Consulting SOW & Engagement Model

This document establishes the contracting model for the entire integration program. It contains the engagement statement of work under which Arrington Advisory Group provides program management to ACME Health, and it defines the three tiers of contracting paper through which every non-employee resource on the program is engaged — consulting, technology vendors, and staff augmentation. It also sets the rules for a problem specific to transactions: paper signed before closing binds an entity that will not exist in the same form afterward. Executed February 20, 2023.

1. Parties, Term and Instrument

2. Scope of Services and Deliverables

Arrington provides program management, and specialist capability in the three areas where ACME's internal bench is thinnest — identity resolution, integration architecture, and cloud platform engineering. Seventeen Arrington personnel are engaged across the program: thirteen onshore and four offshore.

2.1 Explicitly excluded from this engagement

• Decision authority. Arrington recommends; ACME decides. Nothing in this SOW confers authority to approve a disposition, accept a risk, or commit funds.
• Line management. No Arrington personnel manage ACME or Cumberland Valley employees.
• Clean Team services. Contracted separately to a firm with no other role in the transaction — see Section 4.2.
• Transaction advisory. Valuation, diligence and deal negotiation are outside scope and were performed by others before this engagement began.
• Any activity constituting pre-close operational control of the target.

3. Acceptance, Fees and Invoicing

3.1 The acceptance mechanism

Each deliverable in Section 2 carries a named ACME acceptor, a defined acceptance period, and written acceptance criteria agreed before work begins. Deliverables are invoiced on acceptance. Where a deliverable is rejected, the rejection must state which criterion is unmet; Arrington remediates at its own cost and resubmits.

3.2 Fee structure

3.3 Termination

• For convenience by ACME on 30 days' written notice, with fees payable for accepted deliverables and work in progress at the point of notice.
• For cause by either party on material breach uncured after 30 days.
• On transaction failure. If the transaction does not close, the engagement terminates automatically at the point of abandonment. This clause exists because a signed merger agreement is not a closed transaction, and an engagement structured as though it were would leave ACME paying for integration management of a company it did not buy.

4. Independence, Conflicts and the Clean Team Boundary

4.1 Conflict representation

Arrington represents that it holds no engagement with Cumberland Valley Health Plan, no engagement with a competing bidder, and no financial interest in the transaction outcome. Arrington's fees are not contingent on closing, on synergy attainment, or on any transaction metric.

4.2 Why Arrington is not the Clean Team

Arrington personnel are integration advisors with broad access to ACME's planning. That access is incompatible with the information barrier. The Clean Team is therefore engaged separately from Harpeth Clean Team Services, which has no other role in the transaction, and no Arrington personnel hold Clean Team credentials or receive restricted-category information in any form other than issued Release Memoranda.

5. Three Tiers of Contracting Paper

Twenty-eight of the seventy-three people on this program are not employees of either party. They reach the program through three distinct kinds of paper, and the distinction is not administrative — it determines who owns the outcome when the work goes wrong.

5.1 Tier 2 — technology and specialist vendors

5.2 Tier 3 — staff augmentation

Two Rivers Talent Partners supplies four data stewards under time-and-materials SOWs issued against a master services agreement. This is the one population on the program where ACME rents hours rather than buying a result, and Section 6 explains why that is the correct choice here and Section 8 explains what it obliges ACME to do.

6. Deliverable SOW versus Staff Augmentation

6.1 Why the data stewards are staff augmentation and not a fixed-price service

Clerical review of identity matches is continuous, volume-driven queue work whose size cannot be known until profiling is complete. It also requires the reviewers to work inside ACME's systems, against ACME's data governance rules, under an ACME supervisor's quality standards. Fixed-pricing that means pricing an unknown volume of an activity ACME must control — which produces either a padded price or a vendor incentivized to close the queue rather than to close it correctly.

7. Rate Card and Vehicle Selection

7.1 Rate card

Rates below are the blended basis on which deliverable fees are priced and against which time-and-materials hours are billed. They are inclusive of benefits, overhead and supplier margin.

7.2 The offshore boundary

Offshore personnel work interface regression testing against de-identified and synthetic datasets. No member-level data leaves the United States, per Tennessee Department of Commerce and Insurance conditions and ACME privacy policy. This constraint is inherited, not negotiated, and it is the reason the offshore population is concentrated in interface testing rather than distributed across the program: interface testing is the substantial body of work that can be performed correctly without ever touching a real member record.

7.3 Vehicle selection rule

8. Co-Employment Guardrails

Staff augmentation personnel are employees of the staffing firm. Treating them as ACME employees creates worker-classification and co-employment exposure — a risk that lands on HR and Legal, and one a program manager should raise before Procurement discovers it.

9. Contracting Across the Close

9.1 Who is the contracting party

9.2 The rule this program applied

Where a program instrument could be signed by ACME alone, it was — because ACME survives the transaction and a contract with the surviving entity needs no action at closing. Where the work could not lawfully begin until after closing, the paper was dated after closing rather than signed early in anticipation. Both choices trade a little speed for the elimination of a novation requirement.

9.3 What this program deliberately did not do

• Did not sign vendor consolidation agreements before closing. Consolidating Cumberland Valley's vendors onto ACME's contracts before ACME owned Cumberland Valley would be operational control of the target. Consents were prepared and held for post-close execution.
• Did not novate inherited contracts in anticipation. A novation executed before closing binds an entity that may never merge, and the counterparty consent obtained for it may not survive a changed closing date.
• Did not contract the data stewards early to secure availability. Tempting, and rejected: the work is unlawful before closing, and a staffing contract with nothing to do is either idle cost or an invitation to start early.

10. Register of Program Contracting Instruments

11. Execution

This statement of work is not effective until executed by an authorized signatory of both parties and endorsed by ACME Legal. ⚠ Work performed before execution is performed at Supplier's risk and is not payable.

Related artifacts: 1 — Integration Charter (§8.2, delegated authority) · 5 — Clean Team Protocol · 14 — Resource Plan · 21 — Vendor & Contract Disposition Matrix · 33 — Data Steward SOPs & SLA