Protect Your Interests When Hiring Subcontract Management Consultants
In an ideal world, management consultants would be able to do it all.
But in reality, no one can be in two places at one time. For some
engagements, it makes good business sense to hire a subcontracted
management consultant to assist with specific aspects of the project.
Using subcontractors can be a great way to get the job done, add
expertise and extend your geographic reach – without the commitment of
hiring a full-time employee. But, it can also open the door to a world
of risk.
No matter how much you trust your independent
contractor, there’s always room for him or her to make a mistake that
could have a negative impact on your business reputation, client
relationship or liability. That’s why the No. 1 rule in working with
subcontractors is: “Document Everything!”
Before you bring an
independent contractor onto a project, do your homework. You may be
able to prevent any misunderstandings by clearly establishing your
expectations in both a subcontract management plan and a 1099
independent contractor agreement.
What Is a Subcontract Management Plan?
A
subcontract management plan spells out the relationship between you and
the independent contractor you employ, as well as the contractor and
your client.
Such a plan usually includes a detailed overview of
the project your independent contractor will work on, including any
areas of concern where issues may arise. This statement of work can
clearly define the tasks, services and deliverables for which the
subcontractor will be responsible, as well as any scheduling and budget
constraints in which those objectives should fit. The statement of work
can also include clear quality measurements for the subcontractor’s
deliverables.
Often, management consultants will include an
organizational chart in the plan, detailing the various team members
who will touch the project, and what their roles will be. These team
members can include primary consultants, subcontract consultants and
client staff members who will be involved in bringing the project to
completion.
The plan can also define how these people will interact with each other. For example:
• Who will serve as the primary contacts?
• Who will be the major decision-makers?
• Who will be in charge of risk management, and what processes will be used?
• What processes will be used to track and resolve issues that arise during the project?
The
subcontract management plan is also an excellent opportunity to
document your expectations for communication with your independent
contractor during the course of a project. For example, you can define:
• How you prefer to communicate: by videoconference, phone, e-mail or in-person
• How often you wish to receive progress updates, and in what form
• How often your client should receive updates, and in what form
• The frequency of management status meetings
• The budget for any necessary long-distance travel or communications
As
with any management consulting project, some factors are just out of
your control, so there’s always a risk that a project’s requirements
will change once work is under way. A subcontractor management plan is
a good place to spell out a process for how proposed changes should be
submitted and evaluated, who will be responsible for making decisions
about them, and what process those individuals will use.
At the
same time, the plan can define the parameters by which the
subcontractor’s work will be considered complete, as well as any
long-term support that he or she may need to provide to the client once
the work is done.
A Contract for Subcontractors
While
the subcontract management plan is an excellent tool for ensuring that
your subcontractor is clear on the work to be done, there’s one more
important document you will need: a subcontractor agreement, signed by
both you and the contractor.
Such agreements contain clauses
designed to prevent your independent contractor from taking a job with
your client, as well as language regarding who owns your company’s
intellectual property, exactly what your subcontractor is responsible
for delivering, and more. Getting your subcontractor’s signoff on the
contract protects your interests and reduces your liability should
anything go wrong during the course of the project.
To learn
more about subcontractor agreements, see the related article. “Got
Subcontractors? Protect Your Interests with a Subcontractor Agreement.”
By giving your independent contractor a clear understanding of
your expectations before work begins, you can avoid management
consulting project pitfalls, boost client satisfaction, and help to
make your contractor a valued, long-term extension of your team.
Source: Free Guest Posting Articles from ArticlesFactory.com
About Article Author

Jim Cochran is the founder and President of Business Insurance Now, a company providing insurance for management consultants. Jim’s experience in the insurance industry allows him to understand the unique liabilities that management consultants are exposed to. Cover your consultancy with errors and omissions insurance for consultants.
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