Archaeology as a Business

[drpeterwardle]

Those nice people at the Excise have just sent me a guide to what the vatable overheads should be for various industries. These are the figures for the flat rate charge of Vat on turnover. The scheme is only applicable to turnovers of less than 150K.

If we are a cultural services or archive industry then the VAT on goods and services equates to 10% of turnover, general building or construction services 9%, professionals in the construction industry 5% or lawyers 4.5%.

My VAT works out at just about the right amount.

A ready reckoner for how much Vat would be saved/paid can be found at:
http://212.100.226.149/hmc/index.jsp

So what should we be compared with as far as charge out rates and Vat are concerned?

Peter

[the invisible man]

VOR, there is a parallel with your yoof creature in construction - the Project Manager. This has no similarity to its namesake in archaeology who equates to a builder's Contrcats Manager. Nobody knows what a Project Manager does (other than wear sharp suits and speak in tongues) but (s)he always slows down a project and adds to the costs.

Contrary to popular belief, other than major government projects and local jobbing builders doing your kitchen extension, construction contracts do not run way over time/budget. The contractor works to a set of contract documents - usually drawings, specifications and bills, and to a set programme with a date for completion. If the project goes over the contract sum, there will be a reason for this, most likely an inadeqacy in the contract documents (or client added extras).

Obviously on the other thread I did not mean to suggest that archaeology is priced by the post hole! An intriguing idea... I have assumed that it is priced against a brief or specification setting out a schedule of work in sufficient detail for it to be quantifiable, implemented and monitored, (and) to form the basis for a measurable standard. (IFA Stds and Gdnce for arch exc 3.2.3)

Do you not then submit a lump sum tender against those parameters? Surely there must be a breakdown to permit an "extras" or indeed omissions to be priced fairly/

Sorry to be dim but I am not a pro, as you will have gathered.

[the invisible man]

drpeterwardle - surely all hats are OVERHEADS?????

Actually if you were on a building site the contractor is of course obliged to provide all visitors with a hard hat, and/or to require all subcontractors (presumably including archaeologists) to provide THEIR staff and visitors with hard hats etc.

If the tax man insists you are adverting, ask for the hat back like everyone else does, or take your name off it!

[drpeterwardle]

Briefs and Specs.
snip "I have assumed that it is priced against a brief or specification setting out a schedule of work in sufficient detail for it to be quantifiable, implemented and monitored, (and) to form the basis for a measurable standard. (IFA Stds and Gdnce for arch exc 3.2.3)"

The reality is actually very different and difficult to apply. If it was possible to predict how many post holes and other things are going to be present life would be much easier. Some digging teams simply refuse to give a breakdown of their costs.

Hard Hats
actually technically when I visit a site as a member of the professional team I am neither sub-contractor nor visitor. Hats are easy to provide boots are not especially for smaller shoe sizes are not

In terms of tax gifts are frowned upon and purchasers do not like accepting them except of Christmas. That reminds me of another overhead - gifts and Christmas cards for clients. I spend about ?100 on this. It will soon be time to get the cards printed.

To ask a client for a ?4 hat back would be regarded as cheeky.

Percentage Consultancy Fees
If you are a sub contractor then there will be an uplift on the amount that is charged commonly a percentage. If therefore perfectly possible for a construction contractor to charge an uplift on a consultants charge which includes an uplift of the archaeological consultants fee which includes an up lift of the fieldwork teams fee. This is industry standard.

Peter

[the invisible man]

With respect Peter, if you enter a building site, with the permission of the contractor, you are a visitor, whoever you are. Even the architect and the client (the "Employer") are visitors and require the contractor's permission to enter. Naturally it is extremely rare for such permission to be refused!

Visitors including clients and consultants are loaned hard hats by the contractor and give them back before they leave, it is not cheeky and is the norm. Most professionals will of course have their own hats and boots anyway.

So are you suggesting that units submit their tenders on a scrap of paper with a single figure written on it? I'm beginning to think that a lot could be learned from looking at the contruction industry process!

[peter_derby]

The tendering process and production of WSI/ proposals is in itself an overhead - or management cost if you like. You are at your place of work putting together detailed documentation in order to 'possibly' get the work. You are not being paid 'project time'to do this. The staff out in the field or working on post ex are on project time. Those involved in the production of proposals in response to briefs by planning archaeologists or specifications from a consultant do so as an overhead.

The tricky part is working out what resources each job requires - this differs not one iota whether it has come through planning via a potential client or whether a consultant is involved. At the end of the day you are at the mercy of whoever you are in competition with

[drpeterwardle]

Single figure bids are very common and charging for the WSI is standard practice in some areas. I are not suggesting these are good/bad practices just what is actually done.

The tricky bit is the bid on a tender competition and winning. This is not neccessarily being the cheapest (it usually is on one job I won the contract when we were three times the price of the lowest bid and it was a big contract.) This is a big overhead if you are not winning a high proportion of the bids.

I can never decide if it is better to ask a small number of people to bid or ask everybody who is able to do the job.

Peter







Peter

[peter_derby]

I think again it depends on the type of organisations who are tendering. It is true price does not always win - but generaly it does. In fact in my experience producing WSI for a consultant should (not always) mean that price is not necessarily as important as the quality of your WSI. When you work straight for a developer you will be at the mercy of price/ timetabling

What irks me is putting proposals together in competition with the 'one man bands' - whos staff will be cash in hand - nudge nudge say no more etc - no paid holidays or sick etc. Here overheads are minimal and it really isnt a level playing field

[the invisible man]

This is one of the points I was driving at before I got obsessed with hard hats. To combine the point with the one made by Dr Pete about who should be invited to tender, some basic information on prospective bidders should be gathered in order to compile a tender list. This would include number of employees and so on, and for larger projects even a D and B check. I presume that this is done? Thus one person bands can be omited from the tender list - if indeed unsuitable for that particular job of course.

I am pleased to learn that lump sum tenders are normal. One used to such procedures would presume that those whos tender is of interest (usually the lowest, maybe the lowest 2 if close) are invited to submit their breakdown (priced bills in construction). Again this acts as a back stop against unsuitable firms, and a check against arithmetical errors or unsafe tenders - if they've underpriced it or otherwise cocked up the tender they won't do the job properly.

Yes preparation of tenders is an overhead, which is why the tender list should be of a reasonable length - no point in wasting a lot of people's time and money. Minimum of 3 and no more than 6, I suggest.

There, and I didn't mention hard hats once. Well, only once but I think I got away with it.

[BAJR Host]

After spending gays putting together complex tenders and WSIs I wondered how to include these costs into the process (even considering charging for the production of tenders - as how many tenders are produced that you know you will not get... no matter what!) In the end I just bit the bullet. However after having WSI and tender documents unread apart from the last page... I really did consider putting out a documnet with 25 blank pages a pretty front cover and a large 48pt font total cost covering the last page.