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Double billing 1

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swearingen

swearingen

Civil/Environmental
Feb 15, 2006
667
Sitting here on a 12 person international conference call that the client requires me to be on, while marking up drawings on another job got me thinking. Can I bill both clients for the same hour? I actively participate in the call, but when the conversation wanders or some of the meeting occurs in another lanquage, I continue my markups.

What do you guys think?

Of course that also brings up the question of when I'm on a plane. The client that required me to be on the plane is paying for my time there to get to his facility, but I can also work on other client's material while confined to that little seat.

I'm curious to see what you guys have to say...


-5^2 = -25 ;-)

 
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Double billing would seem to be unethical to me. You cannot possibly have been producing two hours of work in a single hour.

If you were to bill fractional hours such that the total billed hours equals real hours spent, then that should be OK.

TTFN
faq731-376
7ofakss
 
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I agree - it seems unethical, but I'd like some clarification about your statement about "producing" two hours of work in one hour.

When I'm on the plane, I wouldn't consider myself "producing." I'm getting paid to sit in an uncomfortable, cramped seat in a pressurized aluminum tube at 35,000 feet. If I'm going to inspect some field problem, I don't have anything to "produce" at that time. It would seem to be ethical that if I pulled out another client's work and "produced" something that I would charge that client and reduce the first client's hours by that amount. It would also seem fair that someone should be charged a premium for my discomfort of sitting between a snoring man and a coughing teenager, namely the first client...


-5^2 = -25 ;-)

 
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Unethical and in many places illegal.

Paid travel time is a nice perk, and rare. Read a book. Watch a movie. Sleep.

If you work on another client's job while flying then the client you are flying for gets a break.
 
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The engineering codes in the states that I'm licensed in have a strict prohibition against billing two clients for the same piece of work without their consent, but I don't think that applies here.

Let's look at time in the aluminium tube first. I charge all time away from home on a day rate (10 hour days) from the time I walk out my front door until I walk back in. When I get to where I'm going I always end up working more than 10 hours a day so I feel it all works out. If I have dead time (like in those cramped seats) I always ask myself "is there anything productive I can be doing for the client paying for the trip right now?" If there is, then I either relax or do it (i.e., I don't have a problem reading a novel on a plane, but if I'm going to work I preferentially work on stuff for the company paying for the trip). If I feel like working on a plane and there is nothing that the client paying for the trip would benefit from, then I have no problem working on billable hours for someone else. I'm not sure it really makes an ethical difference, but I always ask the question.

I spend a lot of time on tedious conference calls. Often people are talking in languages I don't understand and often the conversation drifts to parts of projects I'm not involved in. In that case I'll play Brickbreaker or Texas Hold 'em on my Blackberry to stay awake, but if I do something for another client I don't charge both clients for the same time. I'm not sure that it is really different than the travel scenario, but it feels like it is different to me. I just don't do it.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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The key is your TIME spent. A company is willing to pay for your time to travel, which is great, since my company only pays if I travel during the week; all that means is that I now refuse any trip that requires my presence off-site on a Monday or Friday.

Nonetheless, when someone pays for an hour of time, it's assumed that you're devoting that hour to the client. If you are multitasking, then you ought not and should not charge any single client for that entire time. As many of us might still recall, aerospace and defense timekeeping rules allow us to bill in increments of tenths of hours, so hypothetically, you can have 10 clients in a given hour, each one billed for 6 minutes of your time.

I don't understand why you think there should be any alternative to this at all. This is very fundamental ethical behavior question; you do not that charge multiple customers for the same product.

TTFN
faq731-376
7ofakss
 
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If you do this alot you should talk to your lawyer about adding a clause to your contract about this. Such as, required travel (or conference time that occurs in other languages or to parts of projects you not involved in) is not considered design time and any design work to be done (for you or others) shall be billed separately as design time. You might also talk to your State Board about it.

Garth Dreger PE - AZ Phoenix area
As EOR's we should take the responsibility to design our structures to support the components we allow in our design per that industry standards.
 
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Clearly, the hang-up is the hourly billing. The billing of hours spent on the plane does not fully compensate me for having to spend time away from my family or the indignity of being searched at the airport.

Therefore, If it were me, I would charge a flat rate equivalent to, say, 10 hrs per day of domestic travel, as a "travel fee," rather than as billable work. This makes travel a binary proposition; no travel is zero dollars, any travel is, say, 1000 dollars.

TTFN
faq731-376
7ofakss
 
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Switch to lump sum fees. No more ethical dilemnas on time management...
 
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Not quite the same, but an example I've used here before.

I'd worked for a company that had multiple clients in the same area, with different contract arrangements for each company. Our services were primarily hourly based, but there were minimum engagement fees and so on for the work. Some of the clients also paid an availability premium regardless of whether we actually worked the full duration or not.

I'd had multiple times where I'd had a call out for the first client (standard engagement including availability) and carried out the works required at short notice for them. Works were completed in half a day, with no further prospect of more work for that day. Second client calls, has a job that afternoon, with time based duration of about an hour.

Second client has a minimum callout amount of 1 day. Both clients got billed for services, first client for full day engagement as per availability (even though there was no more work to be done that day), second client gets billed for full day as per terms of contract and minimum call out.

Not quite ethically sound? Sure. Both clients were happy with the results and the services provided on the basis of their engagement.
If it were hourly rates based, I don't see that you can charge both clients at once.

I think zdas04 has a nice summary for it.
 
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The key here is benefit to the client. zdas04 has it correct, in my opinion.

Let's say I'm sitting outside a courtroom waiting to testify. My client has asked me to be there for their benefit and they are paying me to do so. I might be called at any time, but I don't know how long my wait will be. In the interim, I'm reviewing documents for another client so that I don't get behind and compromise their "benefit" of my services. They also benefit from my review of the documents since that is one of the tasks I must perform for them. Both clients are receiving the benefit of my services.

Keep in mind that as engineers we are more likely to give away services to clients than overcharge them. There are phone calls, "Oh by the way" conversations, etc. that never get charged to the client.

Also, travel time is time. It should be billed as any other time. If a client is not willing to pay for my travel time, I don't work for them. Insurance companies are notorious for trying to pull this one.

Sometimes your billing practices just need to match the expectations of the client. Daily billing rates, flat rate trip charges, etc.....had an insurance company that didn't want to pay travel time, and mileage was only paid at a reduced rate. They had no problem paying a flat rate trip charge, that, interestingly enough was the compilation of estimated time and mileage....go figure!
 
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Ron,
That comes under the category "it is easier to have a policy than a decision". The trip charge fit into their policy, the T&M didn't. I get so sick of that mind set.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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David,
...me too. I see it all too often. Corporate weenies with no balls.

Ron
 
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Ron & David. It's just to hard to change them and so easy to use their rules to your advantage. Offer the best deal for them, if they reject it on policy grounds take advantage where you can. Don't cheat but study their rules and take full advantage, ie treat people as you find them.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &
for site rules
 
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FSS has it nailed. It's tough to get properly compensated for productivity or innovation if you get paid purely by the hour, you have more than one client, and you view your timesheet as gospel (ethics aside- if your client has audit rights, you better be sure you do treat your timesheet as gospel!). Is T&M less risky than fixed fee? Only if you can't properly define the scope of work.
 
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The general consensus, and MintJulep's helpful link, is that this is unethical. My gut told me this was the case, I just wanted to hear what my peers had to say.

I find the flat rate travel charge interesting, though. From MintJulep's link and a few other posts, it appears that if I charged a flat travel fee, but then worked on the plane, I could charge for that hour to the other client.

Thanks for the info, guys...




-5^2 = -25 ;-)

 
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i don't see the problem. what do you do travel while sitting there doing nothing then maybe work in hotel later or work on the plane and have a free evening. both clients get be same benefit they paid for. if your work for client b only takes the plane time are you all suggesting they get it free?
 
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I also agree that double billing on a time and materials contract is unethical, but it comes down to the contract.
On a standard T&M, you are contracted to bill your time. If you had twenty four hours of travel and worked on another project the whole time, could you bill 48 hours for a single day? That doesn't pass the smell test.
However, there are many ways to structure contracts and there are several posts above that offer good information on how to bill effectively.
In the case of a simple travel charge in a contract, I see nothing wrong with working on another project that is T&M and billing both.
 
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