Cons:

Pros:

* A service level agreement gives both government agencies and vendorsa baseline by which to measure performance and a way to determine whetherthe service contracted for is being delivered.

* Because a prime contractor is accountable for the whole system, theblame game that often takes place between an agency and contractors iseliminated. The prime simply finds the problem and fixes it.

* Payment can be tied to service quality and customer satisfaction.

* Vendors have strong financial incentives to operate at maximum efficiency;vendors that perform above expectations earn as much as a 10 percent bonuson their monthly fee, while vendors who fail can be docked payments.

* Upgrades to the system are done on a scheduled basis at no additionalcost to the government.

* Once the contract is in place, agencies can expect a level paymentstream based on operating costs rather than capital expenditures. That allowsofficials to better manage and forecast their telecommunications budget.

Cons:

* Service level agreements are often accompanied by a perceived loss ofcontrol.

* It may be difficult to get disparate user groups to agree on requirements.

* Agencies sometimes pay for a higher level of service than is necessaryfor some employees, though the cost savings inherent in the model usuallybalance out this potential disadvantage.

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