Direct Advice

[Flubster]

Chaps, chapesses and sasguru,

I am currently halfway through a 6 month contract, but have been approached by an ex-colleague to provide some consultancy to his current employer. Today, I went to their offices to discuss the work involved and determine plan of action. The PM has advised he wants to make this a fixed-price item of work and asked me to quote timescales and daily rate.

Now, this is the first time I've ever even looked at going direct so there are a number of questions and concerns...

1. What should I consider to be a resonable daily rate? I imagine I need to build in some contingency as this may over-run on my estimates. As a guideline, I generally operate in the £350/day area, so I reckon £450/day to be a reasonable starting point.

2. Any advice on determining timescales? There are two phases of work whch I am estimating to be 5 days and 10 days respectively. I am pretty confident that I can achieve this, even if it means working late and on weekends if needs be.

3. Contracts...I have PCGPlus membership so have access to their templates...any clauses I should be putting in?

4. Should I be telling the current client that I'm just taking a 3-week break (have only taken 4 days of since June) or be straight with them? There is a possible extension in December for a further 6 months and I'd quite like to take them up on the offer if it comes up.

5. I understand a larger consultancy have been asked to quote for this work and can guess their rates. Does this put me in a position of strength?

All in all, I'm not too bothered if this doesn't happen, but it would be nice (nearer to home, bigger rate, CV enhancement, experience, etc). I need to deliver a quote by tomorrow lunchtime(ish).

Cheers...

[malvolio]

Go read your own atavar, if you can...

If you belong to the PCG, ask them. All due respect to the guys here, but there are some real experts on their forums, including people who do what you are looking at all the time. Meanwhile...

1. Rate is what you feel comfortable with but start from your current day rate, add expenses, add 30%, multiply by however many days you think you need, add 10% contingency to cove rework, that's the charge for the whole deliverable that you will invoice on completion. Then stick to it.

2. From which you can deduce this is two pieces of work, not n days of effort. IF they have a timeframe, that's the rules you have to work to. How long it takes in man hours is not anything they care about. Ask them when they want it (realistically) and if they don't know, give them a working estimate. Then stick to it (get the idea?).

3. Dunno, the standard one is pretty good. Ask the experts on there. It's he schedule you need to amend; the normal TS&Cs are probably OK already for most purposes.

4. Tell them you won't be around for a while. You don't have to give reasons, but you do have to make sure there is not going to be a problem or a missed deadline if you aren't there and that they are comfortable with that.

5. No. Ignore them, make your best offer. They will be three times that anyway.

Best of luck - I think you need it!

[VectraMan]

I did something similar, though I did this work after a contract had finished. In my case I estimated four weeks and worked out a price based on four weeks at my previous rate, which the client seemed happy enough with. As it happened four weeks was when I delivered it, except I was ill for a week and took quite a few days off along the way, so really only took me two.

I used a template agreement letter off PCG, and added a loose specification on what was required. That's where you're obviously going to have to be careful, as you don't want them disputing what you've done at the end of it. In my case it was a small amount of work and I trusted them, so I didn't worry too much about it, but if you're going to get into longer projects then you need a much more rigid spec and clearly defined goals. You might want to think about putting in some milestones, and getting the client to sign off on the work at that point so you can invoice them.

Is it really worth it if you're taking a break out of your current contract? I imagine your current client won't be too impressed.

[oraclesmith]

1. What should I consider to be a resonable daily rate? I imagine I need to build in some contingency as this may over-run on my estimates. As a guideline, I generally operate in the £350/day area, so I reckon £450/day to be a reasonable starting point.

Sounds OK. If you're doing fixed price for smallish bits of work, then you keep your daily rate to yourself and just quote a price for the job.

2. Any advice on determining timescales? There are two phases of work whch I am estimating to be 5 days and 10 days respectively. I am pretty confident that I can achieve this, even if it means working late and on weekends if needs be.

You need a proper spec for the work up front if you're doing fixed price, to limit risk of overrun. If you don't have one, then write it into your proposal so that you specify exactly what the client is getting for their cash. If you're on another contract at the same time, then you could get into bother if you overrun.

3. Contracts...I have PCGPlus membership so have access to their templates...any clauses I should be putting in?

I haven't seen the PCG ones, but I usually put in a clause about having IPR and copyright on the work I do, with a free perpetual license to the client. This allows me to use the development again if necessary.

4. Should I be telling the current client that I'm just taking a 3-week break (have only taken 4 days of since June) or be straight with them? There is a possible extension in December for a further 6 months and I'd quite like to take them up on the offer if it comes up.

Er.. this depends on the current client. I don't know what your relationship is with them or what you do for them, but if I was your client I wouldn't let you take three weeks out of a running contract, regardless of the reason.

5. I understand a larger consultancy have been asked to quote for this work and can guess their rates. Does this put me in a position of strength?

Quite the opposite. I recently lost a contract bid to a large consultancy. Clients like them because they can call on a pick and mix range of consultants with a variety of skills and can put multiple bodies on the assignment if necessary. If there is likely to be larger scale follow-up work, then seriously consider linking up with some other contractors so at least you can appear to have a bit of a team.

In my opinion.

[barely_pointless]

don't , under any circumstances allow them to vaguely link the "acceptance" of the work with "payment", if it's fixed price, make it so and phase the deliverables. Dismiss or remove anything that looks vague or not clearly defined.

also get terms to pay writtin in, I've known too many beancounters who deliberately take advantage of "directs", just cos they get a pathethic feeling of self importance in doing so

on the other hand, if you really know your stuff and can do it in 1/3 of the time quoted, make hay and go to the pub, or chase a bit of fluff from accounts payable or marketting......

[Flubster]

Thanks all for the advice, especially chasing the fluff arounf the AP department.

As for the current client, I am way ahead of schedule so I'll just be telling them I'm going on a break.

[ratewhore]

Good advice above and this is my 2p's worth:

I've got a couple of direct customers and I set my daily consultancy rate by knowing how much other consultancies charge. I have undercut them by around 10% but the important thing to note is that these are b2b consultancy rates (i.e. what would CSC charge a customer for example?), NOT contractor rates (which are about 30-40% lower). I'm not entirely sure why the customer would want the fixed price plus an indication of the daily rate, I would leave that off the proposal entirely.

I have a standard set of t's and c's which say nothing about acceptance, aside from all the bumf about insurances and IPR etc, that the product x will cost price y and payment terms are 30 days from date of invoice.

HTH...

[BlasterBates]

You can limit your risk by producing a test specification before you start implementing, and send it to teh customer for approval.

Fulfilling the test spec. is then a clear realisable goal, it will also clarify any vague requirements, because the test spec is a set of scenarios.

When you handover the software just run through the test spec with the client get it signed off and then you're covered. Watertight from a legal perspective.

They can't then come back with things that aren't in the spec., obviously things like the program crashing are part of the warranty (and remember, you should include a warranty, six months usually, with response times), and you have to fix those as part of the contract (build that in, extra for being on call of course, and providing support that is not part of the warranty.).

[Denny]

I did something similar, though I did this work after a contract had finished. In my case I estimated four weeks and worked out a price based on four weeks at my previous rate, which the client seemed happy enough with. As it happened four weeks was when I delivered it, except I was ill for a week and took quite a few days off along the way, so really only took me two.

I used a template agreement letter off PCG, and added a loose specification on what was required. That's where you're obviously going to have to be careful, as you don't want them disputing what you've done at the end of it. In my case it was a small amount of work and I trusted them, so I didn't worry too much about it, but if you're going to get into longer projects then you need a much more rigid spec and clearly defined goals. You might want to think about putting in some milestones, and getting the client to sign off on the work at that point so you can invoice them.

Is it really worth it if you're taking a break out of your current contract? I imagine your current client won't be too impressed.

If you are a proper B2B contractor operating on those terms outside IR35 with your current contract then you shouldn't worry about taking time out to do other work if your current deadlines don't slip. That's what all businesses do - deliver deliverables promptly and efficiently and double up on jobs when the time allows and put in extra hours on the same job when required at other times. If that can't be done, businesses tend to exercise their rights of substitution and offer a substitute on the job you want to take up or on your current contract.

If you are basically a pseudo employee inside IR35 - and it sounds like you are to me, judging by your reluctance to come clean - then just take a three week 'holiday' and don't advertise the fact to your fellow de-facto employees and permie colleagues that you are working elsewhere. However, don't make the mistake of thinking that this self-inflicted break working for another job elsewhere full time for three weeks makes any difference to your inside IR35 position on your current contract - it won't - even if you return to it afterwards like you intend to. Both jobs will be treated separately and if Gordo decides that you are a de-facto employee on your current contract and full time de-facto employee for three weeks on your interim contract then your IR35 position for both jobs will not change.

If you are ever investigated by Gordo, how will you explain to your present client when Gordo's henchmen ask questions of them that you were on holiday when in fact the IR know full well that you have declared income for those three weeks on holiday? Don't you think they won't bring that up if you are claiming to be outside?

To be outside IR35 the B2B relationship status has to be intended and agreed to your current client which means, of course, that you would have simply told them you were off on another job for three weeks and that the current client agreed that no substitute was necessary for the time you were away. Lying about being on holiday could in fact weaken your IR35 exempt position if you are claiming to be outside at the moment, not strengthen it.

[vetran]

slowly slowly

To current gig - Hi I'm 3 weeks ahead in the project, I was thinking of taking some time off, would you forsee any problems with that? Obviously for serious issues you will be you would be able to contact me, I'll check my mail & messages 3 times daily.

off to new gig.

Back to current gig and assuming no major problems. Look at this cool new solution I found while I was away, I thought you were on holiday? no I was on another gig helping an old mate whao was having a few problems.

no holiday mentioned, done this a few times.