Contractor subcontracting another contractor?
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    Default Contractor subcontracting another contractor?

    I'm an IT developer contractor (have Ltd).My ex-colleague is IT consultant(has Ltd as well) .
    He has a contract with a company A that implements a system for the company B.
    Last week he has offered me an opportunity (for several days) to help them out on the project as they are going live soon with the implementation and need quickly to fix the outstanding issues.
    He suggests me invoicing him at my daily rate and he invoices the company A. (e.g he'll be using substitution rule - he himself will be on holidays that week)

    I want to have a contract so that my paperwork is in order and I don't raise invoices for the work that is not reflected in the contracts.

    So I have two questions:

    1) Is it better if I invoice/sign contract him(as per above) or to have a contract directly with company A? In terms of rate both will be the same, but I believe company A has got much more heavy and controlling standard contract wording than the contract we can have with my mate. Could there be the benefit of signing it directly with them?

    2) How to write a correct contract between our Ltds?
    I have my previous contracts with big companies, but not sure if it's a good idea to try to adapt them. A lot of stuff is not applicable. For example "reporting line" (e.g normally it's client's project manager I'm dealing with). Has anyone done the same and already have any good appropriate template? So that it's clear, simple and fit for purpose?


    Thank you
    Last edited by Goggy; 26th September 2015 at 09:53.

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    You're attempting to turn a practically microscopic molehill into Everest, keep it simple.

    Your mate has got a couple of days work available that needs someone with your skillset, he's willing and able to pay an acceptable day rate for this.

    You can write and both sign a one page statement that says exactly what you're both agreeing to and that's a contract, it doesn't need to be complicated.

    Trying to get directly involved with the clients procurement setup may well be directly against what the client wants. They may well have talked it over with your mate, he's mentioned that you may be available and to keep things simple the client has asked him to get you in for a few days and they will pay him to pay you.

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    MF subcontracts me to service the boiler. She's not a bad old stick really, and I get cake afterwards.
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    If you invoice your mate, you're doing him a favour, classic substitution example, nails IR35. If you invoice the client directly, then he hasn't brought you in, they have, from a legal perspective, all he's done is give you/them a referral. That's not substitution.

    As said, sign a one-page contract. You don't have to worry about making it IR35 friendly, it's only a few days, just put down what you've agreed and get him to sign it before he goes. If you can't get the contract because he already left on holiday, work anyway -- you've got a verbal agreement, and the client knows about it, so it's probably enforceable even if he tries to get funny. This might be the one exception to the "never work without a contract" rule. You are wise to try to get something in writing, but for a few days it probably won't matter if you don't. He's not likely to destroy a relationship with you and potentially with the client for the amount of money involved.

    It's good for him, and it's great for you. Something else on your CV, another potential client down the road, etc. Keep it simple and don't put up any roadblocks about contracts.

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    Pretty sure there are template contracts for subcontracting as well on the usual outlets like IPSE
    Unless you're the lead dog, the scenery never changes.

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    Quote Originally Posted by NibblyPig View Post
    Pretty sure there are template contracts for subcontracting as well on the usual outlets like IPSE
    Totally excessive for the requirement, a simple statement of work with charges to be applied would be more than adequate for the task.

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    Quote Originally Posted by TykeMerc View Post
    Totally excessive for the requirement, a simple statement of work with charges to be applied would be more than adequate for the task.
    Thanks a lot guys. Would something like below be ok then?

    "The agreement between MrA of Ltd1 and MrB of Ltd2.

    It was agreed that MrA will provide for MrB software development services for the period
    from D1 of Sept to D2 of Oct at the XX rate per day.

    Today's date.

    SignatureMrA, SignatureMrB "

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    Quote Originally Posted by Goggy View Post
    Thanks a lot guys. Would something like below be ok then?

    "The agreement between MrA of Ltd1 and MrB of Ltd2.

    It was agreed that MrA will provide for MrB software development services for the period
    from D1 of Sept to D2 of Oct at the XX rate per day.

    Today's date.

    SignatureMrA, SignatureMrB "
    The agreement is between your Ltds.
    The deliverables should really be listed.
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    Quick SOW and an invoice. Why make it complex
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    Along those lines, but I'd be a bit more specific, Software development is too woolly unless you are just there to provide fill in labour.

    I would lose the reference to Mr's A and B, this is one company engaging the specialist services of another.

    I would use something very roughly along the lines of:-

    Statement of agreed works and remuneration.

    Between:-

    HisCo Ltd

    and

    YouCo Ltd

    HisCo Ltd require the tasks listed below to be completed between the dates XX/XX/XX and YY/YY/YY

    (list of specific tasks, coding, wibbleflange testing etc, keep it simple and specific, it needs to be specific so that it's easy to measure what success and completion look like)

    It has been agreed that YouCo Ltd will supply skilled resource to complete the tasks listed above on a per professional day basis charged at a rate of XYZ.00. (You can include a statement of Monday-Friday or some variant depending what you agree and feel will work). Include a statement of the agreed payment terms including success criteria, invoice and payment method.

    If it matters where the work takes place then include a statement to that effect and include a statement that access to those premises will be controlled by a third party and that delays in access will be charged at the agreed day rate.

    Signed on behalf of HisCo Ltd

    Signed on behalf of YouCo Ltd


    Something along those very simple lines is totally adequate.

    (Oh I'll need your address to invoice you for the consultancy btw.)

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