What do you charge to not do any work, but instead sit around and wait, just in case?
August 4, 2009 1:19 PM   Subscribe

I have no idea what to charge to be "on call" for a year, just in CASE a computer has a problem.

I got a call this morning from some guy that works with a company that has a government contract with -- I'm guessing -- the Social Security Administration here in Baltimore. His company does IT for them. Well, they have a couple of Macs that they want someone on call for, and surprise surprise, his company wouldn't know how to spell "Mac" if you spotted them three letters.

I do ONLY Mac support and consulting, on kind of a "boutique" business -- I'm a sole proprietor, and I consider it a strength that small businesses always are dealing with me, the same person, and know they'll get me whenever they call, e-mail, or have me come out to their location. So I guess this guy found my company website on Google and called.

Basically, he wants to know what I'd charge to basically be on call, 24x7x365x4 (I don't know what the x4 is, but I'm assuming four business hour response time), for a one-year contract to cover these two Mac Pro machines their client has. Mind you, they don't need me to come out on a scheduled basis or anything like that; they just want to have someone to call for onsite support/repair in case something goes wrong.

I can do tech support, server work (on OS X Server), networking, and LIGHT hardware (e.g., memory upgrades, hard drive swaps, cloning/imaging). I don't do more hardcore hardware stuff, like logic board replacement, etc., much less do it AT the client site -- but I don't think many companies who DO do that kind of service can do it at the client site, either. (There's just a shitload of tools, workbench, etc. you have to have.)

Now, these are pretty new, high-end machines, and the odds of them having serious hardware problems inside of a year are pretty damn low. Still, say something comes up. Would I be OK by explaining to them that it's a high-level repair that HAS to be sent out, and then coordinating everything (pickup, drop-off at a repair facility, being sole point of contact with said repair facility, picking it up when it's done, and delivering it back to the client site)? All the while, I could give them a loaner machine (not necessarily as high spec, but functional) in the meantime.

I've never been asked for something like this, and I don't really know how these government deals work. Also, I'm really not sure HOW the hell to charge to a company that wants me on "retainer," though doesn't actually need me to even show up unless something goes wrong. Yet, the guy who asked me was looking for a quote, something along the lines of a monthly fee or whatever, even (apparently) if I go months without so much as a phone call or e-mail with these people.

But say something big happens and I have to coordinate repair, etc. Do I have to eat the cost, in light of the fact that I'm charging them a retainer? In other words, are we looking at more of an "insurance policy" model rather than a "service contract" model (wherein the latter actually entails regular onsite visits, etc. -- you know, something that's actually DONE, regularly)?

It kinda sounds too good to be true, but hey, it's the government. Working logically isn't their strong suit.

For anyone who's done this before, I'd love to hear whatever input you can offer. Better yet, some suggestions on what a good ballpark range is, too. These are two high-end Mac Pro machines, probably no more than a year old, pretty nicely souped up. FYI, I normally charge businesses $135 an hour for onsite support.
posted by CommonSense to Computers & Internet (20 answers total) 3 users marked this as a favorite
When I went back to school full-time, I was paid a retainer from my former employer to be on-call for their Mac IT support. The amount was pretty thin ($300ish/month, I think), but that's all it was: to keep me available (and, they were good friends, too, so I was comfortable with the amount). Having said that, it wasn't 24/7/365, so YMMV. They then paid me my hourly rate to go in and make things happy again.

But, keep in mind with their requirements, if you like beer, for instance, you now need to be on-call all the time, and can't be, you know, unavailable. My friend, who does 24/7/365 on-call IT for printers installed at a local (large) industrial site, gets $.15 an hour, I believe, but he's an employee, not a business owner.

If it were me, I'd quote them $1 an hour for being on call (so, you'd get $700ish/month for being available), and charge $135/hour when you get called in.
posted by liquado at 1:32 PM on August 4, 2009 [1 favorite]

Normally a retainer means that you get X hours of work per month for $Y per month, and you're agreeing not to take on so much work that the retaining client gets bumped.

Being on-call is something else. This means that, in theory, you never get to leave town, and are willing to be roused at 3:00 AM. It's possible the client doesn't have such stringent needs—you should clarify. This strikes me as the big sticking point. If I were in your place, I'd find a colleague I trusted who would be my fallback guy when I was out of town and write him into the agreement. The on-call aspect deserves a massive PITA surcharge. What's it worth to you to field 3:00 AM calls?
posted by adamrice at 1:41 PM on August 4, 2009

I'd also suggest building right into the contract that it'll be renegotiated after 3 or 6 months or whatnot. This gives you the ability to start cranking your rates upwards depending on exactly how being the sole point of contact 24x7 is affecting you. I've done that before, and it was very much not fun, and very much not something I'd be willing to do again barring much heftier compensation than you might think is fair at the start. Bear in mind that really doing the sole 24x7 thing responsibly means, among other things: you don't get to sleep through that phone call and just check your messages in the morning; any potential travel plans are crimped based on where you can have whatever connectivity you'll need, from planned vacations to short-notice weekend trips or whatnot; getting up for brief bits of tasks in the middle of the night is relatively easy enough when you're healthy, but become just terrific fun when you're, say, running a serious cold much less anything more annoying, etc.

So I'd say feel fine about bumping up your normal rate a touch; I also like the idea of charging a nominal buck that adds up for simple "available" time as well.
posted by Drastic at 1:44 PM on August 4, 2009

Response by poster: I do enjoy having a drink or two many days, and I do enjoy a relatively leisurely lifestyle (which often means I don't make nearly as much as I potentially could). And I do enjoy my sleep.

However . . . this is for two desktop machines -- they aren't servers, and they aren't mission-critical boxes. (Well, I'll have to get confirmation on the latter point.) It's a government agency; they're not going to have employees burning the midnight oil at 3:00 AM. If, hypothetically, something happens and I need to come in at that hour, I would imagine it would be extremely out of the ordinary, and not something that'll happen often. That being the case, sure, I wouldn't mind. If they do this weekly, that's another story altogether.

My judgment may be tainted right now by the fact that back in February, I lost a client that was responsible for about 90% of my income (really dumb, I know), so I'm REALLY getting desperate. The very THOUGHT of being able to suck in $700ish a month for doing -- well, hell, for doing anything -- is amazingly tempting to me.

Another question . . . say something has to go in for repair, and it's not covered under warranty. Do I bill them for that, or do I eat that charge as part of the understanding that I'm essentially an "insurance policy" or "warranty extension" for them?
posted by CommonSense at 1:49 PM on August 4, 2009

I would start out with at least $10,000 a year for 24/7 coverage. Include 10hrs/mo (non-rollover). I'd say negotiate from $1000+10hrs per month to start, with the $2K discount if they pay up front. Bump it up if you charge more than $100/hr bench rate.
posted by rhizome at 2:13 PM on August 4, 2009

Response by poster: OK, well, here goes nothing. Just shot the guy an e-mail back with these terms:

$1.15 per hour retainer fee (assuming 24x7 coverage, this is approximately 700 hours a month)
Includes two hours of onsite time per month, with no rollover option; travel time one way is billable (from the Canton area of Baltimore City)
+ $150.00 per hour for any additional onsite time, including travel time one way
Retainer fee is payable monthly (using the formula 365 x 24 / 12), or 5% discount if the entire year is paid up front
Option to renegotiate contract at the six-month mark

And gave the caveat that I have some questions that need clarification, which MAY change these numbers if the answers to said questions turn out to be radically different from my assumptions.

This basically works out to roughly the same as rhizome's suggestion, without the alarming $10k figure up front (but of course, if you do the math, it's a hair over $10k). Including 10 hours with that seemed like way too much to me.

I've been lowballing my rate for a few years now -- in this market, $135 is sort of on the low end, so I bumped it up to $150.

If it looks like I'm getting a little aggressive, I rationalize it like this: I have just ENOUGH qualms about my ability to pull of a 3:00 AM call, so if they pass on my offer, I figure hey, I probably just got saved from a world of hurt. And if they DO decide to take me up on it . . . man, what a bunch of morons. "Your tax dollars at work," eh?
posted by CommonSense at 2:29 PM on August 4, 2009

Response by poster: [FYI, I'm kinda exaggerating my slacker-ness. I'm actually a fairly upstanding, hard-working guy.]
posted by CommonSense at 2:31 PM on August 4, 2009

Make sure the contract states that they have to pay for any parts and off site services (such as sending out for a logic board replacement).

Depending on what you can get from them, and how badly you are going to need a new computer in the near future, you might want to purchase a machine that matches theirs, and get it running with a clone of one of their drives. That way, if there is a failure on their part that requires the computer to be sent out, you could either just put their drive into your computer, or copy their files from their drive onto your computer. They have a workable solution with no downtime, and when your contract is up with them, you have a new (to you) computer with very low hours on it.
posted by markblasco at 2:32 PM on August 4, 2009

What if you want to go on vacation? or go to your sister's wedding 6 states away? You'll need a mobile phone with internet access and tether-able for 100% internet access, and a laptop and backup. You need to know somebody who can theoretically cover for you. If you're in a plane on the tarmac in Chicago on your way to Uncle Guido's funeral, you aren't able to provide support.

10 years ago, I got 200/week for being on call every 4 weeks, and the mobile phone and laptop were provided for me.

You can dramatically lower the hardware angst by only taking on machines that are under warranty, and disclaiming coverage if there's abuse. You'll need a really good contract. If they have a leaky roof, you aren't responsible. You may think they wouldn't try that, but if they have a leaky roof, their insurer could definitely look for other payers. Your time is valuable. Your loss of freedom is significant. Don't sell it short.
posted by theora55 at 2:41 PM on August 4, 2009

Additionally, it may be worth considering different levels of compensation depending on *when* you're required to service these machines. Having been the techie on call 24/7, I know I would SURE like to have been compensated more for that 3AM call than for the 3PM one. Maybe up your rate to 150% outside of "standard business hours"?
posted by pkphy39 at 2:41 PM on August 4, 2009

Liquado pretty much nails it. You're being paid to be on leash, always. I don't know what a fair rate is, but I'd ask about options wrt going off-leash -- I'd want to be able to hand off the responsibility temporarily, if it became necessary.

When/If they call, that's a chargeable instant, and the $135 $150 rate kicks in (and, of course, any call has a minimum charge)

(On preview, everyone else nails it, too)
posted by Tuesday After Lunch at 2:43 PM on August 4, 2009

The problem isn't with that occasional 3AM, or more likely 4:45 on a long weekend Friday afternoon call. It's that with a 24X7X365 4 hour response you, as a single technician, have to be available for a 3AM call. Or more worrisome to make it to the site in the window even if all ready on site with another customer who may very well be experiencing a mission critical problem.

All sorts of things essentially beyond your control can take you out of the four hour response loop. You could be in an auto accident; need a root canal; be hospitalized for hundreds of assorted infections and illnesses; heck even be arrested for no good reason. You should try and work out a mutual coverage agreement with someone else. Even if they can't fix the problem as well as you they will satisfy the response window preventing you from getting sued.

And ditto theora55.
posted by Mitheral at 2:45 PM on August 4, 2009

Response by poster: Hmmm. Thanks for all the really valuable responses. I've sent the e-mail (quoted part of it above), but very clearly pointed out that it's not binding; I'd want some further clarification and discussion before giving them a final, solid quote. I'll definitely have this thread on hand as I do so.

Good idea on having the "clone" machine on hand. I wouldn't really mind a new desktop right now -- but pulling the trigger has been completely out of the question, given my financial condition these days. But I could certainly see the logic to it as a business expense if I get this contract. Plus, I'd get about 20% off with my Apple Consultants Network quarterly discount, which makes it hurt a lot less (and may totally overshadow any depreciation that occurs in the 11-12 months after I buy it, should I decide to sell it instead).

Well, fingers crossed, in any event. Thanks again.
posted by CommonSense at 2:56 PM on August 4, 2009

How much is never being more than 2 hours from home worth to ya, or never drinking that second beer.
posted by SirStan at 4:22 PM on August 4, 2009 [1 favorite]

My own personal experience... being on call haunts my every waking and sleeping hour. At my work we rotate it (and get paid far less than you do) and every time my phone makes a noise I dread it. I have to set my text notification sound to something loud so it will wake me up.

I know you say its "just two machines" but this is a customer with carte blanche to call you 24/7. He could always say "oh theres a problem with one of those macs... oh wait no there isn't but maybe you could help us with blah?". You can say no but theoretically they can pester you any time.

I know you also say its government, and maybe its different there to here, but I used to work for the government here in Australia in IT support, and though they are slow to move, if a project has a go live day because a politician has said it will go live that day, then they'll burn the midnight oil to try to escape any blame.

If thats happening, and those macs die, you will be in the firing line. What if you are at the movies? Drunk? Out of town?

I'd think of the worst case scenario (Xmas day,New Years Eve) and think how much is it worth you to be disrupted then.

Also what happens if you don't respond within the given time? Do you incur a penalty?
posted by Admira at 4:26 PM on August 4, 2009

Response by poster: This looks like it'll shortly be a non-issue. The guy called back wanting me to "bottom-line" it for him with a monthly fee. He's apparently entirely unable to do simple math. The couple of times I tried to start a sentence wherein I'd go ahead and do the math FOR him, he'd kind of cut me off and ask me to just e-mail him back with the numbers there.

I got the sense from the chat that he doesn't want to go above, say, $100 a month per machine, so . . . about $200ish a month, all told. Yet he still expects 24x7x4.

He kept playing up the "you might not hear from me for six months, but you'd still get a check each month" angle. Uhh, yeah, I know that. That's assumed, dipshit.

I went ahead and sent him the e-mail with the calculations done FOR his lazy ass. (Really, how hard is it to find out the number of hours in a year, multiply it by the hourly I gave you, then divide that by 12 to get a monthly?) I expect not to hear back, or to get one of those lame one-line "thanks; I don't think this'll work out" e-mails that really means "fuck you."

I'd have another person or two I could contact, incidentally, just in case I wasn't able to be onsite when they needed me or something. But it looks like it's fast becoming a non-issue now, anyway.
posted by CommonSense at 4:27 PM on August 4, 2009

From your last post, it sounds like you can't trust this guy to respect you when it comes to calling you in. Given he doesn't understand Macs (from your initial post), and is hemming and hawing about the details (an indication to me he's not an experienced IT manager), the agreement sounds like it will bite you in the ass. When he panics because one of the Macs has an message he hasn't seen before, you'll be more inconvenienced than he is in the end when he calls you over a non-issue, but you don't need to actually go in (and thus charge him).

Make sure your agreement is iron-clad, and covers inconveniences to your personal life such as being called for non-issues, coming in on off-hours, etc. Another option is to negotiate for standard working hours, so you can choose to relax and such, and he won't have to pay a retainer or off-hour fees.
posted by GJSchaller at 5:39 PM on August 4, 2009

Response by poster: I don't think there'll be a contract. I replied to the guy:
Here's what the rate would be, in "per month" terms. Basically, this is just drawn from the numbers I gave you before, but I've gone ahead and run the numbers to get it to you in the terms you're looking for.

- $839.50 per month -- I can round this down to an even $800.00 per month. UNLIMITED number of machines.
- INCLUDES two hours of time per month; however, the two hours does NOT roll over if not used
- Any time greater than two hours in a month is billed at $150 per hour, with a one-hour minimum, one-way travel charged.
- Guaranteed 24x7x4 availability.
- If you can pay one year up front, I can give a 10% discount (i.e., $8,640 for a year, instead of $9,600).
- Toll-free contact number (888-XXX-XXXX), which goes to either my office or my personal cell number automatically, as applicable.
The douche's response? A single e-mail with "OK".

posted by CommonSense at 6:06 PM on August 4, 2009

I'd be REALLY surprised if they paid anything near that. A server with less than 8x5x4hour coverage goes for ~$200 a month, and that includes all costs, hardware and software. $9000 a year can buy quite a few brand new computers should they break. His $100 a month per machine is probably about right.

(I'm not sure he's being lazy- he is your customer. He says what he wants, you give him your price. If this was retail, would you make me calculate my own tax?)

What you need to determine is whether calls are going to be screened by someone or not. Are you going to be bothered by end users with "where's the toner" and "I forgot my password to the DMMSAFA website"? Or will the company screen calls and just send you out when there's verified trouble?

Frankly, I wouldn't do it on any kind of blanket coverage at all. If I had to spec for something like that, I'd spec it like this:

afterhours/weekend coverage = $X00 an hour, one hour minimum.
Same business day coverage = $less
Next business day = $less

If they don't like it like that, I would suspect they are trying to screw me somehow. People don't think paying "one flat rate" is a good idea unless they think they are going to get the better end of the deal.

Given Mefi's high Googlerank, I'd really have the mods zap this thread when you're done with it, given that you've put in text directly from the e-mail messages you've exchanged, and have your e-mail in your profile.

Huh? He quoted what he wrote himself. I don't see the issue.
posted by gjc at 8:43 PM on August 4, 2009

It sounds like a no-go but just in case you do get (and want) the job, this concerns me: - $839.50 per month -- I can round this down to an even $800.00 per month. UNLIMITED number of machines.

I don't think it would be prudent to put in a contract for an unlimited number of machines. 2 machines, you might get through a year with no calls at all. But if, say, they get 20 machines that pretty much guarantees you'll be receiving support calls.
posted by 6550 at 6:26 AM on August 5, 2009

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