Yasmin analysis

[LondonManc]

I admit I don't know much about this process. This is a valuable post from you for once. So, if a PSC contractor is claiming that they are providing a true business-to-business service, their company accepts various risks and obligations on a T&M or fixed price basis, then it should technically go through this business tender process?

As a contractor you always face that risk of not being paid. Part of the negotiation that you have at the start of the contract is your payment terms. If you're through a good agency to a decent client, the agency will generally acquiesce to weekly terms so that you have as little exposed as possible.

Conversely, if you're directly in a B2B relationship, as I've done in the past, you'll get paid for month 1's work at some point in month 3; you'll submit an invoice for work carried out by a given date in month 2 and you'll go on to the client's invoice payment run in, say, the second week of month 3. This is standard B2B behaviour when there isn't an agency in the middle. It can also be the case that this is how the agency gets paid despite you being on weekly; they have sufficient working capital to cover the weekly payments until they receive their money from the client.

In terms of T&M versus fixed-price, it's very much a judgement call on your part - are you prepared to risk a fixed-price because you know enough about the deliverable? If you're a seasoned developer, then you'll be more likely to know if a fixed cost quote is worth it.

[northernladuk]

Sorry but it is you that is failing to understand the legal transfer of risk. I understand it which is why I said earlier that transfer of risk is at the heart of whether there is a true business relationship in play. Most PSC contracts assume the risk of delivering to the clients requirements which is why we have to use that structure and have Professional Indemnity insurance.

The point is that HMRC wishes to ignore all of this and is not using ownership of risk as a determining factor anywhere - they want to focus on working practice only while ignoring which party assumes the risk.

This could well be fatal to their position if argued correctly in Court.

But that's not really true which is HMRC's argument. We do as we are told with very little chance of needing PI. You've got the wrong risk. You are talking about competance to deliver our little bit. Eek is talking about the risk that the delivery of the solution is late or doesn't work which starts to incur penalties and extra time that has be done by the supplier at their cost. Although we have that in our contracts we just don't do that. We do a piece of work we are told to do that fits in to a bigger solution. If that bigger solution doesn't work it's not our fault (generally).

[eek]

Sorry but it is you that is failing to understand the legal transfer of risk. I understand it which is why I said earlier that transfer of risk is at the heart of whether there is a true business relationship in play. Most PSC contracts assume the risk of delivering to the clients requirements which is why we have to use that structure and have Professional Indemnity insurance.

The point is that HMRC wishes to ignore all of this and is not using ownership of risk as a determining factor anywhere - they want to focus on working practice only while ignoring which party assumes the risk.

This could well be fatal to their position if argued correctly in Court.

And as NLUK states above that's not risk within a business contract, the indemnity insurance is to protect you from the great unknowns...

Yasmin is taking responsibility to delivery the full website for a fixed fee. Any and all problems are for her to fix at her own cost (and that could include major rewrites if things don't work correctly). Likewise penalties could be part of the contract and applied if things aren't delivered on time.

At which point I'm going to put you on ignore until the mods get fed up with you arguing the toss and ban you....

[northernladuk]

And as NLUK states above that's not risk within a business contract, the indemnity insurance is to protect you from the great unknowns...

Yasmin is taking responsibility to delivery the full website for a fixed fee. Any and all problems are for her to fix at her own cost (and that could include major rewrites if things don't work correctly). Likewise penalties could be part of the contract and applied if things aren't delivered on time.

At which point I'm going to put you on ignore until the mods get fed up with you arguing the toss and ban you....

And there is another key word. Responsibility. It's not all about risk. We have very little responsibility. Be competent in our skills and deliver to the clients timescales. That's about it. That's why HMRC see us as disguised permie. Yasmin has a lot of responsibility, if not all of it if you take out requirements. You can't expect us or permies to have that level.

The OP is just not grasping these concepts and is just trying to apply it to the risk and the responsibility he has, which really is next to none.

I hope the OP comes back in a year or two when these have all dawned on him and re-reads this thread

[rob s]

So I'm guessing there's no hiding behind gcloud then either:

digital specialists, eg an individual developer or user researcher to work on a specific project

As this will just be just as subject to the determination mechanism as agency bodies?

[breaktwister]

Eek is talking about the risk that the delivery of the solution is late or doesn't work which starts to incur penalties and extra time that has be done by the supplier at their cost. Although we have that in our contracts we just don't do that. We do a piece of work we are told to do that fits in to a bigger solution. If that bigger solution doesn't work it's not our fault (generally).

I see your point but the fact of the matter is that your PSC has assumed risk of non-delivery and it is particularly relevant if financial risk has been assumed (which I know all my contracts carry this risk). The end-client has the right to say "you haven't delivered according to our requirements therefore we expect you to rectify at your own time and expense". The fact that this rarely happens is irrelevant. What is relevant is that the end-client has transferred the risk and responsibility of delivery to your company.

I am going to start a new thread to discuss ownership of certain risks and how this is an important consideration in respect of the actual wording of the Finance Act 2017.

[eek]

So I'm guessing there's no hiding behind gcloud then either:



As this will just be just as subject to the determination mechanism as agency bodies?

Not quite. While the answer is that it depends the work is project based and will have fixed deliverables so its probably outside.

The important thing is the GCloud is not CL1 as contingent labour 1 clearly states that you are under direction and control. I suspect a CL1 contract will usually be inside GCloud will usually be outside due how the work is paid for (Gcloud is paid on delivery, CL1 paid by hour / day).

Also I'm sure NLUK said a while back that GCloud has had most of the agencies removed from it - you now need to explicitly join yourself and specify what work you perform.

[northernladuk]

Also I'm sure NLUK said a while back that GCloud has had most of the agencies removed from it - you now need to explicitly join yourself and specify what work you perform.

Yup.. and for the OP and anyone that doesn't know about how onerous the process and why it's no good for us generally just have a look at the buyers guide. If we wait for all this as our single source of income you are going to spend a long time on the bench even if you can get on the list..

https://www.gov.uk/guidance/g-cloud-buyers-guide

[RonBW]

Yup.. and for the OP and anyone that doesn't know about how onerous the process and why it's no good for us generally just have a look at the buyers guide. If we wait for all this as our single source of income you are going to spend a long time on the bench even if you can get on the list..

I found it dead easy to get onto the Digital Marketplace as a supplier - you imply that it's hard to get on the list. Which bit did you struggle with?

[northernladuk]

I found it dead easy to get onto the Digital Marketplace as a supplier - you imply that it's hard to get on the list. Which bit did you struggle with?

We were talking about G-Cloud. I only saw the tail end of the the rush to Digital Marketplace and never got round to it. There will have to be quite a cultural change within the PS before Digital Marketplace has any effect on us. The guidance clearly states...

If you need to find people for roles where the person enters into a contract directly with the public sector organisation you work for, you’ll need an employment agency. You can find contractors and interim staff through Contingent Labour ONE, Consultancy ONE and Non Medical Non Clinical, but the hirer will be responsible for the outcome of the work, not the supplier.

so nothing much is going to change for the moment.

The 11 point engagement process right below the paragraph I've quoted also shows it's not going to work well for the vast majority.