Potential project & its liabilities

[BluesCam]

I have been approached by a small group of people to become a partner in chasing a government contract. They want me to be "Executive Producer", but the only reason they have approached me is because my company is registered and certified as a mandated vendor. The budget will be a about $220,000.00 They have suggested that I receive $10,000.00 for being the company of record, submitting the proposal and keeping an overall eye on things.
There is a good chance that we can win this contract because of its requirements and this groups background in similar projects.

BUT... I think that because of the potential liabilities, payroll issues, and the fact that the books will be audited by the government, this is not worth it to me. They have already selected their crew, editor, etc. and so I would not profit from any of that. $10K seems hardly worth the responsibility and liability I will face over a 5-6 month period of production and beyond (audit).

It is an interesting project, but I have many reservations about it, plus I am not comfortable with other issues related to past projects completed by this group.

Has anybody been in a similar situation? Any input is appreciated.
Thanks.

[Matt Box]

Sound like a headache of major proportions. If your company is really set up for this kind of stuff and you have all the resources your gonna need like accountants and lawyers then go for it. From what you wrote I would pass on it, just too much worrying on the business side of things.

[Stoney]

Get more money out of the deal, if you think $10K isn't enough. Simple, get paid for what you deserve or don't do it.

[freedom]

Ad agencies put a 17% markup on everything they touch. I would not take less than 10%.
But, it sounds like you have no oversight, so what happens when the job goes over budget?
I would get a lawyer to draw up a very tight contract that says these other guys are liable for the overages, even if they have to mortgage their houses to pay you. Make sure they are personnaly liable for the costs.
You should get your cut off the top, not what's left over, which there will be a good chance of nothing left!!!
Watch your *ss!

[netnews]

Just the fact that you have posted this query, it sounds like you have a "gut feeling" regarding this venture.

For me, when the red flags start popping up and the bells start going off, that's a good reason to back away.

My "gut" has never steered me wrong.

[BluesCam]

I wonder if this type of arrangement is even legal? Especially in dealing with a gov't contract. The demo would be theirs not mine (more appropriate content).

[Nino]

Don’t just walk away from this deal, run. What will happen if they get deposits for this job and they don't deliver or fail to pay subcontractors, you'll be on the hook not them.

In 1993 I got involved with a similar deal with the government of Barbados. A “well established” marketing company in Florida made a proposal to the Tourism Board of Barbados to produce a marketing program worth $1 million to promote the Island to American tourists. To get government approval they hired and pay an upfront sum of money to a small travel marketing company on the Island. This guy was the front man. I was hired to produce two videos starring Robert Leach, plus there was a film crew to produce a series of commercials, a graphic artist to create printed material and a photographer for stills. The Florida company had everything in motion and on target. They met all the strict government requirements and delivered all the proofs of the planned material, and just enough to get paid 50% of the total budget. They needed my finished video to get 75% percent of the money. I smelled something rotten and because I only received half of my money I delivered my video with a time code window under the stipulation that the final product will be delivered upon receiving full payment. I immediately got a call from the client threatening me with all kinds of legal actions if I don’t deliver the video immediately. Two days later I got a letter from the court in a Florida county that the client had filed for Bankruptcy leaving the government of Barbados with $500,000 worth of proofs but no finished work, and all the subcontractors with no money at all. The front man in Barbados lost everything he had. I got the rest of my money directly from an ad agency working for the Barbados government because mine was the only project that was finished and ready to go. I was able to maintain full ownership of the material even thou it was listed as the client's assets in the bankruptcy filing because in my contract I stipulated that I'm the sole owner of the intellectual properties until I release my rights in writing.

[BluesCam]

Thanks. I'm sorry to hear about your experience. I'm glad you got your money. I think you are absolutely right. I told them today I would not be the company of record. I feel 30 lbs lighter!