All-Inclusive Contract Recommendations

All-Inclusive Contract Recommendations
0

#1

When I work as a consultant, I generally do an hourly plus expenses negotiation but I have a potential contract that wants to do an all-inclusive rate that is about $30 to $40 more than I would usually bill to cover the travel expenses. I’d prefer not to disclose geographic locations but my origination and ending point are both in the US and I need to fly. The destination city has fairly reasonable public transportation from the airport to my hotel and the hotel is walking distance from the client site.

I’ve never done it, but I have some general ideas. I’d like to know which of my ideas are correct and what additional ideas people may have:

  1. When my expenses are being reimbursed, I max out the daily limit and enjoy myself, but given each dollar of food is 50 cents less money in my pocket (after taxes), I am planning to be frugal in my eating choices, to include packing some of my food with me for the week such as canned salmon, almonds, and possibly a few days worth of salads with some ice packs to keep cool on the plane.

  2. Rather than itemize my meal expenses at the end of the year against the 1099ed income, I will use the Per Diem rate for food, which if I am eating frugally, would be double or triple what I actually pay for food. Of course, meals are only half deductible off taxes, but I get to deduct the artificially high per diem meals rate, and it’s fully legal and also a heck of a lot simpler.

  3. The hotel I am selecting is based on geographic location to the client but seems very reasonably priced for the area. I might be able to negotiate a weekly rate that is cheaper than daily, but perhaps suboptimal since I only need to be on-site for 3.5 days a week (40 hours)

  4. I can work Mon through Thursday at 11am, or Tuesday through Friday (11am) and switch at my discretion. I am considering as a cost-saving measure to do Tues -> Fri, stay in that city over the weekend, Mon -> Thurs, fly home. And then repeat - so I get to be home Thurs night -> Mon afternoon every other week. The calculation here is whether or not round trip airfare is more or less expensive than 2 nights in the hotel. Because doing this stacking technique will save me a round trip flight at the cost of 2 additional hotel nights. It does seem like this is cheaper and also saves me the headache of flying twice, with the benefit of exploring this city. But I’m also home less.

  5. It appears that I need to use two different airlines to make this work. Airline A has direct outbound flights at suitable times, whereas Airline B has direct reverse flights at the proper times. So I won’t be able to max out reward status with either. Also, most airliners have gone to ticket price-based rewards, and I’m going to get the absolute cheapest ticket since it comes out of my pocket.

  6. The client has stated remote work should be possible after the first month on-site. It was unclear what percentage that would be, but based on vague comments and also experience working with similar clients in similar roles, It may mean that I only fly out 2 weeks a month, or possibly 3 weeks. It may also mean the weeks I am on-site, I only have to work 2.5 days on site and can go home a day early. For example, Fly out Monday, work Tuesday through Thursday at 11am. Fly home Thursday. Work remote from home on Friday. That saves me one night of a hotel.

  7. As always, this is an opportunity to get new reward credit card signup bonuses using legitimate, organic spend. I may sign up with one of the premium cards to get airline credits and possibly lounge access, depending on my research of the airports and which lounges they have.

  8. I might also be able to min/max things a bit by switching loyalties as needed to maximize special promotions. Such as Marriott MegaBonus. May not be the closest hotel, and may require me walking a few more blocks, but may be worth meeting the criteria of saying 2 nights to get free X points or whatever. I’ll have to run the numbers. This benefit is a unique one because generally, the client has a preferred hotel you need to stay at, but since it’s all-expenses, I can choose as desired since the only person that ever sees the receipts is me and the IRS if I get audited.

Curious to hear comments on my ideas and if anyone has any others.


#2

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#3

Per diem is definitely the way to go as the frugal consultant. Full expenses work better for living it up on the client dime.


#4

If you’re status-agnostic you could save a ton by doing opaque bookings like Priceline. Not sure I’d want to live like that tho.

Otherwise, you could easily make top-tier everywhere with that many stays.

If it’s 4 hotel nights weekly, I’d also consider using the Citi Prestige “fourth night free” benefit. Decent rate reduction and works with elite benefits. Also, if your client is a mega Corp, they’ll probably have a Corp rate that’s within $20 of Priceline/govt. rate.

Also, depending on the city, you might just get a cheap apartment or Airbnb.


#5

As for air, you would likely make it on segments rather than spend/distance- especially if you’re willing to force extra connections in for the same price.

You can get status-lite fairly easily, either from a challenge/match from something you have already, from an airline co-brand card, or other ways. For instance, Marriott Plat gets you UA silver and DL pseudo-medallion.

See the manufacturing status thread here for more info.


#6

Ultimately, it will come down to your quality of life and whether you want to optimize money or points or convenience,


#7

I’ve done both types for long periods of time each. Full expense contracts get billed to what is acceptable to the client per the contract’s terms and you obviously go for points/convince and life-style.

I’ve had a few contracts that the client didn’t want to see the expenses (travel, meals, rental cars) show on the invoicing. My experience is because they don’t want people on their team now how well you are living on their dime, but at the same time have no problem paying 30% in hourly rate.

I’m a frugal person obviously. When I’m on a per Diem contract here are my tips.

  1. Look for corporate housing at a monthly rate, many times it can rival 4-night a week hotels. You have the loss of points and loyalty, but you gain convenience (clothes, toiletries and a kitchen).

  2. Food – I don’t cook. I’ve lived on Wegmans $5-$9 meals (fresh made). Pro-tip – go daily, make friends with the counter ladies. Before you know it you receiving double portions of everything. And they are good enough for two meals each. Same thing at Whole Foods but a little more expensive. My second stand-by is healthy mom & pop janpanese. Usually under $10 for a complete dinner depending on city.

  3. Flights - If you do the corporate apartment you have great flexibility on travel days.

Good luck.