As part of consulting engagements over the last 2 years I have had the opportunity to review multiple OPM contracts, many of them from prestigious schools with successful online programs. Common themes and observations that have emerged from these reviews include:
- The overall brevity of the contracts themselves and the extent to which, when concepts are covered, they are usually covered in a very supplier friendly manner.
- In addition to being long in duration, many contracts included other business terms which led to barriers to exit and effective contract ‘lock in’. Lack of specificity about exit roles and responsibilities, marketing spending, IP Ownership, and more, make planning to, and having the freedom to, move on very complicated.
- The seeming absence of many 2019 standard service contract clauses and components. Modern services contracts need to cover a long list of issues. For example, FERPA, WCAG Compliance, US Data Privacy, GDPR, and many more. Not addressing these issues explicitly in contracts generates a real risk to the school.
- The number of contracts that were originally signed years ago and have just been renewed/extended. Very few seem to be updated for today’s world. Times have changed in OPM, market rates for revenue share have developed, business terms for IP Ownership have moved on, not to mention standard terms as described above.
For successful programs (and programs that hope to become successful through the OPM partnership) the amount of revenue share generated can easily get to be over $5m per year. That can add up to a $40m -$60m sum over a 10-year term. Maybe it is understandable that in the early days of OPM these contracts were entered into quickly, perhaps without as much scrutiny as was needed. Today, whether entering OPM for the first time or reviewing/extending the contract, effort deserves to be done thoughtfully.
Is your OPM contract ‘Fit for Purpose’?