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IT Consultant Travel Time & Overtime?

IT consultant travel time & OvertimeWe are engaging with a firm to implement a Virtual network for about 25 desktops.

The project needs to be done by the end of May and they say they can achieve this.

There are a couple of clauses that I am not sure about.

1) They will bill us 50% of the billing rate for travel time for anyone who needs to travel to our site.  They are local but claim they can do most of the work remotely.  I would think for a local firm its not my problem if they have to hire someone who doesn't live in the area.  Your thoughts on this?

2) They will bill us 50% over the normal billing rate for any hours outside of normal working hours.  My thought is that if they say they can finish the job by the end of the Month its not my problem to figure out out when they will need their folks to work.  Many times I would expect work to be done after hours so that possible downtime of our network would be minimized.   Should we pay a premium for after hours?  Your thoughts on this?

At this time the project does not have "Costs not to exceed" language.

Thank you for your insights!!

Answers

Pat Voll
Title: Vice President
Company: RoseRyan
(Vice President, RoseRyan) |

It sounds like you are being billed on a time-and-materials basis, rather than a flat fee for the services. I would find it unusual to pay for commute time; the firm is local, and so travel to/from your offices seems like a normal commute.

For your second question - this is less clear to me. It could be that the consulting firm needs to pay OT premium to its employees, and is therefore looking to pass that cost through to you. Or it could be that they really want to minimize after-hours work, and are building in a penalty to try to avoid that. Without understanding the business objective of the consulting firm, it's hard to understand. If it is intended to minimize after-hours work, then this becomes a budget discussion - we don't know how competitive the rates are, and what the final price tag will look like after factoring the amount of work you want done after-hours. You'll need to evaluate that and determine if this is a reasonable cost overall. You could build in parameters to try to protect yourself from unpleasant surprises (such as locking in which specific tasks would be performed after hours, how many hours are needed to perform those tasks, and dates when the work is to be done.). I don't know how big this project is, but if this is substantial to you, I would request regular status meetings to make sure you are aware of budget and timeline issues on a real-time basis.

Hope this helps -- good luck with your project!

Topic Expert
Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

You may want to shop around for other providers. Firms that include clauses like that are likely either (a) nickle and dime specialists, not customer oriented or (b) they have been burnt in the past and don't know how to manage contracts.

Overtime premium is bogus IMHO - they have already recovered fixed costs out of normal time, so overtime worked does not bear that burden.

What is their definition of remote? From their office nearby, or from the home of the employee/ sub-contractor living in another town/state? You can ask those questions.

What you should ask for is a total estimate of tasks, costs, and deliverables, along with assumptions. Ask yourself: Can you meet your side of the contract?

Regards
Len

(Agent, JKS Solutions, Inc.) |

This type of billing is typical of firms who serve clients outside their normal business area.

Number 1 - says that all hours incurred for travel to your office, including time in the air or on the ground between airport transfers will be billed at 50%. You can counter and offer to pay all direct costs of travel such as airfare, taxi, lodging.

Number 2 - They want normal overtime if overtime is incurred. Firms pay their consultants generally on an hourly basis and are required to pay time and a half on payroll. They want to bill the same to maintain their margins. Fairly standard.

If you don't want to pay for consultants to fly in, do some more research and find a local firm to help you out. If they are local you can specify no overtime, but in that case, they may not meet your deadline.

Anonymous
(President) |

In a related matter, what billing concept (standard) for T &E costs is suggested for an independent consultant who is being considered,who will be traveling by air from out of state approximately one week per month to assist a school district with IT training of teachers? The trainer was previously employed by the school district and choose to relocate for personnel reasons, whose expertise is being sought by the administration. Any suggestions would be appreciated.

Nicole Lucarelli
Title: Director
Company: Financial Services
LinkedIn Profile
(Director, Financial Services) |

If you are asking about Travel and Expense specifically, a good rule of thumb is the consultant needs to follow the same policy as employees. If you limit fare class (i.el, no first class) or have a preferred provider, they should be made to follow the same rules. This would include per diem, meals, selection of hotels, etc. If they are renting a car, it should be clear if they are covered under any company driver insurance. Generally, this only covers employees. Consultants should pay this out of pocket and include on their invoice for payment as a separate line item.

Nicole Lucarelli
Title: Director
Company: Financial Services
LinkedIn Profile
(Director, Financial Services) |

This does sound like a contingent worker type shop vs. consultants. While they may have to pay their workers over time, when I procured services from these firms, I have said that is their cost of doing business. If I wanted to deal with overtime rules, I would hire employees. I have seen clients of these firms exclude the 50% premium. However, if it's a different rate based on time of day (ie 24/7 tech support outside of normal business hours) there might be a premium. You would have to decide if the service they are offering warrants that.

Travel time is another area these types of firms promise their workers. I would exclude this for any local worker and need it to be specifically pre-approved for anyone out of town, particularly if the person has some special skill set you need. All things are negotiable. There are numerous firms like this out there. Shop around for someone who can deliver the talent you need under terms you are comfortable with.

You also want to know the breakdown of the rates. Ask for a detailed breakdown of the bill rate: how much they pay the contractor, taxes, fringe, administration, and profit. This can help you compare firms if you are shopping around to know how much of what you are paying goes to the employee, which should get you better talent, and how much the firms is retaining.

Having regular meetings to determine how much of the budget has been billed compared to how much of the work has been completed will help keep the project on track as well.

Daiv Simcic
Title: Accounting Manager and Integration Speci..
Company: UATP
LinkedIn Profile
(Accounting Manager and Integration Specialist , UATP) |

If they are doing it as a project and are not an outside monitor for your networks, maintenance etc., then you are paying for the cost of using them as consultants, and I would expect this for any firm.

If they provide ongoing service and maintenance then you should make them change the local travel clause.

If you have to pay them as consultants and only use them for this project, they could come back and tell you that is the cost of doing business. Either shop around or see if they can do it for a flat fee.

It's actually your cost of doing business when you are changing to virtual networks. If this is only one project it would not make business sense to you to hire employees and all the extra expenses to complete the job.

John Argo
Title: Consultant
Company: Independent Advisory Services
(Consultant, Independent Advisory Services) |

Most consultants are not able to charge for travel unless they're able to actually get work done, for which they charge for the actual work done. Travel is usually eaten as the cost of doing business and/or built into the billing rate. The exception might be if the nature of YOUR business causes them to have a bunch of extra travel. The same applies to OT or shift differentials. Implementing a VPN of that size should not involve a lot of back and forth, anyway, or that much time.

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