Contractually provided service levels ensure levels of performance, such as quality and timeliness, and are a framework under which both company and vendor can manage the outsourcing relationship.  Failure to meet service levels should result in financial penalties to the vendor.  Specific service levels that are critical, such as those pertaining to regulatory compliance, may be weighted to reflect their importance. 

From a contractual standpoint, a total percentage of dollars at risk per month per Statement of Work, or across multiple Statements of Work, must be determined.  For example, if an agreement calls for a maximum of 20% at risk per month, multiple service levels must be weighted according to importance to reach that 20%.  In addition, if more than one service level is missed for a given month, an accelerator may be used to reach that maximum at risk sooner.  Continued service level failures should result in contractually required action plans to address such failures.  In the event that chronic service level failures occur after such action plans have been acted upon, the Statement of Work should be terminated for cause, without penalty to company.