Common use of Chargeback Clause in Contracts

Chargeback. ‌ The Multi-sourcing Service Integrator (MSI) is responsible for developing, managing, and maintaining the Chargeback System as well as developing and coordinating the associated Service Component Providers processes, as described in Exhibit 2.1.2, Cross Functional Service SOW. The Service Component Providers are responsible for data collection, data integrity, and providing data feeds to the MSI for charging back those fees to Customers. Where applicable, the MSI manages the Chargeback unit rate development process in coordination with DIR. DIR provides the methodology, but the MSI develops the calculations and maintains the process, which may include the allocation of some, or all, of a Service Component Provider’s Charges into another Service Component Provider’s Charges for Chargeback purposes. The MSI is the financial intermediary between the Service Component Providers and DIR. In this role, the MSI provides the Services to provision and manage the Chargeback and Utilization Tracking System, Chargeback and utilization reporting, Chargeback invoice consolidation, and management of the invoice dispute process. A component of the Chargeback invoice consolidation responsibility is the reconciliation of the cumulative total of all Service Component Providers’ Monthly Invoices with the cumulative total of the Customers’ Chargeback invoices. The MSI provides DIR with the supporting detail necessary to facilitate DIR’s payment of the Monthly Invoice to each Service Component Provider. A description of the current Chargeback system, capabilities and process is described in Chargeback and Reporting Services For Pass-Through Expenses per Section 9 below, New Services, and other Services for which Service Component Provider is authorized to charge separately by DIR, Service Component Provider will provide data to the MSI to support the Charges by Customer and Customer account identifier that conforms with the requirements of Section 12.1(a), Invoice, of the Agreement. DIR provides the MSI with the chargeback methodology and the MSI makes available to DIR and Customers through the Portal the monthly chargeback volumes, rates, and extended charge per Service per Customer and Customer account identifiers. Chargeback detail for each Customer is made available in the Chargeback System via the Portal in a format that aligns with the form(s) of invoice described in Attachment 4-F, Form of Invoice. At a minimum, DIR requires Service Component Provider to provide detailed billing data by Customer, Customer account identifier, by service type and by such factors as requested by DIR. DIR is responsible for providing Service Component Provider with the factors to track, as well as the methodology to be used to indicate usage among such factors. The MSI provides detailed billing information available online in a database that lends itself to searching, ad hoc reporting, and the ability to export data. This detailed billing information, provided by the MSI, must include the current Contract Year and the previous two Contract Years’ data. Billing detail beyond this time period is archived, by the MSI, and available upon request. Service Component Provider will develop and implement changes to comply with OMB Guidance for Grants and Agreements (Title 2, Subtitle A, CFR 200) based upon chargeback requirements provided by DIR. The chargeback unit rate methodologies may be adjusted as necessary to meet federal approval or to better facilitate effective and efficient charging of the Services to DIR and Customers. For most billable Services, the chargeback methodology will distribute charges to the benefiting Customers and programs based upon proportionate usage. This approach requires appropriate utilization data be captured for each Service and used to distribute charges to the benefiting programs identified by each Customer.

Chargeback. ‌ The Multi-sourcing Service Integrator (MSI) is responsible for developing, managing, and maintaining the Chargeback System as well as developing and coordinating the associated Service Component Providers processes, as described in Exhibit 2.1.2, Cross Functional Service SOW. The Service Component Providers are responsible for data collection, data integrity, and providing data feeds to the MSI for charging back those fees to Customers. Where applicable, the MSI manages the Chargeback unit rate development process in coordination with DIR. DIR provides the methodology, but the MSI develops the calculations and maintains the process, which may include the allocation of some, or all, of a Service Component Provider’s Charges into another Service Component Provider’s Charges for Chargeback purposes. The MSI is the financial intermediary between the Service Component Providers and DIR. In this role, the MSI provides the Services to provision and manage the Chargeback and Utilization Tracking System, Chargeback and utilization reporting, Chargeback invoice consolidation, and management of the invoice dispute process. A component of the Chargeback invoice consolidation responsibility is the reconciliation of the cumulative total of all Service Component Providers’ Monthly Invoices with the cumulative total of the Customers’ Chargeback invoices. The MSI provides DIR with the supporting detail necessary to facilitate DIR’s payment of the Monthly Invoice to each Service Component Provider. A description of the current Chargeback system, capabilities and process is described in Chargeback and Reporting Services For Pass-Through Expenses per Section 9 below, New Services, and other Services for which Service Component Provider is authorized to charge separately by DIR, Service Component Provider will provide data to the MSI to support the Charges by Customer and Customer account identifier that conforms with the requirements of Section 12.1(a), Invoice, of the Agreement. DIR provides the MSI with the chargeback methodology and the MSI makes available to DIR and Customers through the Portal the monthly chargeback volumes, rates, and extended charge per Service per Customer and Customer account identifiers. Chargeback detail for each Customer is made available in the Chargeback System via the Portal in a format that aligns with the form(s) of invoice described in Attachment 4-F, Form of Invoice. At a minimum, DIR requires Service Component Provider to provide detailed billing data by Customer, Customer account identifier, by service type and by such factors as requested by DIR. DIR is responsible for providing Service Component Provider with the factors to track, as well as the methodology to be used to indicate usage among such factors. The MSI provides detailed billing information available online in a database that lends itself to searching, ad hoc reporting, and the ability to export data. This detailed billing information, provided by the MSI, must include the current Contract Year and the previous two Contract Years’ data. Billing detail beyond this time period is archived, by the MSI, and available upon request. Service Component Provider will develop and implement changes to comply with OMB Guidance for Grants and Agreements (Title 2, Subtitle A, CFR 200) based upon chargeback requirements provided by DIR. The chargeback unit rate methodologies may be adjusted as necessary to meet federal approval or to better facilitate effective and efficient charging of the Services to DIR and Customers. For most billable Services, the chargeback methodology will distribute charges to the benefiting Customers and programs based upon proportionate usage. This approach requires appropriate utilization data be captured for each Service and used to distribute charges to the benefiting programs identified by each Customer.

Chargeback. ‌ The Multi-sourcing Service Integrator (MSI) MSI is responsible for developing, managing, and maintaining the Chargeback System as well as developing and coordinating the associated processes for all other DCS Service Component Providers processes, as described in Exhibit 2.1.2, Cross Functional Service SOWProviders. The Service Component Providers are responsible for data collection, data integrity, and providing data feeds to the MSI for charging back those fees to CustomersChargeback information. Where applicable, the The MSI manages will manage the Chargeback unit rate development process in coordination with DIR. DIR provides will provide the methodology, methodology but the MSI develops will develop the calculations and maintains maintain the process, which may will include the allocation of some, some or all, all of a DCS Service Component Provider’s Charges into another Service Component Provider’s Charges Resource Unit for Chargeback purposes. The MSI is will be the financial intermediary between the Service Component Providers and DIR. In this role, the MSI provides will provide all of the Services in Exhibit 2.1 Section A.2.5, to include provision and manage management of the Chargeback and Utilization Tracking System, Chargeback and utilization reporting, Chargeback invoice consolidation, and management of the invoice dispute process. A component of the Chargeback invoice consolidation responsibility is the reconciliation of the cumulative total of all Service Component Providers’ Monthly Invoices with the cumulative total of the DIR Customers’ Chargeback invoices. The MSI provides will provide DIR with the supporting detail necessary to facilitate DIR’s payment of the Monthly Invoice to each Service Component Provider. A description of the current Chargeback systemFor all Charges that are billable on a Resource Unit basis, capabilities HSC/SSC, Transition and process is described in Chargeback and Reporting Services For Transformation Charges, Pass-Through Expenses per Section 9 belowthrough Expenses, New Services, and all other Services services for which Service Component Provider is authorized to charge separately by DIR, Service Component Provider will provide data to the MSI to support the Charges by DIR Customer and DIR Customer account identifier that conforms with the requirements of Section 12.1(a), Invoice, 12.1 of the Agreement. DIR provides will provide the MSI with the blended unit rate chargeback methodology and the MSI makes will make available to DIR and DIR Customers through the Portal the monthly chargeback volumes, rates, and extended charge per Service Resource Unit per DIR Customer and DIR Customer account identifiers. Except for the ASU allowance and the HSC/SSC, it is anticipated the DIR chargeback methodology will include the use of applying the chargeback unit rate (Base Charge plus or minus variable ARC/RRC charges divided by total volume consumed) to the DIR Customer volume plus the allocation of other charges including Transition and Transformation Charges on a weighted average basis. Service Provider will use the DIR approved methodology to allocate Service Component Provider and Service Provider service level credits to DIR Customers on a quarterly basis based on the nature of the credit and the impacted DIR Customers. Service level credits are only allocated to DIR Customers once the right of Earnback has been lost or has expired. The MSI will implement chargeback in a phased approach. Chargeback detail for each DIR Customer is should be made available in the Chargeback System via chargeback system and on the Portal in a format that aligns with the form(s) of invoice described in Attachment 4-F, Form of Invoice. F. At a minimum, DIR requires DCS Service Component Provider Providers to provide detailed billing data by DIR Customer, DIR Customer account identifier, by service type project, by Resource Unit, and by such factors as requested by DIR, including the ability to track usage by major Application and Authorized User. Server Component Provider will be required to provide HSC and SSC chargeback information mapped to server instances for chargeback purposes. DIR is will be responsible for providing DCS Service Component Provider Providers with the factors to track, as well as the methodology to be used to indicate usage among such factors. The MSI provides will provide detailed billing information available online in a database that lends itself to searching, ad hoc reporting, and the ability to export data. This detailed billing information, provided by the MSI, must information should include the current Contract Year and the previous two Contract Years’ data. Billing detail beyond this time period is archived, by the MSI, should be archived and available upon request. Service Component Provider will develop and implement changes to comply with OMB Guidance for Grants and Agreements (Title 2, Subtitle A, CFR 200) Circular A-87 based upon chargeback requirements provided by DIR. The chargeback unit rate methodologies may be adjusted as necessary to meet federal approval or to better facilitate effective and efficient charging of the Services to DIR and DIR Customers. It is anticipated the chargeback methodologies generally fall into three categories. For most billable ServicesResource Units, the chargeback methodology will distribute charges to the benefiting Customers and programs based upon proportionate usage. This approach requires that appropriate utilization data be captured for each Service of these resource units and used to distribute charges to the benefiting programs identified by each DIR Customer. For certain billable Charges, such as Transition and Transformation Charges, it may not be possible to determine utilization attributable to specific DIR Customers. In this case, the charges associated with each milestone are to be amortized and then distributed to the DIR Customers in the following manner, as directed by DIR. Charges directly attributable to a DIR Customer should be allocated to that DIR Customer. Charges that are not attributable to a specific DIR Customer should be allocated using cost data from the prior month. Mainframe related charges should be allocated based on each DIR Customer’s Mainframe related costs as a proportion of total Mainframe related costs. Similarly, Server related charges should be allocated based on each DIR Customer’s Server related costs as a proportion of total Server related costs. Finally, charges which cannot be attributable solely to a DIR Customer or as a Mainframe or Server related cost should be allocated based on each DIR Customer’s total costs as a proportion of the total costs for all DIR Customers. The MSI will allocate the chargeback for the ASU Charges as instructed by DIR. Service Provider will provide detailed billing data by DIR Customer for the co- location services monthly recurring charges, one-time charges for co-location transition services, one-time charges for migration services, and any allocation of build-out charges. DIR may provide the MSI with miscellaneous chargeable items to include in the DIR Customer Chargeback invoices. These charges are internal to the State and exclusive of Service Provider Charges. In this event, DIR will provide the MSI with the specific allocation methodology to distribute these charges to the appropriate DIR Customers.