Summary
This 8-K filing from ACE Limited (now Chubb Ltd) on November 15, 2005, details a significant amendment to its long-standing information technology outsourcing agreement with IBM Corporation. The amendment, effective November 1, 2005, extends the contract by three years, now running until 2012. This extension is accompanied by a projected annual cost saving for ACE of approximately $11 million and a reduction in potential early termination fees. Key changes in the amended agreement also introduce greater flexibility and accountability. ACE Limited can now source similar IT services from third-party providers, moving away from exclusivity with IBM. Furthermore, the revised contract incorporates new service level measurement methodologies and sets express performance goals for IBM, aiming to enhance service quality and transparency. The amendment also allows IBM to provide services from international locations.
Key Highlights
- 1ACE Limited amended and restated its IT outsourcing agreement with IBM Corporation.
- 2The agreement term was extended by three years, now extending through 2012.
- 3Projected annual payments from ACE to IBM are reduced by an estimated $11 million.
- 4Early termination charges for ACE have been reduced.
- 5ACE is now permitted to obtain similar services from third-party providers, ending exclusivity.
- 6New methodologies for measuring IBM's service levels and express service goals have been introduced.
- 7IBM is now permitted to provide services from locations outside the United States.