Reply to: Thinking outloud - getting round the new PSC rules

[missinggreenfields]

The way I am going to deal with it is take my much sought after experience and skills to the private sector as will most good contractors, leaving the public sector with 3rd rate cowboys, then watch as their system crumble costing millions to the taxpayer. Whoever came up with this one needs sectioned.

<HMRC Thinking>Hmmm - we need to get people back from the private sector into the public sector. I know - let's extend this to private sector and they will come back!</HMRC Thinking>

[youngguy]

The way I am going to deal with it is take my much sought after experience and skills to the private sector as will most good contractors, leaving the public sector with 3rd rate cowboys, then watch as their system crumble costing millions to the taxpayer. Whoever came up with this one needs sectioned.

I certainly agree with the crumbling system. I also wonder how the overall market will handle up to 26,000 contractors seeking work in the private sector.

Cowboys may possibly be left yes, the less experienced plus those career path contractors who may struggle to get past agencies with Gov centric CVs.

[Unix]

Now my plan for getting round the new PSC rules is very simple. Write code, creating a set of packages that I can sell to others and stop being a bum on seat contractor but I've been thinking (dangerous I know).

The one get out clause in the new PSC rules is where materials are provided and those materials make up over 20% of the value of the project - this gives me an idea.

Now the question is would the following work...

1) licence some of the packages (discussed above) on a per developer licence - using the bits that save developers large amounts of time by removing the need to develop a lot of custom code.
2) provided a means for live production licences to be resold based on the complexity of the project (say at 20-25% of the contract cost)...
3) ideally pocket a bit of 2 for myself....

Anyone care to comment...

The way I am going to deal with it is take my much sought after experience and skills to the private sector as will most good contractors, leaving the public sector with 3rd rate cowboys, then watch as their system crumble costing millions to the taxpayer. Whoever came up with this one needs sectioned.

[jamesbrown]

I'm curious on that point as the one thing I know all the specialist consultancies are trying to develop, at the moment, is as much intellectual property / "build blocks" / "starting points" as possible to differentiate themselves from the competition and reduce total development time....

Sure, but that's a business strategy for reducing costs/maximizing profits, not a basis for defining a material (input) cost in terms of the question in the consultation:

"Is 20% or more of the contract for materials consumed in the service?"

My point is that, IMHO, YourCo licensing a product that amounts to >=20% of the contract value is not going to qualify as a "material consumed in the service" based on the phrasing and examples given (and is, of course, a very rare situation for most PS contracts for knowledge services that are delivered by "PSCs"). I think you're arguing that it might be. It might be. My main point is that it's a very rare situation anyway.

[eek]

However, in improving that framework and delivering it, the "value-add" would not be part of the material cost.

I'm curious on that point as the one thing I know all the specialist consultancies are trying to develop, at the moment, is as much intellectual property / "build blocks" / "starting points" as possible to differentiate themselves from the competition and reduce total development time....

[MrMarkyMark]

I agree with the view that it's worth waiting for the details, because there could be significant changes at the level of granularity about what constitutes a "material" and what proportion of the contract value might be appropriate. This is really down in the weeds w/r to the wider significance of these measures, although I appreciate that the OP understands this. It's also worth bearing in mind that, in the presence of continuing ambiguity, the default position by most clients and agents would be to minimize risk.

That being said, I think it would be difficult to argue that a material is anything other than a "raw input" to a service being delivered (an input which may or may not be consumed during the delivery), and would not extend to that part of an output in which some value had been added to the raw material. For example, it may be possible to argue that a particular off-the-shelf framework (COTS) was an input cost (material). However, in improving that framework and delivering it, the "value-add" would not be part of the material cost. In practice, I can envisage very few cases involving the delivery of knowledge-services where the materials would account for a significant fraction of the delivery.

This +1.

Obviously, as a product specialist I have many materials, as well as thousands of my authored (not CUK) forum posts as a specialist in "my" technology.
Of course this very extensive library of information gets regularly used, but I totally agree with JB on this point.

[jamesbrown]

I agree with the view that it's worth waiting for the details, because there could be significant changes at the level of granularity about what constitutes a "material" and what proportion of the contract value might be appropriate. This is really down in the weeds w/r to the wider significance of these measures, although I appreciate that the OP understands this. It's also worth bearing in mind that, in the presence of continuing ambiguity, the default position by most clients and agents would be to minimize risk.

That being said, I think it would be difficult to argue that a material is anything other than a "raw input" to a service being delivered (an input which may or may not be consumed during the delivery), and would not extend to that part of an output in which some value had been added to the raw material. For example, it may be possible to argue that a particular off-the-shelf framework (COTS) was an input cost (material). However, in improving that framework and delivering it, the "value-add" would not be part of the material cost. In practice, I can envisage very few cases involving the delivery of knowledge-services where the materials would account for a significant fraction of the delivery.

[youngguy]

But it's not. We have consultation document, we know what we do and we have some varied experience of delivering to Public Sector. We should be looking at solutions using these facts to put something together that fits them all. It's not guesswork. That's what you are doing without any further thought.

I just see a cycle where you make a sweeping statement, bet, guess and end up correcting it and explain to you why rather than actually putting something tangible like eek is trying to do.

We do have a document. It does not define things such as materials , hence eek's Q. We have seen from the past definitions are critical to all of this with the BETs and MOO, SDC etc.

I don't see my statement as sweeping. Previously I have seen people dodge rules and right now I am hearing people looking at similar approaches.

Eek put out a vague open thought (which I personally have no issue with) where he was thinking about how he could 'circumvent' one of the rules, which led to a debate about what we think that means. From some posters it suggests there is some difference of opinion on what a material would be based upon when it is created etc.

We could have said to eek "who knows, pointless Q without detail, its your specific situation, AYCOTBAC if you can't decide about your own business " but that would be neither helpful nor true. I thought eek's post was useful and relevant BUT if I hadn't, I would have ignored it and got on with my day as I don't own this forum, not everyone needs to share my view, I don't take it personally, I'm not 'on an ego trip and I don't see any value in attacking forum members. 😀

[northernladuk]

It is guesswork, which is what we are all doing.

But it's not. We have consultation document, we know what we do and we have some varied experience of delivering to Public Sector. We should be looking at solutions using these facts to put something together that fits them all. It's not guesswork. That's what you are doing without any further thought.

I just see a cycle where you make a sweeping statement, bet, guess and end up correcting it and explain to you why rather than actually putting something tangible like eek is trying to do.

[youngguy]

Just more guesswork and fantasy with no basis or actual argument as usual. It's getting very tedious and taking more time to correct his statements than it is to focus on the actual topic. #nothelping.

It is guesswork, which is what we are all doing.

As I mentioned previously, I have seen such arguments in the past and former colleagues are still thinking/hoping to "hide" via different frameworks and delivery models.

I don't do anything to do with training, but I did want to stimulate some discussion about what constitutes a material as HMRC have not yet defined. You don't HAVE to be involved in every thread you know....so if you don't want to discuss something you don't have to feel the need to shut it down. You can just abstain.

Finally, you can't correct an opinion, you can challenge it but it is not yours to correct 😉. I know you have your friends and enemies on here but it doesn't mean that your friends are always correct and your enemies incorrect - except when it comes to PC of course (I'm only kidding PC!)

[LondonManc]

I think the question is when was the manual written.

If written while being paid by the client its worth £0, if it was written prior to that and you are providing them with material not written on their dollar surely its whatever proportion you think is justifiable...

Correct. If it's part of your product portfolio and you present it "as-is", it's a product. If you are providing tailored materials that have a T&M cost for a specific project, then they're a product deliverable rather than a product. At least that's how I'd expect it to be.

[youngguy]

Not yet but you can see where I'm aiming for. In this case the material would be a fundamental part of the finished product, no different from the COTS product that is being customised in the first place...

I know of someone who did something similar . They tried to get on supplier frameworks (such as G cloud) and in the end they partnered with a bigger company due to the hassle. The company fronts it and they doubled their day rate. I don't exactly know the arrangement so can't say if
they are caught under the new rules but will post if I find out.

How did that work out?

It worked at the time ... They argued the case that they didn't have to do the BETs. I don't think that exact model would work this time given the consultancy example in this consultation doc.

[eek]

But highly paid in the public sector

I think the question is when was the manual written.

If written while being paid by the client its worth £0, if it was written prior to that and you are providing them with material not written on their dollar surely its whatever proportion you think is justifiable...

[LondonManc]

As Eek points out this is a hypothetical discussion with zero details about engagement so all we can do is guess and flounder which is pointless.

But highly paid in the public sector

[eek]

As Eek points out this is a hypothetical discussion with zero details about engagement so all we can do is guess and flounder which is pointless.

Yep... The entire point of this thread was to answer a question which was do I release something now or might it be worth using it for something slightly different down the line.

It seems that it might be worth doing the latter as it would fundamentally change what was being purchased and delivered...

The latter discussion about materials just emphasizes what the OTS stated as well today - which is that knowledge workers (trading on their years of expertise) are at a distinct disadvantage when it comes to IR35 as all the criteria continually works against our value and uniqueness...