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We are a small transportation company. we are going to bid

hello. we are a small...
hello. we are a small transportation company. we are going to bid on a city courier contract. we have been approached by another courier company who missed out on the bid meeting. they want to be a sub-contractor for us, where they do all the work and we get a percentage. what are the pros/cons to doing this. we have always worked alone, but would love for this to happen and we not have to take on all the responsibilities of vehicles, employees etc.
JA: Was this discussed with a manager, HR, or an attorney?
Customer: I am the manager/HR. We were planning on getting with an attorney, but we need to make a discussion quickly.
JA: Is the employment "at will," union, full time, or part time?
Customer: full time courier service, picking up packages from city hall to various locations
JA: Anything else you want the lawyer to know before I connect you?
Customer: we will be drawing up a contract between us and this other company. the other company is larger and have all of the bonding and insurance requirements. we want to make sure that we don't get screwed any kind of way and if we are allowed to sub-contract this type of contract from the city. the bid does not specify anything saying that you cannot. this company already has contracts with the city, but again the bid stated you had to attend the pre-bid meeting and they missed out on the meeting. they also have contract writers on board who would probably have a better chance of securing the contract for us. what do we need to look out for?
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Answered in 8 minutes by:
8/7/2017
Legal Eagle
Legal Eagle, Lawyer
Category: Legal
Satisfied Customers: 6,550
Experience: Licensed to practice before state and federal court
Verified

Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating so all that means is that you can count on me to help today. I think what you are doing is probably a very smart thing. I imagine that this larger company is kicking themselves for missing out on this opportunity to get a government contract. As I'm sure you know, getting a government contract is a very lucrative thing because governments almost always pay their bills compared to private people. Being a small courier company, I can imagine that you have dealt with similar situations where people did not pay their bills at all or pay their bills on time. As an attorney, I know that I can speak for myself when I say that sometimes collecting payments can be kind of a challenge.

With that said there are a couple of things that I want you to be aware of in contracting with this other company. First, I think you need to make absolute sure that the city is okay with you subcontracting for these particular services. Remember, the city relies on taxpayer money and if they are unaware of a subcontract, and it comes out later, you can probably forget about securing any other contracts in the future. Therefore, double-check to make sure that the city allows this for this particular bid.

The next thing that you want to make sure is that you lay out the terms very clearly of what the subcontracting deal is. what I mean by that of course is that make sure that you have specifically identified how much the subcontractor will be paid, help them understand that this sub contract is contingent on you receiving the bid, and then also make sure that their insurance and any licenses they need a rough day

The other thing which I would want you to be sure of is that you need to make sure that you have a non-compete clause in your contract. What this means is that the subcontractor should be prohibited from competing against you for any future city bids within a period of time. The reason that I'm saying this is because the subcontractor could do things that may make you look bad in front of the city. Therefore, when another bid comes up the subcontractor could say, “Well, [your company] did a terrible job so hire us.” If you have a non-compete Clause, it will allow you to make sure that you are securing city bids and it'll help ensure that the subcontractor is not doing anything to undercut you later on

Although I provided an initial answer, it’s important that you are 100% satisfied. If you feel I have done so, please rate me 5 stars and let me know if you have any follow up questions. As a side note, you can also click here in the future to request me individually.

Legal Eagle
Legal Eagle, Lawyer
Category: Legal
Satisfied Customers: 6,550
Experience: Licensed to practice before state and federal court
Verified
Legal Eagle and 87 other Legal Specialists are ready to help you
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Customer reply replied 4 months ago
Ok great. Am I allowed to ask you any more questions or do I have to go back and submit another question in general, my first time doing this.

You can ask more questions here. I have to step away momentarily, but feel free!

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Customer reply replied 4 months ago
Ok, the bid has to be in this Friday. I am to give an answer tomorrow, Monday. They are first going to draw up a contract, which I will have them add the non-compete clause, only after I get with the city. I wanted to know how the insurance part will work, if they are the ones that have the required insurance and we don't. would we supply the insurance to the city in the sub-contractors name, or would we need to secure our own insurance as well. this is another reason why we really did not want to bid on this contract to incur more insurance costs. also how would it work as far as employees, would their employees be able to represent the sub-contracting company or our company?

Good question. Generally, you can supply the insurance under the sub-contractor's name, but you'll have to be a named insured, so you'll need to be an additional insured on the sub's policy. Also, the employees would represent the sub, not your company. This will make a difference because you won't be on the hook for liability, unemployment insurance, and worker's comp.

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Customer reply replied 4 months ago
Thank you so much. This service is great
Customer reply replied 4 months ago
This will be a great way to have a lawyer on retainer and convinces me to continue the service.

It's no problem and best of luck!

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Customer reply replied 4 months ago
I'm sure there will be more questions. I noticed the last few responses to more time. Do I need to start a new thread to get your answers quicker? Want to stick with you so I don't have to start from scratch with someone new.

I certainly appreciate it. One of the things that you could do is that you can post a new question directly to me. If you save me as a favorite or if you click on my link, click here, then you can request me directly and I usually take maybe at most one to two hours to respond to people during the day.

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Customer reply replied 4 months ago
Hello. I have an agreement between us and the sub that I need looking over. We have gotten confirmation from the city, and added the non -conpete clause. Can I upload to you and how soon can I get a response?

Hi, did someone review your agreement?

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Customer reply replied 4 months ago
they he said everything looked good but I didn't believe. After googling some terms that I wasn't comfortable with, they decided to back out of the deal. So we'll move forward with the contract alone.

I'm sorry to hear about that. What specific terms were giving you trouble?

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Customer reply replied 4 months ago
The main one was termination. If there was any types of crimes committed, the other party had 30 days to cure. I wanted immediate term.

Do you think that listing specific crimes that would lead to immediate termination would be better? Then minor crimes have a 30 day window would work?

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Customer reply replied 4 months ago
Well they listed some,I guess I could have had them to add minors and that would work. I should have asked you about it. The guy drawing up the agreement didn't seem to know any more than me. I believe when he kept going to the owner with our requests, maybe he didn't present it correctly. They also wanted to give us our 25% in net after their expenses. Well we couldn't agree to that without knowing how much that would be. We needed to know out of the full bid amount how much would the expenses be and by the bid being due tomorrow, I guess the owner thought we were asking to much.

I can understand. Drafting these agreements is tough, which is why I had to pass on a revision because it requires a lot of effort to make sure they are done right. I think that you are the right path though. I bet if you tell a local lawyer about your deal, they'd jump at the chance to be a part of it.

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Customer reply replied 4 months ago
Thank you again I'm sure I'll be in touch with other issues.

It's my pleasure.

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Legal Eagle
Legal Eagle
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