General Consultant Discussion

Maybe I've just managed to avoid this in 16 years of being a Sage partner but has anyone ever had a prospect insist on you providing a performance bond before beginning an ERP project?

Nope.

No but I have had them ask for proof of $1,000,000 insurance and to be named on the policy. They turned into crappy customers who ultimately wanted to pay by the hour but only for difficult questions - all others free.

They want me to provide a letter of credit from our bank and 3 years of business and personal financial statements. Really?

Freaky! Sounds like they plan on suing.

is the client named Dewey, Cheatem, and Howe

You've been working this prospect for a while and they're just now mentioning they're wanting these things?

Jim, and we are definitely the Stooges!

That's exactly what Amy said.

LOL - I'd tell them to wait by the mailbox because I'll be sending them real soon. Then they'd never hear from me again. I agree with Robert - these guys probably have a history of suing, being sued - or both. Run Forest Run!

We have had the proof of insurance requirement similar to Wayne's client, but only with one client. The performance bond is intended for construction contractors where the projects are really not open to interpretation and do not involve the client touching what they are working on. There are so many variables and factors that affect our projects, it's hard to believe a surety company would issue this for a consulting contract.

Right on John! I was thinking the same. Sounds like we will be moving on from this prospect.

We had a Client that demanded a $37,000 per day damages clause because they say, they would be losing that much per day if we were late completing the project. What constituted ""Completion"" was very clearly defined. Our comeback was that if that is the case, then we will want a $37,000 per day bonus for each day completing early. The demand was dropped. In your case, John, I would want to know whose idea this was (competitor, mid-level manager trying to move up,etc.) and why now? It is standard when asking for a Performance bond the the Owner requesting the bond pay the premium. If you want to pursue the project, make the Premium Cost high enough to make it worth your while.

Harold, the request came from the owner. I talked with him some more today. They are accustomed to getting those types of requests (or just providing a sterling D & B report) to their customers (Wal-Mart, Lowe's, Menard's, etc.). So, several years ago they started asking all of their vendors for the same.

I once had a prospect that wanted a non-compete that we would not do any work for a period of 2 years for any company in the same industry as them. This was all fine and dandy - but they wanted to execute it even before we'd met -- and they were already a MAS 90 user so the bulk of their requirements were just support.... Basically if I met with them - they decided not to use us - I'd potentially be locked out of doing any work for anyone they deemed a competitor for 2 years. Similar reasoning as what John said - they're just used to those terms. In the end I think we worked it down to an NDA.