TPM-04: Standard Vendor Agreements

Control Description

The Company has defined a standard agreement with key vendors and third parties that includes the required security, availability, confidentiality, processing integrity, and privacy (update as necessary) commitments in accordance with the Company's security, availability, confidentiality, processing integrity, and privacy policies (update as necessary). These commitments contain performance guarantees and address liability for failure to perform, including potential termination of the contract for failure to remediate. A member of the legal department is responsible for reviewing and approving of all new third-party contracts to help ensure that they include the applicable security, availability, confidentiality, processing integrity, and privacy (update as necessary) practices and commitments.

Plain Meaning

This control requires organizations to have standard vendor agreements that include specific security and compliance commitments. These agreements must include performance guarantees, liability provisions, and termination clauses for non-compliance. All new vendor contracts must be reviewed and approved by legal to ensure they include the required commitments.

Implementation

Standard Agreement Requirements

Required Commitments

• Security: Vendor security practices and controls
• Availability: Service availability and uptime guarantees
• Confidentiality: Data protection and confidentiality measures
• Processing Integrity: Data accuracy and processing reliability
• Privacy: Privacy protection and compliance measures

Agreement Components

• Performance Guarantees: Specific commitments for each requirement
• Liability Provisions: Clear liability for failure to meet commitments
• Termination Clauses: Conditions for contract termination due to non-compliance
• Remediation Requirements: Process for addressing compliance failures
• Monitoring Rights: Company's right to monitor vendor compliance

Implementation Approach

Standard Agreement Development

• Template Creation: Develop standard vendor agreement template
• Legal Review: Have legal department review and approve template
• Policy Alignment: Ensure agreement aligns with company policies
• Customization Process: Process for customizing template for specific vendors
• Approval Workflow: Clear approval process for all vendor agreements

Legal Review Process

• Contract Review: Legal review of all new vendor contracts
• Compliance Verification: Ensure contracts include required commitments
• Approval Documentation: Document legal approval of contracts
• Ongoing Review: Periodic review of existing contracts for compliance
• Update Process: Process for updating contracts when policies change

Simple Implementation Steps

1. Develop Standard Template: Create standard vendor agreement template
2. Define Required Commitments: Specify security and compliance requirements
3. Legal Review: Have legal review and approve template
4. Create Approval Process: Establish contract approval workflow
5. Train Staff: Educate team on contract requirements and process
6. Implement Monitoring: Set up process to monitor contract compliance

Agreement Management

• Template Maintenance: Keep standard template current with policy changes
• Contract Tracking: Track all vendor contracts and their status
• Compliance Monitoring: Monitor vendor compliance with agreement terms
• Renewal Process: Process for reviewing and renewing contracts
• Termination Procedures: Procedures for terminating non-compliant vendors

Key Success Factors

1. Comprehensive Template: Standard agreement covering all required commitments
2. Legal Involvement: Legal department review and approval of all contracts
3. Policy Alignment: Agreement requirements aligned with company policies
4. Clear Enforcement: Clear procedures for enforcing agreement terms
5. Ongoing Monitoring: Regular monitoring of vendor compliance

Common Pitfalls to Avoid

• Incomplete Agreements: Missing required commitments in vendor agreements
• No Legal Review: Not having legal review vendor contracts
• Weak Enforcement: Not enforcing agreement terms when vendors fail to comply
• Outdated Templates: Not keeping agreement templates current

Related Controls

• TPM-01: Third-party communication protocols
• TPM-02: Vendor compliance remediation
• TPM-03: Annual third-party risk assessment

Related Links

Vendor Contract Management

• Vendor Agreement Best Practices
• Contract Security Requirements
• Legal Contract Review