Long story short, I have an offer for a technical contract. The company has been courting me for years and I finally decided to call them up and see if they had anything for me. They did, but because of some internal changes, I now have to go through one of their "preferred vendors" as they don't take on contractors directly.

This was my lead and the position was created for me. There was no recruiting effort on behalf of the staffing company and there was not an existing position that they could attempt to fill with anyone else.

The staffing company hasn't come back yet with firm numbers, but I suspect they'll be attempting to take between $2,000 and $2,500 per month ($24,000-$30,000 per year) with a single monthly invoice and net 45 payment terms, so I would not see my first paycheck until 2 1/2 months after I start and the staffing company would not have to float any money to me. This seems a bit excessive to me. I have a list of staffing companies that I can go through and am trying to get others to move, but the first one has been very aggressive in trying to secure it with the end customer. I would think that $1,000/mo should be plenty for this sort of thing.

There is some value in that the firm went through the client's vetting process to become a vendor and there is some effort involved in setting up the contract, but for me to restrict myself through a staffing contract and to be taxed that much of what I'm getting paid (corp-to-corp) seems like the standard FSA "because you can afford it" argument.

Sounds very excessive considering you created and found the position.
Find out who is in charge at the staffing company and deal with them.  Negotiate a lower rate.

I know nothing of these things, but that seems like a lot.

Their cookie cutter model isn't designed for you.  If no provision for you is made, you will end up getting the short end of the stick.

Other than taking the invoice and turning it into a check to you what is this contract company doing to earn their cut?

I'm an independent engineering consultant.

Anymore than 15% of the hourly rate for invoicing and liability insurance is excessive.  If they are providing access to group insurance, are handing W2 employer taxes, or provide some other benefits, then it will be more.

I am a corporation and liability insurance is required on my behalf, so all they are doing is forwarding an invoice and cutting a check. No W2, no benefits, liability insurance or anything would be coming from them.

Do you know how often they get paid, invoice, some firms bill biweekly some monthly.  For that kind of money/overhead they should be able to float you biweekly or something significantly less then net 45.  

Depends on the customer, turn it to a retainer !  Have them pay you a retainer up front and then every month they should reup the retainer.

I'd give those fuckers maybe 5% of invoice value.  They are adding no value.  Now, what you may find is that they have a monopoly at the company you're looking at for invoice.  Some companies are too lazy to sign contacts with many different vendors, and subsequently force everyone to go through one billing mechanism.  In these environments, you'll get hosed.

Yeah, that seems... excessive.

Add $24k to your bill. Problem solved.

There's no monopoly, except that some of the preferred vendors refuse to allow people to be hired as employees by the end customer, which would be extra-fucked in my case.

I even have a list of vendors and have been talking to a number of them. I think it's a bit fucked that they're not offering to do whatever it takes to make me happy since it's a high level position that will likely have me making hiring recommendations.

Could you jump through the hoops to become a direct vendor and then take on your own clients without it being a conflict of interest? Made lemonade out of lemons.

I'm not clear why you don't receive anything for 2.5 months.  Usually a contract company takes a percentage, where you get something like $10/hr and they bill at $12/hr





Do not sign until you are happy with the agreement.

I've never dealt with a temp agency or a staffing agency. If they are acting as a broker they would have to indemnify me before I'd go to work for them. and therein lies their only added value...especially if I had created the position.

The value is not for you but the hiring company. If you are on the direct contract job for more than 365 calendar days one could argue that you are de facto full time employee and eligible for full benefits through the company. By signing through a temp agency you cannot be considered a full time employee of the company.

Also you should be paid weekly even if the agency doesn't get paid for 45 days. As a direct contractor you would turn in an invoice and be paid n45. As a employee of the agency you would be part of payroll from the agency.