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Re: Is reimbursible contract an open cheque?

Active Member
Majid K Member Since: Sep 11, 2019
1 of 22
We'd awarded a contract to 1 engineering company after accepting their offer of 190 hours + 100 risk hours to complete a job. A company informed that 100 risk hours are required to safeguard their interest in the event more hours are required to finish the work. The company also refused to work on fixed term basis.
Until this day, the company has charged us between 290-300 hours (amounting to some 10000$) and work completion is nowhere close to sight.
I asked them to stop further booking and honor their commitment to accomplish all pending work. In return they came back informing they can't work for 'free'.
They are asking for 100 more hours but at the same time are also informing that few of the tasks (which is critical to successful completion of this project) are excluded from these 100 hours and it can't be ascertained at this stage as to how many hours it'd take to complete those tasks. In principle, the company is asking for an open cheque.
All this has led to delays in project delivery which inturn has forced us to keep deferring the project launch date.

Would Upwork be able to intervene and help us on this matter?
Community Guru
Preston H Member Since: Nov 24, 2014
2 of 22

re: "Would Upwork be able to intervene and help us on this matter?"

 

Why do you need Upwork to intervene?

 

If you want to grant them an "open cheque", then YOU ARE ALLOWED to do that.

 

If you do NOT want to grant them an "open cheque," then you DO NOT NEED to do that.

 

You may close the contract at any time.

You are under no obligation to continue working with these people.

Active Member
Majid K Member Since: Sep 11, 2019
3 of 22
Thank you for your reply.
The contract was for developing a physical prototype. All the agreed 190 hours + 100 risk hours (amounting to 10000)$ have been spent until now but even the design is not yet finalised.
If I close the contract now then all the spent time & money would be lost and I wouldn't have the prototype either.
would it make sense to close the contract in such a scenario? Or is it that i'm missing out on something that you are trying to convey?
Community Guru
Preston H Member Since: Nov 24, 2014
4 of 22

Majid:

 

I'm not sure what you mean when you say that all the time and money would be lost.

 

ALL OF THE WORK that has been done thus far belongs to you.


Nothing is "lost."

 

If this is an hourly contract, then it means that every bit of work that was done under the contract belongs to you. Regardless of what happens in the future, all past work that you paid for already belongs to you.

 

I'm simply pointing out that clients have ZERO RESTRICTIONS when it comes to closing a contract. Clients may literally end a contract at any time.

 

You are free to contnue working with the current freelancer or agency for as long as you want to.

 

Or you may bring in other freelancers to work on the project alongside the current team.

 

Or you may stop working with the current team and continue working only with other freelancers.

 

If you do not want to continue working with the current freelancer or agency or group of freelancers, then it would be your choice to hire other people to continue working with what has already been developed.

 

This is all up to you. What exactly is it that you want Upwork to do? Upwork is not a party to this contract.

Active Member
Majid K Member Since: Sep 11, 2019
5 of 22
Thanks again for the quick response.

If the company is not honoring it's commitment of executing the project within agreed budget/ timeframe then in my opinion they are not complying to Upwork's T&Cs.

In such a scenario, can't upwork intervene and mediate a solution out between both parties?

Engaging a new contractor at this intermediate project stage will not be the best option as it'd lead to further time wastage.
Community Guru
Preston H Member Since: Nov 24, 2014
6 of 22

re: "If the company is not honoring it's commitment of executing the project within agreed budget/ timeframe then in my opinion they are not complying to Upwork's T&Cs."

 

I do not doubt that you feel that way.

 

Upwork itself may disagree.

 

If you are using an hourly contract, then you are paying for the freelancer's time. You are not paying for a specific deliverable.

 

re: "In such a scenario, can't upwork intervene and mediate a solution out between both parties?"

 

You can ask.

 

But asking Upwork to intervene in the development of your software system is not the key to success.

 

Upwork is not a software development company.

Upwork's purpose is to help clients find freelancers to work on their projects.

 

Upwork will not be able to force the freelancers you hired to finish the project.

 

BUT: It IS POSSIBLE to contact Upwork Customer Support and ask them to help you communicate with the freelancer. Upwork employees DO INDEED help mediate between clients and freelancers.

 

is this the ideal solution to your situation?

 

No, not really.

 

Your problem is that you do not have a good, independent project manager (PM) working for you.

 

You allowed the lead dev on the freelancer team that you hired to serve as the PM.


That was a mistake.

 

If you want to move forward successfully on this project, you need to have a good, independent PM on your side.

 

Upwork WILL NOT SERVE AS YOUR project manager.

Community Guru
Preston H Member Since: Nov 24, 2014
7 of 22

Only about 20% of lead devs can serve effectively as PM.

 

Is YOUR lead dev in that 20%?


Or is your lead dev one of the 80% who can NOT?

 

(I already know the answer to this question.)

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Community Guru
Petra R Member Since: Aug 3, 2011
BEST ANSWER
8 of 22

You say you hired a company on an hourly contract...

That is not actually possible. You can only have hired one or several freelancers on hourly contracts because companies are not allowed to share hourly contracts between several people, it is a terms of service violation even with the client's knowledge and consent.

 

Take a look at the work diaries. Are all the hours tracked with the tracker (NOT manual time.)

 

Did you officially hire one person only or did you have several people hired each with their own contracts? How many people, to your knowledge, worked on your project?

Community Guru
Jennifer M Member Since: May 17, 2015
9 of 22

To add to what Petra said, if they are using manual time and you decide to continue with them, I would start requiring them to use Tracker. If no tracker, then require them to fill out some kind of thing that explains what the time is for along with some kind of proof of progress that matches their claim. I don't blame you for getting angry at such a terrible estimate. This is why I always over estimate, although this kinda ticks clients off sometimes too because they think there is no way it should take me that long. Usually, they are right but I like to CMA. It could be they are running into issues that they aren't telling you.

Active Member
Majid K Member Since: Sep 11, 2019
10 of 22

Hello Jennifer,

Yes i agree with your approach. It's possible that manhour estimation during project bidding can go wrong. That's the very reason the company had considered 100 'underestimation risk' hours while bidding and we had even agreed to it. The issue now is that the regular hours as well as the underestimation risk hours have been exhausted and we are nowhere close to completion. And moreover the company is still not willing to disclose how many more hours would be required. Hence my question (is reimbursable contract an open cheque?).

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