What is a Quality Agreement?

By definition, a quality agreement is a legally-binding document that clearly states the specific quality parameters of a certain project and which party is responsible for bringing the said parameters into action. The intent of having a quality agreement is to reduce the internal frustration of being told what to do without the input of a sponsor and also helps avoid the possibility of not living up to expectations. The level of detail inside a quality agreement will vary depending on the project’s developmental stage. It should be noted, however, that a quality agreement is not the same as a business agreement that covers the commercial terms and conditions that a contract contains. A quality agreement is merely prepared by quality personnel and only focuses on the quality of the service being provided.

When is a Quality Agreement Needed?

Every time a contractor is called into service or the services of a contract manufacturing organization (CMO) is to be used, a quality agreement is to be used. Here are some situations that necessitate a quality agreement:

Regulatory Requirements of a Quality Agreement

Having a quality agreement is not just down to a matter of keeping good business practice. In fact, there are also regulatory requirements of a quality agreement. The requirements of a quality agreement indicate the following critical activities that must be done:

What are the Different Types of Quality Agreements?

There are four different types of quality agreements, and each of them is tailored to cater to the needs of a specific type of relationship. Here are those:

Manufacturing Quality Agreement: This type of quality agreement is between parties involved in the contract manufacture process and defines and establishes each party’s manufacturing activities in terms of compliance with the Current Good Manufacturing Process (CGMP) regulations.Supplier and Vendor Quality Agreement: These types of quality agreement defines the terms and conditions that relate to the overall quality of the raw materials that is supplied to a manufacturing facility that are used in the production of finished goods.Service Quality Agreement: This type of quality agreement outlines the terms and conditions that relate to the overall quality of services that are supplied to a manufacturing facility that is used in the production of goods.

Why Do We Need a Quality Agreement?

The simplest reason on why we need a quality agreement document is to manage the expectations of the two parties involved in the agreement from the perspective of the quality of work that is to be provided and their compliance with the regulations that are in place. Any outsourced activity that is covered by the Good Manufacturing Process (GMP) that is guidelines should be clearly and concisely defined, agreed upon, and controlled in order to prevent any misunderstandings between the parties involved which can lead to products created or services rendered that are of subpar quality.

What Should Be Included In a Quality Agreement?

Here are the critical areas that should be covered when writing an effective quality agreement:

Activities. An effective quality agreement should define all roles and manufacturing activities and establish appropriate contact personnel for each organization. It is also important for the parties involved to develop written and verbal communication protocols, and the quality agreements should be clear with respect to the product release.Scope. The scope of a quality agreement should be covering numerous compliance activities which include qualification, calibration, maintenance, and inspection of manufacturing equipment and instruments. It may also include the validation of analytical procedures, computer systems, and manufacturing processes.Dispute Resolution. The document should also include and clearly define the routine, escalated, and emergency incidents and the ways in which they should be handled. It should also define the things to do in case disputes happen and should also state the ways in which raised disputes can be solved effectively and quickly.Material Management. An effective quality agreement should indicate the party that will establish component specs and the party that will establish the processes that are needed for auditing, qualifying, and monitoring the component suppliers. It should also contain the identification of the people that will conduct any testing and/or sampling procedures that are in accordance with the Current Good Manufacturing Process (CGMP) regulations.Product-specific considerations. This section of the quality agreement addresses any considerations that concern individual products. It must also designate how owners will transfer their knowledge which includes product and process development information to their contract facilities.Change control and revisions. The quality agreement should specify the controlled and documented changes that can be made by the contractor with the owner’s notification only and the changes that need to be thoroughly discussed, reviewed, and approved by the owner before they can be implemented.Documentation. This section of the quality agreement must be included because any activity that has not been documented can be considered to not have happened. This part needs to describe protocols for making changes to standard operating procedures, manufacturing records, specs, validation documentation, and any other essential documents that are related to products made or services rendered by the contract facility. This part of the agreement should also define how the records will be made readily available for inspection.Definition of Terms. This is included in the agreement document in order to prevent any possibility of misunderstanding. This is also known as a glossary of keywords, acronyms, and abbreviations. This also rings true especially when dealing with parties from a location with a different language or dialect, as the terminology that they use can vary greatly. The complex words or technical jargon should be clearly and concisely defined to make them easier to understand.

How to Write a Quality Agreement

An effective quality agreement has standard procedures in place to indicate the types of vendors and services that will require the said document. As it is being written, nothing should be taken for granted and both parties should review it to ensure that their requirements are included. With that being said, here are the steps that you can follow in order to write a quality agreement:

1. Identify the parties involved in the agreement.

In a quality agreement, the parties involved are the quality assurance coordinator, the head of the laboratory from the  main sponsor and the corresponding individual from the contract company, and the auditor from the sponsor company for routine assessment of the contract company. It is also important to identify the roles of the parties involved in the quality agreement, which can be done via the use of the RACI (responsible, accountable, consulted, and informed) matrix method:

2. Write down the essential elements of the quality agreement.

In this step, begin writing down the main body of the agreement, along with its essential information. It is important to keep in mind that a quality agreement should be describing and acknowledging the responsibilities of the parties involved, terms of collaboration, the scope of the project in the agreement, the terms concerning the materials management, the activities to be performed, the product-specific considerations, the change control and revisions, and the terms regarding the documentation of the activities that are performed throughout the timeline of the agreement.

3. Write down the elements/clauses that can be used in case something goes wrong.

An essential part of the quality agreement (or any agreement) is also writing down the elements or clauses that can be referenced by all parties involved in case something goes awfully wrong throughout the project. The elements refer to the following: Terms Regarding Insurance or indemnification, guidelines to be used for resolving disputes, coverages in case any individual gets injured while doing activities that relate to the agreement, grounds for terminating the ongoing agreement or contract, and the terms to be referenced for possible amendment of the terms listed in the agreement or contract.

4. Verify the document.

In this step, it is important to go through the agreement once or multiple times and give it a proper verification process after producing your initial draft. Make sure that nothing of importance is left out, and nothing unnecessary to the agreement or project is included in the document. The process of editing and proofreading consists of the examination of the entire material, structure, clarity, and style. It is important to review the document for the purpose of monitoring, adverse event reporting, accountability purposes, and checking for negotiable terms or clauses. It is also recommended that you submit the paper over to a legal professional for evaluation after thorough rewriting and editing. It is always advisable to seek a legal professional’s advice to help you find ways to produce effective and legal documents.

Auditing in a Quality Agreement

The role of auditing in a quality agreement is essential because it confirms that a contract company can work with a suitable quality system. With that being said, auditing comes in three different types, which are the following:

Initial Audit: This type of audit is used to assess the facilities of the contract company along with their quality management system, analytical instrumentation and systems, staff organization and training records, and record-keeping procedures. The main purpose of this audit is to determine if the facility is suitable to work in accordance with the quality standards that are set.Routine Audit: This type of audit is carried out on a regular basis. The purpose of a routine audit is to confirm that a facility’s quality management system is operating as documented and that the analytical work that is carried out on the owner’s behalf is up to standards with the quality agreement.For Cause Audit: This type of audit is carried out whenever problems arise at a facility that specifically calls for an audit, such as a suspected falsification of the data, and whenever there are unexpected failures or glitches.


Where is a Quality Agreement Needed?

These documents are not only needed between contractors that operate in a different regulatory environment. In fact, a quality agreement is also needed during any outsourcing agreement between different divisions of the same company, regardless of where they are located. Whenever a business is to be done in a different state or region, it is good standard practice to have an effective quality agreement in place regardless if it is required or not.

What are the qualities of a great quality agreement?

Here are the qualities that make up a great quality agreement:

  • It clearly lays out who is responsible for which aspects of the statement of work, whether it should be the contract giver or the client
  • It specifies time windows for review of documents, reporting of deviations, notifications, and audits, and it also specifies business or calendar days.
  • It contains a clear and concise definitions section which in turn leaves little to no room for interpretation. For example, it should specify the difference between a critical, major, or minor deviation.
  • A great quality agreement describes a way or a mechanism for amending the terms contained inside it, if absolutely necessary.
  • It should describe exactly the things that will be delivered and the tasks that will be performed.

What should be excluded in writing a quality agreement?

There are also items that should be excluded whenever a quality agreement is being made. Here are those items:

  • General business terms and conditions
  • Pricing clauses
  • Delivery terms
  • Confidentiality obligations
  • Liability Limitations

The items that are listed above do not belong in a quality agreement. Instead, they should be listed in a separate document called a supply agreement.

In conclusion, having a well-written quality agreement is essential because it allows the parties involved to define their expectations and rules governing projects and ensures that their quality attributes align with each other. It also saves a great amount of money and time by preventing any kind of misunderstanding between all parties from happening. It also helps them in the overall process of contract analysis. In this article, examples of a well-written quality agreement are provided above so that you can have something to use as a reference in case you want to write one yourself.