In temporary assignments, a package offer may sometimes be an interesting and more efficient alternative for the employer.
Package Offer
A package offer essentially means:
Based on careful analysis of the requirements,
setting a lower price for the entire assignment to be paid altogether in advance,
rather than a monthly or hourly rate.
You expect the work to be done optimally and leave the worry about the details to the expert.
Advantages of a package offer:
- For you:
-
The overall cost will be reduced (e.g. by CHF 10000.- or more)
-
A possibility to get the work accomplished earlier.
-
Time management becomes the contractor's worry, not the employer's.
The employer worry less about hours spent each day and concentrates on work accomplished.
- For me: After the first month including analysis,
I get the entire payment of the rest in advance by the end of the second month.
Example
You have a project for which you have estimated and planned six months with a budget of
CHF 72000.-/6 = 12000.- per month.
My proposal
Within the first month, I perform careful analysis of the requirements and
define together with you, the employer, the targets to achieve.
First month is paid 12000 as initially agreed.
Then I give you a package proposal of 50000.- for
the five remaining months, instead of your planned 60000.- [72000 (original) - 12000(1st month)
- 10000(reduction)=50000]
You can accept or reject this proposal, of course, but if you accept, you
agree to pay the entire proposed package in advance by the end of the second month.
Remember, this agreement takes place within the first month (which is paid
normal), to give ample chance for both sides to cover the requirements.
Also included in the agreement whether finishing the necessary tasks may be achieved sooner than planned.
Concretely, if all the requirements are satisfied after four months, for instance,
the contractor is allowed to terminate his service and leave.
But on the other hand, if so agreed, if more time appears to be needed within the same predefined requirements,
no extra payment is added.
This kind of offer is particularly interesting for mission critical assignments with tight budget and time.
The project ends up costing less than predicted and probably even finished earlier.
This gives an additional possibility to make improvements or adjustments as necessary.
Any further improvements or adjustments may then either be discussed separately, if significant work is required,
or just carried out within the given time limit in case of minor impact.
Why Package Offer?
Experience shows that a lot of stress is caused both to the employer and the contractor in following hourly rates.
This is particularly true when some days require more hours than usual.
- For the employer, because more hours mean more pressure on the budget.
- For the contractor, because this pressure causes extra stress that reduces efficiency.
Therefore, agreeing on a package means more peace of mind for both sides.
The agreement is written and signed by both, within the first month.
In case of any unexpected changes to the requirements during the following months (some requirements abandoned, or some new added),
the two sides meet and agree on how much this change impact the agreement, and if necessary, make an adjustment to it.