Service Level Credit Calculation Clause Samples
The Service Level Credit Calculation clause defines how credits or compensation are determined when a service provider fails to meet agreed-upon performance standards. Typically, this clause outlines the specific metrics or thresholds that trigger a credit, the formula for calculating the amount owed, and the process for applying these credits to future invoices or payments. Its core practical function is to incentivize the service provider to maintain high service levels and to provide a clear, pre-agreed remedy for the customer in the event of service shortfalls.
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Service Level Credit Calculation. Upon a Service Level Failure, Contractor will provide the State with the Service Level Credit(s) which shall be calculated as the product of (i) the Service Level Credit percentage allocated by the relevant Service Level set out in Section 54.7 above, multiplied by (ii) the Total Ongoing Services Fee for the month corresponding to the Measurement Period (except with respect to the Availability Service Level for Online Portal, which shall be addressed as set forth below). The foregoing calculation shall be performed for each Service Level Failure occurring in a given month. With respect to the Availability Service Level for Online Portal, the Service Level Credit shall be calculated as a product of (i) the Service Level percentage allocated by the Availability for Online Portal Service Level set out in Section 54.7 above, multiplied by 10% of the Total Ongoing Services Fee. If a single Incident results in the failure of Contractor to meet more than one Service Level, the State shall have the right to select any one of such multiple Service Levels affected by the Incident for which it will be entitled to receive a Service Level Credit; i.e., Notwithstanding and as an exception to the above, in the event of an Incident impacting the Availability Service Level for any Core Functionality, the Service Level Credit will be provided for each Core Functionality experiencing a Service Level Failure.
Service Level Credit Calculation. A service level credit will be provided as follows based on the percentage of your monthly Subscription Fee: 99-100% N/A 98% 10% 97% 20% 96% 30% 95% 40% 94% 50% 93% 60% 92% 70% 91% 80% 90% 90% Less than 90% 100%
Service Level Credit Calculation a. For failure to meet a Service Level, the Service Level Credit will be determined as follows:
1. Except as set forth in Section 5.1(b)(2), the At Risk Amount means [***] (“At Risk Amount”).
2. A Weighting Factor is assigned to each Service Level, and the total of the Weighting Factors for all Service Levels shall be equal to 100%. Service Level assigned weighting factors are specified in the tables set forth in Exhibit B-1 to this Schedule (“Weighting Factor”).
3. Subject to (b), (c), and (d) below, failure to meet a Service Level for any month will result in a Service Level Credit amount that will be determined by [***] For example, if the Monthly Service Charges are [***] and IBM has failed to meet a Service Level with a [***] the applicable credit would be: [***]
b. During the initial [***] period following the Start Date, in the event IBM fails to meet a Service Level, the Service Level Credit calculation shall be modified as follows:
1. The Service Level measurement for all Service Levels shall be adjusted to [***]
2. The At Risk Amount for a Peak Month shall be limited to [***] or for a Non-Peak Month, [***]
3. Any failure by IBM to meet a Service Level shall not be included in the calculation giving rise to a Service Level Termination Event as set forth in Section 6.0 of this Schedule B.
c. As part of the Transition Phase 2 activities, as each of the WSI systems subject to System Availability Service Levels set forth in Exhibit B-1 are accepted and promoted into production mode in the ODCS environment at IBM’s facility, each such Service Level will be subject to a [***]
d. During the ODCS / Managed Hosting phase of the Term, applicable Service Levels and associated Service Level Credits for the affected systems, if any, will not apply or be payable by IBM during any month in which WSI’s CPU Hour usage exceeds [***] as set forth in Schedule C.
e. On a monthly basis for each calendar month of the Term, the amount of Service Level Credits, if any, to which WSI is entitled will be [***]. Service Level Credits, if any, will be reflected in IBM’s invoice in the calendar month following the month for which any such amounts are calculated.
f. Any Service Level Credits owed from IBM to WSI upon the expiration or termination of the Services will be paid within [***] following the effective date of expiration or termination. If the Monthly Service Charges for a subject month has not been incurred, or for any other reason has been credited or waived except in...
Service Level Credit Calculation. Subject to Section 6(f) below, for each CPI Expected Service Level Default or Minimum Service Level Default, Service Provider shall accrue to Customer a Service Level Credit that will be computed in accordance with the following formula: Performance Credit = A × B Where A is the At Risk Amount; and Where B is the Allocation of Pool Percentage for the applicable CPI. For example only, assume that Service Provider fails to meet the Minimum Service Level for a CPI, the At Risk Amount is [***]% of the [***], and the [***] for the month in which the Service Level Default occurred were $[***]. Additionally, assume that the Allocation of Pool Percentage for such CPI is [***]%. The Performance Credit due to Customer for such Service Level Default would be computed as follows:
Service Level Credit Calculation. Each Service Level Credit shall be calculated as follows: Service Level Credit = A X (B / 100) Where:
(a) A is the At Risk Amount for the month in which the Service Level Failure occurred; and
(b) B is the Weighting Factor for the Critical Service Level for which the Service Level Failure occurred. For example, assume that Supplier fails to meet the Service Level Target for a Critical Service Level and (i) the Monthly Charges for the month in which the Service Level Failure occurred was $100,000, (ii) the Weighting Factor for such Critical Service Level is 60 percent, and (iii) the At Risk Amount is [****]* percent. The Service Level Credit due to LS&Co. for such Service Level Failure would be computed as follows: EXECUTION VERSION A = [****]* [the monthly Charges multiplied by the At Risk Amount]; Multiplied by: B = 0.6 (60/100) [the Weighting Factor divided by 100]; Equals = $9,000 [the Service Level Credit.]