Ideas to keep quotes for consulting service accurate on not inflated

Ed Panek

VP QA RA Small Med Dev Company FDA and ISO13485:16
Trusted
#1
Our consultants recently quoted us for work and then the invoice came in much higher. This has happened multiple times and I am trying to figure out a way in our contract to stop that from happening, or if it happens, to alert us in real time its happening. Anyone have any tricks or ideas to add to our agreements?
 

Marc

Captain Nice
Staff member
Admin
#2
We may be better able to answer if you give us some specifics, such as what some of the jobs were that came in over the quoted/expected price and by how much (say, as a % of expected/quoted cost). Were they 10% over expectations? 20%?

What did the contract say? I.e.: What did you agree to? How specific were you in defining deliverables?

Consulting can be a problem because of various issues. I used to give wide quotes (low and high). Some companies simply did not understand why and I understand why they didn't. As I used to explain: "The end cost will depend upon the amount of work your employees take on (and actually do), as many times a company agrees to do specific tasks and then they simply do not." This is just one of the factors that makes it difficult to give a Firm Fixed Price Quote. Things like "are your expectations that I do everything, or do you expect to be involved in the process?"

Another example: I have a large client. I spent a week at their facility and came up with a project plan complete with responsibilities, etc. I left for 2 weeks so that they could work on their part of the plan for that time. When I arrived back they had literally done nothing. The plant manger and I had a shall we say interesting discussion. We did come up with a "revised" plan and a way to monitor progress but it wasn't easy.

or if it happens, to alert us in real time its happening.
I used to do this, but not always in "real time" because with many of my clients I would spend 2 days a week to a whole week and then be gone for sometimes 2 weeks as they worked on tasks, so I might not get feedback about actual progress in a timely manner if I wasn't physically there.

Another interesting aspect to this thread: Consultants - Please take a minute and tell us your thoughts from your end. What are the challenges to quoting a job, for example.
 

Marcelo Antunes

Addicted to standards
Staff member
Admin
#3
Establish a fixed amount of time per hour and and additional time that can be added after agreement on both parts. Or ask for a fixed project fee. Anything besides a fixed one should be agreed upon the parties before work is done.

In fact, I've been doing this since I begun consulting more than 10 years ago, which seems to be a good practice that helps keep expectations for both parties. If your consultant is deceiving you like this, you should probably change the consultant.
 

Marc

Captain Nice
Staff member
Admin
#4
Something else I remembered - I would do a free, no obligation assessment visit. During the visit I would assess the company's real situation and do a gap analysis from which I'd make a project plan. With larger companies this could easily take a week. With that information I gave a quote for the project (usually a firm, fixed price quote). In the quote I would make it clear that any responsibilities they failed to follow through on in a timely manner could extend the project completion time.
 

Marcelo Antunes

Addicted to standards
Staff member
Admin
#5
Something else I remembered - I would do a free, no obligation assessment visit. During the visit I would assess the company's real situation and do a gap analysis from which I'd make a project plan. With larger companies this could easily take a week. With that information I gave a quote for the project (usually a firm, fixed price quote). In the quote I would make it clear that any responsibilities they failed to follow through on in a timely manner could extend the project completion time.
Yes, I do that too. In fact I will visit a potential client today to determine the scope of the work and agree it with him before sending the proposal. It's another good practice that helps a lot to make expectations clear.
 

Ed Panek

VP QA RA Small Med Dev Company FDA and ISO13485:16
Trusted
#6
Thanks. Im going to ask for a few items in our next quoted work.

  • A detailed quote revealing the exact work to be done. Granular and well defined.
  • A requirement to contact us and obtain approval for each incremental charge above the quoted price.
  • A requirement that if they determine the overall finished price will exceed 10% of the original quote to obtain our approval.
  • A note that we are beholden to the IRS guidelines on reimbursable expenses and we cannot reimburse some expenses like staying at extravagant hotels (Ritz Carlton), eating $100 meals, etc. Our ISO auditor did this last time.
 

Marcelo Antunes

Addicted to standards
Staff member
Admin
#7
Thanks. Im going to ask for a few items in our next quoted work.
  • A note that we are beholden to the IRS guidelines on reimbursable expenses and we cannot reimburse some expenses like staying at extravagant hotels (Ritz Carlton), eating $100 meals, etc. Our ISO auditor did this last time.
This is more like common sense, but if the bad auditor does that, you surely must make it clear on the contract that he cannot do it.
 

John Broomfield

Staff member
Super Moderator
#8
Ed,

Stop buying an unknown number of days.

As the client define your objectives for your consulting project. Select consultants with the required competence to design and execute an effective service that will fulfill your objectives.

Invite them to bid lump sum (inclusive of expenses) on the service against their own designed service specification to which they will be held accountable.

Expect their service specification to specify your role as well as theirs for all the tasks necessary.

Evaluate the proposals and award your contract with the approved service spec attached; based on your confidence of success.

Monitor progress to ensure both parties are timely in fulfilling their responsibilities.

I’ve found this approach works very well with consultants who know their stuff.

John
 

Marc

Captain Nice
Staff member
Admin
#9
staying at extravagant hotels (Ritz Carlton), eating $100 meals, etc.
US$100 meals? Wow. I don't remember ever spending that much for a meal.

Ha! Now that I think about it

I always specified that the client paid airfare, rental car and lodging.

I flew coach and got cheap rental cars.

I would ask the client for their preferred hotel/motel (usually they had one or two which gave them a special rate).

I never charged for for meals or any other "misc." expenses.

If the client was within driving distance (taking into consideration I have always liked driving so up to 1000 miles or maybe a bit more was never a problem), I would drive (no travel costs or expenses - I ate those costs). Many times for clients within "driving distance" I would take an extra day or two and do a bit of sight seeing before I got there.

This method helped me a lot in doing quotes in a way that the client nor I had to deal with messy stuff like meals and trivialities.
 

Ed Panek

VP QA RA Small Med Dev Company FDA and ISO13485:16
Trusted
#10
Thanks! Yes we use an auditor that is contracted to our NB; not a direct employee of theirs. He is a bit cagey and old (which is fine but he is set in his ways). He stays at expensive hotels, is late usually, and finds things in our audits I consider to be irrelevant (Tells us if our QMS numbering system matched the standard this would go much faster. He also demanded to use anti-static mats in our R&D area when we stated in our FMEA there are no static points to our device at any time plus its R&D not production). He also t old a colleague of mine if she has a baby she should be at home and not in the office!

On the other hand the feeling is that he wants us to pass the audit so we deal with him.
 

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