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Vendor Contract Negotiation

Pricing tiers, rate limits, SLAs, data-use, and termination terms to negotiate with LLM vendors.

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Vendor Contract Negotiation Checklist

Provider: _________________________
Negotiation Lead: __________________
Contract Start Date: _______________
Annual Commitment Value: $__________

1. Preparation (Before Negotiation)

  • Current usage data compiled (last 6 months)
    Monthly spend: $__K avg | Token volume: ____M/month | Growth rate: ____%

  • Projected growth calculated (12 & 24 months)
    12-month projection: $__K/month | 24-month: $__K/month

  • Competitive quotes obtained from ≥2 alternatives
    Provider B: $/1M tokens | Provider C: $/1M tokens
    Leverage: competitive pricing is your strongest negotiation tool.

  • Internal budget approved for commitment level
    Approved annual commitment: $____K | Approved by: ________

  • Usage breakdown by model prepared

    Model % of Spend % of Volume Critical?
    ☐ Y ☐ N

  • Must-have vs nice-to-have requirements listed
    Must-have: ________________________________________________
    Nice-to-have: _____________________________________________

  • Walk-away terms defined (BATNA)
    Walk away if: ________________________________________________

  • Legal team briefed on key terms to review
    ☐ Legal review scheduled for: ________

2. Pricing Terms

  • Volume discount tiers negotiated

    Tier Monthly Spend Discount
    1 $0–$10K __%
    2 $10K–$50K __%
    3 $50K–$200K __%
    4 $200K+ __%

  • Batch API pricing confirmed
    Discount vs. real-time: ____% | Availability: ☐ GA ☐ Beta

  • Prompt caching discount confirmed
    Cached input discount: ____% | Availability: ☐ Yes ☐ No

  • Rate lock period negotiated
    Rate locked for: ____ months | Price increase cap: ____%/year

  • Minimum commitment defined
    Monthly minimum: $____ | Annual minimum: $____
    Use-or-lose: ☐ Yes ☐ No (rollover)

  • Overage rate agreed
    Rate above commitment: ____% of list price

  • Prepaid credits vs. pay-as-you-go evaluated
    ☐ Prepaid (____% discount) ☐ Pay-as-you-go ☐ Hybrid

  • Free tier / startup credits confirmed
    Credits available: $____ | Expiration: ________

  • Fine-tuning costs clarified
    Training cost: $____/1M tokens | Inference markup: ____%

  • Multi-model bundle pricing explored
    Bundle discount for using ≥3 models: ____%

3. SLA Terms

  • Uptime guarantee negotiated
    SLA: ____% monthly uptime | Current published: ____%

  • Latency guarantees documented
    P95 TTFT guarantee: ____ms | Guaranteed throughput: ____ TPM

  • SLA credit mechanism defined
    Credit for downtime: ____% of monthly spend per ____% below SLA

  • Incident notification requirements set
    Notification within ____ minutes | Channel: ☐ Email ☐ Status page ☐ API

  • Support response times guaranteed
    P1: ____ hours | P2: ____ hours | P3: ____ hours

  • Dedicated support resources confirmed
    ☐ Dedicated account manager ☐ Technical account manager
    Min spend for dedicated support: $____/month

  • Capacity reservation (if applicable)
    Reserved capacity: ____ RPM | ____ TPM | Cost: $____/month

  • Maintenance window terms agreed
    Scheduled maintenance notice: ____ hours | Max duration: ____ hours

4. Data & Security

  • Data Processing Agreement (DPA) executed
    ☐ Standard DPA ☐ Custom DPA | Signed: ☐ Yes

  • Training data opt-out confirmed in writing
    ☐ Provider will NOT use our data for training

  • Data residency options confirmed
    Available regions: ☐ US ☐ EU ☐ APAC | Required: ________

  • Encryption standards verified
    In transit: ☐ TLS 1.3 | At rest: ☐ AES-256 | CMEK: ☐ Available

  • Compliance certifications confirmed
    ☐ SOC 2 Type II ☐ ISO 27001 ☐ HIPAA BAA ☐ GDPR ☐ FedRAMP

  • Audit rights established
    ☐ Annual audit right ☐ Pen test permitted ☐ Third-party audit reports

  • Data retention & deletion policy agreed
    Retention period: ____ days | Deletion on request: ☐ Yes (within ____ days)

  • Subprocessor notification requirements set
    Notice of new subprocessors: ____ days advance notice | Objection right: ☐ Yes

5. Commercial Terms

  • Contract duration negotiated
    Duration: ____ months | Start: ________ | End: ________

  • Auto-renewal terms reviewed
    ☐ Auto-renews for ____ months ☐ No auto-renewal
    Cancellation notice period: ____ days before renewal

  • Termination for convenience clause secured
    ☐ Either party can terminate with ____ days notice
    Early termination fee: ________

  • Price increase cap agreed
    Max annual increase: ____%
    Notification period: ____ days before increase

  • IP indemnification confirmed
    ☐ Provider indemnifies for IP infringement claims
    Cap on indemnification: $____

  • Liability cap defined
    Provider liability cap: $____ or ____× annual contract value

  • Model deprecation guarantees secured
    Notice period before model sunset: ____ months
    Migration support: ☐ Included ☐ Additional cost

  • Insurance requirements verified
    ☐ E&O insurance ☐ Cyber liability | Minimum coverage: $____M

6. Exit Strategy

  • Data portability guaranteed
    ☐ All fine-tuned model weights exportable ☐ Usage data exportable
    Format: ________

  • Transition period defined
    Post-termination access: ____ days | At what cost: ________

  • API compatibility assessed for migration
    ☐ OpenAI-compatible API ☐ Proprietary only
    Proprietary APIs increase switching costs.

  • Knowledge transfer obligations documented
    ☐ Provider will assist with migration ☐ Self-service only

Negotiation Summary

Term Our Ask Their Offer Agreed Notes
Volume discount __% __% __%
Rate lock __ months __ months __ months
Uptime SLA __% __% __%
Termination notice __ days __ days __ days
Price increase cap __% __% __%
Minimum commitment $__K $__K $__K

Total Annual Contract Value: $________K
Effective Discount vs. List Price: ____%

Template from the TokenOps Atlas — tokenops-atlas