Managed Sourcing

Providing and managing the over sourcing of the employees and services to another company on fix set of rates for hourly / monthly/ or yearly. Considered as Manage Sourcing. Now a days business owners prefer to work with independent contract employee rather than hiring them.

Benefits to hiring independent contractors include:

Flexibility in the working hours as per your requirement, and making the payment by the project.

No need of creating a new department in your company for non-essential tasks, like IT and maintenance, as you can simply outsource it.

Ease of termination without any paperwork and potential problems that usually comes with firing an employee.

Not having to pay taxes in terms of taxes, benefits, and agreements. Although you must have a contract, which still required the paperwork.

Less hiring paperwork, fewer reports, and payments to the Agency

T & M (Time and Material)

When a company employee is hired on Hourly basis then that will be called T&M contract. The Employee is paid a set of rate for every hour that employee worked. In T & M contracts include predetermined unit rates for labor and materials agreed by both party. When it’s not possible to calculate exact total cost estimation of the project, schedule undefined or when update to be made in middle of the project.

Following items is negotiated during Time and Material contracts:

  • The labor rate specifies a fixed rate for all labor, including administrative personnel.
  • A Time and Materials Not to Exceed contract includes a cap that represents the maximum amount that can be charged by the contractor.
  • T&M contracts can set a maximum number of labor hours, which states that in case of contractor exceeding a specified amount of labor hours, the additional hours would not be billed to the other party.

When to use T&M contract?

Project scope not fully known

Flexibility to modify the scope




As the word sounds the employee is hired at a fix rate permanently that contract will know as Permanent contract. The permanent contract can be also known as a fixed price contract. The employee will be paid fix amount of money it will be monthly of early. The Employee is paid by the company. The fixed rate contract includes the full price of the project. When it’s possible to calculate the exact total cost estimation of the project the permanent contract is applicable.

When Permanent contracts usually provide certain benefit. The permanent contract allows for better budgeting. Because the buyer has the knowledge exactly how much the product or service will cost, the buyer can specifically plan for that in their budget. And sometimes, the market drives the cost of a particular product or service up. When this happens, the buyer benefits by having a permanent contract.

Due to advance agreement upon a fixed rate, there is a certain degree of limitation over owner’s exposure as well as accountability at the time construction.

The most important benefit is that the owner is not liable for any over expenditure as the contractor has already accepted a fixed price for the construction.

As far as the cost is concerned, it is much easier to get a construction loan with a Lump sum contract as it provides a high degree of certainty.

It is comparatively easier to supervise and manage Lump sum contracts.

Unlike other arrangements, the payments are made after fixed durations and that too based on the amount of work completed.

When to use Permanent contract?

Limited budget
or fixed budget

Small projects with
limited scope

Clear requirements
and deadlines