company


may request certain changes and modifications. Changes and Modifications will
generally fall into two categories:
● “Soft” changes which have no cost or schedule impact to the agreed upon
Conceptual Design. These changes will be incorporated at no additional
charge.
● “Hard” changes which impact wither cost or schedule or both. These
changes will be incorporated as edits to the Conceptual Design as
documented in Schedule A and the Budget as documented in Schedule C.
Vendor will quote a reasonable additional fee to make “Hard” Changes, and the
Company will pay for any elected “Hard” changes at the next agreed-upon payment
milestone.

5. Expenses

The Agreement will provide that each party will bear its own expenses of
performance.

6. Ownership

( Normally, standard license and service level agreement are referenced here.
Custom integration work most likely is owned by both parties, usually through a standard
contract. If it’s proprietary integration with internal systems, then the Company usually
owns it, if it’s integration with another vendor’s solution, such as SAP, then you both
should own it – make sure you end up owning any standard integration.)

7. Subcontract

The Company understands and agrees that Vendor may subcontract certain
portions of the development work.

8. End User Technical Support

( Keep any commitment here minimal, but do enough to make the ROI look
good.)

9. Confidentiality

(Usually referenced out through a mutual NDA. Be wary of data confidentiality


clauses as with many cloud solutions, you have to be very specific regarding
compliance.)

Vendor Company
_____________________________ _______________________________
Signature: Signature:
_____________________________ _______________________________
Title: Title:
_____________________________ _______________________________
Date: Date:
Schedule A
Conceptual Design

(Insert your Conceptual design here.)


Schedule B
Phase Definition
1. Proof of Concept phase:

In the Proof of Concept Phase, Vendor produces and delivers a Design ("Design")
that includes the defined integration parameters, application navigation, designs, user
stories, and process flow. The Design determines the development plan, budget, delivery
milestones, approval process, change order process and other items in the Agreement.
During the Design, Vendor creates the Development Plan, the Delivery Schedule and
submits the definition of deliverables against the schedule.

The Parties acknowledge that the Proof of Concept Phases is an iterative,


subjective, creative process that requires collaboration and deliverables from both
Company and from Vendor. If the Company is not able to provide the technical support
or resources aligned with the planned schedule, then schedule impact may result in a
“Hard” change resulting in a change in the budget.

Using the Conceptual Design as a point of departure, and affording The Company
meaningful consultation, Vendor will create Version 1.0 of the Proof of Concept
Specification. Vendor will present the Specification to the Company. The Company will
respond to the Proof of Concept Specification, and Vendor will modify Version 1.0 and
produce Version 1.1 of the Proof of Concept Specification.

The Company will compensate Vendor for delivery of the Proof of Concept
Specification through Version 1.1 of the Proof of Concept Specification based on the
budget in Schedule C.

2. Concept Validation Phase:

In the Concept Validation Phase, Vendor produces and delivers a Proof of


Concept - a working "mini-" version of the Integration delivered in a production sandbox
or test environment, which includes final features, integration, batch processing, reports,
and results verification. The Proof of Concept is a subset of the final Integration -
representing a fraction of the total size of the final Integration. The Proof of Concept will
be suitable for demonstration purposes, integration validation, focus testing, and
feasibility review of the Integration. The parties acknowledge that the Proof of Concept
is used to determine if the design of the Integration is acceptable and the intended
outcome of the Integration can be realized if development moves forward in a follow-on
contract. The parties may determine to re-design the Integration upon review of the
Proof of Concept. In such an event the parties will negotiate in good faith any
modifications to the design, the development plan, or the development budget.

The Company will compensate Vendor for completion of the Concept Validation
of the Proof of Concept Specification Version 1.1 of the Proof of Concept Specification
based on the budget in Schedule C.
3. Production Feasibility Phase:

In the Production Feasibility Phase, Vendor and Company personnel assess the
integration completed in the Company Validation phase and evaluate the scope of effort
to implement a full integration to achieve the desired Company results. Vendor will
provide consulting and support to define feasibility for full production implementation.
Company is responsible for supporting resources to define what would be required for a
full production implementation.

At the end of the Production Feasibility Phase, Vendor will make a


recommendation for the next project which would be built based on pricing and resources
required to get to an initial production pilot in a live environment.

Schedule

Task Date

Proof of Concept phase 8 weeks from start (example


timelines, insert dates that make
sense)
Development of Proof of Concept

Concept Validation phase 20 weeks from approval of


Evaluation of Proof of Concept Conceptual Design (example
timelines, insert dates that make
sense)

Production Feasibility phase

Integration Plan 10 weeks (example timelines, insert


dates that make sense)
Schedule C
Budget and Payment Milestones
$75,000 Target Budget

Task Approximate Cost

Conceptual Design phase


Development of Proof of Concept $25,000

Concept Validation phase


Evaluation of Proof of Concept $25,000

Production Feasibility phase


Feasibility Assessment and Planning $25,000
_______________________________________________________

Total $75,000

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