Re: Freelance Bidding by the Job- What Works Best?

Subject: Re: Freelance Bidding by the Job- What Works Best?
From: Bonni Graham <bonnig -at- IX -dot- NETCOM -dot- COM>
Date: Fri, 10 May 1996 10:53:23 -0700

Jim Barton wrote:
>The person handling the manual, who comes well recommended, doesn't want me
>to work by the hour. He says:
> "At this point, I'm not going to hire an employee for the [120 hour]
>project. The bureaucratic hassles of having employees are too immense for
>anything other than permanent, full time positions. But if you want to
>include provisions in your bid to lower your risk, that would be fine."

>Here's the question: What are some good provisions to include in my bid to
>lower my risk?

Well, there's two things to say about this, really. The first is that you can
reassure your potential client that simply because you track and bill a project
by the hour does not necessarily make you an employee -- you are still a
contractor (at least in the US), unless the client is withholding taxes,
especially since the client has no real control over your work time (since you
are doing this in the evenings and on the weekends). I have two fairly big
contracts like this right now -- I am in no way, shape, or form an employee, yet
I submit invoices based on an hourly representation of my work for that client.

The second is the advice portion: carefully calculate how many hours you think
the project will take, multiply that by your chosen hourly rate, then add 15% to
the bid. That gives you a fifteen percent "safety margin". In addition, you
might want to note in the contract that if the client requires extensive changes
to the document (because he or she added a bunch of features at the last minute,
for example), you would like to meet to renegotiate the terms of the bid. I
reevaluate my fixed bids and T&M (time and materials = hourly, for all intents
and purposes) estimates at each milestone, and report to the client any issues I
see arising that affect cost or delivery dates.

Hope that helps -- if you want more information, feel free to email me.
Bonni Graham
Manual Labour
bonnig -at- ix -dot- netcom -dot- com
San Diego, CA

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