CXO

Tips for success as a subcontractor

Subcontractors are often in a dubious position: They're not quite independent, yet they aren't employees, either. How can you make subcontracting work for you? Here's some advice from an expert.


Independent contactors who subcontract find themselves in an ambiguous situation: They stop being completely independent, but they aren’t quite employees. If you, as an independent contractor, decide to subcontract, you probably won’t have as much freedom to do your work when and how you want. It’s also likely that you’ll need to budget extra time into your work for another layer of approval.

In this article, I’ll recommend ways to navigate such issues and help you make the difference between being part of a great project and contributing to a disaster.

Last of three parts
The first installment in this series discussed how to determine whether you need a subcontractor, three ways to find a subcontractor, and how to ease that person into the client relationship. Part two gave guidelines for establishing a successful relationship with a subcontractor.

Tip #1: Adjust your attitude
It’s easy to jump at the chance to subcontract. After all, you’re getting a project handed to you: You don’t have to find the client, negotiate the project, or establish the scope.

The flip side is that you won’t have the kind of control over the project that you’re used to. The prime contractor is likely to conduct business differently than you do, and you may disagree with how to implement a solution or deal with a difficult client.

Deal with the situation by anticipating this loss of freedom. Before you take on the project, ask the prime contractor if you are free to express differences of opinion about the work or the client. The answer should be “yes,” but remember that ultimately, the prime contractor will have the final say.

You must also be prepared to present a unified front to the client. Running around the prime contractor to let the client know of your disagreement is a strict no-no. (This does not apply to unethical or illegal behavior.) The bottom line is that if independent is your favorite part of being an independent contractor, think twice before you become a subcontractor.

On the other hand, you can apply the mantra I use for any project that requires me to put up and shut up: This project, too, will end. Just like a regular contracting gig—and unlike full-time employment—a subcontracting job always has a definite end in sight.

Tip #2: Budget for the extra time
Have the prime contractor explain how much input he or she will have into your work and how much time you should budget for review. For example, you may think you have plenty of time to meet a deadline if you forget to factor in a week of review before your work goes to the client.

Also address time for revisions: Should you build in revision time, or will the contractor extend your deadline to allow you to make any requested revisions?

If the contractor wants a lot of input into your work, have the contractor commit to scheduled reviews before your deadline. Making these reviews part of your deliverable timeline helps avoid major revisions at your deadline. If the contractor is already familiar with your work, this may be unnecessary. But if the contractor seems nonchalant about reviewing your work even though he or she knows little about you, be on guard (and read the next tip carefully).

Tip #3: Find out why you’re there
At the risk of sounding paranoid, I suggest you do a lot of digging to find out why the prime contractor really needs you. Ask for references from other subcontractors, if possible, or from former clients. Ask the contractor for all information on the client and do your own research as well. While you probably won’t be able to ask the client directly for references from other contractors, you can still do Internet research and ask around your professional community to look for current financial problems or any history of nonpayment. You don’t want to take on someone else’s nightmare client.

All this background work should help you determine whether you’re coming in to serve as the scapegoat for the contractor’s disaster. Be especially wary if the contractor seems to be turning the whole project over to you without a good reason.

Tip #4: Ask if there’s anything else you need to know
To further protect yourself, ask the prime contractor if there’s anything else about the client, the project, or additional expectations you need to know.

For example, shortly after starting a past project, it became clear from the client’s description of the work that I would need to put in many more hours than I had initially thought. Although the extra work (and extra money) would be fine with me, when I mentioned this discrepancy to the prime, I was told that it wasn’t in the budget for me to work more than a certain number of hours a week. Plus, I wasn’t supposed to tell the client why I couldn’t accommodate the workload. This is the sort of thing you want to uncover sooner rather than later.

Payment can be another sticky issue: Will you be paid within a certain number of days after submitting your invoices or when the client pays the prime contractor?

Make it clear to the prime contractor that you expect the terms of the contract to be honored. If you face a long gap between invoicing and payment, consider stipulating in your contract that your work stops on the first day a payment is late.

If the contractor wants to tie your payment to the client’s payment, try to do it this way: If the prime’s contract with the client specifies payment within x days after invoicing, make your payment due from the prime in x plus five or 10 days. This allows the prime to pay you out of timely payments from the client, but doesn’t leave you holding the bag if the client is late paying the prime contractor.

But because such an arrangement may leave you waiting 40, 70, or 100 days for payment, it’s effective only for long projects. For short projects, consider negotiating an upfront payment that will be deducted from your first invoices until paid.

Meredith Little runs InfoDoc Services, a documentation consulting business she started in 1998. Based in Colorado, the company provides procedural documentation, knowledge management expertise, and solutions such as user manuals and online help to IT companies nationwide.


Share your subcontractor stories
What other tips would you add to Meredith Little’s list? Start a discussion below. We’ll compile your advice and feature it in an upcoming article.

 

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