OT: Any BCIT EET Grads Here?

[snip]

I think it only applies to what the primary contractor bills the government per hour. What you pay employees or subcontractors doesn't matter, UNLESS you play pass-it-on, then you can get snagged big time.

[snip] ...Jim Thompson

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| James E.Thompson, CTO                            |    mens     |
| Analog Innovations, Inc.                         |     et      |
| Analog/Mixed-Signal ASIC's and Discrete Systems  |    manus    |
| Phoenix, Arizona  85048    Skype: Contacts Only  |             |
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      The only thing bipartisan in this country is hypocrisy

The exact definition of pass-it-on is a gray zone, better not become trapped. I was explicitly asked whether I charged other rates to others, upon which I responded "no". That sealed the deal, they trusted me on that.

Employee pay is a very different matter.

--
Regards, Joerg

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Yes.

...and you absolutely should be getting paid for having to adjust your own design when something like that happens.

At least where I work, pretty much all of the contracts start out as being fixed price/fixed schedule... but I don't think there's *ever* been one that didn't have *numerous* price and schedule adjustments over time. I believe that to a large extent this is pretty standard in industry, since we're often talking contract specs that are, say, all of a dozen pages for what's thought to be a project that'll take (on the order of) tens of thousands of man hours -- the likelihood that somehow those dozen pages really contain enough information to allow a "reasonable man" to fully predict exactly how much time and money will be needed is vanishingly small; when it's discovered that some parts of the contract are actually more time-consuming to implement than initially predicted, the customer certainly should be ponying up for the additional costs involved.

I suppose one of the most important part of any contract (business to business or just employee/company working arrangements) is to establish up-front what matters the most and where there's some flexibility: Which is more important, price or schedule? If there's zero or no wiggle room on either, clearly one does have to start hedging towards Jon's approach of bidding, e.g., 3x what you think it will likely cost because you're not effectively providing insurance for the project yourself.

Over time the deal is making sure everyone's happy -- as a customer, you don't want to feel that you're being nickeled and dimed, whereas as a consultant/service provider I presume you don't want to feel you're being taken advantage of. (Some years ago, I had a management type come in one day and ask how long I thought it'd take to update a schematic to change one part to another part that -- having tested both -- was found to be preferable. I gave an honest reply of, "oh, no more than 15 minutes" -- for which we billed the customer a day! From this point of view, consultants such as yourself who end up billing down to almost the minute look like a *very* good deal!)

If you're, e.g., a company designing electronics and hiring a consultant to do likewise, sure... but if you're a company that designs, e.g., fitness equipment and just need a consultant to do, e.g., the electronic display for the ski machine, I think it's still a bit more of a leap of faith.

Right, noise fixes are certainly a classic example were a fixed-price contract would be foolish.

They're out there -- many little microcontroller-centric projects fall into that category (say... IR remote controls, computer mice, printer sharing boxes, etc.)... although they're often not really the "fun" projects. :-)

Pretty unlikely, I suspect!

---Joel

One of these days you should post some pictures of all that sound board/audio distribution work you did for your church. :-)

It's a regular installation, some inside walls, vintage Yamaha mixer, plus I did not do anything alone. I am just one of the fix-it guys if something goes on the fritz.

--
Regards, Joerg

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I don't advertise rates, or advertise at all. It's through existing contacts. So I guess I wouldn't get these calls, even if they _were_ tempted.

For those who do worry about such things and who do advertise and care about getting such companies to call them, they will just have to figure out how to address that kind of anxiety in a way that achieves that goal. I probably am not going to be much help, there.

Well, it was your scenario in the first place so I will let you define it, further, here. It just sounded that way to me, earlier, when you wrote. If it isn't some negotiation tactic, then I accept your assurances.

My point remains, though. If someone _needs_ a lower rate, the easiest thing to do is ask. Doesn't mean I'll say yes. But it is a possible solution. I personally would look more favorably upon that, than someone asking me to offer a fixed price bid on some large project about which I was largely unsure about some significant-to-me risk factors. It's one thing to accept some rate, knowing at least that I will get paid something for time applied. It's entirely another to worry about something that could potentially wind up requiring unpaid years (I'm exaggerating a little) of my life. Besides, if they really want me taking on significant business risks of theirs, they should convince me and cut me a piece of the action or else buy the "insurance" offer (if I'm willing to offer that.)

I think my position is pretty easy to understand and you are ponying up possible exceptions you can imagine. But my general response there is that what doesn't fit my business model gets passed by. I find something else to do. So I suppose that will be my answer to those exceptional cases you may come up with, broadly speaking. I am not in the business of bending over backwards to accept all comers, forced to find some accommodation each and every time for each and every circumstance. I am not some charitable business 'fixit' nor do I need to twist myself into a pretzel for any and all situations. I'm always free to walk away. So if it doesn't fit what I've already discussed, then... find someone else.

I don't mean to suggest some stiff, inflexible policy, either. The best thing is for folks to just talk a little. Explain what is going on, discuss alternatives. Chances are, there is some way of meeting in the middle. A strategy that addresses both sides in a mutual way.

So please don't get me wrong. The point I'm making is that being forced to accept a lot of project risk isn't MUTUAL! It's one-sided. And if the business relationship isn't a mutual one, it's better to walk away from it. It should be a mutual situation that balances both sides well. That's the goal.

Project risk is usually owned by the service consumer. It's theirs, not mine. If it goes well, they get the upside. If it goes badly, they get the downside. If they are trying to shovel that load onto me, to absolve themselves of that risk they own in some unfair way, then why accept it??? I see no good reason. If they are willing to buy insurance on it, I might offer that. If they are willing to convince me that buying into that product or product line (or their business) is worthwhile, I might do that by exchanging the cost of the insurance for a piece of the action they offer. But the bottom line is that this needs to be mutual, not a pure, unpaid shifting of their risk onto my shoulders. That is NOT mutual. It's very one-sided. And I know enough to walk away from one-sided relationships.

Everyone gets to choose their poison. I'm just offering some advice about how to think about things. No one has to take it.

Of course! If they can pin you down to some modest, mean value for the contract and then shovel onto you a lot of additional business risk of theirs in the bargain, then it is a one-sided relationship that favors them. Why wouldn't they like that?

I sure would.

I want to be part of mutual relationships where both sides honestly seek to do well by each other and not unfairly take advantage. I don't know what to add to that.

That is not always the case, in my experience. Many know a lot about the risks, even if they don't know about the specific implementation technology. For example, from a purely market/sales point of view they may already be aware of the fact that no one else has ever achieved a workable solution, but decide not to tell you that.

But accepting it for discussion here, it's my job to "see" what is involved. If I can't see some parts, it's my job to make sure that I ask questions, do research, etc., to try and estimate it better. At some point, I just have to haul those unknowns to the front of the project and call them out there and say: "These are significant unknowns that, working with you to narrow down better, have not been amenable and remain difficult to assess. We need to do time-and-materials on these, do them immediately so we get them out of the way early in the project, and once we get past these we can discuss a fixed priced bid." Something like that, anyway.

Asking me to _eat_ them isn't mutual. It's asking me to eat their risk when both of us know they are significant and initially untractable. There is a path. Do time and materials until they are nailed down. Then revisit the fixed price bid strategy. If they are honest folks, they will understand this argument and, obviously by that point because they participated in trying to nail them down earlier, will have already realized that these things do indeed remain as problem areas needing research or testing so that they can be better estimated.

I hope you aren't arguing that I should, after culling out these problem areas in cooperation with them, eat their risks despite our mutual understanding that they are potentially highly variable in terms of required work and aren't resolvable right away, needing further work. For them to bald-faced ask that, after getting to that point, would seem once again to be a one-sided relationship. And I'd probably not accept that. One-sided relationships don't work out well.

Jon

However, that usually triggers endless heated debates. "But we assumed that would always be part of the work ...".

But then you are at the mercy of the customer. He might react either by ponying up or by showing up with his attorneys.

I don't like to be in the insurance business :-)

I've heard of cases like that ;-)

We usually are, considering the amount of screw-ups saved. But this is IMHO also most fair to the client, they get billed what they actually use, no more and no less.

This assignment actually will almost be in that 2nd category, the electronics are not the prime part of the whole enchilada (but they want to make sure those work). Happens pretty often ... "What if the stuff in that pipe over there freezes?" ... "Ahm, well, oh!". We've got to be generalists.

Same for redesigns, unless the client lets you scrap most of it and start from a blank sheet.

Yup, and I just had one from a client where they forgot a _major_ routine that nobody had thought of. It hadn't been in the spec and that now blew up some units.

Right, usually not even on uC stuff.

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Regards, Joerg

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I think this is a good point. I offer more than 30, usually, at no charge. If someone isn't willing to give a little at the beginning of a relationship, where there is the potential for ongoing mutual business going into the future, it's likely to be a one-sided affair all the way through it. When I interview doctors, for example, I insist that they don't charge me for the first "get to know each other" visit. If they can't handle that, I walk away and don't look back. I expect the same thing of me, too, when dealing with others.

Jon

Hi Jon,

That's a great situation to be in.

I don't think companies looking for a fixed-rate contract generally need lower rates; in most all cases they can probably afford $100-$200/hr just fine -- it's much more about the "control" aspect of the project.

I agree that your position is easy to understand and well within the realm of "reasonable"; I'm more playing devil's advocate for the customer here, tossing in the current state of the economy to make the point that at the moment it's likely a bit more of a "buyer's marker" for consultants.

Yes, this is a good point and one that many companies might miss when they first go looking for a consultant.

Some companies would do that, but most want a mutually-beneficially relationship just as much as you do, so they wouldn't knowingly do it becasue long-term it's unlikely to work out (...you'll drop them like a hot potato as soon as you can). My impression is that companies who try to pin down consultants at a fixed rate are doing so (1) out of fear of exposure ("loss of control") and (2) due to not recognizing various inherent risks in their projects -- these are parts of the "control aspect" of a project I mentioned above.

You're the guy who starts calling up the hospital's billing office and negotiating rates while your kid is still having his broken leg fixed, as I recall. :-)

I think we agree, we're just expressing the same thoughts in words that isn't making it particularly obvious.

Hmm, good point. That's kinda borderline-evil, I think.

Yes, that makes perfect sense.

---Joel

Charitably, perhaps they don't realize how much time is required to make the necessary adjustment and figured it'd be a "5 minute fix?"

[our contracts start out fixed price/schedule but always seem to be re-negotitated over time]

Yes, that's a possibility. It's apparently largely the power of good communication/relationship with the customer that -- at least to date -- has prevented that: You get to a point of trust where the customer accepts that if you say something really was ill-defined and much harder than anticipated ("...and here's why..."), it really was, and you're not just out digging for gold.

It is perhaps a little ironic that government contracts (that we're often some low-level sub-sub-contractor for) are considered so "juicy" when, on the surface, with their fixed price/schedule, they would seem to be a turn-off for many consultants. :-)

Even in the case at a former employer that I mentioned to Jon, where the well-known multi-national company threatened to sue but finally chose not to, while arguably it counted as one bridge burned , the company did go on to much larger, more successful things (...although it did eventually die, and I'd suggest it was largely the fault of poor management, but for another 5 years or so they were keeping 30-some-odd people employed and some of the equipment is still used to this day, so it was by no means all bad).

---Joel

Interestingly, companies often fret about having to pay a consultant while having no qualms at all paying twice that rate to attorneys on a continuing basis. That's something I never understood.

[...]

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Regards, Joerg

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Attorneys who are just doing, e.g., contract preparation have well-known tasks and hence the expected number of billable hours is quite predictable, whereas "please go fix this noise problem for me, Mr. Schulze-Clewing" is almost entirely unpredictable insofar as how long it'll take... or if it can even be done?

Lawyers who are doing, e.g., research projects that might take any number of hours are probably working on some deal where the customer standards to gain or lose far more than the cost of the lawyer's time? :-)

I agree though it doesn't really make much sense. It might be that in the regular course of growing up, everyone becomes at least somewhat familiar with lawyers and what they do and so on so there's a certain sense of "relationship" already established? Whereas few people have any clue just what the heck an analog consultant does?

---Joel

I've never seen any of them do a fixed bid. Except, of course, the contingency deals of ambulance chasers.

With lawyers it's mostly worse. Some legal stuff has come up and nobody has the foggiest how ugly it'll get, whether there will be a settlement or an ugly drawn-out lawsuit. Examples would be patent troll cases. Yet companies have no problems just paying for that service.

With noise or sub-par circuit performance they usually have people on staff who have a pretty good feel about how bad it is and who would be competent to watch the consultant. But would you really know how to watch an attorney who is drafting up an intricate demurrer or who dukes it out with the other party's counsel? Although, I've done it in one case and sorta taken over ... and won, where the lawyer said it'll never work :-)

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Yep -- clearly there's an industry "standard" there.

Nope -- that's a good point.

I wonder if the average church has as many volunteer lawyers as they have volunteer cooks, musicians, carpenters, electricians, etc.?

I doubt it. Some folks are paid though, for example our music director. But it is very little. It's lots of work and they really do it out of love.

Technical work at our church isn't much and I wouldn't want to be paid for it. Mostly it's not seen anyhow, like taking home a broken Telex receiver after worship and fixing it. Ok, I did eat a donut last time I brought one back in :-)

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Regards, Joerg

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Put that down and highlight it!

Not so long ago, while negotiating over a rather modest contract, I found out that they were paying about $60k/month for a patent attorney. Nearly continuously. Cripes!!!

Jon

Two years ago, when I was interviewing, I gave one company a whole day free. I even sat in on a design review and told them were their problems were. "...and BTW, watch out for...". We never could come to complete agreement on a salary and then they reneged anyway (communications problems with corporate). I found another home before they got their heads straightened out. All is well because it's warmer here. ;-)

Why can't an employee be cut? If it ain't working...

Chip design is almost always like this. Every processor I've worked on was defined in minute detail. The architectural model became the project definition (at least until the hardware is comes back ;). Management gets grumpy when they have to fork over another $2M for a set of masks.

If engineers made the laws maybe they'd pay engineers more.

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I know you're stuck on yourself, Slowman, but you are *not* everyone. You do have a distinct resemblance to DimBulb, however.

Then compels you to respond, Slowman? The same fetish for self flagellation that AlwaysWrong always demonstrates?