The prices you are paying ($80/hr onsite and $60 offsite) are entirely reasonable. That is simply a reasonable rate for a company if they are to stay in business. What do you think your burden rate is? I'll bet if you asked your accounting department what each employee's burden rate is you will find that you fall right in there. If you are making $20/hr that is NOT your burden rate. Your burden rate is going to be 2-3x that when you factor in operating costs. It is impossible to STAY in business and not charge those kinds of rates.
"Should I force the rate down by about $20/hr or so?" Are you kidding? What do you pay the kid next door to cut your grass?
Lowest dollars per hour often translates into a false economy. You may find someone to do the job cheaper but they may be slower or less skillful or less reliable. You have someone producing a good service for you - don't mess with it!
Originally Posted by Lord Phat  Hi, I work in purchasing for a factory in upstate NY. We recently had one of our best CNC programmers retire and only have a couple left so operations outsourced some g-code to a third party, particularly for programming our large mills.
I do not have a machinist background but have been asked to evaluate the prices they are paying. We are using a firm with a top notch programmer they are pretty much loaning us but we are paying $80/hr when he is onsite working here and $60 when he is offsite. In addition, we are kind of remote so we are wrangling over travel expenses.
I have no idea of benchmarks for this. Are we getting screwed? Should I force the rate down by about $20/hr or so? Thanks. |