Contractors and Agents
Could contractors and agents collaborate more to their mutual financial benefits?
I was thinking of ways that contractors could turn themselves into small businesses. I wrote to one of our agent friends, Philip Dixon, with some questions.
IT Contractor
I’m looking for more ways where contractors and agencies can co-operate to
their mutual benefit. Do you see any ways contractors and agents can do that to their mutual benefit?
Philip Dixon’s Reply
These are my own thoughts.
Question 1 – If a contractor you had out at a site said to you that he wanted to tout for new business, e.g. bidding for a project that would be mutually to your
advantage would you take interest? What would you want out of it?
Answer 1 – The simple answer is, yes of course it would be of interest. By the way SVC do not have anything in their contract forbidding contractors from approaching clients about projects. However it does state that you have to do it with our knowledge.
In return, I would want to handle all resourcing of any additional manpower on an exclusive basis and have involvement in the tendering process. The contractor’s company would need to have sufficient liability cover and be happy to formalise the arrangement by way of a binding contract.
I suspect, however, that most contractors‘ companies do not have that level of cover to justify the risk. Where the project does not justify additional resource, I would suspect a split deal on GP would be in order (depending on what risk each party was willing to carry).
Agency Representative at Company
Question 2 – If a contractor you had out at a site wanted to be your representative at a site, where they kept you informed every time someone was needed or for fresh opportunities, e.g. in different projects with different Project Managers, what could you do financially for the contractor? Would you consider some sort of Joint Venture with him?
Answer 2 – No Joint Venture, but it is our policy to pay a one-off ‘bounty’.
Remember we take the risk (a major point). A perfect example of this is one
client we have is a lousy payer and a contractor of ours on site is so well
thought of that they have given him company credit card for expenses.
He could easily go direct (after the period of time stated in our terms) but
chooses not to because he would have to wait months for payment. So, we pay him
every week without fail but often don’t get money for him for 2, 3 or even 4 months
down the line.
Fast Track Visa Workers
Question 3 – Agencies are not allowed to bring in Fast Track Visa workers direct. However, I presume that contractors can bring them in through their limited
companies. Is there anything that could be done there to the mutual benefit
of yourself and the contractor, especially if this contractor was your site
representative?
Answer 3 – It really depends on the structure of the company in question. I am sure there are certain questions asked by the authorities to justify an FTV
application. There is almost certainly a financial investment to be made by
the contractor.
Do you think a one-man-band v EDS could succeed in getting the required paperwork?
I don’t think so.
So how do you get around it?
The contractor’s company could form an alliance with the agency under a
different name and adhere to a framework. This point, however, doesn’t
apply to SVC, we are part of a larger group of companies that includes a
systems and software house. We could apply safe in the knowledge that it is
‘in-house’.
Contractors and Agents Touting for New Business
Question 4 – At the moment, contractors don’t tout for any new business at a company, because of the clause in their contract that says that they can’t.
Therefore, both agencies and contractors lose out.
A contractor wouldn’t even think of bidding for a new project or to take over the running of a part of the system. Is there any way that you can see that this can be
overcome to the mutual advantage of the agency and the contractor?
Answer 4 – I can’t comment on the first sentence as we don’t have one. The contractor as a stand-alone individual does not have the clout (or, again, possibly
liability cover) and, I suspect, the resources to bid. It is therefore down
to the agency to provide the risk cover and resources.
A lot of project contracts, as I am sure you are aware, have financial penalties for
non-compliance if, for example, you miss a deadline. Would an individual
have the finances for that eventuality?
Again, as above, an alliance and framework agreement (including confidentiality, intellectual property protection, non-disclosure etc) would need to be in place.
There are many ways contractors and agents can collaborate.
Philip Dixon
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