RE: What is a reasonable cut that a contracting company should take?

From: David Humphrey (knights-of-niat_private)
Date: Tue Dec 17 2002 - 07:31:59 PST

  • Next message: mlhat_private: "Re: What is a reasonable cut that a contracting company should take?"

    Brian,
    
    I have had this same dificulty determining current market rates, so I
    will post what little relevant experience I can on the matter.  After
    being offered $45/hr. from a consulting company for security architect
    work, I started to become concerned that I was in the wrong field.
    Looking through direct billing records for GSA contracts on the Internet
    however, I found rates being charged *to* customers from such consulting
    firms were anywhere between $95 and $195 /hr.  My experience led me to
    believe that I should be "up there" in billing at the high end here.  I
    also knew from experience consulting in the past that my rates there
    were flexible but were being charged out at around $250 / hr. to
    customers.  Higher than the GSA rate. 
    
    These are obviously widely varying targets.  
    
    The last bit of information I can contribute is this; I managed to
    negotiate a rate with a local IT consulting firm that caters to a
    relatively normal (and at this time, stable) market - health care.  They
    have a formula something like this; 33% of contract award is to go to
    the sales staff for digging up the opportunity, 33% of the contract is
    fed back to the firm for overhead and base salaries, and 33% of the
    contract is finally awarded to the engineers actually doing the job!
    They were willing to bottom-out the hourly rate for such contracts at
    $75/hr. directly to me.  
    
    And even this seems low, though in relation to the way this admittedly
    small consulting firms dig up and maintain their business, it may well
    be fair for both parties.  A larger more established firm may do better
    in overhead costs.  I can't say, however, looking at the original
    $45/hr. offer from just such a firm, I'd say they were trying to keep
    75% of the contract award if not more.  
    
    ...which does *not* seem fair.  I'm glad it never happened.
    
    
    -Ace
    
    > -----Original Message-----
    > From: Brian Cahill [mailto:bcahillcisspat_private] 
    > Sent: Monday, December 16, 2002 3:55 PM
    > To: securityjobsat_private
    > Subject: What is a reasonable cut that a contracting company 
    > should take?
    > 
    > 
    > 
    > Hi,
    > 
    > I am submitting myself on a security project via a 
    > contracting company.
    > 
    > They will take a piece of the hourly rate.  With that, what 
    > is a reasonable 
    > cut that I should expect the contracting company to take?
    > 
    > Thanks,
    > 
    > Brian
    > 
    > 
    > 
    > 
    > 
    > 
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