Fee structure for RFQ presentations and interviews as a consultant on a “project team”

[Susan G. Anderson]

My professional life has been practicing in public horticulture, parks and gardens. I have a BLA and am in process of completing the LARE. I also am a Fellow from a well respected Masters of Science Program in Public Garden Administration. I have a lot of experience.  I have been approached on more than one occasion to participate as a “potential” expert or consultant on a proposal for project submittal for RFQs on public work with a multidisciplinary firm which I have worked with in the past. The most recent proposal was accepted and narrowed to a selection of three firms. My role in the potential project was significant based on the submitted proposal. My participation in the interview process, as a team member, included a site visit, interview preparation including development, review and practice. This also involved travel time as this project amounted to a roundtrip of three hours. In total, I spent thirty to thirty-five hours on this last endeavor. It was not awarded to the firm.

So here is my question: What advice do you have regarding structuring fees for participation on RFQs and interview teams?

Thank you!

[Susan G. Anderson]

I would like to add to this post that I want to cultivate this type of project work, and I do enjoy the firm I have worked with on these proposals. Independent contracting is a risk like any other business endeavor and I understand that. I am looking for input on what standard practice is on this type of work.

I have family members in other professions who questioned how I was recovering costs for my time on this as it was standard in their industries for potential consultants to be paid.

Thanks again for any input you have.

[Chris Whitted]

All of my experience with this kind of thing is second-hand; meaning it was the firm I worked for approached to be a partner/team member, not me as an individual consultant, and I wasn’t ‘in charge’ of anything.  We also sought out partners as well.  I’ve seen it work basically two ways, one of which you’ve experienced.  Essentially it’s a marketing endeavor for all concerned – nobody is making money and nobody is getting paid until you are awarded the actual contract. And that’s how you have to approach it and one of the things to consider when deciding whether or not to join the team, along with who is leading and in charge of what. In the situation you describe, if your role (and percentage) in the contract had not been significant it would not have been worth the investment/risk of your time, but as it was…

The other way is as a consultant/sub, where your knowledge and expertise is worth a fee – period. They need you to get a project, so they would be willing to pay just to get you on the team. It might be an hourly plus expenses or a flat proposal fee, but they want or need you enough that they’re willing to pay it. The risk here is by charging and up-front fee you risk not being approached as much (especially in current markets) since it’s just that much more money the lead has to spend to even try to get the job. And maybe your approach varies, where if all they need from you is some project examples and a rough budget/schedule you don’t charge, whereas if you have to do significant legwork like your example then a fee comes into play. Or maybe it’s free until you get short-listed and then starts costing them. Each case is probably going to be a little bit different.

The situations I’ve observed ran the gamut – we had cases like yours where we didn’t agree with the lead’s approach, didn’t get the contract, and were out quite a bit in man hours and expenses for proposal materials. We also had cases where we (or often subs for us with specialized niches like traffic or lighting studies) were actually listed on multiple teams going after the same project where each team just got a copy of the same information and materials to include in their package.  I think a few times there were even cases where the same person had to stick around for multiple team interviews.

[Thomas J. Johnson]

I guess my question (and I’m not being a smart a$$), is; why would your fee structure be any different than if you “had” the project? It seems like you place a value of X on your time. They want 35 hours of your time? That will be 35 x (X), please and thank you (see, there I’m being a bit of a smart a$$). 

If you’re traveling, your traveling. If you’re doing a site visit, you’re doing a site visit. If you’re doing an inventory, anaylsis, DD, etc. It is what it is…

If you can’t afford my initial ideas, then you can’t afford the finished product.

It seems like you can get yourself in trouble (with different projects/clients “she only charged me this for that… etc) and devalue yourself when you start saying, “well I only charge X for this and Y for that but you’ll need this and it will cost Z”… Just saying it like that makes me fee kinda cheap & dirty… I’d stick with your going rate or whatever you charge per phase of design…

We have a tendency to give too much of ourselves and not charge enough in this profession, which hurts not only your own pocket book but everyone else’s. Charge them what you’re worth and not a penny less. 

[Glenn Arthur]

Hi Susan ,

My experience has been that if you put zero value on your own time , then others also think your time has no value .  This doesn’t matter whether it is prep work or the actual project work .

 I know it is always tricky with competitive tendering , especially in a downward  market , but for you the question might really be ” could i have spent my time better elsewhere actually earning a living , instead of putting in so many hours for free in an attempt to earn a living ” ?  I also get the impression from your message above that you maybe did not know how much income there was going to be forthcoming from this new project ?? 

I have also found that many people/ corporations with projects are reluctant to declare a project budget upfront, as they think that all of those tendering for the project will come in just a few dollars under the budgeted amount . These companies that refuse to tell you their project budget, are in my experience, the ones that like to have all the potential tenderers running around doing prep work for FREE.   Then they give the actual project to one of their old friends, or AFTER you have quoted for the project, they tell you there budget is half that amount .

My company now refuses to do any upfront design or ideas work for free.  However, we still want to show the client that we are serious about wanting their business.  So we now charge for all prep work for tenders at normal hourly rates , but we offer to refund a portion of the fees(25 to 50%) back if we are awarded the project .   Our success rate is about 40% , but we have also heard that some of those companies that did get the other 60% of the tenders were not happy with the amount of revenue they received from the project either. 

So maybe we actually gained 100% of the types of projects that we wanted to be involved with anyway ? 

Conclusion ….trust your instinct every time Susan …it is usually right every time !   

[Susan G. Anderson]

Thank you for the thoughtful responses. I realize I need to value my time. This was the first proposal where I invested this amount of time on a potenial work of this scope. As I continue on this learning curve, I realize I need to get input as I proceed. I do consider it a networking and marketing opportunity with this firm. And I have been happy to do it as I have had the time but I realize there are opportunity-costs to take into consideration in the future. I need to ration my “free-time.”

 

Thanks again!

 

[Andrew Garulay, RLA]

Invseting some rationed free time can have great payoffs sometimes. Why not do exactly that? When one of these comes along that you see as an investment for potential work, write up a proposal for x amount of free time and an hourly rate for additional time if the consulting time goes beyond that. This would be done for the individual project only and not a standard operation.

 

This allows a better chance at getting in on a project, but keeps you from being taken advantage of.

[Susan G. Anderson]

Actually, Andrew, that is exactly the thought I had regarding it. Thank you for confirming it for me!

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