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GBE101: economic woes and the consignment promises of tomorrow

Work for fee – not free.

by Donna L. Quesinberry
Government Business Examiners

2009 had to be the worst year ever for economic woes in federal contracts. The Government Business Examiner in talking with numerous industry experts has learned that many consultants and businesses experienced a tough market climate during the past year, but everyone is looking forward to increased performance in 2010.

Probably due to this reality – 2009 was also the most common year going for customers seeking consignment services. For federal contract business solution consultants – there’s always an element of the industry that seeks work for free – rather than work for fee. Typically, these are up and coming companies without a share of overhead to pay for consultants to help them secure work.

There’s always the promise of a rainbow and a pot-o-gold at the end of the awards trail and the risk is evident. Often desperation or the desire to help those in need gets the better of unsuspecting consultants who may find their promissory of pay turns into a scam of injustice – yes, even among the consummate professional who are otherwise hailed as qualitative achievers.

How does a consultant indemnify themselves when securing contracts? Here’s a quick list of considerations:

  • Insist your client use “your” consultant contract – there’s no need for your customer to dictate contract terms to you
  • Provide a non-disclosure agreement (NDA) to all clients | customers when you determine you might enter negotiation and don’t send them any products until you receive a signed NDA
  • Include “creations” clauses in your consultant contract – retain your intellectual property copyrights (if you create boilerplate, templates, diagrams, slide presentations, graphics, artwork, illustrations, executive summaries, business plans, management plans, etc. they are “your” creations – retain them as your service products) – clients purchase one-time use of your intellectual property – paying you for a business solution in response to an RFP doesn’t mean “your” product then becomes their suite of remedies – your remedy is your product
  • Register your service products – if you create killer management plans – register a copyright or trademark that states you own it and then use first rights, exclusive rights, one-time use rights, etc.
  • Have an attorney or legal assistant you can trust review your agreements
  • Insist on a chargeback retainer or deposit for services – if a client cannot pay anything now – the likelihood of change is minimal post-award – no matter what they say today – commercial contracts always feature a deposit or retainer
  • When asked to work for post-award promissory – implement critical milestone customer satisfaction time lines and use metrics | questionnaires to establish a positive history, become acquainted with the end client, require sign-offs at production intervals (1/4th, 1/2th, 3/4’s, and final development approvals)
  • Insist on “use” tax – in September 2009 “use” taxes were implemented in many states
  • Be involved in pricing and ensure fees are listed in the IR&D/B&P as well as incentive bonuses and charge additional fees for consignment service considerations (30% is the standard markup)
  • Make certain that any legal remedy is for your state of record – the client isn’t hiring you as an employee – they are buying a service product from you
  • Secure testimonials early in project development from your client – get a written statement that they like your work before you have reached the half mark in development
  • Use teleconferences where you can record meetings and pay to record one or two where feedback is representative

Many companies promise to pay post-award or they promise to have your consulting company complete a share of the work – you might even be listed in the organizational and deliverable structure – many times this works out in your best interests; however, there are many companies that work with you through 3/4’s of their development and then establish or “create” some issue in the final hour to thwart their having to pay you post-award. Someone in the industry told the Government Business Examiner –

If I have written a consultant in to IR&D/B&P what is to stop me from taking that money post-award and adding it to my profit? Why can’t I just unload the consultant?

The truth is – companies do just that. Just like your momma told you growing up,

If it is too good to be true – it is.

Indemnifying yourself is “good business” and ensuring that clients meet you on “your terms” is “smart business.” Just ask yourself – would they work for you on consignment? If the answer is, No – well you know the truth of it. For quality companies a retainer and consignment with a percentage increase, bonus incentive and back-end follow-on work is a wonderful arrangement – but when you are promised the world – don’t be surprised as you near submission to hear that client starting singing a surprising tune of dissatisfaction. As soon as that happens, look for the courthouse to secure your funds.

Here’s a topical YouTube video – that touches on other consultant ideals – from an information technology (IT) perspective.

Have an excellent consulting 2010!

About the Author
: Ms. Quesinberry, DonnaInk Publications (dp)
President, manages a government (federal and state) and commercial consultancy. A published technical non-fiction and fictional author, she is also university course developer and instructor as well as poetess. Donna interviewed on CNBC and is a single mother of 5 adult children with 7 grandchildren. dp is a small, woman-owned sole proprietorship, with over 19 years of professional expertise featuring high performance measurements and a significant win ratio for multiple | diverse genres among GSA Schedule, grant, federal contract, technical communication | content management industries.

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