Fee reduction contract clause

[Teixe]

How would you react or do after reading this:

While checking the Clauses for a new contract I found an "Addendum to Terms and Conditions for Assignment at Client" that states:

" In line with <client's name> cost reduction programme, if the contract period extends for a further 6 months the daily or hourly rate of the contractor will be reduced by 3% and in addition if the contract extends for a further 12 months the daily or hourly rate will be reduced by a further 2%."

I guess at the end I'll just have to accept it but I wonder if fellow contractors have seen this before and what have you done about it?

Edited by Teixe on Monday 4th April 16:18

[Soovy]

Teixe said:

How would you react or do after reading this:

While checking the Clauses for a new contract I found an "Addendum to Terms and Conditions for Assignment at Client" that states:

" In line with <client's name> cost reduction programme, if the contract period extends for a further 6 months the daily or
hourly rate of the contractor will be reduced by 3% and in addition if the contract extends for a further 12 months
the daily or hourly rate will be reduced by a further 2%. "

I guess at the end I'll just have to accept it but I wonder if fellow contractors have seen this before and what have you done about it?

Ask them to take it out, if they won't then decide whether you are prepared to accept it or not!

[spikeyhead]

Soovy said:

Ask them to take it out, if they won't then decide whether you are prepared to accept it or not!

I'd insist that they increase the rate, as with experience you'd be more valuable to the client.

[Cyberprog]

Bit sneaky to hide it in the terms & conditions though.

[Mr POD]

I can see how and why they think it's a valid idea, but it sucks. It's an automotive thing that big companies do to other big companies, when they argree to buy there components, which gives the supplier the chance to find waste (MUDA). When your only cost is YOU, you can hardly have a lean activity looking for cost savings.

I've discussed with another contractor, how he came on a one month contract at 600 quid a day, and after a month they offered him a 12 month contract at £300 a day on the grounds that they were committing to a longer period, which was fine until he pointed out the clause that said they could give him just 1 week notice if they no longer required his service.

I recently had a contract renewed at the same rate, as previously, and I got the client - the man that signs my invoice, to agree that the work required more hours, which is good because I'm stuck 120 miles from home in the week anyway.

[spikeyhead]

I've had rates go up, down and sideways on renewal.

One contract started off at a decent rate, then on first renewal went down, then second time went half way up, then down, then back to where it started from before finally doing some on a fixed price job and finish.

However, to commit to something in advance where the rates can only go down? I'd never sign it. Just cross out the clause you don't like.

[edc]

At renewal time don't extend the existing contract but agree a new contract?

[Teixe]

Result.
I followed Soovy's advise, they have deleted the clause.

Thanks.

[Soovy]

Teixe said:

Result.
I followed Soovy's advise, they have deleted the clause.

Thanks.

Good work.




750 quid please.

[spikeyhead]

Soovy said:

Teixe said:

Result.
I followed Soovy's advise, they have deleted the clause.

Thanks.

Good work.




750 quid please.

Tsk, should have insisted on a raise