1. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved BVS Contract Process

2. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 1 Overview Simple Designed so that everyone involved in the deployment can understand the mechanics Two contracts Assessment and BVS Covers basic legal issues - How and when SSA gets paid - Client’s obligations - SSA’s obligations - Protects SSA’s intellectual property - When SSA and/or client can terminate BVS Contracting Process

3. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 2 Assessment Contract Components Engage with client for X weeks Receive flat fee payment of $Y Client receives assessment document at end of term Anticipates BVS Contract BVS Contracting Process

4. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 3 BVS Contract Components Use assessment as a roadmap for BVS Contract SSA to receive “Retainer Fee” on quarterly basis throughout term of contract: - Retainer Fee = SSA Costs + Margin - Covers knowledge transfer component of contract - Acts as “insurance” in the event client delays training/projects BVS Contracting Process

5. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 4 BVS Contract Components SSA to receive “Success Fees” on quarterly basis Success Fees paid to SSA for all successfully implemented projects (lean, six sigma, change management, DFSS) Success Fees paid one of three ways, as determined by Steering Committee: - Flat Fee (e.g. lean work) - Progress Payments (e.g. cycle time reduction) - Shared Benefits Compensation at 4% (e.g. classic six sigma projects) For Flat Fee and Shared Benefits Compensation, Success Fees paid when projects close; for Progress Payments, Success Fees paid quarterly as projects progress Success Fees capped BVS Contracting Process

6. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 5 BVS Contract Components Client responsible for: - Adhering to training schedule (penalties for being off schedule; possible penalty: increase term of retainer fee payments) - Sending minimum number of students to class (penalties result) - Committing certain resources to deployment (full time finance champion, tracking software, deployment champion, etc.) BVS Contracting Process

7. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Presentation NamePg 6 BVS Contract Components Termination by SSA: - If client is not on schedule with training for X months - If SSA has received less than $Y per quarter in the last two quarters in Success Fees BVS Contracting Process Contracting GapsRecommended Actions