Reply to: Managed service type contract via agency?

[7specialgems]

IMO I think it all unravels when you consider who drafted the contract.

If it was a proper managed service contract, I would expect the Supplier to be the party who is in the box seat to draft and agree the contract and do all the leg work.

Or at least that's what I would insist on as the supplier.

Otherwise I'd be nervous about the whole thing being Staff Augmentation in disguise and how my milestones can be measured as met so I get paid (when you take into account the same arrangement with other suppliers and who is reponsible for what)

But then IANAL

[SteelyDan]

Did you note my earlier comment? It's only outside IR35 if the agency is supplying resources for a specific project with a known deliverable...

Yes I did, thanks, the specific programme (programme X to deliver something which I can't mention, but it's IT related) is the overarching deliverable which has a run time of c.18 months, as far as I'm aware. All staff are contractors, oddly, not sure how many but quite a few. The agency are stating the contract is out of IR35, and approved by HMG, as I mentioned earlier. Spoke with a couple who had their contracts checked (QDOS I think) & all seems above board. Some didn't bother to get their contracts checked however...I was thinking of getting an email from said agency to state categorically that the role, programme, is absolutely outside of IR35. Not got it yet, but it might be the case that this is mentioned in the contract. I'll enquire.

[malvolio]

I've decided to give it a shot so I'll see how things pan out. If it turns out to be a 'crock' then I'll move on.
Potential long term programme, deemed as outside IR35 so next years off-payroll won't impact; the work seems good, so are rates, location could be better but I can live with it as been there before.
On the face of it, should be a winner, especially as the market ain't great at the moment.

Did you note my earlier comment? It's only outside IR35 if the agency is supplying resources for a specific project with a known deliverable...

[SteelyDan]

I've decided to give it a shot so I'll see how things pan out. If it turns out to be a 'crock' then I'll move on.
Potential long term programme, deemed as outside IR35 so next years off-payroll won't impact; the work seems good, so are rates, location could be better but I can live with it as been there before.
On the face of it, should be a winner, especially as the market ain't great at the moment.

[SteelyDan]

Pretty much this^^^^^^

I'd do fixed price work to payment milestones, but only if I had a lot of control. If the MSP involved is just a body shop, which it sounds like, and the 'deliverables' are just a sham I'd be very nervous.
T&M without signed timesheets is risky as well.

The key things to me are
- how do you prove you've delivered? - PM verifies work has been done - meeting/evidence meeting with me at appropriate juncture, PM confirms to Prog Manager
- how do they pay? Is it T&M or fixed price per deliverable? - No, there's a contractual day rate which I've agreed with agency which runs just like a normal contract - i.e. 21 days in month = 21 days pay: get deliverables signed off/agreed as above>submit invoice end of month>cash hits bank 3 days later
- how do you get paid for work that has taken longer to deliver due to client delays? - if mitigating circumstances, milestone/deliverables can be deferred & don't affect the payment
- if the agency is a large one, but is now doing 'MSP', is the 'line manager' (for want of a better term) the end client, or the agency?'line manager' is prog manager (contractor)who ultimately reports to Board level

Comments against yours. Agency seems to sit between team of contractors & end client as far as I could make out...

[Lance]

I tend to put on the services sheet that I'll 'contribute' to a given project or task. Not deliver it - way too risky!

that's great if you're T&M.

Not much use if the deliverable is sh1te and nobody gets paid, no matter the quality of your contribution.

[PerfectStorm]

I tend to put on the services sheet that I'll 'contribute' to a given project or task. Not deliver it - way too risky!

[SteelyDan]

Pretty much this^^^^^^

I'd do fixed price work to payment milestones, but only if I had a lot of control. If the MSP involved is just a body shop, which it sounds like, and the 'deliverables' are just a sham I'd be very nervous.
T&M without signed timesheets is risky as well.

The key things to me are
- how do you prove you've delivered?
- how do they pay? Is it T&M or fixed price per deliverable?
- how do you get paid for work that has taken longer to deliver due to client delays?
- if the agency is a large one, but is now doing 'MSP', is the 'line manager' (for want of a better term) the end client, or the agency?

Good points, I'll find out this week. Thanks.

[SteelyDan]

It is the only way under the PS rules HMRC will recognise an engagement as being potentially outside IR35. IF you are supplied as part of an outsource agreement with a third party to deliver a set piece of work or a defined element of it, then you may be outside IR35. Yes I think this is the one

The question is, does the agency have a contract to deliver a set piece of work? I'll find out this week when I meet them


Explore exactly what the agency is offering and what they are being paid for. Your deliverables-based approach is damn all use if all they are doing is body shopping under another name. Noted

Comments against yours.

[Lance]

That's a hell no from me. 95% of failure to meet deadlines has been due to the client ******* things up, lack of resource, direction, bad specs, delays in approval etc.

Pretty much this^^^^^^

I'd do fixed price work to payment milestones, but only if I had a lot of control. If the MSP involved is just a body shop, which it sounds like, and the 'deliverables' are just a sham I'd be very nervous.
T&M without signed timesheets is risky as well.

The key things to me are
- how do you prove you've delivered?
- how do they pay? Is it T&M or fixed price per deliverable?
- how do you get paid for work that has taken longer to deliver due to client delays?
- if the agency is a large one, but is now doing 'MSP', is the 'line manager' (for want of a better term) the end client, or the agency?

[malvolio]

I've not heard it before, so maybe you can give examples where you have?

It is the only way under the PS rules HMRC will recognise an engagement as being potentially outside IR35. IF you are supplied as part of an outsource agreement with a third party to deliver a set piece of work or a defined element of it, then you may be outside IR35. Otherwise you are merely a manpower replacement and so almost certainly caught.

The question is, does the agency have a contract to deliver a set piece of work? I fear that, as usual, they are cherry-picking the bits they like and claiming to sell you in as a service provider when in reality all they have is a contract to deliver some resources to deliver a project team to the client.

Explore exactly what the agency is offering and what they are being paid for. Your deliverables-based approach is damn all use if all they are doing is body shopping under another name.

[FIERCE TANK BATTLE]

Yes, know where you're coming from, but to my mind these are things which will be identified & risks raised at the right juncture to mitigate anticipated non-achievement of milestone(s). RAID/RAG stuff really.

I'm not a tech so spec etc. doesn't come into it, but lack of available resource, approval, non-availability of key personnel (SMEs), are all things which should be captured, particularly in pub sec organisations.

I'm a bit concerned I could be spending more time identifying, managing & reporting risk than delivering what I should be. It's a fairly senior role leading a small practice, so probably all part of the territory. Been a few years since I was last in pub sec but seems things have changed a little, & this one doesn't appear to be a 'bums on seats' type of contract role, or one where there's any slacking. Could be interesting...

The overarching contract meets 'HMG' approval, not specifically HMRC as I, incorrectly, stated earlier.

Risky business if you ask me. I started a gig and they paid me over £3,000 before I even had a computer to log into, because they simply didn't provision one until the day I started, despite delaying my start date for a couple of weeks and knowing for over 2 months they were bringing someone onboard.

In my case, paid for scratching my balls and gossiping, but if I had money-dependent milestones I would have been going mental at the risk of it being unpaid.

[SteelyDan]

That's a hell no from me. 95% of failure to meet deadlines has been due to the client ******* things up, lack of resource, direction, bad specs, delays in approval etc.

Yes, know where you're coming from, but to my mind these are things which will be identified & risks raised at the right juncture to mitigate anticipated non-achievement of milestone(s). RAID/RAG stuff really.

I'm not a tech so spec etc. doesn't come into it, but lack of available resource, approval, non-availability of key personnel (SMEs), are all things which should be captured, particularly in pub sec organisations.

I'm a bit concerned I could be spending more time identifying, managing & reporting risk than delivering what I should be. It's a fairly senior role leading a small practice, so probably all part of the territory. Been a few years since I was last in pub sec but seems things have changed a little, & this one doesn't appear to be a 'bums on seats' type of contract role, or one where there's any slacking. Could be interesting...

The overarching contract meets 'HMG' approval, not specifically HMRC as I, incorrectly, stated earlier.

[FIERCE TANK BATTLE]

where you get paid (only) if you achieve the milestones...(errrm tick)

That's a hell no from me. 95% of failure to meet deadlines has been due to the client ******* things up, lack of resource, direction, bad specs, delays in approval etc.

[SteelyDan]

I wonder where we've heard that before....

Do they have a QC opinion too?

I'd be asking for proof of this "approval".

I've not heard it before, so maybe you can give examples where you have?