The correct answer is A. The bank should review all third-party audit reports of the vendor that are publicly available. This recommendation is most appropriate for reducing operational risk associated with a potential vendor contract as it allows the bank to assess the adequacy of the vendor's control environment. According to the guidelines regarding internal controls, financial institutions should review available audits or reports, such as the American Institute of Certified Public Accountants' Service Organization Control 2 report, for significant service provider relationships.

Option B is incorrect because compensating sales representatives mainly with commissions could encourage them to direct customers towards higher margin products without considering the associated risk, which is not a responsible practice.

Option C is incorrect as well. Outsourcing critical processes is not inherently ruled out by the guidelines. It is possible for a community banking organization to outsource critical business activities to highly reputable service providers, and larger financial institutions may use numerous service providers for various business activities with material risk.

Option D is also incorrect. Instead of being responsible for developing the vendor's contingency planning process, the bank should monitor the vendor's process and assess the adequacy and effectiveness of the vendor's disaster recovery and business continuity plan, ensuring it aligns with the bank's own plan.

The focus of this question is on operational risk and resiliency, specifically on managing outsourcing risk and the topics and provisions that should be addressed in a contract with a third-party service provider.