It is important to keep in mind that this is a right and not an obligation. For example, the funder is not automatically liable for amounts due by the promoter, it usually enters into its position and thus accepts its rights and obligations only if it makes a compliant notification. Insofar as step-in rights belong to third parties (who can only impose rights, no obligations), they must be subject to the acceptance of the obligations related to them. Subcontracts are not the only type of agreements in which you will find step-in rights. They are used in many other trade agreements, including construction, project finance and development contracts. In these relationships, step-in rights are generally easier to exercise and easier to exercise than in an outsourcing relationship where it may be impossible to “intervene” and fulfill the supplier`s obligations. The decision to terminate the MoJ`s contract with G4S indicates that, despite the efforts of the parties, this measure was ultimately not successful, although the decision to take over the leadership of HMP Birmingham from government control also has political overtones. If some or all of the services in the provider`s shared service environment are provided, you are unlikely to be able to exercise step-in rights. It is understandable that other customers do not allow a third party to access an environment in which its services are performed. Even if your specific services are delivered from a dedicated, isolated environment inside the vendor`s service center, the problems of having the necessary internal resources or finding a third party to support the operations described above can be prohibitive.
So, if they are difficult or impossible to exercise, is it advantageous to have a step-in-right in your outsourcing contract? Absolutely. As a customer, you must have all the possibilities available in case the provider fails to provide the services. However, there may be similar rights that you might consider, which can not only give you leverage in your relationship with the provider when it is late, but also provide you with solutions that help the provider get back on track with the service. Here are some examples: for this reason, it is recommended to support the rights of the client with an “all Asset” guarantee (or at least a light guarantee like a pen), so that step rights can be implemented when an administrator is appointed contractor. However, it is important that these rights do not generally give the client alone the guarantee over “all or, essentially, all” of the contractor`s assets. If an administrator were appointed as the holder, the contracting authority would not be able to exercise its registration rights during the administration, unless it did so as an insured party with a guarantee right over all or essentially all of the contractor`s assets. . . .