Joel is an Engineer who has recently left the Navy and is employed by a small firm.

As panel mechanisms are the only path for Joel to work in Defence, the small firm has to “partner” via a Major Service Provider (MSP). The MSP acts as a gatekeeper to the work and can dictate contract terms.

The MSP takes a profit margin of 40% with almost no risk and does none of the work.

To win the contract, and ensure they can retain Joel, the small firm takes a thin margin of 13% and almost all the risk of the contract. Due to the MSP’s margin, there is less money left to pay Joel.