Sub-contracting small piece of work

[meanttobeworking]

I've been offered a small (probably measured in days rather than weeks) piece of work outside my core skillset (I'm a PM, work is SEO). I have a fellow contractor that I'm planning to use to deliver the work, and this strikes me as a useful opportunity to contract for the work with the client, then send a substitute 'in' to do the actual work. I'm not sure I totally trust the end client (it's a small local tradesman rather than a Ltd) and this will be my first sub-contracting work, so I'm looking to do this as safely as possible.

So my plan is to document a statement of work, for which I'll quote a fixed price. I'll ask for a fixed price from my sub-contractor, introduce them to each other, sit back and make a modest margin. I'll ensure there's a clause in my agreement with subcontractor that their payment is dependent on the end client's payment (is this legal?).

Can anyone offer any other advice for this scenario?

[Andrew at Boox]

A few things

Good thinking to take advantage of the opportunity...

1. Make sure you have some form of contract with your sub-contractor. Even if it's just an Assignment schedule of some sort that he/she signs - just so you're covered. I also suggest adding a clause that as a sub contractor he's responsible for paying his own taxes. Otherwise HMRC could pin you for Employers NI if an employment relationship is found.

2. Cash flow - if payment cycles differ with the end client, make sure you have cash to pay the sub contractor (sounds silly, but you'll be surprised how many don't think of this!)

3. Make sure you have the correct insurances in place if End Client targets you for poor work by the subby.

Good luck!

[Kanye]

I wouldn't say it was a good idea.

- It sounds like a lot of hassle and risk (liability/insurance, getting paid, reputation, cashflow) relative to the amount of margin. Could it could lead to significant future work?;

- I do not think it would be legal or ethical to have a clause saying that the sub contractors payment is contingent on yours. There will be two seperate contracts, and if the guy delivers his side then he should expected to be paid regardless of whether your are. Would you really want the hassle if you couldn't pay the sub contractor?;

- I'm not sure if this is what you are proposing, but I wouldn't contract with them thinking they are going to get you, then you send in a subcontractor under right of substitution. Make it clear that it's your 'company' delivering the work and not you personally.

I would personally steer well clear unless I'm missing something. Simply refer the work on to the SEO guy and something may come back to you in future.

[Edit - Perhaps ask SEO guy for a finders fee or kickback for your trouble.]

[meanttobeworking]

Thanks for both your replies.

I have the relationship with the local business. The other contractor has the SEO skills. The local business has a number of online ventures, so there's the potential for repeat business in other areas. I'd like to remain in control of that rather than just pass it over to someone else. It is also a clear and legitimate demonstration that I am in business so also ticks some IR35 / BE test boxes.

PS. Yes, they know that it won't be me doing the work

[NotAllThere]

... I'll ensure there's a clause in my agreement with subcontractor that their payment is dependent on the end client's payment (is this legal?)...

Why would it not be? You could agree with the end customer that they pay you before the contract starts and with the subby that you pay him thirty days after satisfactory completion if you wanted to.

In fact, given that you don't entirely trust the customer, that'd be the place to start.