🤓Contract types as external consultant

When working as an IT consultant, there are 2 main ways to deliver services to the EU institutions :

• Times and Means

• Fixed-Price

A time and materials (T&M) contract is a type of agreement in which the Commission, as a client, pays for the materials used and the labor hours spent on a project. The billing rate for labor (your consultant daily rate) is typically based on the type of work being performed and the level of expertise required. This type of contract is often used when the scope of work is not well defined or is subject to change. At the Commission, those contracts have been used since the eraly days of IT outsourcing to replace permanent staff and officials by IT professional, to reduce costs. IT consultants, even with high rates from 2000 - 2010 didn't impact the EU pension fund, so it was an easy switch in the past. Right now, the vast majority of IT work is performed by externals, the few last internal staff working on IT and technical activities will not be replaced when their contract comes to an end or if they leave on pension.

On the other hand, a fixed-price contract is a type of agreement in which the price for the project is agreed upon upfront and does not change, regardless of the number of materials used or labor hours required. This type of contract is typically used when the scope of work is well-defined and is not expected to change. The number of fixed-price contract is growing fast in IT, as it gives an false impression of limited risk in terms of budget slippage. However, the very poor ability of Commission staff to define clear and professional requirements in the vast majority of the cases is a good reason to avoid those types of projects at all costs as IT professional. It is usually a receipt for disaster.

Times and Means

T&M contracts are awarded to companies as part of a framework contract.