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What Do You Do When Outsourcing Goes Bad?

archilocus Payment Milestones (751 comments)

I concur with some of the other posters - once you've let the money go you have no leverage. This applies to any vendor and not just offshore ones. Offshore vendors are just harder to sue...

Once concept we've used with a level of success is a warranty milestone. As someone else has suggested we do a 40-40-20 split with 40% of payment coming after deliver, 40% after testing concludes and 20% is held in a bank guarantee for a warranty period of one month.

If we don't get any production issues after one month they get their money. If we do and it costs to fix it, it comes out of their money (theoretically - but actually we negotiate).

You've got to share the risk...

more than 8 years ago

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