Health Net 2010 Annual Report Download - page 187

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Final Execution Copy
Project demand and (ii) make any corresponding adjustments to the Baseline AD Hours in accordance with Section 5.2(b).
(b) On a monthly basis, Health Net may request a change in the upcoming volume or mix of Baseline AD Hours. In such event,
Supplier shall make such change within 30 days after receiving such request and recalculate the Applications Development Charge
for the remaining months in the applicable Contract Year using the formulas in Sections 5.1(a)(i) and 5.1(a)(ii).
The Parties shall adjust the Applications Development Charge on a monthly basis as provided in Section 5.2(b) to reflect
changes in the Baseline AD Hours forecasted by Health Net. This Section 5.3 describes the incremental Charge Health Net shall pay
if its actual usage of Productive Hours on Applications Development Services for a particular In-Scope Application in a calendar
quarter exceeds the aggregate Baseline AD Hours for that In-Scope Application (as such Baseline AD Hours may be adjusted
pursuant to Section 5.2(b)) for such calendar quarter.
(a) Not later than 30 days after the end of each calendar quarter, Supplier will report (i) the quantity of Productive Hours
authorized by Health Net and performed by Supplier on Applications Development Services during the quarter for each In-Scope
Application (“Actual AD Hours”) and (ii) any variance in Actual AD Hours above or below the Baseline AD Hours for the In-Scope
Application in that quarter.
(b) ***:
(i) ***.
(ii) ***.
Example 1: ***.
Example 2: ***.
(c) Supplier shall use all Commercially Reasonable Efforts to minimize Incremental AD Hours, including by cross-training
Supplier Personnel so that they can work on multiple In-Scope Applications (e.g., if an individual is assigned to MC400 but not fully
utilized performing AD Projects for MC400, Supplier shall assign AD Projects for other In-Scope Applications to such individual).
(d) Supplier shall include any additional charges payable under this Section 5.3 on the invoice for the month following the end
of each calendar quarter.
As of the Effective Date, the Baseline AD Hours reflect what the Parties believe is the optimal mix of Offshore Personnel and
Onshore Personnel. Health Net may alter this mix by adding or removing Baseline AD Hours performed by Offshore Personnel or
Onshore Personnel through the process described in Section 5.2.
(a) Productivity Commitment. Supplier shall achieve at least the annual productivity improvement set forth in the chart below
for each Contract Year in providing Application Development Services (e.g., Health Net shall receive *** more Applications
Development output by the end of
5.3 Charges for Productive Hours in Excess of the Baseline AD Hours
5.4 Offshore / Onshore Ratios
5.5 Productivity
Schedule C (Char
g
es)
C - 8
Health Net / Co
g
nizant Confidential