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Thursday, October 30, 2014

Question

We plan to have subcontract work with an outsourcing company (not a cleaning company). What should we most consider in doing subcontract work with this company? Which is the best, share profit or pay agency fee (marketing fee) to outsourcing company. Can you tell us a common agreement in subcontract work with outsourcing company?


Answer

My primary consideration would be their reputation as responsible primary contractors. Do they pay a decent rate for the work done? Do they pay promptly and without constant pressure from subs?
The best arrangement (contract) is they assign you the work for an agreed upon price, you do it on time, you submit an invoice, and they promptly pay what was agreed.
Share profit sounds hazardous. What if they donít make a profit or fail to honestly report it to you?
Agency fee? If they are honest and capable, they will contract with the client, assign you to do the work at a fair price, and pay you for what you do. They will invoice the client for enough to cover your payout and their management costs, so they show a profit. DO NOT pay anyone for the privilege to work for them!!!!! I repeat, DO NOT buy work.
If this outfit is legitimate, the cost of marketing their services to clients is built into their rate structure. If they have legitimate work and ask you to do it for a profit to you, fine. If they ask you to pay them fees for anything, look elsewhere for your clients. You donít need to waste your money.

Lynn E. Krafft, ICAN/ATEX Editor
lekrafft@uno.com