When the prime plays hardball

On of our projects, the government client wanted to bring on one of our current employees.

No problem, we submitted a high but fair billable rate to the prime PM. This rate is just a bit below what my partner bills and is in the same LCAT.

The prime sent back a low-ball call counter that was 30% lower.

What my partner did at this point was to text the government client and update him on the situation.

The client said that in these situations the prime usually just cautions him about paying too much and then he just approves the rate anyway.

So we stuck to our guns.

I don't know how this will turn out, but we suspect the prime (a private equity backed mega-corp) is just trying to improve their bottom line off the backs of their subs. It's not personal.

But if you're new to the 1099 world, you may not be used to a prime trying to take advantage of you and you may get insulted or just write them off entirely.

The best thing to do in these situations is to make sure you have and use your leverage. In our case, it's a good relationship with the government client.

In a solo 1099 situation, you can have a good client relationship but you can also get leverage by finding alternate projects, having a good amount of savings, or just be willing to stay where you are.

No deal is better than a bad deal.

So don't get thrown off by "hardball" prime negotiation tactics. Keep calm and carry on.

Want the full playbook? Check out Going 1099.