Subcontracting for Private Investigation Companies: 5 things to Expect

Subcontracting for private investigation companies is quite common in the investigation industry.  Private Investigation business owners work as a vendor or subcontractors as fill-in work for their existing investigation business.  What I have found by talking with others in the investigation industry is they didn’t know what to expect as a vendor/subcontractor.  Due to miscommunication between the investigators and the companies, they are working with many investigators who have had bad experiences as vendors. 

It is my hope that after reading this you have an idea of why vendors or subcontractors are used and what to expect when working as one.  In this article when I will use the word vendor to represent subcontractors as they are one and the same.

Why do private investigation companies need vendors/subcontractors?

There are a couple of reasons why private investigation companies use vendors. 

Too much work and not enough investigators

One reason investigation companies use vendors is the company might receive an assignment in an area where they are over booked (don’t have enough investigators and too much work).  To make sure they don’t disappoint their clients they hire a vendor to cover the assignment.  They require the vendor to follow their company expectations, protocols or any client rules.  Vendors are paid more than they would pay their regular employees. 

Private investigation companies want to claim they are nationwide

It order for investigative companies to secure clients or large insurance companies as clients they need to have coverage across the United States and in many cases around the world.  To have immediate investigative coverage companies will secure vendors in areas where they don’t have their own investigators.

It can be cheaper to hire a vendor than to have a private investigator on their payroll

When you consider the various benefits that are paid for: mileage or fuel paid for the investigator, vacation time paid for, and of course, the regular salary paid it can be quite expensive to have investigators on the payroll.  

When a company pays a vendor, contracts are typically set up for a company to pay an investigator a flat rate and sometimes a flat rate with the mileage.  It makes the profit margin very clear for a company on each assignment. 

What to Expect When Subcontracting for Private Investigation Companies

Companies like to pay flat hourly rates to vendors

Hourly rates will vary but you need to understand that you will only get paid for the time you are on-site during a surveillance.  If it takes you 2 hours to drive to a surveillance case and 2 hours to drive home, you will not be paid for that travel time.  You will only be paid for case time (the time they can bill to their client).  Unless you have an agreement that states differently this is what your expectation should be.

Non surveillance assignments in some cases will pay for your travel and report time as this can be billable to a client.   Be sure to find out for sure if this is the case when working for an investigation company.

Your surveillance video must have a time stamp on it

I can’t tell you how many times I have been told by a company that an investigator claims up and down that he will provide surveillance video with a time stamp on it.  And when the time comes to produce the video for the investigation company they don’t know how to do it.  This is bad business and your reputation will be tarnished in the industry.  

So before you begin taking vendor assignments be sure to know how to get a time stamp on your video.

The rates companies will pay to vendors will vary

You will find that companies will pay vendors anywhere from around $35 an hour all the way up to $65 an hour.  There are plenty of reasons for the different rates that companies will pay vendors but the majority of the time it comes down to how much they are charging their own clients.

If a company is charging a client $65 an hour they are not going to pay a vendor $65 an hour because they won’t make a profit.   So they might be willing to pay an investigator $35 an hour so they could secure a profit of $30 an hour.  If a company pays a vendor $65 an hour you can be sure that they are charging their client much more than that per hour.

A vendor will not be paid immediately

Once a vendor completes the assignment (like surveillance), submits the video (with time stamps), submits the report and submits the invoice it can take anywhere from 2 weeks to 2 months to be paid.  Sometimes companies don’t pay vendors until they are paid by the client.

You need to ask a company ahead of time how long it takes to pay an investigator’s invoice so you are not surprised when a check doesn’t come for a couple of months.

A vendor will need insurance to subcontract work

A reputable company will request you have at least 1 million in Errors and Omissions insurance coverage.  They will not hire an investigator that doesn’t have their own business license or insurance.

Where can an investigation company/investigator find vendor work?

The two most common ways to find work as a vendor is either by calling an investigation company or through Yahoo Groups.  

Final Thoughts

If you want to keep working as a subcontractor for private investigation companies, then you need to bring your best each time you work on an assignment and do what you can to make the investigation company happy with your work.  If they like your work then they will likely call you again.  The more work you do for them, the more you can build a relationship with the company, and the more they will trust you to work on their assignments.

If you stink or don’t know what you are doing the company will eventually figure it out and not hire or call you again.  Like anything in the investigation industry, you want to build trust and a good reputation.