Reverse TSA Advisory
Build the catalog before the seller does it for you. Specialist work.
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Reverse TSA service catalog design is the most consequential drafting work in the contract. The catalog defines what the buyer will deliver, what the seller can request, and where the boundary sits between routine fulfillment and chargeable change. Tight definitions protect Newco. Loose definitions invite scope expansion, dispute, and capacity drain. The work sits inside the broader reverse TSA advisory practice and gets done pre signing so the catalog is fixed before operational momentum sets in.
Sellers often want the reverse TSA catalog written as a menu of available services. The buyer's instinct is the opposite. The catalog should be a fence. Inside the fence is what Newco has committed to deliver. Outside the fence is what Newco may decline, or may deliver only as a chargeable change. The fence stays fixed for the duration of the contract. Movements across the fence trigger commercial conversations.
The fence framing matters because the seller's operational appetite grows. The first 30 days produce routine requests aligned to the original scope. By month three the seller is asking for adjacent services that were not specifically listed. By month six the seller is treating the buyer as a continuing internal department. Without a tight catalog, the buyer's team finds itself delivering work for which there is no defined billing, no defined SLA, and no defined exit.
A defensible catalog has five elements for each service: a description of what is delivered, a definition of volume or capacity included, a list of specific exclusions, a description of change request mechanics, and a pricing reference. Catalog entries that omit any of these elements leak scope. The buyer side advisor writes catalog entries with all five elements present and resists seller pressure to leave any of them open.
The catalog is hardest to renegotiate after signing. Pre signing leverage is highest. Once operational delivery starts, every change becomes a contest. The buyer side advisor invests heavily in catalog drafting during the pre signing window and uses the leverage of deal closing to land definitions that will hold through the duration. The work pairs with the reverse TSA primer.
Service descriptions in a reverse TSA need to be narrow enough that the buyer can defend the boundary, and clear enough that the seller knows what to expect. A service titled simply "IT support" invites every IT related request. A service titled "Tier 2 help desk support for the named applications in Schedule A, during the named hours in Schedule B, for users in the named seller business units in Schedule C" gives Newco a fence the seller cannot easily push through.
Each description should answer five questions. Who is the eligible recipient (which seller users or business units)? Which systems, locations, or assets are in scope? What activities are included (and what are explicitly excluded)? What service hours apply? What outputs or service levels define success? Catalog entries that answer all five questions are operationally manageable. Entries that leave any of them open become disputed.
The seller will sometimes ask for catch all language ("and other reasonable services the buyer can provide"). The buyer side advisor declines. Catch all language is the single largest source of scope expansion in reverse TSAs. Where the seller raises a credible concern that the original catalog will miss something legitimate, the answer is to add the change request mechanism, not to add catch all language.
Service description granularity should match the operational reality of each function. Routine high volume services can be described in a single page. Complex specialist services may require multi page descriptions with appended technical schedules. The buyer side advisor sizes the description to the operational complexity and resists the temptation to compress complex services into the same template as simple ones. The work pairs with reverse TSA pricing models.
Every service in the reverse TSA catalog should specify a volume or capacity ceiling. Without a cap, the buyer commits to unlimited demand at the original pricing assumption. Sellers who pay a fixed fee will route everything they can through the included service. Sellers who pay cost plus will still consume more of the buyer's capacity than the original assumption supported, with downstream effects on Newco's own operations.
Common cap formats vary by service type. User access services cap the named seller user count. Transaction processing services cap monthly volumes. Help desk services cap monthly ticket counts. Compute or storage services cap allocated capacity. Specialist services cap hours per month. The buyer side advisor sets caps based on actual operational capacity allocated to the function, not on the seller's optimistic forecast.
Above cap charges should be tiered. The first tier above cap (typically up to 15 percent over) bills at a modest premium (1.25 to 1.5 times the unit rate). The second tier (15 to 30 percent over) bills at a steeper premium (1.5 to 2 times). Beyond 30 percent over cap, the buyer has the right to decline incremental demand. The tiered structure protects the buyer's margin and signals to the seller that high volume usage requires planned commercial conversation rather than routine fulfillment.
The cap calibration discussion happens during pre signing. The buyer side advisor pulls historical volume data, adjusts for the carve out scope, and proposes caps that match the buyer's actual delivery capacity with appropriate margin. The seller will push for higher caps. The buyer holds the line because cap exceedances are easier to negotiate than cap reductions later in the contract.
Exclusions are the catalog's most important defensive provision. The seller's natural reading of any service description is expansive. The buyer's protection comes from explicit exclusions that show the boundary on the other side. A help desk service that excludes hardware repair, software development, and security incident response is operationally clear in a way that the inclusion list alone cannot achieve.
Each catalog entry should list exclusions in three categories. Activity exclusions cover work types that fall outside the service. User exclusions cover seller populations not authorized to access the service. System exclusions cover applications, locations, or assets outside the defined scope. The exclusions list should be specific. Generic exclusions ("other activities not specifically included") are weak because they invite interpretation.
Common exclusion categories that the buyer side advisor lands routinely include: training and onboarding of new seller users (unless explicitly charged), seller initiated change projects, integration to systems acquired by the seller after closing, support for users outside named business units, support outside named service hours, and any activity that requires the buyer to take material business risk on the seller's behalf.
The exclusions list should be maintained as a living document during the contract. As the seller raises new requests, the response from the buyer side advisor includes either fulfillment under the catalog, fulfillment via change request, or explicit logging of the request as out of scope. The log becomes the contemporaneous record that supports the buyer's position if the dispute escalates. The work pairs with the reverse TSA governance framework.
Even the tightest catalog will not anticipate every legitimate seller request. The change request mechanism handles the residual. A workable mechanism specifies who submits the request (the seller's designated coordinator), what the request must include (scope description, business justification, requested timeline), how the buyer responds (within 10 business days with feasibility, scope, pricing, and SLA proposals), and what approval is required (typically written acceptance from a named seller executive before the buyer begins work).
Pricing for change requests should follow the catalog pricing model. Cost plus services get cost plus quotes with the same mark up structure. Fixed fee services get fixed fee quotes scoped to the requested change. Pass through costs flow at cost. The consistency matters because seller will challenge inconsistent pricing across change requests and the consistency makes the buyer's billing defensible.
The buyer should retain a rejection right for change requests that would materially impair the buyer's own operations, that fall outside the buyer's capability, or that would require capacity the buyer cannot make available. The rejection right needs to be drafted carefully because sellers will challenge any rejection. The buyer side advisor builds an objective rejection standard ("the buyer may decline a change request if delivery would require capacity in excess of the buyer's documented operational allocation") and applies it consistently.
Change requests that result in fulfillment should produce a written amendment or a written confirmation in the governance minutes. Verbal acceptance does not survive the audit cycle. The buyer side advisor builds the documentation discipline so every change request has a paper trail that supports billing. The framework pairs with change control mechanisms in the standard TSA work.
The catalog is best built during pre signing review, alongside the standard TSA catalog. The buyer side advisor reviews each candidate service the seller wants the buyer to provide, applies the five element template (description, volume cap, exclusions, change request mechanics, pricing), and produces a draft catalog that becomes the schedule to the reverse TSA. The work typically takes two to four weeks depending on the breadth of services and the complexity of the underlying operations.
The catalog drafting work happens in parallel with the reverse TSA contract drafting. The contract carries the governance, pricing methodology, SLA framework, and exit terms. The catalog carries the service specific definitions. The two need to align. The buyer side advisor coordinates with deal counsel so the contractual mechanism and the catalog detail reinforce each other.
Reverse TSA work is delivered under a Fixed Fee or Portfolio Retainer engagement model. The Fixed Fee engagement covers a defined catalog build for a single transaction. The Portfolio Retainer covers a PE platform running multiple reverse TSAs across portfolio companies. The buyer side advisor scopes the catalog build during diligence and delivers a fixed fee proposal within 48 hours of intake.
The catalog is the operational backbone of the reverse TSA. It is the document the delivery team reads every day. It is the document the seller cites when requesting scope changes. It is the document the governance committee reviews monthly. The buyer side advisor invests in catalog quality during pre signing because the same quality compounds across every month of the duration. The work pairs with the reverse TSA exit strategy framework.
The TSA negotiation pillar covers the clause and pricing mechanics behind every reverse TSA. Corporate buyers face the same dynamics from the provider side.
Cost plus, fixed fee, pass through, and how buyers structure pricing to recover full cost.
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