Career Change to Contract BI?

Hi everyone!

I have been thinking about a career change and would appreciate any opinions.

I have been offered an opportunity to work as an independent contract background investigator with Peraton. Their pay schedule is approximately the following:

  • main subject interview : $250
  • associate interview: $60
  • obtaining records: $30

The opportunity to have a flexible schedule and choose how much I work is appealing.

I have the following questions…

  1. Based on this pay numbers, is it realistic to think I can make $75,000 a year (before taxes)?

  2. As a contractor, I am thinking about job security… is there enough work throughout the year (and in the future) to sustain a livable income?

  3. For other independent BI contractors out there…. how is it going for you so far? Any regrets?

Thank you all !

Just going by the numbers here.

$75000 pre tax would be $6250 per month (75K divided by 12). Let’s say you only do ESIs at $250 per interview. To get to $6250 per month you would need to transmit 25 ESIs per month. That’s a little over 6 per week, round up to 7 per week. If you focus solely on sources (not sure what an associate interview is, assuming it’s a source interview) that’s 104 per month or 26 per week.

As a contractor you can shop other vendors to see who is paying the best rates. You can also work for multiple vendors (with some restrictions) and pick up other contracts (non DCSA)

Realizing it’s usually a mix of item types. Depending on where you are located, this is doable (if the case volume is there) but it is a full time job.

There are other factors as well: Are you having to pay for health benefits? Is there mileage reimbursement? Cost of office supplies (paper, internet, ink, etc) Are you disciplined enough to set aside money for the tax bill that will come at the end of the year?

As for job security, well, my crystal ball is foggy today, so I cannot say if the BI option is going to provide a sustained livable income. : ) If you’re located in the middle of nowhere maybe not. If you’re in DC Metro or near a large military installation/defense contractor it leans towards yes.

I looked hard at going contractor, it is appealing, and most likely I will go that route in my retirement. Health benefits were the deal breaker for me.

Thank you SMCVA for your input, To answer your questions-

My healthcare is covered thru my wife’s job.

I would actually be able to write off a lot. To work for Peraton as an independent contractor, you have to have a registered LLC because Peraton won’t cut a check to you directly but to the name of your business.

As such some of things you can claim for deductions include:

  • mileage / car maintenance
  • office supplies
  • partial mortgage (home office)
  • phone bill
  • dry cleaning
    And other items…

So I’m thinking even if I make $60k pretax annually but is able to claim enough deductions where only $40k of my income is taxed, it could as the same if I made $75k a year.

And by ‘associate interviews’ it refers to the friends, references, neighbors of the applicant seeking a clearance… Peraton pays about $60 per for those interviews.

it really is a crap shoot. The area you live has a lot to do with whether or not your work is steady. And if another COVID happens contractors will be the last ones to get work. Why don’t you want to be an employee? As an employee you can contribute $23K a year to your 401k and get matching. (more if your older) It’s a great way and the easiest way to reduce your taxable income.

Thank you Weebie… I live in New Jersey where there are a few military bases and a bunch of defense companies and being in the vicinity of DC area, I am hoping the work will be steady.

As for why being an indpendent contractor, I’m tired of dealing with bad bosses and office politics….

New Jersey is not “ in the vicinity of DC area” from an assignment perspective. It’s highly unlikely you will get any work from DC area. You can’t swing a cat without hitting a BI around DMV, they are not going to pay you to come work here. Before making the jump I’d confirm there is enough work to keep you busy.

I’d also consider working as an employee for a year because this job has a steep learning curve and trying to navigate it without the support of a team would be really tough.

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If you get on the DCSA contract with Peraton or 1Force (sub contractor to the prime Peraton), I have heard of some Investigators that TDY regularly earn 100% premiums of the rates you mentioned above so you’d be earning $500.00 per ESI; $125.00 per source; and $62.50 per record interview. Thats the only way to get ahead with Peraton and being an IC on the DCSA contract. I have heard of some investigators earning $15,000 over the course of two to three weeks but you’ll work like a dog. You’ll work 14-16 hour days for six days per week. You may have enough time to sleep a few extra hours on Sunday and then you’ll go back to writing reports on Sunday and typing all weekend.

Some of these Investigators that are on constant TDY rotations with 100% premiums are earning well over $150,000 per year but this comes with a heavy price and major burn out factor to earn that kind of money. Most Investigators cannot sustain this level of effort and consistency and constant TDY’s every month. It’s burns you out and makes the job miserable and unsustainable.

The irony in all of this is that the rates the government and these corrupt vendors should be paying us to begin with should already be set at $500.00 per ESI; $125.00 per source; and $60.00 per record but the vendors hold the purse strings and the CI’s and hourly employees march to the vendors drum and the vendors know it. Until the Background Investigators in this industry create a union, the wages will always be sub par.

And if there is one goal I have in this life that is worthwhile it’s to fight for these fair and reasonable wages as a CI and bring all of these BI vendors to their knees one day.

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I an a new IC and kicking myself for not doing this sooner. After now working for a second company that has gone under/dismantled their investigations division, I do not want to go back to hourly.
I would take a look at 1Force and/or Brush Creek if you want to be attached with Peraton, and CANDA I believe is attached to CACI? From what I understand it can be useful to engage with more than one company, but you will not have access to extra work if you engage with more than one that serves the same prime on the contract. If for nothing else to see what each company sign on bonus is currently.

Most, if not all the other IC’s I know are not incorporated unless they have to be. I became a single member LLC, and frankly what I am worried about more than how much work, is missing a tax write off! Insurance is a concern, yes, but that also becomes a write off, and I am probably going to eventually move to only having an HSA.

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As a contractor do they give you grief over reopen cases?

Do you still have access to case support?

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You’ll be asked for status updates on refiles and cases that are past ACD. They hound you day and night as an IC. Its almost a given that they even keep metrics on our quality and timeliness so they can measure us against other IC’s and let the lesser producing IC’s and with worse quality and timeliness go when times are lean with work.

I still would recommend IC vs. hourly but it’s no picnic as an IC either. You deal with crappy case work, issue laden work, and sometimes you are working for $25.00 per hour or less when it’s all said and done with briefing, scoping, interview, report writing, fixing refiles, manifesting, etc. they also don’t pay for mileage or drive time which is a crime in and of itself. How Peraton and others get away with that is a mystery to me.

You are able to claim mileage on your taxes so you end up getting that back once you file your taxes but my question to you would be are you able to choose your work or are you stuck with what is given to you also can you refuse work

The hounding day and night is not my experience, but then I’m not with Peraton.

Timeliness and quality scores are kept on ICs, it’s the cost of doing business as a Sub contractor.

My best advice is don’t put all the proverbial eggs in one basket. Get yourself credentialed on something other than DCSA and the world opens up. I work with ISN, CACI, ADC, and 1Force on a host of various contracts. 1Force has me credentialed on 4 different contracts alone. Also, different companies pay different rates. The range for an ESI from everyone above is as low as $250 and as high as $450. Sometimes with 50% or more premium rates if they need a large amount of work done in my local area. By doing this I never have a shortage of work and the income is as much or as little as I want it to be. You HAVE to be organized to work like this though. Once you get a system down it’s easy as pie.

That being said, I have insurance through my spouse so thats not something I have to consider. Some of these vendors pay mileage, others do not. Most offer a VTC license though which cuts down on miles traveled for now.

Overall I have much preferred the IC life. I was an employee for 18 months, and have been an IC for almost 5 years now. The flexibility is great, and I can take time off when I want to. I just front load my month with work and take on a little extra after vacations if I feel like I need to.

TLDR: Diversify your portfolio of available work and you’ll be golden.

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Which company is paying $450.00 for an ESI? I’d like to know the name of this company.

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excellent advice. I am going to make the switch soon and was going to go with two contracting companies, but after reading this I will likely go with three or more.

I could be wrong but my understanding of specifically the DCSA contract is that you cannot be contracted to more than 2 vendors. Reason being that there are 2 Primes;
So you can be a contractor to Peraton and a SUBK under CACI (CACI is not using 1099s from my understanding)

Or a you can work as a contractor to one subcontractor under Peraton and one under CACI. You are not able (something to do with systems I was told) to work for multiple subs under the same Prime, or for both a sub under a prime and that same prime.

If anyone is actually working for more then 2 vendors specifically on DCSA, please correct me.

but what about different government agencies that need investigations done, not just DCSA?

I’ve worked for multiple SUBS under DCSA in the past without issue, but that has not been recently. I get recruiters reaching out on LinkedIn all the time and they always tell me it’s no problem, so take that for what it’s worth. I am on DHS and DOD for 3-4 different vendors depending on the specific contract. Everyone is aware of everyone else and I have never had a problem.

ISN for the Paperproof contract