Next steps with Bahmni subcontract (input needed)

We are about to get our first grant, from PATH, as part of OpenMRS’s fiscal sponsorship of Bahmni. I want to lay out some next steps, and ask some specific questions.

Next steps:

  1. We get the final contract from PATH
  2. Paul will sign the contract on behalf of OpenMRS Inc
  3. OpenMRS Inc subcontracts with some Bahmni Coalition members (ThoughtWorks, LeapFrog, IntelliSOFT, Mekom, Satvix) to do the work.
  4. Bahmni Coalition members will do the work of the contract, and provide regular updates to OpenMRS leadership

The first two should be straightforward. (Multiple people already reviewed the first contract draft.) The next ones require some discussion.

For the subcontracts, I propose we take the following approach:

  • We do simple capped T&M subcontracts with each entity, and we include the entire PATH SOW as an appendix
  • we have a very flexible termination clause, requiring little notice and little reason given
  • Bahmni project management is already responsible to regularly report to the OpenMRS Community Leadership team about ongoing projects (under the FSA, not these subcontracts), and this can be the mechanism for Bahmni project management or OpenMRS leadership to act in case of delivery risk.

The advantages of this are that:

  • saves work for OpenMRS up front (we avoid the work of mapping each PATH deliverable to specific subcontracts)
  • it correctly places primary PM responsibility in the hands of the Bahmni project, with OpenMRS in an oversight role mainly to mitigate its own risk in signing the PATH contract.

As far as I know, the alternative approach is to do a deliverable-based contract, but (a) this requires more PM work up front, and (b) this probably requires more legal review by the Bahmni coalition members. And I’d like to avoid this overhead.

(I’ll reach out to a handful of OpenMRS operational folks on Skype to chat about this, but I wanted to get some public record of this!)

Edited to add: I’d like input about whether others agree with the approach of “simple T&M subcontracts with flexible termination clauses”.

I should also add that as part of this grant we’re going to try one specific deliverable-based subcontract (“upgrade Bahmni to the latest version of Odoo”) as a proof of concept. But most of the work (i.e. staffing the “core” team) would not be done this way.

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(deleted a duplicate post, above)

This raises some good points @darius - I’m sorry I missed the regular Thursday leadership call yesterday, so some of my comments may have been raised already.

First, this is exciting - a great role for OpenMRS, Inc.

Second, it is probably up to the funding agency (PATH, or the indirect funder) whether Time and Materials or Milestone/Deliverable is permissable, or which is preferred. In any case, I’m sure the award will be capped, so it’s effectively a Milestone/Deliverables based contract overall - regardless of payment triggers, schedule, or reporting mechanism.

Third, we’ll want to ensure there’s an up front payment, or that the billing interval is frequent enough that OpenMRS doesn’t have to front an undue amount of capital. Even with our new donation, that capital is at risk. I think Paul will have good perspective on managing cashflow.

There is significant administrative work in the subcontracts - I would suggest that they be fixed price deliverables to minimize the administrative burden. They should be “at-will termination” so a subcontract can be easily terminated in the event of poor performance. Representing OpenMRS from a fiduciary perspective, I would include a “claw-back” provision for payments that are made on milestone delivery of work later found to be wanting. It’s a bit hard to enforce, of course, but it does make clear our expectations. Agree with your four “next steps”. If OpenMRS Inc. is the entity signing the contracts (as it must be), then the reports should go to the Inc., and be shared with the Leadership team. Capped T&M with the subs might require audits of the T&M claims. Simpler to do Milestone/Deliverable, which requires only audits of the deliverables. But, either way, one problem with subcontracting is that we’ll have to carry the float between when we have to pay the subs and when we in turn get paid. One way around that if the prime contact is Milestone/Deliverable based, and we build in the signing of sub contracts into the milestones. Obviously, I’m not sure I’d agree that deliverables-based requires more work up front, or more legal review. I think “at-will termination” is important to reduce risks regardless of the mechanism, and reasonable as none of the subs will be making significant capital investments to do this work. Milestones can be temporal milestones - for instance: “adequate staffing of 2017 Q3 core team activities, anticipated to require the participation of approx.1.5 FTE, with payment made 30 days after acceptance of the Q3 report”. That would have to be accompanied by a list of anticipated 2017 Q3 activities, of course.

My reply is now too long, but those are some thoughts occurring to me on this flight home.

Lastly - if the contracting is by OpenMRS, Inc. to the subs, reporting should flow from the subs to OpenMRS, Inc. The Inc may ask the Leadership team to review those reports, but it is the Inc., not the leadership team, that has the final responsibility to accept the work of the subs and authorize payment.

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one minor note - some of the contract work our group does has a “no subcontracting” provision inserted. That’s almost always done by the legal team at the sponsor, and it doesn’t have any impact on us because our model is typically to do the work, not sub it out. The provision is there to prevent a “hollow middleman” who contributes nothing but added cost.

I’m sure PATH would not insert such a term, since we’ve been very upfront about the relationship of OpenMRS, Inc. and the Bahmni coalition, and the Bahmni coalition been very upfront about the proposal bringing together partners who will be funded to do this important work.

But, the contract review on the OpenMRS side should ensure that there are no provisions preventing us from subbing the work, or preventing secondary subs, since that’s the intended structure of the work.

Some quick points, because a lot of your (good) points were addressed behind the scenes, while negotiating the contract details:

  • The incoming award from PATH is deliverable-based. I’m proposing that OpenMRS do T&M subcontracts to Bahmni Coalition orgs in order to carry out those deliverables.
  • The contract includes an initial large payment so that OpenMRS doesn’t have to carry the float. (And in general, Bahmni’s expectation of OpenMRS as its fiscal sponsor is to hold Bahmni’s existing funds. We would not ask OpenMRS to carry a float without significant discussion.)
  • The contract allows subawards to specific named orgs in the Bahmni Coalition, or to Daniel or Rafal as contractors (if OpenMRS needs to step in and rescue for some reason).
  • This was not discussed on last Thursday’s call, which I also missed. We’ll have an operational call about this on Wednesday, so input before then is welcome.

Two bigger points:

T&M vs Deliverable-based

I mean to say that a deliverable-based subcontract is more work to set up because the sub will need to do a larger amount of review before they will sign the subcontract, which will add time to the process, and extra work up front.

At least that’s my ThoughtWorks experience, and I assume it holds for other orgs as well. It’s easy for me to pitch “source a dev to work on this big Bahmni deliverable at $X/hr (and they can fire us at will if they’re unhappy)”. Whereas if I pitch “do X deliverables for $Y” then more people need to be involved in the contract review, and they will request some due diligence.

This does place some risk on Bahmni/OpenMRS (instead of on the sub), so we would need to ensure we can effectively monitor the delivery, and we’re generally confident that the subs will deliver. But I hope that conversation can be a single consolidated negotiation between OpenMRS and Bahmni, versus having to work it out with 5 different subs.

(In this specific contract I have no worries at all – I can walk anyone through the details if they care.)

About OpenMRS Inc vs OpenMRS Leadership

While technically OpenMRS Inc is signing all the contracts, and thus ultimately responsible, it’s not practical for the Inc to be reviewing these monthly reports. I would expect they’d delegate this work to the project’s operational leadership.

(If Bahmni needs to primarily report to the OpenMRS Inc BoD, instead of to OpenMRS’s project leadership, then I would be skeptical of the fiscal sponsorship arrangement working out at all! Or is Terry an officer of the Inc, in which case that’s probably fine?)

T&M vs Deliverable-based contracts for subs

Good point re work. With either approach, I think it’s worth writing “at-will termination” into the contract. If that’s done, there’s not really a difference between T&M and deliverable-based. Someone in OpenMRS needs to track the work that’s being done, and determine if it’s satisfactory. With T&M, the tracking is really around resources expended, which doesn’t mean much. WIth Deliverables based, the tracking focusses on progress towards milestones outlined in the SOW. In neither case would I suggest being to proscriptive, but in the T&M case, I’d ask that reporting include progress towards the work outlined in the SOW, and in the deliverables case, I’d ask that reporting include resource expenditures. By “ask that”, I mean include contractually in the periodic reporting. In practice, either progress is being made, or OpenMRS would terminate the contract. The underlying structure really just supports the documentation of that progress.

OpenMRS Inc vs OpenMRS Leadership

You’re right re “technically OpenMRS, Inc.” is signing all the contracts. In fact, the board of the Inc has the “fiduciary” (eg., on behalf of the organization) responsibility to ensure that the work is being carried out responsibly. If I were a member of the board, I would want to delegate the tracking of monthly, or quarterly, reports to specific parts of the organization - likely to a specific person, such as the Executive Director (who might further delegate it. But, part of taking responsibility to act on behalf of the organization means that the board really should be requiring accountability from whoever is supervising the contract.

Typically a board delegates all of that work to the organizations’ executive. I am not sure who the officers for the OpenMRS Inc corporation are, but I don’t think Terry was among them. Most often corporate bylaws identify roles for a president, vice-president, treasurer, and secretary - each with distinct responsibilities (that in turn are often delegated by those individuals). In part that is done for separate of powers (operations vs finance vs legal records).

Also, I’m glad the points I raised earlier had all been resolved in the contract structure!

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I’m also glad to hear the same. Thanks for sharing all of this, @darius and thanks Bill for addressing things I’m sure other people would also be concerned with.

@terry, @christine, and I spoke today, and we all are on board with the combination of (1) T&M contracting, (2) short-notice at-will termination, and (3) the importance of the PM role in tracking progress to ensure successful delivery.

One reason for this is efficiency of contracting, but Christine raised another advantage for our context…

We want a model in which everyone on the Bahmni core team (including people not explicitly on this grant) feels jointly responsible for delivery, because it brings resources to the whole Bahmni enterprise. If we make individual coalition members responsible for individual deliverables, then we won’t build as much team spirit.

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