Evaluating Vendors Like a Library Leader: Part 2 Contract & Data Terms

Understanding the Framework: 5 Risk Domains

This is the second critical domain in the vendor evaluation framework. You\'ve already assessed vendor stability (Part 1). Now we\'re looking at contract mechanicsthe legal and commercial terms that determine what happens when things change.

1. Vendor Stability (Part 1) — Is the company financially healthy enough to keep operating?
2. Contract & Data Terms (this post) — What happens to your data if you need to exit, and what obligations bind you both?
3. Service Quality & Support (Part 3) — Does the vendor actually provide what they promised, or are you on your own?
4. Integration & Lock-In (Part 4) — Can you move your data to another vendor if you need to, or are you trapped?
5. Equity & Mission Alignment (Part 5) — Does this vendor\'s business model support or undermine your library\'s mission?

The contract is where theory meets reality. This is where you discover whether the vendor's promises are actually enforceable, or whether you have no recourse if they fail.

The Question: What Happens to Your Data If You Need to Exit?

Most library leaders never ask this question until they\'re in crisis. A vendor fails, gets acquired, changes their product roadmap, or becomes unaffordable. Then you're stuck: you can\'t leave because you can\'t get your data out.

This post answers the questions you should ask before signing:

• Can we actually export our data, and in what format?
• How much will it cost to leave?
• What if the vendor goes out of businessis our data safe?
• How are we locked into price increases?
• What's the real termination process, and how long does it take?

These aren\'t theoretical questions. The answers determine whether you have real choice or whether you're dependent on the vendor's goodwill.

Why This Matters: Lock-In Is a Deliberate Extraction Strategy

Vendor lock-in is not accidental. It\'s a business model. Vendors know that once they\'ve gotten you to migrate your catalog, patron database, financial records, and workflows into their system, moving is expensive and disruptive. So they build contracts and data formats that make leaving harder than staying.

Here's how it works:

1. Easy onboarding, hard exit. The vendor makes it simple to get started. Data import is handled for you. Integration is "turnkey." But the contract specifies that data export is only available in a proprietary format, and only with 90 days" notice, and only if you\'ve paid all fees through your termination date.
2. Price increases that reset your contract. You signed a three-year deal at $50K per year. In year two, the vendor increases the price to $52K. That\'s a 4% increase, which seems reasonable. But the contract says any modification of pricing resets the contract termso now you're locked in for another three years at the new price.
3. Auto-renewal with hidden opt-out deadlines. Your contract renews automatically unless you send written notice 120 days before the renewal date. The renewal notice comes in June. The opt-out deadline was March. You didn\'t know. Now you're locked in for another year.
4. Termination fees that exceed the cost of staying. You want out. The contract allows itbut charges a termination fee equal to six months of service. It's cheaper to stay for another year and pay the annual fee.
5. Data held hostage. The contract says the vendor will export your data, but only after all invoices are paid and all disputes are resolved. If you're in a dispute about service quality (which you have every right to be), they can withhold your data until you give up and capitulate on the dispute.

This isn\'t an exaggeration. I\'ve reviewed dozens of vendor contracts with these exact terms. And library leaders sign them because they don't know to look for these clauses.

What to Evaluate: The Contract Terms That Actually Matter

1. Data Export: Can You Actually Get Your Data Out?

This is non-negotiable. Before you sign anything, you need to know:

• What format is data exported in? — The best answer is: "MARC for bibliographic records, ISO 2709 standard format." Not "our proprietary XML." Not "we can provide CSV but you\'ll lose data mapping." MARC is the library standard. If they won\'t export in MARC, ask why.
• Is data export included in the contract, or is it an extra fee? — Get the fee in writing. If it\'s "we\'ll provide a quote," that's not a commitment. You need: "Data export is included in annual service fees with no additional charge."
• How long does export take? — "Reasonable time" is not acceptable. Get a specific number: "Data export will be provided within 30 days of request." If they need 90 days, that's a long transition period. Push for 30.
• What about related data systems? — Bibliographic records are only part of it. You also need patron data, circulation history, item-level holdings, serials information, and any integrated financial data. Ask for all of it. In writing.
• What if you want data regularly during the contract? — Some vendors will export, but only at contract termination. You should have the right to request a data export annually "for disaster recovery purposes" with no additional fee. Include this in your contract language.

Red flag language: "Vendor will provide data export upon request in a mutually agreeable format." This means the vendor gets to decide what format. You want to specify the format in advance.

Negotiated language: "Vendor will provide complete data export in MARC format (ISO 2709) within 30 days of written request, at no additional charge. Export includes all bibliographic records, holdings, patron records, and transaction history. Format will be consistent with standard ILS import specifications to facilitate transition to alternative systems."

2. Total Cost of Ownership: What's the Real Price?

The annual license fee is never the total cost. Hidden fees pile up:

• Setup and implementation fees. How much? Get it in the contract. Budget $5K-30K depending on complexity.
• Annual hosting or infrastructure fees. Is this bundled in the license, or separate? If separate, get the maximum increase capped (see below).
• Support tiers. Standard support might be included, but "priority support" or "24/7 support" will cost extra. What\'s the cost? What\'s included in standard?
• User licenses or concurrent user caps. You pay per user, per location, or per concurrent connection? Get this clearly defined. And what happens if you add locations or users mid-contract?
• Data storage overage fees. Is your storage capped? What happens if you exceed it? At what cost?
• Training and professional services. How many hours are included? What's the cost for additional hours? Get hourly rates locked in.
• Integration or API access fees. Do you want to integrate with other systems? That often costs extra. Get the fee in writing.

Add these up and you're looking at 25-50% more than the base license fee. Include all of this in your contract negotiation. Don\'t let "miscellaneous fees" be undefined.

3. Price Increase Mechanisms: The Compound Trap

Every vendor will want to increase prices. The question is: how much, how often, and what triggers a reset?

What you want: "Annual price increases shall not exceed 3% per year, applied to the then-current base fee. Price increases require 90 days' notice. Increases are not cumulativeeach year resets to the current fee plus 3%, not compounded."

What vendors push for: "Pricing will be adjusted annually to reflect market conditions and service enhancements. Adjustments may exceed CPI if justified by expanded service offerings or increased operational costs."

Translation: the vendor can increase prices as much as they want, whenever they want, as long as they claim they've added value.

Specific language to include:

• No annual price increase shall exceed 3% without mutual written consent.
• Price increases apply only to the base license fee, not to implementation, setup, or one-time fees.
• Vendor shall provide notice of any price increase at least 90 days before the anniversary date.
• If annual increase would exceed 3%, Customer has the right to terminate the agreement without penalty at the renewal anniversary.

That last clause is critical. If you don't accept the price increase, you can leave without paying termination fees. This gives you real leverage to negotiate.

4. Auto-Renewal Traps and Notice Periods

Every vendor contract includes auto-renewal language. It exists to trap unwary library leaders. Here's what happens:

• Your three-year contract is set to expire December 31, 2028.
• The contract says "this agreement will renew automatically for successive one-year terms unless Customer provides written notice of non-renewal at least 120 days before expiration."
• 120 days before December 31 is September 2. You don't see the notice. Your executive director is on vacation. It gets buried in a pile of vendor emails.
• December 31 passes. The contract renews automatically. You now owe another year of service.

What to negotiate:

• Reduce the notice period to 60 days, or ideally 30 days.
• Require the vendor to send renewal notices at 120 days before expiration AND at 90 days AND at 60 days. Multiple reminders mean less likely to miss the deadline.
• Include this language: "Vendor shall send renewal notices to the following email addresses: [Director], [Tech Director], [Procurement]. If Customer does not receive written notice of non-renewal by the specified deadline, this shall not constitute automatic acceptance of renewal terms."
• Change the default: "Unless either party provides written notice of non-renewal at least 60 days before the expiration date, this agreement will terminate. No automatic renewal without explicit written consent from Customer."

This flips the burden. Instead of having to remember to opt-out, the vendor has to opt-in. If they miss the deadline, the contract ends. This is fair to both parties.

5. Termination Rights and Exit Costs

The most important question: what happens if you want to leave before the contract expires?

Red flag language: "Customer may terminate for convenience with 180 days" notice and payment of remaining contract fees through the remaining term." Translation: you can leave, but you have to pay for the entire rest of your contract. This isn\'t really terminationit's a penalty.

Better language: "Customer may terminate this agreement for any reason with 90 days' written notice. No termination fees will apply. Vendor will provide complete data export within 30 days of termination notice."

In the real world, you're probably stuck with something in between. Here\'s what you should fight for:

• No deactivation fees or closure penalties. Some vendors charge a "deactivation fee" when you leave. This is pure extraction. Prohibit it explicitly: "No deactivation fees, closure fees, or exit costs will be charged upon termination for any reason."
• Termination rights for convenience after an initial period. "After the first 12 months of the contract, Customer may terminate for convenience with 90 days' written notice and no penalty, provided all fees through the notice period are paid."
• Termination rights for cause with no penalty. "If Vendor fails to meet service levels as defined in Appendix A for more than 30 cumulative days in any 12-month period, Customer may terminate immediately without penalty."
• Clear definition of what "termination" means. Is it the date you serve notice? The date the contract ends? The date the service is shut down? Get this specified: "Termination is effective on the date written notice is received by Vendor. All service will cease on that date. Data export will be provided within 30 days."

The clearer these terms, the more real control you have.

Red Flags That Matter

Contract Language That Signals Vendor Lock-In

• "Data export available in mutually agreeable format." This means the vendor decides the format. You have no leverage. Push back: specify MARC or another standard.
• "Reasonable efforts to export data." "Reasonable" is subjective and unenforceable. Demand a specific timeline: "within 30 days."
• "Export fees will be charged at Vendor's standard professional services rates." This means unlimited cost. Lock in a fee or make it free.
• "All price increases may be applied retroactively to current contract terms." Retroactive means they can bill you for past service at the new rate. Prohibit this: "No retroactive price adjustments."
• "Auto-renewal unless Customer provides written notice in the form specified by Vendor." The vendor gets to define the form. They'll make it obscure. Specify the form in advance, or skip the form requirement entirely.
• "Termination for convenience permitted only with payment of remaining contract balance." This isn\'t terminationit\'s a penalty. Negotiate for free termination after an initial period.
• "Vendor is not responsible for data loss if Customer fails to request export within 60 days of termination." This is time-bound data hostage-taking. Prohibit it: "Vendor will maintain Customer data for at least 12 months after termination, at no charge, for archival or transition purposes."
• "Termination fees apply if Customer's usage exceeds agreed-upon thresholds." This punishes you for success. Remove this clause entirely.

Missing Clauses That Should Be There

• Disaster recovery and data backup responsibilities. Who backs up the data? How often? What happens if the vendor loses your data due to their negligence? Include this: "Vendor will maintain daily backups of all Customer data. In the event of data loss due to Vendor negligence, Vendor will restore from backup at no cost. If restoration is not possible, Vendor will provide credit equal to 12 months of service fees."
• Service level agreements (SLAs) with financial penalties for failure. "99.5% uptime" sounds good, but what happens if the vendor misses it? Your contract should include: "For each 0.1% below 99.5% monthly uptime, Customer receives a 2% service credit." Without this, the SLA is unenforceable.
• Escrow protection for source code. If the vendor goes out of business, can you access the source code to keep the system running? Include: "In the event of Vendor insolvency, Vendor will deposit a copy of the current source code with an independent escrow agent for release to Customer."
• Limitation of liability that protects you, not just the vendor. Most vendor contracts have a clause like "Vendor's total liability shall not exceed the annual service fee." This protects the vendor, not you. Negotiate: "This limitation does not apply to data loss, breaches of data security, or breaches of confidentiality."

Mission Lens: How Contract Lock-In Harms Equity and Institutional Autonomy

Contract lock-in is not just an operational issue. It's a justice issue.

When a vendor locks you into a contract with high exit costs, proprietary data formats, and auto-renewal traps, they\'re extracting economic value from your library. That\'s money that should go to staff, collections, programs, or community partnerships. Instead, it's trapped in a vendor relationship that benefits the vendor more than your patrons.

This disproportionately harms under-resourced libraries:

• Small and rural libraries have fewer staff to monitor contract terms and renewal deadlines. They\'re more likely to miss opt-out windows. When they\'re locked in, they have fewer resources to absorb price increases.
• Libraries serving predominantly BIPOC and low-income communities have smaller budgets and less board support for technology spending. Lock-in contracts that inflate costs reduce the library's ability to invest in the communities they serve.
• Libraries in economically distressed regions can\'t afford to pay termination fees to switch vendors, even when a better option becomes available. They\'re forced to stay with vendors that don't serve their community.
• Tribal libraries and community libraries with limited IT infrastructure are vulnerable to vendors who exploit technical jargon and complex contract terms. Lock-in clauses written in legal language that assumes sophisticated procurement processes disproportionately impact communities without legal or procurement expertise.

When you negotiate contract terms, you're not just protecting your library. You\'re protecting your patrons" access to service. You\'re preserving your institutional autonomy. You're refusing to let a vendor extraction strategy divert resources from your mission.

Ask yourself: if the vendor increased prices by 10% next year, could our library absorb that? Or would we have to cut staff or hours? If we wanted to switch to a better vendor, could we afford the exit costs? Or are we trapped? If we can't answer "yes" to these questions with confidence, the contract terms need to change.

How to Use This in Practice: The Contract Negotiation Checklist

When you're reviewing a vendor contract, use this checklist to identify the critical terms that need to be negotiated.

Negotiating strategy: Identify 2-3 critical items (usually data export, price cap, and termination rights). Be willing to trade on less important items. Most vendors have negotiated these terms before. They\'re not unreasonable. They just won\'t offer them unless you ask.

Real Contract Language Examples

Here are actual clauses from library vendor contracts, edited for anonymity. These show what to watch for:

Example 1: The Data Export Trap (AVOID THIS)

"Provider will furnish customer data in Provider\'s standard formats. Customer understands that data export may require reformatting and is available upon request at Provider\'s then-current professional services rates. Export timeline depends on the volume of data and complexity of the request."

What\'s wrong: "Standard formats" means the vendor\'s proprietary format. "Then-current professional services rates" means they can charge whatever they want. "Timeline depends on..." means no commitment.

Better version: "Provider will furnish customer data in MARC format (ISO 2709 standard) within 30 days of written request, at no additional charge. Data will include all bibliographic records, holdings, patron records, and transaction history, formatted for standard ILS import."

Example 2: The Price Escalation Trap (AVOID THIS)

"Annual licensing fees will be adjusted each renewal year to reflect market conditions, service enhancements, and operational cost increases. Pricing adjustments are at Provider's sole discretion and are not subject to customer approval."

What\'s wrong: Unlimited discretion. They can increase by 20% if they claim they\'ve "enhanced" something.

Better version: "Annual licensing fees may increase by no more than 3% each renewal year. Any increase exceeding 3% requires 90 days' notice. Customer may terminate this agreement without penalty upon receipt of price increase notice if increase would exceed 3%, provided termination notice is delivered within 30 days of receiving price increase notification."

Example 3: The Auto-Renewal Trap (AVOID THIS)

"This Agreement will automatically renew for successive 12-month terms unless Customer provides written non-renewal notice to the address specified in the header of this Agreement, received no later than 120 days before the expiration date."

What's wrong: 120 days is a long window to miss. "Address specified in the header" changes if someone updates the contract template. Nobody reads it.

Better version: "This Agreement will terminate at the end of its term unless both parties agree in writing to renew. Either party may indicate intent to renew at any time during the 60 days before expiration. Provider will send renewal reminders to the following email addresses at 90 days and 60 days before expiration: [Director], [Tech Director]. Failure to send these reminders will not constitute automatic renewal."

Example 4: The Termination Trap (AVOID THIS)

"Customer may terminate this Agreement with 180 days' written notice. Termination for convenience is permitted only if Customer pays all remaining fees due under the Agreement through the end of the then-current term."

What\'s wrong: "Remaining fees" means you're paying for the entire rest of your contract. This isn\'t terminationit\'s a penalty.

Better version: "Customer may terminate this Agreement for any reason with 90 days' written notice, provided Customer has paid all fees through the notice period. No termination penalties or exit fees will be charged. Provider will furnish complete data export within 30 days of termination notice."

What Part 3 Covers

You now understand the contract mechanics. But a good contract isn\'t worth anything if the vendor doesn\'t actually deliver what it promises. That\'s what Part 3 is about: "Service Quality & Support\'evaluating whether the vendor actually provides what they said they would, and what your recourse is when they don\'t.

The Bottom Line

Most library leaders treat vendor contracts as boilerplatetake it or leave it, and most libraries don't have the capacity to negotiate. But:

• Vendor contracts are negotiable. Every vendor I've worked with has negotiated these terms with someone. You can too.
• The specific clauses in your contract determine whether you have real choice or whether you're trapped. Make sure the important ones are in writing.
• Lock-in is deliberate. Vendors build it into contracts because it worksit traps libraries into higher prices and longer relationships. You have to actively negotiate against it.
• These terms matter most when things go wrong. When the vendor raises prices, shuts down, or changes their product, your contract determines whether you can leave.

Don\'t sign a contract you haven\'t negotiated on at least three key points: data export format and cost, annual price cap, and termination rights. If the vendor won't negotiate these, that tells you something about how much they value your business.