Pre-Contract Due Diligence And Operational Safeguards For AI Vendor Engagements

A contract is only as strong as the diligence that informs it. Before a single term is negotiated, the procurement team, including the organization’s legal counsel, should conduct structured due diligence that maps the vendor’s capabilities, practices, and risks to the protections the contract will need to provide.

This article outlines the key diligence workstreams and the operational safeguards that should accompany any AI vendor engagement.

Data Inventory and Use Mapping

The first question is deceptively simple: what data will be shared with the vendor?

The answer, however, requires a granular inventory that goes beyond broad categories. If the engagement involves sensitive data (the kind of data that could facilitate identity theft or cause significant harm if exposed) the organization should ask whether synthetic data can be used instead. Synthetic datasets that preserve the statistical properties of real data without exposing actual personal or proprietary information can